Civil Rv w Cases

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UNIVERSITY OF THE EAST vs. ROMEO A.JADER, GR No. 132344. February 17, 2000.UNIVERSITY OF THE EAST, petitioner, VS. ROMEO A. JADER, respondentGR No. 132344. February 17, 2000.

FACTS:Romeo Jader, a law student of the University of the East, failed to take his regular examinationin Practice Court I in his first semester of his last school year. However, he was able to removethe incomplete mark when the Dean of his college approved his application to take a removalexamination.In the 2nd semester, his name appeared in the tentative list of candidates for graduation for theDecree of Bachelor of Laws and in the invitation for the 35th Investiture and CommencementCeremonies, the plaintiff’s name appeared. Thus, he attended the investiture ceremonies and graduated.On April to September 1998, he took a leave of absence from his work and enrolled at the pre-bar review class in Far Eastern University. To his dismay upon knowing that he incurred adeficiency, he dropped his review class and was not able to take the bar examinations.He then filed a suit against UE praying for moral and exemplary damages arising from thelatter’s negligence. The trial court ruled in his favor and was granted for actual damages. TheCourt of Appeals affirmed the trial court’s decision with modification. The CA awarded moraldamages. On account of suffering moral shock, mental anguish, serious anxiety, besmirchedreputation, wounded feelings and sleepless nights and ultimately for not having to take the barexam.

ISSUE:Whether or not Romeo Jader can validly claim for moral damages.

RULING:In view of the foregoing issue, the Supreme Court emphatically enunciated that moral damagescannot be awarded to Romeo Jader. It cannot believe that he suffered shock, trauma, and pain.

Along this vein, the Supreme Court held Jader negligent. It opined that as a student, he shouldhave been responsible enough to ensure that all his affairs, especially those appertaining to hisacademics, are in order. If respondent was indeed humiliated by his failure to take the bar, hebrought this upon himself by not verifying if he has satisfied all the requirements. While theCourt held the University of the East negligent and therefore liable for actual damages in favorof Jader, the latter was also held liable for negligence thereby no moral damages can beawarded in his favor. The decision was affirmed with modification.



G.R. No. 171365 October 6, 2010

ERMELINDA C. MANALOTO, AURORA J. CIFRA, FLORDELIZA J. ARCILLA,LOURDES J. CATALAN, ETHELINDA J. HOLT, BIENVENIDO R. JONGCO, ARTEMIO R.JONGCO, JR. and JOEL JONGCO, Petitioners,vs.ISMAEL VELOSO III, Respondent.

D E C I S I O N

LEONARDO-DE CASTRO, J.:

Before Us is a Petition for Review on Certiorari of the Decision1 dated January 31, 2006 ofthe Court Appeals in CA-G.R. CV No. 82610, which affirmed with modification theResolution2 dated September 2, 2003 of Branch 227 of the Regional Trial Court (RTC-Branch 227) of Quezon City in Civil Case No. Q-02-48341.

We partly reproduce below the facts of the case as culled by the Court of Appeals from therecords:

This case is an off-shoot of an unlawful detainer case filed by [herein petitioners] ErmelindaC. Manaloto, Aurora J. Cifra, Flordeliza J. Arcilla, Lourdes J. Catalan, Ethelinda J. Holt,Bienvenido R. Jongco, Artemio R. Jongco, Jr. and Joel Jongco against [herein respondent].In said complaint for unlawful detainer, it was alleged that they are the lessors of aresidential house located at No. 42 Big Horseshoe Drive, Horseshoe Village, Quezon City[subject property] which was leased to [respondent] at a monthly rental of P17,000.00. The

action was instituted on the ground of [respondent's] failure to pay rentals from May 23,1997 to December 22, 1998 despite repeated demands. [Respondent] denied the non-

payment of rentals and alleged that he made an advance payment ofP825,000.00 when he

paid for the repairs done on the leased property.

After trial, the Metropolitan Trial Court (MeTC) decided in favor of [petitioners] by ordering[respondent] to (a) vacate the premises at No. 42 Big Horseshoe Drive, Horseshoe Village,Quezon City; (b) pay [petitioners] the sum of P306,000.00 corresponding to the rentals due

from May 23, 1997 to November 22, 1998, and the sum ofP17,000.00 a month thereafter

until [respondent] vacates the premises; and (c) pay [petitioners] the sum ofP5,000.00 as

attorney's fees.

On appeal to the Regional Trial Court (RTC) [Branch 88, Quezon City], the MeTC decisionwas reversed. [Respondent] was ordered to pay arrearages from May 23, 1997 up to the

date of the decision but he was also given an option to choose between staying in theleased property or vacating the same, subject to the reimbursement by [petitioners] of one-half of the value of the improvements which it found to be in the amount ofP120,000.00.

[Respondent] was also given the right to remove said improvements pursuant to Article1678 of the Civil Code, should [petitioners] refuse to pay P60,000.00.

When both parties moved for the reconsideration of the RTC decision, the RTC issued anOrder dated February 23, 2001 modifying its previous ruling by increasing the value of theimprovements from P120,000.00 toP800,000.00.

After successive appeals to the Court of Appeals and the Supreme Court, the decision of

the RTC dated November 29, 2000 which reversed the decision of the MeTC, became finaland executory.3

Whilst respondent's appeal of the Metropolitan Trial Court (MeTC) judgment in the unlawfuldetainer case was pending before the RTC-Branch 88, respondent filed before the RTC-Branch 227 on November 26, 2002 a Complaint for Breach of Contract andDamages4 against the petitioners, docketed as Civil Case No. Q-02-48341. The saidcomplaint alleged two causes of action. The first cause of action was for damages because

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the respondent supposedly suffered embarrassment and humiliation when petitionersdistributed copies of the above-mentioned MeTC decision in the unlawful detainer case tothe homeowners of Horseshoe Village while respondent's appeal was still pending beforethe Quezon City RTC-Branch 88. The second cause of action was for breach of contractsince petitioners, as lessors, failed to make continuing repairs on the subject property topreserve and keep it tenantable. Thus, respondent sought the following from the court aquo:

PRAYER

WHEREFORE, premises considered, it is respectfully prayed that after hearing the courtrender a decision against the [herein petitioners] and in favor of the [herein respondent] by -

1. Ordering [petitioners] to pay [respondent] the following amounts:

a) P1,500,000.00 as moral damages and consequential damages;

b) P500,000.00 as exemplary damages;

c) P425,000.00 representing the difference of the expenses of the improvements

of P825,000.00 andP400,000.00 pursuant to Art. 1678 of the Civil Code;

d) P594,000.00 representing interest for three (3) years from 1998 to 2000 on

the P825,000.00 advanced by the [respondent] at the rate of 24% per annum;

e) P250,000.00 as compensation for the [respondent's] labor and efforts in

overseeing and attending the needs of contractors the repair/renovation of theleased premises;

f) P250,000.00, plus 20% of all recoveries from [petitioners] and P2,500.00 per

hearing as attorney's fees;

g) Cost of suit.

[Respondent] further prays for such other reliefs and remedies which are just and equitableunder the premises.5

The petitioners filed an Omnibus Motion6 on February 18, 2003 praying for, among otherreliefs, the dismissal of respondent's complaint in Civil Case No. Q-02-48341. Petitionersargued that respondent had no cause of action against them because the MeTC decision inthe unlawful detainer case was a matter of public record and its disclosure to the publicviolated no law or any legal right of the respondent. Moreover, petitioners averred that therespondent's present Complaint for Breach of Contract and Damages was barred by prior

judgment since it was a mere replication of respondent's Answer with CompulsoryCounterclaim in the unlawful detainer case before the MeTC. The said unlawful detainercase was already judicially decided with finality.

On September 2, 2003, the RTC-Branch 227 issued a Resolution dismissing respondent'scomplaint in Civil Case No. Q-02-48341 for violating the rule against splitting of cause ofaction, lack of jurisdiction, and failure to disclose the pendency of a related case. The RTC-Branch 227 adjudged that Civil Case No. Q-02-48341 involved the same facts, parties, and

causes of action as those in the unlawful detainer case, and the MeTC had already properlytaken cognizance of the latter case.

Respondent received a copy of the RTC-Branch 227 decision in Civil Case No. Q-02-48341on September 26, 2003. He filed a Motion for Reconsideration7 of said judgment on October10, 2003, which RTC-Branch 227 denied in an Order 8 dated December 30, 2003.

















Respondent received a copy of the RTC-Branch 227 order denying his Motion forReconsideration on February 20, 2004, and he filed his Notice of Appeal9 on March 1, 2004.However, the RTC-Branch 227, in an Order 10dated March 23, 2004, dismissed respondent'sappeal for being filed out of time.

Respondent received a copy of the RTC-Branch 27 order dismissing his appeal on April 30,2004 and he filed a Motion for Reconsideration11 of the same on May 3, 2004. The RTC-Branch 227, in another Order 12 dated May 31, 2004, granted respondent's latest motionbecause it was "convinced that it is but appropriate and fair to both parties that this matterof whether or not the Appeal was filed on time, be resolved by the appellate court ratherthan by this Court." The RTC-Branch 227 then ordered that the records of the case beforwarded as soon as possible to the Court of Appeals for further proceedings.

The Court of Appeals, in a Resolution13 dated February 8, 2005, resolved to give duecourse to respondent's appeal. Said appeal was docketed as CA-G.R. CV No. 82610.

On January 31, 2006, the Court of Appeals rendered its Decision in CA-G.R. CV No. 82610.

The Court of Appeals fully agreed with the RTC-Branch 227 in dismissing respondent'ssecond cause of action (i.e., breach of contract) in Civil Case No. Q-02-48341. Theappellate court, however, held that RTC-Branch 227 should have proceeded with the trialon the merits of the first cause of action (i.e., damages) in Civil Case No. Q-02-48341,because "[a]lthough [herein respondent] may have stated the same factual antecedents thattranspired in the unlawful detainer case, such allegations were necessary to give anoverview of the facts leading to the institution of another case between the parties beforethe RTC acting in its original jurisdiction."14

The Court of Appeals then went on to find that petitioners were indeed liable to respondentfor damages:

No doubt, distributing the copies was primarily intended to embarrass [herein respondent] inthe community he mingled in. We are not unmindful of the fact that court decisions arepublic documents and the general public is allowed access thereto to make inquiriesthereon or to secure a copy thereof. Nevertheless, under the circumstances of this case,although court decisions are public documents, distribution of the same during thependency of an appeal was clearly intended to cause [respondent] some form ofharassment and/or humiliation so that [respondent] would be ostracized by his neighbors.The appeal may have delayed the attainment of finality of the determination of the rights ofthe parties and the execution in the unlawful detainer case but it did not justify [hereinpetitioners'] pre-emption of the outcome of the appeal. By distributing copies of the MeTCdecision, [petitioners] appeared to have assumed that the MeTC decision would simply be

affirmed and therefore they tried to cause the early ouster of [respondent] thinking that ahumiliated [respondent] would scurry out of the leased premises. Clearly, there was evidentbad faith intended to mock [respondent's] right to appeal which is a statutory remedy tocorrect errors which might have been committed by the lower court.

Thus, moral damages may be awarded since [petitioners] acted in bad faith. Bad faith doesnot simply connote bad judgment or negligence, it imports a dishonest purpose or somemoral obliquity and conscious doing of a wrong, a breach of known duty through somemotive or interest or ill will that partakes of the nature of fraud. However, an award of moraldamages would require certain conditions to be met, to wit: (1) first, there must be an injury,whether physical, mental or psychological, clearly sustained by the claimant; (2) second,

there must be culpable act or omission factually established; (3) third, the wrongful act oromission of the defendant is the proximate cause of the injury sustained by the claimant;and (4) fourth, the award of damages is predicated on any of the cases stated in Article2219 of the Civil Code.

But it must again be stressed that moral damages are emphatically not intended to enrich aplaintiff at the expense of the defendant. When awarded, moral damages must not bepalpably and scandalously excessive as to indicate that it was the result of passion,
























prejudice or corruption on the part of the trial court judge. For this reason, this Court findsan award of P30,000.00 moral damages sufficient under the circumstances.

On the other hand, to warrant the award of exemplary damages, the wrongful act must beaccompanied by bad faith, and an award of damages would be allowed only if the guiltyparty acted in a wanton, fraudulent, reckless or malevolent manner. Accordingly, exemplarydamages in the amount of P10,000.00 is appropriate.15

In the end, the Court of Appeals decreed:

WHEREFORE, the decision of the Regional Trial Court is AFFIRMED with theMODIFICATION that the case is dismissed only as to the second cause of action. As to thefirst cause of action, [herein petitioners] are ordered to pay [herein respondent] moraldamages of P30,000.00 and exemplary damages of P10,000.00.16

Hence, the instant Petition for Review.

Petitioners assert that respondent's appeal of the RTC-Branch 227 Resolution datedSeptember 2, 2003, which dismissed the latter's complaint in Civil Case No. Q-02-48341,was filed out of time. Respondent received a copy of the said resolution on September 26,2003, and he only had 15 days from such date to file his appeal, or until October 11, 2003.Respondent, instead, filed a Motion for Reconsideration of the resolution on October 10,2003, which left him with only one more day to file his appeal. The RTC-Branch 227subsequently denied respondent's Motion for Reconsideration in an Order dated December30, 2003, which the respondent received on February 20, 2004. Respondent only had untilthe following day, February 21, 2004, to file the appeal. However, respondent filed hisNotice of Appeal only on March 1, 2004. Hence, petitioners conclude that the dismissal ofrespondent's complaint in Civil Case No. Q-02-48341 already attained finality.

Petitioners argue in the alternative that the award of damages in respondent's favor has nofactual and legal bases. They contend that the Court of Appeals erred in awarding moraland exemplary damages to respondent based on the bare and unproven allegations in thelatter's complaint and without the benefit of any hearing or trial. While the appellate courtdeclared that RTC-Branch 227 should have proceeded with the trial on the merits involvingthe action for damages, it surprisingly went ahead and ruled on petitioners' liability for saiddamages even without trial. Even assuming for the sake of argument that respondent'sallegations in his complaint are true, he still has no cause of action for damages againstpetitioners, for the disclosure of a court decision, which is part of public record, did notcause any legal and compensable injury to respondent.

Respondent, on the other hand, maintains that his appeal of the September 2, 2003Resolution of the RTC-Branch 227 to the Court of Appeals was timely filed and that thesame was aptly given due course. In addition, respondent asserts that the appellate courtwas correct in holding petitioners liable for damages even without any hearing or trial sincepetitioners, in filing their omnibus motion praying for the dismissal of respondent's complainton the ground of "no cause of action," were deemed to have hypothetically admitted as truethe allegations in said complaint.

The petition is partly meritorious.

We note, at the outset, that the propriety of the dismissal by the RTC-Branch 227 of

respondent's second cause of action against petitioners (e.g., for breach of contract) was nolonger disputed by the parties. Thus, the present appeal pertains only to respondent's firstcause of action (e.g., for damages), and in connection therewith, we are called upon toresolve the following issues: (1) whether respondent timely filed his appeal of the Resolutiondated September 2, 2003 of the RTC-Branch 227 before the Court of Appeals; and (2)whether respondent is entitled to the award of moral and exemplary damages.

We answer the first issue on the timeliness of respondent's appeal affirmatively.











Jurisprudence has settled the "fresh period rule," according to which, an ordinary appealfrom the RTC to the Court of Appeals, under Section 3 of Rule 41 of the Rules of Court,shall be taken within fifteen (15) days either from receipt of the original judgment of the trialcourt or from receipt of the final order of the trial court dismissing or denying the motion fornew trial or motion for reconsideration. In Sumiran v. Damaso,17 we presented a survey ofthe cases applying the fresh period rule:

As early as 2005, the Court categorically declared in Neypes v. Court of Appeals that byvirtue of the power of the Supreme Court to amend, repeal and create new procedural rulesin all courts, the Court is allowing a fresh period of 15 days within which to file a notice ofappeal in the RTC, counted from receipt of the order dismissing or denying a motion for newtrial or motion for reconsideration. This would standardize the appeal periods provided inthe Rules and do away with the confusion as to when the 15-day appeal period should becounted. Thus, the Court stated:

To recapitulate, a party-litigant may either file his notice of appeal within 15 days fromreceipt of the Regional Trial Court's decision or file it within 15 days from receipt of the order

(the "final order") denying his motion for new trial or motion for reconsideration. Obviously,the new 15-day period may be availed of only if either motion is filed; otherwise, thedecision becomes final and executory after the lapse of the original appeal period providedin Rule 41, Section 3.

The foregoing ruling of the Court was reiterated in Makati Insurance Co., Inc. v. Reyes, towit:

Propitious to petitioner is Neypes v. Court of Appeals, promulgated on 14 September 2005while the present Petition was already pending before us. x x x.

x x x x

With the advent of the "fresh period rule" parties who availed themselves of the remedy ofmotion for reconsideration are now allowed to file a notice of appeal within fifteen days fromthe denial of that motion.

The "fresh period rule" is not inconsistent with Rule 41, Section 3 of the Revised Rules ofCourt which states that the appeal shall be taken "within fifteen (15) days from notice of

judgment or final order appealed from." The use of the disjunctive word "or" signifiesdisassociation and independence of one thing from another. It should, as a rule, beconstrued in the sense which it ordinarily implies. Hence, the use of "or" in the aboveprovision supposes that the notice of appeal may be filed within 15 days from the notice of

judgment or within 15 days from notice of the "final order," x x x.

x x x x

The "fresh period rule" finally eradicates the confusion as to when the 15-day appeal periodshould be counted - from receipt of notice of judgment or from receipt of notice of "finalorder" appealed from.

Taking our bearings from Neypes, in Sumaway v. Urban Bank, Inc., we set aside the denialof a notice of appeal which was purportedly filed five days late. With the fresh period rule,the 15-day period within which to file the notice of appeal was counted from notice of the

denial of the therein petitioner's motion for reconsideration.

We followed suit in Elbiña v. Ceniza, wherein we applied the principle granting a freshperiod of 15 days within which to file the notice of appeal, counted from receipt of the orderdismissing a motion for new trial or motion for reconsideration or any final order orresolution.







Thereafter, in First Aqua Sugar Traders, Inc. v. Bank of the Philippine Islands, we held thata party-litigant may now file his notice of appeal either within fifteen days from receipt of theoriginal decision or within fifteen days from the receipt of the order denying the motion forreconsideration.

In De los Santos v. Vda. de Mangubat, we applied the same principle of "fresh period rule,"expostulating that procedural law refers to the adjective law which prescribes rules andforms of procedure in order that courts may be able to administer justice. Procedural lawsdo not come within the legal conception of a retroactive law, or the general rule against theretroactive operation of statutes. The "fresh period rule" is irrefragably procedural,prescribing the manner in which the appropriate period for appeal is to be computed ordetermined and, therefore, can be made applicable to actions pending upon its effectivity,such as the present case, without danger of violating anyone else's rights.18 (Emphasessupplied.)

Also in Sumiran, we recognized the retroactive application of the fresh period rule to casespending and undetermined upon its effectivity:

The retroactivity of the Neypes rule in cases where the period for appeal had lapsed prior tothe date of promulgation of Neypes on September 14, 2005, was clearly explained by theCourt in Fil-Estate Properties, Inc. v. Homena-Valencia, stating thus:

The determinative issue is whether the "fresh period" rule announced in Neypes couldretroactively apply in cases where the period for appeal had lapsed prior to 14 September2005 when Neypes was promulgated. That question may be answered with the guidance ofthe general rule that procedural laws may be given retroactive effect to actions pending andundetermined at the time of their passage, there being no vested rights in the rules ofprocedure. Amendments to procedural rules are procedural or remedial in character as they

do not create new or remove vested rights, but only operate in furtherance of the remedy orconfirmation of rights already existing.19(Emphases supplied.)

In the case before us, respondent received a copy of the Resolution dated September 2,2003 of the RTC-Branch 227 dismissing his complaint in Civil Case No. Q-02-48341 onSeptember 26, 2003. Fourteen days thereafter, on October 10, 2003, respondent filed aMotion for Reconsideration of said resolution. The RTC-Branch 227 denied respondent'sMotion for Reconsideration in an Order dated December 30, 2003, which the respondentreceived on February 20, 2004. On March 1, 2004, just after nine days from receipt of theorder denying his Motion for Reconsideration, respondent already filed his Notice of Appeal.Clearly, under the fresh period rule, respondent was able to file his appeal well-within theprescriptive period of 15 days, and the Court of Appeals did not err in giving due course to

said appeal in CA-G.R. CV No. 82610.

We likewise agree with the Court of Appeals that the RTC-Branch 227 should not havedismissed respondent's complaint for damages on the ground of failure to state a cause ofaction.

According to Rule 2, Section 2 of the Rules of Court, a cause of action is the act or omissionby which a party violates a right of another.

When the ground for dismissal is that the complaint states no cause of action, such fact canbe determined only from the facts alleged in the complaint and from no other, and the court

cannot consider other matters aliunde. The test, therefore, is whether, assuming theallegations of fact in the complaint to be true, a valid judgment could be rendered inaccordance with the prayer stated therein.20

Respondent made the following allegations in support of his claim for damages againstpetitioners:

FIRST CAUSE OF ACTION















28. After the promulgation of the Metropolitan Trial Court of its Decision dated August 3,1999, ordering the [herein respondent] and all person claiming rights under him to -

(a) Vacate the leased premises;

(b) pay the [herein petitioners] the sum of P306,000.00 as unpaid rentals from May

23, 1997 to November 22, 1998; and

(c) pay the sum of P5,000.00 as attorneys fees;

But while said Decision was still pending appeal with the Regional Trial Court, the[petitioners], through [petitioner] Manaloto, already distributed copies of said Decision tosome of the homeowners of Horseshoe Village, who personally know the [respondent]. Thisact is a direct assault or character assassination on the part of the [respondent] because asstated in the said decision, [respondent] has been staying in the premises but did not orrefused to pay his monthly rentals for a long period of time when in truth and in fact wasuntrue.

29. That from the time the said decision was distributed to said members homeowners, the[respondent] became the subject of conversation or talk of the town and by virtue of which[respondent's] good name within the community or society where he belongs was greatlydamaged; his reputation was besmirched; [respondent] suffered sleepless night and seriousanxiety. [Respondent], who is the grandson of the late Senator Jose Veloso andCongressman Ismael Veloso, was deprived of political career and to start with was to run ascandidate for Barangay Chairman within their area which was being offered to him by thehomeowners but this offer has started to fade and ultimately totally vanished after thedistribution of said Decision. Damages to his good names and reputations and otherdamages which he suffered as a consequence thereof, may be reasonably compensated

for at least P1,500,000.00 as moral and consequential damages.

30. In order to deter [petitioners] and others from doing as abovementioned, [petitioners]should likewise be assessed exemplary damages in the amount of P500,000.00.21

A cause of action (for damages) exists if the following elements are present: (1) a right infavor of the plaintiff by whatever means and under whatever law it arises or is created; (2)an obligation on the part of the named defendant to respect or not to violate such right; and(3) an act or omission on the part of such defendant violative of the right of the plaintiff orconstituting a breach of the obligation of defendant to the plaintiff for which the latter maymaintain an action for recovery of damages.22 We find that all three elements exist in thecase at bar. Respondent may not have specifically identified each element, but it may be

sufficiently determined from the allegations in his complaint.

First, respondent filed the complaint to protect his good character, name, and reputation.Every man has a right to build, keep, and be favored with a good name. This right isprotected by law with the recognition of slander and libel as actionable wrongs, whether ascriminal offenses or tortuous conduct.23

Second, petitioners are obliged to respect respondent's good name even though they areopposing parties in the unlawful detainer case. As Article 19 of the Civil Code requires,"[e]very person must, in the exercise of his rights and in the performance of his duties, actwith justice, give everyone his due, and observe honesty and good faith." A violation of such

principle constitutes an abuse of rights, a tortuous conduct. We expounded in SeaCommercial Company, Inc. v. Court of Appeals24 that:

The principle of abuse of rights stated in the above article, departs from the classical theorythat "he who uses a right injures no one." The modern tendency is to depart from theclassical and traditional theory, and to grant indemnity for damages in cases where there isan abuse of rights, even when the act is not illicit.


















Article 19 was intended to expand the concept of torts by granting adequate legal remedyfor the untold number of moral wrongs which is impossible for human foresight to providespecifically in statutory law. If mere fault or negligence in one's acts can make him liable fordamages for injury caused thereby, with more reason should abuse or bad faith make himliable. The absence of good faith is essential to abuse of right. Good faith is an honestintention to abstain from taking any unconscientious advantage of another, even throughthe forms or technicalities of the law, together with an absence of all information or belief offact which would render the transaction unconscientious. In business relations, it meansgood faith as understood by men of affairs.

While Article 19 may have been intended as a mere declaration of principle, the "cardinallaw on human conduct" expressed in said article has given rise to certain rules, e.g . thatwhere a person exercises his rights but does so arbitrarily or unjustly or performs his dutiesin a manner that is not in keeping with honesty and good faith, he opens himself to liability.The elements of an abuse of rights under Article 19 are: (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 .25

Petitioners are also expected to respect respondent's "dignity, personality, privacy andpeace of mind" under Article 26 of the Civil Code, which provides:

ART. 26. Every person shall respect the dignity, personality, privacy and peace of mind ofhis neighbors and other persons. The following and similar acts, though they may notconstitute a criminal offense, shall produce a cause of action for damages, prevention andother relief:

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

(2) Meddling with or disturbing the private life or family relations of another;

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

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

Thus, Article 2219(10) of the Civil Code allows the recovery of moral damages for acts andactions referred to in Article 26, among other provisions, of the Civil Code.

In Concepcion v. Court of Appeals,26 we explained that:

The philosophy behind Art. 26 underscores the necessity for its inclusion in our civil law.The Code Commission stressed in no uncertain terms that the human personality must beexalted. The sacredness of human personality is a concomitant consideration of every planfor human amelioration. The touchstone of every system of law, of the culture andcivilization of every country, is how far it dignifies man. If the statutes insufficiently protect aperson from being unjustly humiliated, in short, if human personality is not exalted - then thelaws are indeed defective. Thus, under this article, the rights of persons are amplyprotected, and damages are provided for violations of a person's dignity, personality,privacy and peace of mind.

It is petitioner's position that the act imputed to him does not constitute any of thoseenumerated in Arts. 26 and 2219. In this respect, the law is clear. The violations mentioned

in the codal provisions are not exclusive but are merely examples and do not preclude othersimilar or analogous acts. Damages therefore are allowable for actions against a person'sdignity, such as profane, insulting, humiliating, scandalous or abusive language. Under Art.2217 of the Civil Code, moral damages which include physical suffering, mental anguish,fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, socialhumiliation, and similar injury, although incapable of pecuniary computation, may berecovered if they are the proximate result of the defendant's wrongful act or omission.27















And third, respondent alleged that the distribution by petitioners to Horseshoe Villagehomeowners of copies of the MeTC decision in the unlawful detainer case, which wasadverse to respondent and still on appeal before the RTC-Branch 88, had no apparentlawful or just purpose except to humiliate respondent or assault his character. As a result,respondent suffered damages - becoming the talk of the town and being deprived of hispolitical career.1avvphi1

Petitioners reason that respondent has no cause of action against them since the MeTCdecision in the unlawful detainer case was part of public records.

It is already settled that the public has a right to see and copy judicial records anddocuments.28 However, this is not a case of the public seeking and being denied access to

judicial records and documents. The controversy is rooted in the dissemination bypetitioners of the MeTC judgment against respondent to Horseshoe Village homeowners,who were not involved at all in the unlawful detainer case, thus, purportedly affectingnegatively respondent's good name and reputation among said homeowners. The unlawfuldetainer case was a private dispute between petitioners and respondent, and the MeTC

decision against respondent was then still pending appeal before the RTC-Branch 88,rendering suspect petitioners' intentions for distributing copies of said MeTC decision tonon-parties in the case. While petitioners were free to copy and distribute such copies of theMeTC judgment to the public, the question is whether they did so with the intent ofhumiliating respondent and destroying the latter's good name and reputation in thecommunity.

Nevertheless, we further declare that the Court of Appeals erred in already awarding moraland exemplary damages in respondent's favor when the parties have not yet had thechance to present any evidence before the RTC-Branch 227. In civil cases, he who allegesa fact has the burden of proving it by a preponderance of evidence. It is incumbent upon theparty claiming affirmative relief from the court to convincingly prove its claim. Bareallegations, unsubstantiated by evidence are not equivalent to proof under our Rules. Inshort, mere allegations are not evidence.29

At this point, the finding of the Court of Appeals of bad faith and malice on the part ofpetitioners has no factual basis. Good faith is presumed and he who alleges bad faith hasthe duty to prove the same. Good faith refers to the state of the mind which is manifested bythe acts of the individual concerned. It consists of the intention to abstain from taking anunconscionable and unscrupulous advantage of another. Bad faith, on the other hand, doesnot simply connote bad judgment to simple negligence. It imports a dishonest purpose orsome moral obliquity and conscious doing of a wrong, a breach of known duty due to somemotive or interest or ill will that partakes of the nature of fraud. Malice connotes ill will or

spite and speaks not in response to duty. It implies an intention to do ulterior andunjustifiable harm.30

We cannot subscribe to respondent's argument that there is no more need for thepresentation of evidence by the parties since petitioners, in moving for the dismissal ofrespondent's complaint for damages, hypothetically admitted respondent's allegations. Thehypothetical admission of respondent's allegations in the complaint only goes so far asdetermining whether said complaint should be dismissed on the ground of failure to state acause of action. A finding that the complaint sufficiently states a cause of action does notnecessarily mean that the complaint is meritorious; it shall only result in the reinstatement ofthe complaint and the hearing of the case for presentation of evidence by the parties.

WHEREFORE, in view of all the foregoing, the petition is PARTIALLY GRANTED. TheDecision dated January 31, 2006 of the Court of Appeals in CA-G.R. CV No. 82610 is

AFFIRMED WITH MODIFICATIONS. The award of moral and exemplary damages made bythe Court of Appeals in favor of respondent Ismael Veloso III is DELETED. The complaint ofrespondent Ismael Veloso III in Civil Case No. Q-02-48341 is hereby REINSTATED beforeBranch 227 of the Regional Trial Court of Quezon City only in so far as the first cause of















action is concerned. The said court is DIRECTED to hear and dispose of the case withdispatch.

SO ORDERED.



G.R. No. 171365 October 6, 2010

ERMELINDA C. MANALOTO, AURORA J. CIFRA, FLORDELIZA J. ARCILLA,LOURDES J. CATALAN, ETHELINDA J. HOLT, BIENVENIDO R. JONGCO, ARTEMIO R.JONGCO, JR. and JOEL JONGCO, Petitioners,vs.ISMAEL VELOSO III, Respondent.

D E C I S I O N

Before Us is a Petition for Review on Certiorari of the Decision1 dated January 31, 2006 ofthe Court Appeals in CA-G.R. CV No. 82610, which affirmed with modification theResolution2 dated September 2, 2003 of Branch 227 of the Regional Trial Court (RTC-Branch 227) of Quezon City in Civil Case No. Q-02-48341.

We partly reproduce below the facts of the case as culled by the Court of Appeals from therecords:

This case is an off-shoot of an unlawful detainer case filed by [herein petitioners] ErmelindaC. Manaloto, Aurora J. Cifra, Flordeliza J. Arcilla, Lourdes J. Catalan, Ethelinda J. Holt,Bienvenido R. Jongco, Artemio R. Jongco, Jr. and Joel Jongco against [herein respondent].In said complaint for unlawful detainer, it was alleged that they are the lessors of aresidential house located at No. 42 Big Horseshoe Drive, Horseshoe Village, Quezon City[subject property] which was leased to [respondent] at a monthly rental of P17,000.00. The

action was instituted on the ground of [respondent's] failure to pay rentals from May 23,1997 to December 22, 1998 despite repeated demands. [Respondent] denied the non-payment of rentals and alleged that he made an advance payment ofP825,000.00 when he

paid for the repairs done on the leased property.

After trial, the Metropolitan Trial Court (MeTC) decided in favor of [petitioners] by ordering[respondent] to (a) vacate the premises at No. 42 Big Horseshoe Drive, Horseshoe Village,Quezon City; (b) pay [petitioners] the sum of P306,000.00 corresponding to the rentals due

from May 23, 1997 to November 22, 1998, and the sum ofP17,000.00 a month thereafter

until [respondent] vacates the premises; and (c) pay [petitioners] the sum ofP5,000.00 as

attorney's fees.

On appeal to the Regional Trial Court (RTC) [Branch 88, Quezon City], the MeTC decisionwas reversed. [Respondent] was ordered to pay arrearages from May 23, 1997 up to thedate of the decision but he was also given an option to choose between staying in theleased property or vacating the same, subject to the reimbursement by [petitioners] of one-

half of the value of the improvements which it found to be in the amount ofP120,000.00.

[Respondent] was also given the right to remove said improvements pursuant to Article1678 of the Civil Code, should [petitioners] refuse to pay P60,000.00.

When both parties moved for the reconsideration of the RTC decision, the RTC issued anOrder dated February 23, 2001 modifying its previous ruling by increasing the value of theimprovements from P120,000.00 toP800,000.00.

After successive appeals to the Court of Appeals and the Supreme Court, the decision ofthe RTC dated November 29, 2000 which reversed the decision of the MeTC, became finaland executory.3

Whilst respondent's appeal of the Metropolitan Trial Court (MeTC) judgment in the unlawfuldetainer case was pending before the RTC-Branch 88, respondent filed before the RTC-Branch 227 on November 26, 2002 a Complaint for Breach of Contract andDamages4 against the petitioners, docketed as Civil Case No. Q-02-48341. The saidcomplaint alleged two causes of action. The first cause of action was for damages becausethe respondent supposedly suffered embarrassment and humiliation when petitionersdistributed copies of the above-mentioned MeTC decision in the unlawful detainer case to

















the homeowners of Horseshoe Village while respondent's appeal was still pending beforethe Quezon City RTC-Branch 88. The second cause of action was for breach of contractsince petitioners, as lessors, failed to make continuing repairs on the subject property topreserve and keep it tenantable. Thus, respondent sought the following from the court aquo:

PRAYER

WHEREFORE, premises considered, it is respectfully prayed that after hearing the courtrender a decision against the [herein petitioners] and in favor of the [herein respondent] by -

1. Ordering [petitioners] to pay [respondent] the following amounts:

a) P1,500,000.00 as moral damages and consequential damages;

b) P500,000.00 as exemplary damages;

c) P425,000.00 representing the difference of the expenses of the improvements

of P825,000.00 andP400,000.00 pursuant to Art. 1678 of the Civil Code;

d) P594,000.00 representing interest for three (3) years from 1998 to 2000 on

the P825,000.00 advanced by the [respondent] at the rate of 24% per annum;

e) P250,000.00 as compensation for the [respondent's] labor and efforts in

overseeing and attending the needs of contractors the repair/renovation of theleased premises;

f) P250,000.00, plus 20% of all recoveries from [petitioners] and P2,500.00 per

hearing as attorney's fees;

g) Cost of suit.

[Respondent] further prays for such other reliefs and remedies which are just and equitableunder the premises.5

The petitioners filed an Omnibus Motion6 on February 18, 2003 praying for, among otherreliefs, the dismissal of respondent's complaint in Civil Case No. Q-02-48341. Petitionersargued that respondent had no cause of action against them because the MeTC decision inthe unlawful detainer case was a matter of public record and its disclosure to the publicviolated no law or any legal right of the respondent. Moreover, petitioners averred that therespondent's present Complaint for Breach of Contract and Damages was barred by prior

judgment since it was a mere replication of respondent's Answer with CompulsoryCounterclaim in the unlawful detainer case before the MeTC. The said unlawful detainercase was already judicially decided with finality.

On September 2, 2003, the RTC-Branch 227 issued a Resolution dismissing respondent'scomplaint in Civil Case No. Q-02-48341 for violating the rule against splitting of cause ofaction, lack of jurisdiction, and failure to disclose the pendency of a related case. The RTC-Branch 227 adjudged that Civil Case No. Q-02-48341 involved the same facts, parties, andcauses of action as those in the unlawful detainer case, and the MeTC had already properlytaken cognizance of the latter case.

Respondent received a copy of the RTC-Branch 227 decision in Civil Case No. Q-02-48341on September 26, 2003. He filed a Motion for Reconsideration7 of said judgment on October10, 2003, which RTC-Branch 227 denied in an Order 8 dated December 30, 2003.

Respondent received a copy of the RTC-Branch 227 order denying his Motion forReconsideration on February 20, 2004, and he filed his Notice of Appeal9 on March 1, 2004.





















However, the RTC-Branch 227, in an Order 10dated March 23, 2004, dismissed respondent'sappeal for being filed out of time.

Respondent received a copy of the RTC-Branch 27 order dismissing his appeal on April 30,2004 and he filed a Motion for Reconsideration11 of the same on May 3, 2004. The RTC-Branch 227, in another Order 12 dated May 31, 2004, granted respondent's latest motionbecause it was "convinced that it is but appropriate and fair to both parties that this matterof whether or not the Appeal was filed on time, be resolved by the appellate court ratherthan by this Court." The RTC-Branch 227 then ordered that the records of the case beforwarded as soon as possible to the Court of Appeals for further proceedings.

The Court of Appeals, in a Resolution13 dated February 8, 2005, resolved to give duecourse to respondent's appeal. Said appeal was docketed as CA-G.R. CV No. 82610.

On January 31, 2006, the Court of Appeals rendered its Decision in CA-G.R. CV No. 82610.The Court of Appeals fully agreed with the RTC-Branch 227 in dismissing respondent'ssecond cause of action (i.e., breach of contract) in Civil Case No. Q-02-48341. The

appellate court, however, held that RTC-Branch 227 should have proceeded with the trialon the merits of the first cause of action (i.e., damages) in Civil Case No. Q-02-48341,because "[a]lthough [herein respondent] may have stated the same factual antecedents thattranspired in the unlawful detainer case, such allegations were necessary to give anoverview of the facts leading to the institution of another case between the parties beforethe RTC acting in its original jurisdiction."14

The Court of Appeals then went on to find that petitioners were indeed liable to respondentfor damages:

No doubt, distributing the copies was primarily intended to embarrass [herein respondent] in

the community he mingled in. We are not unmindful of the fact that court decisions arepublic documents and the general public is allowed access thereto to make inquiriesthereon or to secure a copy thereof. Nevertheless, under the circumstances of this case,although court decisions are public documents, distribution of the same during thependency of an appeal was clearly intended to cause [respondent] some form ofharassment and/or humiliation so that [respondent] would be ostracized by his neighbors.The appeal may have delayed the attainment of finality of the determination of the rights ofthe parties and the execution in the unlawful detainer case but it did not justify [hereinpetitioners'] pre-emption of the outcome of the appeal. By distributing copies of the MeTCdecision, [petitioners] appeared to have assumed that the MeTC decision would simply beaffirmed and therefore they tried to cause the early ouster of [respondent] thinking that ahumiliated [respondent] would scurry out of the leased premises. Clearly, there was evident

bad faith intended to mock [respondent's] right to appeal which is a statutory remedy tocorrect errors which might have been committed by the lower court.

Thus, moral damages may be awarded since [petitioners] acted in bad faith. Bad faith doesnot simply connote bad judgment or negligence, it imports a dishonest purpose or somemoral obliquity and conscious doing of a wrong, a breach of known duty through somemotive or interest or ill will that partakes of the nature of fraud. However, an award of moraldamages would require certain conditions to be met, to wit: (1) first, there must be an injury,whether physical, mental or psychological, clearly sustained by the claimant; (2) second,there must be culpable act or omission factually established; (3) third, the wrongful act oromission of the defendant is the proximate cause of the injury sustained by the claimant;

and (4) fourth, the award of damages is predicated on any of the cases stated in Article2219 of the Civil Code.

But it must again be stressed that moral damages are emphatically not intended to enrich aplaintiff at the expense of the defendant. When awarded, moral damages must not bepalpably and scandalously excessive as to indicate that it was the result of passion,prejudice or corruption on the part of the trial court judge. For this reason, this Court findsan award of P30,000.00 moral damages sufficient under the circumstances.




















On the other hand, to warrant the award of exemplary damages, the wrongful act must beaccompanied by bad faith, and an award of damages would be allowed only if the guiltyparty acted in a wanton, fraudulent, reckless or malevolent manner. Accordingly, exemplarydamages in the amount of P10,000.00 is appropriate.15

In the end, the Court of Appeals decreed:

WHEREFORE, the decision of the Regional Trial Court is AFFIRMED with theMODIFICATION that the case is dismissed only as to the second cause of action. As to thefirst cause of action, [herein petitioners] are ordered to pay [herein respondent] moraldamages of P30,000.00 and exemplary damages of P10,000.00.16

Hence, the instant Petition for Review.

Petitioners assert that respondent's appeal of the RTC-Branch 227 Resolution datedSeptember 2, 2003, which dismissed the latter's complaint in Civil Case No. Q-02-48341,was filed out of time. Respondent received a copy of the said resolution on September 26,

2003, and he only had 15 days from such date to file his appeal, or until October 11, 2003.Respondent, instead, filed a Motion for Reconsideration of the resolution on October 10,2003, which left him with only one more day to file his appeal. The RTC-Branch 227subsequently denied respondent's Motion for Reconsideration in an Order dated December30, 2003, which the respondent received on February 20, 2004. Respondent only had untilthe following day, February 21, 2004, to file the appeal. However, respondent filed hisNotice of Appeal only on March 1, 2004. Hence, petitioners conclude that the dismissal ofrespondent's complaint in Civil Case No. Q-02-48341 already attained finality.

Petitioners argue in the alternative that the award of damages in respondent's favor has nofactual and legal bases. They contend that the Court of Appeals erred in awarding moral

and exemplary damages to respondent based on the bare and unproven allegations in thelatter's complaint and without the benefit of any hearing or trial. While the appellate courtdeclared that RTC-Branch 227 should have proceeded with the trial on the merits involvingthe action for damages, it surprisingly went ahead and ruled on petitioners' liability for saiddamages even without trial. Even assuming for the sake of argument that respondent'sallegations in his complaint are true, he still has no cause of action for damages againstpetitioners, for the disclosure of a court decision, which is part of public record, did notcause any legal and compensable injury to respondent.

Respondent, on the other hand, maintains that his appeal of the September 2, 2003Resolution of the RTC-Branch 227 to the Court of Appeals was timely filed and that thesame was aptly given due course. In addition, respondent asserts that the appellate court

was correct in holding petitioners liable for damages even without any hearing or trial sincepetitioners, in filing their omnibus motion praying for the dismissal of respondent's complainton the ground of "no cause of action," were deemed to have hypothetically admitted as truethe allegations in said complaint.

The petition is partly meritorious.

We note, at the outset, that the propriety of the dismissal by the RTC-Branch 227 ofrespondent's second cause of action against petitioners (e.g., for breach of contract) was nolonger disputed by the parties. Thus, the present appeal pertains only to respondent's firstcause of action (e.g., for damages), and in connection therewith, we are called upon to

resolve the following issues: (1) whether respondent timely filed his appeal of the Resolutiondated September 2, 2003 of the RTC-Branch 227 before the Court of Appeals; and (2)whether respondent is entitled to the award of moral and exemplary damages.

We answer the first issue on the timeliness of respondent's appeal affirmatively.

Jurisprudence has settled the "fresh period rule," according to which, an ordinary appealfrom the RTC to the Court of Appeals, under Section 3 of Rule 41 of the Rules of Court,











shall be taken within fifteen (15) days either from receipt of the original judgment of the trialcourt or from receipt of the final order of the trial court dismissing or denying the motion fornew trial or motion for reconsideration. In Sumiran v. Damaso,17 we presented a survey ofthe cases applying the fresh period rule:

As early as 2005, the Court categorically declared in Neypes v. Court of Appeals that byvirtue of the power of the Supreme Court to amend, repeal and create new procedural rulesin all courts, the Court is allowing a fresh period of 15 days within which to file a notice ofappeal in the RTC, counted from receipt of the order dismissing or denying a motion for newtrial or motion for reconsideration. This would standardize the appeal periods provided inthe Rules and do away with the confusion as to when the 15-day appeal period should becounted. Thus, the Court stated:

To recapitulate, a party-litigant may either file his notice of appeal within 15 days fromreceipt of the Regional Trial Court's decision or file it within 15 days from receipt of the order(the "final order") denying his motion for new trial or motion for reconsideration. Obviously,the new 15-day period may be availed of only if either motion is filed; otherwise, the

decision becomes final and executory after the lapse of the original appeal period providedin Rule 41, Section 3.

The foregoing ruling of the Court was reiterated in Makati Insurance Co., Inc. v. Reyes, towit:

Propitious to petitioner is Neypes v. Court of Appeals, promulgated on 14 September 2005while the present Petition was already pending before us. x x x.

x x x x

With the advent of the "fresh period rule" parties who availed themselves of the remedy ofmotion for reconsideration are now allowed to file a notice of appeal within fifteen days fromthe denial of that motion.

The "fresh period rule" is not inconsistent with Rule 41, Section 3 of the Revised Rules ofCourt which states that the appeal shall be taken "within fifteen (15) days from notice of

judgment or final order appealed from." The use of the disjunctive word "or" signifiesdisassociation and independence of one thing from another. It should, as a rule, beconstrued in the sense which it ordinarily implies. Hence, the use of "or" in the aboveprovision supposes that the notice of appeal may be filed within 15 days from the notice of

judgment or within 15 days from notice of the "final order," x x x.

x x x x

The "fresh period rule" finally eradicates the confusion as to when the 15-day appeal periodshould be counted - from receipt of notice of judgment or from receipt of notice of "finalorder" appealed from.

Taking our bearings from Neypes, in Sumaway v. Urban Bank, Inc., we set aside the denialof a notice of appeal which was purportedly filed five days late. With the fresh period rule,the 15-day period within which to file the notice of appeal was counted from notice of thedenial of the therein petitioner's motion for reconsideration.

We followed suit in Elbiña v. Ceniza, wherein we applied the principle granting a freshperiod of 15 days within which to file the notice of appeal, counted from receipt of the orderdismissing a motion for new trial or motion for reconsideration or any final order orresolution.

Thereafter, in First Aqua Sugar Traders, Inc. v. Bank of the Philippine Islands, we held thata party-litigant may now file his notice of appeal either within fifteen days from receipt of the







original decision or within fifteen days from the receipt of the order denying the motion forreconsideration.

In De los Santos v. Vda. de Mangubat, we applied the same principle of "fresh period rule,"expostulating that procedural law refers to the adjective law which prescribes rules andforms of procedure in order that courts may be able to administer justice. Procedural lawsdo not come within the legal conception of a retroactive law, or the general rule against theretroactive operation of statutes. The "fresh period rule" is irrefragably procedural,prescribing the manner in which the appropriate period for appeal is to be computed ordetermined and, therefore, can be made applicable to actions pending upon its effectivity,such as the present case, without danger of violating anyone else's rights.18 (Emphasessupplied.)

Also in Sumiran, we recognized the retroactive application of the fresh period rule to casespending and undetermined upon its effectivity:

The retroactivity of the Neypes rule in cases where the period for appeal had lapsed prior to

the date of promulgation of Neypes on September 14, 2005, was clearly explained by theCourt in Fil-Estate Properties, Inc. v. Homena-Valencia, stating thus:

The determinative issue is whether the "fresh period" rule announced in Neypes couldretroactively apply in cases where the period for appeal had lapsed prior to 14 September2005 when Neypes was promulgated. That question may be answered with the guidance ofthe general rule that procedural laws may be given retroactive effect to actions pending andundetermined at the time of their passage, there being no vested rights in the rules ofprocedure. Amendments to procedural rules are procedural or remedial in character as theydo not create new or remove vested rights, but only operate in furtherance of the remedy orconfirmation of rights already existing.19(Emphases supplied.)

In the case before us, respondent received a copy of the Resolution dated September 2,2003 of the RTC-Branch 227 dismissing his complaint in Civil Case No. Q-02-48341 onSeptember 26, 2003. Fourteen days thereafter, on October 10, 2003, respondent filed aMotion for Reconsideration of said resolution. The RTC-Branch 227 denied respondent'sMotion for Reconsideration in an Order dated December 30, 2003, which the respondentreceived on February 20, 2004. On March 1, 2004, just after nine days from receipt of theorder denying his Motion for Reconsideration, respondent already filed his Notice of Appeal.Clearly, under the fresh period rule, respondent was able to file his appeal well-within theprescriptive period of 15 days, and the Court of Appeals did not err in giving due course tosaid appeal in CA-G.R. CV No. 82610.

We likewise agree with the Court of Appeals that the RTC-Branch 227 should not havedismissed respondent's complaint for damages on the ground of failure to state a cause ofaction.

According to Rule 2, Section 2 of the Rules of Court, a cause of action is the act or omissionby which a party violates a right of another.

When the ground for dismissal is that the complaint states no cause of action, such fact canbe determined only from the facts alleged in the complaint and from no other, and the courtcannot consider other matters aliunde. The test, therefore, is whether, assuming theallegations of fact in the complaint to be true, a valid judgment could be rendered in

accordance with the prayer stated therein.

20

Respondent made the following allegations in support of his claim for damages againstpetitioners:

FIRST CAUSE OF ACTION















28. After the promulgation of the Metropolitan Trial Court of its Decision dated August 3,1999, ordering the [herein respondent] and all person claiming rights under him to -

(a) Vacate the leased premises;

(b) pay the [herein petitioners] the sum of P306,000.00 as unpaid rentals from May

23, 1997 to November 22, 1998; and

(c) pay the sum of P5,000.00 as attorneys fees;

But while said Decision was still pending appeal with the Regional Trial Court, the[petitioners], through [petitioner] Manaloto, already distributed copies of said Decision tosome of the homeowners of Horseshoe Village, who personally know the [respondent]. Thisact is a direct assault or character assassination on the part of the [respondent] because asstated in the said decision, [respondent] has been staying in the premises but did not orrefused to pay his monthly rentals for a long period of time when in truth and in fact wasuntrue.

29. That from the time the said decision was distributed to said members homeowners, the[respondent] became the subject of conversation or talk of the town and by virtue of which[respondent's] good name within the community or society where he belongs was greatlydamaged; his reputation was besmirched; [respondent] suffered sleepless night and seriousanxiety. [Respondent], who is the grandson of the late Senator Jose Veloso andCongressman Ismael Veloso, was deprived of political career and to start with was to run ascandidate for Barangay Chairman within their area which was being offered to him by thehomeowners but this offer has started to fade and ultimately totally vanished after thedistribution of said Decision. Damages to his good names and reputations and otherdamages which he suffered as a consequence thereof, may be reasonably compensated

for at least P1,500,000.00 as moral and consequential damages.

30. In order to deter [petitioners] and others from doing as abovementioned, [petitioners]should likewise be assessed exemplary damages in the amount of P500,000.00.21

A cause of action (for damages) exists if the following elements are present: (1) a right infavor of the plaintiff by whatever means and under whatever law it arises or is created; (2)an obligation on the part of the named defendant to respect or not to violate such right; and(3) an act or omission on the part of such defendant violative of the right of the plaintiff orconstituting a breach of the obligation of defendant to the plaintiff for which the latter maymaintain an action for recovery of damages.22 We find that all three elements exist in thecase at bar. Respondent may not have specifically identified each element, but it may be

sufficiently determined from the allegations in his complaint.

First, respondent filed the complaint to protect his good character, name, and reputation.Every man has a right to build, keep, and be favored with a good name. This right isprotected by law with the recognition of slander and libel as actionable wrongs, whether ascriminal offenses or tortuous conduct.23

Second, petitioners are obliged to respect respondent's good name even though they areopposing parties in the unlawful detainer case. As Article 19 of the Civil Code requires,"[e]very person must, in the exercise of his rights and in the performance of his duties, actwith justice, give everyone his due, and observe honesty and good faith." A violation of such

principle constitutes an abuse of rights, a tortuous conduct. We expounded in SeaCommercial Company, Inc. v. Court of Appeals24 that:

The principle of abuse of rights stated in the above article, departs from the classical theorythat "he who uses a right injures no one." The modern tendency is to depart from theclassical and traditional theory, and to grant indemnity for damages in cases where there isan abuse of rights, even when the act is not illicit.


















Article 19 was intended to expand the concept of torts by granting adequate legal remedyfor the untold number of moral wrongs which is impossible for human foresight to providespecifically in statutory law. If mere fault or negligence in one's acts can make him liable fordamages for injury caused thereby, with more reason should abuse or bad faith make himliable. The absence of good faith is essential to abuse of right. Good faith is an honestintention to abstain from taking any unconscientious advantage of another, even throughthe forms or technicalities of the law, together with an absence of all information or belief offact which would render the transaction unconscientious. In business relations, it meansgood faith as understood by men of affairs.

While Article 19 may have been intended as a mere declaration of principle, the "cardinallaw on human conduct" expressed in said article has given rise to certain rules, e.g . thatwhere a person exercises his rights but does so arbitrarily or unjustly or performs his dutiesin a manner that is not in keeping with honesty and good faith, he opens himself to liability.The elements of an abuse of rights under Article 19 are: (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 .25

Petitioners are also expected to respect respondent's "dignity, personality, privacy andpeace of mind" under Article 26 of the Civil Code, which provides:

ART. 26. Every person shall respect the dignity, personality, privacy and peace of mind ofhis neighbors and other persons. The following and similar acts, though they may notconstitute a criminal offense, shall produce a cause of action for damages, prevention andother relief:

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

(2) Meddling with or disturbing the private life or family relations of another;

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

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

Thus, Article 2219(10) of the Civil Code allows the recovery of moral damages for acts andactions referred to in Article 26, among other provisions, of the Civil Code.

In Concepcion v. Court of Appeals,26 we explained that:

The philosophy behind Art. 26 underscores the necessity for its inclusion in our civil law.The Code Commission stressed in no uncertain terms that the human personality must beexalted. The sacredness of human personality is a concomitant consideration of every planfor human amelioration. The touchstone of every system of law, of the culture andcivilization of every country, is how far it dignifies man. If the statutes insufficiently protect aperson from being unjustly humiliated, in short, if human personality is not exalted - then thelaws are indeed defective. Thus, under this article, the rights of persons are amplyprotected, and damages are provided for violations of a person's dignity, personality,privacy and peace of mind.

It is petitioner's position that the act imputed to him does not constitute any of thoseenumerated in Arts. 26 and 2219. In this respect, the law is clear. The violations mentioned

in the codal provisions are not exclusive but are merely examples and do not preclude othersimilar or analogous acts. Damages therefore are allowable for actions against a person'sdignity, such as profane, insulting, humiliating, scandalous or abusive language. Under Art.2217 of the Civil Code, moral damages which include physical suffering, mental anguish,fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, socialhumiliation, and similar injury, although incapable of pecuniary computation, may berecovered if they are the proximate result of the defendant's wrongful act or omission.27















And third, respondent alleged that the distribution by petitioners to Horseshoe Villagehomeowners of copies of the MeTC decision in the unlawful detainer case, which wasadverse to respondent and still on appeal before the RTC-Branch 88, had no apparentlawful or just purpose except to humiliate respondent or assault his character. As a result,respondent suffered damages - becoming the talk of the town and being deprived of hispolitical career.1avvphi1

Petitioners reason that respondent has no cause of action against them since the MeTCdecision in the unlawful detainer case was part of public records.

It is already settled that the public has a right to see and copy judicial records anddocuments.28 However, this is not a case of the public seeking and being denied access to

judicial records and documents. The controversy is rooted in the dissemination bypetitioners of the MeTC judgment against respondent to Horseshoe Village homeowners,who were not involved at all in the unlawful detainer case, thus, purportedly affectingnegatively respondent's good name and reputation among said homeowners. The unlawfuldetainer case was a private dispute between petitioners and respondent, and the MeTC

decision against respondent was then still pending appeal before the RTC-Branch 88,rendering suspect petitioners' intentions for distributing copies of said MeTC decision tonon-parties in the case. While petitioners were free to copy and distribute such copies of theMeTC judgment to the public, the question is whether they did so with the intent ofhumiliating respondent and destroying the latter's good name and reputation in thecommunity.

Nevertheless, we further declare that the Court of Appeals erred in already awarding moraland exemplary damages in respondent's favor when the parties have not yet had thechance to present any evidence before the RTC-Branch 227. In civil cases, he who allegesa fact has the burden of proving it by a preponderance of evidence. It is incumbent upon theparty claiming affirmative relief from the court to convincingly prove its claim. Bareallegations, unsubstantiated by evidence are not equivalent to proof under our Rules. Inshort, mere allegations are not evidence.29

At this point, the finding of the Court of Appeals of bad faith and malice on the part ofpetitioners has no factual basis. Good faith is presumed and he who alleges bad faith hasthe duty to prove the same. Good faith refers to the state of the mind which is manifested bythe acts of the individual concerned. It consists of the intention to abstain from taking anunconscionable and unscrupulous advantage of another. Bad faith, on the other hand, doesnot simply connote bad judgment to simple negligence. It imports a dishonest purpose orsome moral obliquity and conscious doing of a wrong, a breach of known duty due to somemotive or interest or ill will that partakes of the nature of fraud. Malice connotes ill will or

spite and speaks not in response to duty. It implies an intention to do ulterior andunjustifiable harm.30

We cannot subscribe to respondent's argument that there is no more need for thepresentation of evidence by the parties since petitioners, in moving for the dismissal ofrespondent's complaint for damages, hypothetically admitted respondent's allegations. Thehypothetical admission of respondent's allegations in the complaint only goes so far asdetermining whether said complaint should be dismissed on the ground of failure to state acause of action. A finding that the complaint sufficiently states a cause of action does notnecessarily mean that the complaint is meritorious; it shall only result in the reinstatement ofthe complaint and the hearing of the case for presentation of evidence by the parties.

WHEREFORE, in view of all the foregoing, the petition is PARTIALLY GRANTED. TheDecision dated January 31, 2006 of the Court of Appeals in CA-G.R. CV No. 82610 is

AFFIRMED WITH MODIFICATIONS. The award of moral and exemplary damages made bythe Court of Appeals in favor of respondent Ismael Veloso III is DELETED. The complaint ofrespondent Ismael Veloso III in Civil Case No. Q-02-48341 is hereby REINSTATED beforeBranch 227 of the Regional Trial Court of Quezon City only in so far as the first cause of















action is concerned. The said court is DIRECTED to hear and dispose of the case withdispatch.

SO ORDERED.

G.R. No. 132344 February 17, 2000

UNIVERSITY OF THE EAST, petitioner,vs.ROMEO A. JADER, respondent.

YNARES-SANTIAGO, J.:

May an educational institution be held liable for damages for misleading a student intobelieving that the latter had satisfied all the requirements for graduation when such is notthe case? This is the issue in the instant petition for review premised on the followingundisputed facts as summarized by the trial court and adopted by the Court of Appeals

(CA),1 to wit:

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

4", also Exhibits "2-L", "2-N").1âwphi1.nêt

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

JADER ROMEO A.

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

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

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

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



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

He thereafter prepared himself for the bar examination. He took a leave of absencewithout pay from his job from April 20, 1988 to September 30, 1988 (Exhibit "G") andenrolled at the pre-bar review class in Far Eastern University. (Exhibits "F" to "F-2").Having learned of the deficiency he dropped his review class and was not able totake the bar examination.2

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

In its answer with counterclaim, petitioner denied liability arguing mainly that it never led

respondent to believe that he completed the requirements for a Bachelor of Laws degreewhen his name was included in the tentative list of graduating students. After trial, the lowercourt rendered judgment as follows:

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

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

SO ORDERED.3

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

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

SO ORDERED.4

Upon the denial of its motion for reconsideration, petitioner UE elevated the case to thisCourt on a petition for review under Rule 45 of the Rules of Court, arguing that it has noliability to respondent Romeo A. Jader, considering that the proximate and immediate causeof the alleged damages incurred by the latter arose out of his own negligence in notverifying from the professor concerned the result of his removal exam.

The petition lacks merit.

When a student is enrolled in any educational or learning institution, a contract of education

is entered into between said institution and the student. The professors, teachers orinstructors hired by the school are considered merely as agents and administrators taskedto perform the school's commitment under the contract. Since the contracting parties arethe school and the student, the latter is not duty-bound to deal with the former's agents,such as the professors with respect to the status or result of his grades, although nothingprevents either professors or students from sharing with each other such information. TheCourt takes judicial notice of the traditional practice in educational institutions wherein theprofessor directly furnishes his/her students their grades. It is the contractual obligation of



the school to timely inform and furnish sufficient notice and information to each and everystudent as to whether he or she had already complied with all the requirements for theconferment of a degree or whether they would be included among those who will graduate.

Although commencement exercises are but a formal ceremony, it nonetheless is not anordinary occasion, since such ceremony is the educational institution's way of announcingto the whole world that the students included in the list of those who will be conferred adegree during the baccalaureate ceremony have satisfied all the requirements for suchdegree. Prior or subsequent to the ceremony, the school has the obligation to promptlyinform the student of any problem involving the latter's grades and performance and alsomost importantly, of the procedures for remedying the same.

Petitioner, in belatedly informing respondent of the result of the removal examination,particularly at a time when he had already commenced preparing for the bar exams, cannotbe said to have acted in good faith. Absence of good faith must be sufficiently establishedfor a successful prosecution by the aggrieved party in a suit for abuse of right under Article19 of the Civil Code. Good faith connotes an honest intention to abstain from taking undueadvantage of another, even though the forms and technicalities of the law, together with the

absence of all information or belief of facts, would render the transactionunconscientious.5 It is the school that has access to those information and it is only theschool that can compel its professors to act and comply with its rules, regulations andpolicies with respect to the computation and the prompt submission of grades. Students donot exercise control, much less influence, over the way an educational institution should runits affairs, particularly in disciplining its professors and teachers and ensuring theircompliance with the school's rules and orders. Being the party that hired them, it is theschool that exercises general supervision and exclusive control over the professors withrespect to the submission of reports involving the students' standing. Exclusive controlmeans that no other person or entity had any control over the instrumentality which causedthe damage or injury.6

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

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

which states:

Art. 19. Every person must, in the exercise of his rights and in the performance of hisduties, 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 toanother, shall indemnify the latter for the same.

Art. 19 was intended to expand the concept of torts by granting adequate legal remedy forthe untold number of moral wrongs which is impossible for human foresight to providespecifically in statutory law.8 In civilized society, men must be able to assume that others

will do them no intended injury — that others will commit no internal aggressions uponthem; that their fellowmen, when they act affirmatively will do so with due care which theordinary understanding and moral sense of the community exacts and that those with whomthey deal in the general course of society will act in good faith. The ultimate thing in thetheory of liability is justifiable reliance under conditions of civilized society.9 Schools andprofessors cannot just take students for granted and be indifferent to them, for without thelatter, the former are useless.



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

It is apparent from the testimony of Dean Tiongson that defendant-appellee

University had been informed during the deliberation that the professor in PracticeCourt I gave plaintiff-appellant a failing grade. Yet, defendant-appellee still did notinform plaintiff-appellant of his failure to complete the requirements for the degreenor did they remove his name from the tentative list of candidates for graduation.Worse, defendant-appellee university, despite the knowledge that plaintiff-appellantfailed in Practice Court I, again included plaintiff-appellant's name in the "tentativelist of candidates for graduation which was prepared after the deliberation and whichbecame the basis for the commencement rites program. Dean Tiongson reasons outthat plaintiff-appellant's name was allowed to remain in the tentative list ofcandidates for graduation in the hope that the latter would still be able to remedy thesituation in the remaining few days before graduation day. Dean Tiongson, however,did not explain how plaintiff appellant Jader could have done something to completehis deficiency if defendant-appellee university did not exert any effort to informplaintiff-appellant of his failing grade in Practice Court I.12

Petitioner cannot pass on its blame to the professors to justify its own negligence that led tothe delayed relay of information to respondent. When one of two innocent parties mustsuffer, he through whose agency the loss occurred must bear it.13 The modern tendency isto grant indemnity for damages in cases where there is abuse of right, even when the act isnot illicit.14 If mere fault or negligence in one's acts can make him liable for damages forinjury caused thereby, with more reason should abuse or bad faith make him liable. Aperson should be protected only when he acts in the legitimate exercise of his right, that is,when he acts with prudence and in good faith, but not when he acts with negligence or

abuse.15

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



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

SO ORDERED.



G.R. No. 146322 December 6, 2006

ERNESTO RAMAS UYPITCHING and RAMAS UYPITCHING SONS, INC., petitioners,vs.ERNESTO QUIAMCO, respondent.

D E C I S I O N

CORONA, J .:

Honeste vivere, non alterum laedere et jus suum cuique tribuere. To live virtuously, not toinjure others and to give everyone his due. These supreme norms of justice are theunderlying principles of law and order in society. We reaffirm them in this petition for reviewon certiorari assailing the July 26, 2000 decision1 and October 18, 2000 resolution of the

Court of Appeals (CA) in CA-G.R. CV No. 47571.

In 1982, respondent Ernesto C. Quiamco was approached by Juan Davalan,2 JosefinoGabutero and Raul Generoso to amicably settle the civil aspect of a criminal case forrobber y3 filed by Quiamco against them. They surrendered to him a red Honda XL-100motorcycle and a photocopy of its certificate of registration. Respondent asked for theoriginal certificate of registration but the three accused never came to see him again.Meanwhile, the motorcycle was parked in an open space inside respondent’s businessestablishment, Avesco-AVNE Enterprises, where it was visible and accessible to the public.

It turned out that, in October 1981, the motorcycle had been sold on installment basis to

Gabutero by petitioner Ramas Uypitching Sons, Inc., a family-owned corporation managedby petitioner Atty. Ernesto Ramas Uypitching. To secure its payment, the motorcycle wasmortgaged to petitioner corporation.4

When Gabutero could no longer pay the installments, Davalan assumed the obligation andcontinued the payments. In September 1982, however, Davalan stopped paying theremaining installments and told petitioner corporation’s collector, Wilfredo Veraño, that themotorcycle had allegedly been "taken by respondent’s men."

Nine years later, on January 26, 1991, petitioner Uypitching, accompanied bypolicemen,5 went to Avesco-AVNE Enterprises to recover the motorcycle. The leader of thepolice team, P/Lt. Arturo Vendiola, talked to the clerk in charge and asked for respondent.

While P/Lt. Vendiola and the clerk were talking, petitioner Uypitching paced back and forthinside the establishment uttering "Quiamco is a thief of a motorcycle."

On learning that respondent was not in Avesco-AVNE Enterprises, the policemen left tolook for respondent in his residence while petitioner Uypitching stayed in the establishmentto take photographs of the motorcycle. Unable to find respondent, the policemen went backto Avesco- AVNE Enterprises and, on petitioner Uypitching’s instruction and over the clerk’sobjection, took the motorcycle.

On February 18, 1991, petitioner Uypitching filed a criminal complaint for qualified theftand/or violation of the Anti-Fencing Law6 against respondent in the Office of the City

Prosecutor of Dumaguete City.7

Respondent moved for dismissal because the complaint didnot charge an offense as he had neither stolen nor bought the motorcycle. The Office of theCity Prosecutor dismissed the complaint8 and denied petitioner Uypitching’s subsequentmotion for reconsideration.

Respondent filed an action for damages against petitioners in the RTC of Dumaguete City,Negros Oriental, Branch 37.9 He sought to hold the petitioners liable for the following: (1)unlawful taking of the motorcycle; (2) utterance of a defamatory remark (that respondent

http://www.lawphil.net/judjuris/juri2006/dec2006/gr_146322_2006.html#fnt1




































was a thief) and (3) precipitate filing of a baseless and malicious complaint. These actshumiliated and embarrassed the respondent and injured his reputation and integrity.

On July 30, 1994, the trial court rendered a decision10 finding that petitioner Uypitching wasmotivated with malice and ill will when he called respondent a thief, took the motorcycle inan abusive manner and filed a baseless complaint for qualified theft and/or violation of the

Anti-Fencing Law. Petitioners’ acts were found to be contrary to Articles 1911 and 2012 of theCivil Code. Hence, the trial court held petitioners liable to respondent for P500,000 moral

damages, P200,000 exemplary damages and P50,000 attorney’s fees plus costs.

Petitioners appealed the RTC decision but the CA affirmed the trial court’s decision withmodification, reducing the award of moral and exemplary damages to P300,000

and P100,000, respectively.13 Petitioners sought reconsideration but it was denied. Thus,

this petition.

In their petition and memorandum, petitioners submit that the sole (allegedly) issue to beresolved here is whether the filing of a complaint for qualified theft and/or violation of the

Anti-Fencing Law in the Office of the City Prosecutor warranted the award of moraldamages, exemplary damages, attorney’s fees and costs in favor of respondent.

Petitioners’ suggestion is misleading. They were held liable for damages not only forinstituting a groundless complaint against respondent but also for making a slanderousremark and for taking the motorcycle from respondent’s establishment in an abusivemanner.

Correctness of the Findings of the RTC and CA

As they never questioned the findings of the RTC and CA that malice and ill will attended

not only the public imputation of a crime to respondent

14

but also the taking of themotorcycle, petitioners were deemed to have accepted the correctness of such findings.This alone was sufficient to hold petitioners liable for damages to respondent.

Nevertheless, to address petitioners’ concern, we also find that the trial and appellate courtscorrectly ruled that the filing of the complaint was tainted with malice and bad faith.Petitioners themselves in fact described their action as a "precipitate act."15 Petitioners werebent on portraying respondent as a thief. In this connection, we quote with approval thefollowing findings of the RTC, as adopted by the CA:

x x x There was malice or ill-will [in filing the complaint before the City Prosecutor’sOffice] because Atty. Ernesto Ramas Uypitching knew or ought to have known as he

is a lawyer, that there was no probable cause at all for filing a criminal complaint forqualified theft and fencing activity against [respondent]. Atty. Uypitching had nopersonal knowledge that [respondent] stole the motorcycle in question. He wasmerely told by his bill collector ([i.e.] the bill collector of Ramas Uypitching Sons,Inc.)[,] Wilfredo Veraño[,] that Juan Dabalan will [no longer] pay the remaininginstallment(s) for the motorcycle because the motorcycle was taken by the men of[respondent]. It must be noted that the term used by Wilfredo Veraño in informing

Atty. Ernesto Ramas Uypitching of the refusal of Juan Dabalan to pay for theremaining installment was [‘]taken[’], not [‘]unlawfully taken[’] or ‘stolen.’ Yet, despitethe double hearsay, Atty. Ernesto Ramas Uypitching not only executed the[complaint-affidavit] wherein he named [respondent] as ‘the suspect’ of the stolen

motorcycle but also charged [respondent] of ‘qualified theft and fencing activity’before the City [Prosecutor’s] Office of Dumaguete. The absence of probable causenecessarily signifies the presence of malice. What is deplorable in all these is thatJuan Dabalan, the owner of the motorcycle, did not accuse [respondent] or thelatter’s men of stealing the motorcycle[,] much less bother[ed] to file a case forqualified theft before the authorities. That Atty. Uypitching’s act in charging[respondent] with qualified theft and fencing activity is tainted with malice is alsoshown by his answer to the question of Cupid Gonzaga16 [during one of their



























conversations] - "why should you still file a complaint? You have already recoveredthe motorcycle…"[:] "Aron motagam ang kawatan ug motor." ("To teach a lesson to the thief of motorcycle.")17

Moreover, the existence of malice, ill will or bad faith is a factual matter. As a rule, findingsof fact of the trial court, when affirmed by the appellate court, are conclusive on this Court.We see no compelling reason to reverse the findings of the RTC and the CA.

Petitioners Abused Their Right of Recovery as Mortgagee(s)

Petitioners claim that they should not be held liable for petitioner corporation’s exercise ofits right as seller-mortgagee to recover the mortgaged vehicle preliminary to theenforcement of its right to foreclose on the mortgage in case of default. They are clearlymistaken.

True, a mortgagee may take steps to recover the mortgaged property to enable it to enforceor protect its foreclosure right thereon. There is, however, a well-defined procedure for the

recovery of possession of mortgaged property: if a mortgagee is unable to obtainpossession of a mortgaged property for its sale on foreclosure, he must bring a civil actioneither to recover such possession as a preliminary step to the sale, or to obtain judicialforeclosure.18

Petitioner corporation failed to bring the proper civil action necessary to acquire legalpossession of the motorcycle. Instead, petitioner Uypitching descended on respondent’sestablishment with his policemen and ordered the seizure of the motorcycle without asearch warrant or court order. Worse, in the course of the illegal seizure of the motorcycle,petitioner Uypitching even mouthed a slanderous statement.

No doubt, petitioner corporation, acting through its co-petitioner Uypitching, blatantlydisregarded the lawful procedure for the enforcement of its right, to the prejudice ofrespondent. Petitioners’ acts violated the law as well as public morals, and transgressed theproper norms of human relations.

The basic principle of human relations, embodied in Article 19 of the Civil Code, provides:

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

Article 19, also known as the "principle of abuse of right," prescribes that a person shouldnot use his right unjustly or contrary to honesty and good faith, otherwise he opens himself

to liability.19 It seeks to preclude the use of, or the tendency to use, a legal right (or duty) asa means to unjust ends.

There is an abuse of right when it is exercised solely to prejudice or injure another .20 Theexercise of a right must be in accordance with the purpose for which it was established andmust not be excessive or unduly harsh; there must be no intention to harmanother .21 Otherwise, liability for damages to the injured party will attach.

In this case, the manner by which the motorcycle was taken at petitioners’ instance was notonly attended by bad faith but also contrary to the procedure laid down by law. Consideredin conjunction with the defamatory statement, petitioners’ exercise of the right to recover the

mortgaged vehicle was utterly prejudicial and injurious to respondent. On the other hand,the precipitate act of filing an unfounded complaint could not in any way be considered to bein accordance with the purpose for which the right to prosecute a crime was established.Thus, the totality of petitioners’ actions showed a calculated design to embarrass, humiliateand publicly ridicule respondent. Petitioners acted in an excessively harsh fashion to theprejudice of respondent. Contrary to law, petitioners willfully caused damage to respondent.Hence, they should indemnify him.22



























WHEREFORE, the petition is hereby DENIED. The July 26, 2000 decision and October 18,2000 resolution of the Court of Appeals in CA-G.R. CV No. 47571 are AFFIRMED.

Triple costs against petitioners, considering that petitioner Ernesto Ramas Uypitching is alawyer and an officer of the court, for his improper behavior.

SO ORDERED.



G.R. No. L-19671 November 29, 1965

PASTOR B. TENCHAVEZ, plaintiff-appellant,vs.VICENTA F. ESCAÑO, ET AL., defendants-appellees.

I. V. Binamira & F. B. Barria for plaintiff-appellant.Jalandoni & Jarnir for defendants-appellees.

REYES, J.B.L., J.:

Direct appeal, on factual and legal questions, from the judgment of the Court of FirstInstance of Cebu, in its Civil Case No. R-4177, denying the claim of the plaintiff-appellant,Pastor B. Tenchavez, for legal separation and one million pesos in damages against hiswife and parents-in-law, the defendants-appellees, Vicente, Mamerto and Mena,1 allsurnamed "Escaño," respectively.2

The facts, supported by the evidence of record, are the following:

Missing her late afternoon classes on 24 February 1948 in the University of San Carlos,Cebu City, where she was then enrolled as a second year student of commerce, VicentaEscaño, 27 years of age (scion of a well-to-do and socially prominent Filipino family ofSpanish ancestry and a "sheltered colegiala"), exchanged marriage vows with PastorTenchavez, 32 years of age, an engineer, ex-army officer and of undistinguished stock,without the knowledge of her parents, before a Catholic chaplain, Lt. Moises Lavares, in thehouse of one Juan Alburo in the said city. The marriage was the culmination of a previouslove affair and was duly registered with the local civil register.

Vicenta's letters to Pastor, and his to her, before the marriage, indicate that the couple weredeeply in love. Together with a friend, Pacita Noel, their matchmaker and go-between, theyhad planned out their marital future whereby Pacita would be the governess of their first-born; they started saving money in a piggy bank. A few weeks before their secret marriage,their engagement was broken; Vicenta returned the engagement ring and accepted anothersuitor, Joseling Lao. Her love for Pastor beckoned; she pleaded for his return, and theyreconciled. This time they planned to get married and then elope. To facilitate theelopement, Vicenta had brought some of her clothes to the room of Pacita Noel in St.Mary's Hall, which was their usual trysting place.

Although planned for the midnight following their marriage, the elopement did not, however,materialize because when Vicente went back to her classes after the marriage, her mother,

who got wind of the intended nuptials, was already waiting for her at the college. Vicentawas taken home where she admitted that she had already married Pastor. Mamerto andMena Escaño were surprised, because Pastor never asked for the hand of Vicente, andwere disgusted because of the great scandal that the clandestine marriage would provoke(t.s.n., vol. III, pp. 1105-06). The following morning, the Escaño spouses sought priestlyadvice. Father Reynes suggested a recelebration to validate what he believed to be aninvalid marriage, from the standpoint of the Church, due to the lack of authority from the

Archbishop or the parish priest for the officiating chaplain to celebrate the marriage. Therecelebration did not take place, because on 26 February 1948 Mamerto Escaño washanded by a maid, whose name he claims he does not remember, a letter purportedlycoming from San Carlos college students and disclosing an amorous relationship between

Pastor Tenchavez and Pacita Noel; Vicenta translated the letter to her father, and thereafterwould not agree to a new marriage. Vicenta and Pastor met that day in the house of Mrs.Pilar Mendezona. Thereafter, Vicenta continued living with her parents while Pastorreturned to his job in Manila. Her letter of 22 March 1948 (Exh. "M"), while still solicitous ofher husband's welfare, was not as endearing as her previous letters when their love wasaflame.



Vicenta was bred in Catholic ways but is of a changeable disposition, and Pastor knew it.She fondly accepted her being called a "jellyfish." She was not prevented by her parentsfrom communicating with Pastor (Exh. "1-Escaño"), but her letters became less frequent asthe days passed. As of June, 1948 the newlyweds were already estranged (Exh. "2-Escaño"). Vicenta had gone to Jimenez, Misamis Occidental, to escape from the scandalthat her marriage stirred in Cebu society. There, a lawyer filed for her a petition, drafted bythen Senator Emmanuel Pelaez, to annul her marriage. She did not sign the petition (Exh."B-5"). The case was dismissed without prejudice because of her non-appearance at thehearing (Exh. "B-4").

On 24 June 1950, without informing her husband, she applied for a passport, indicating inher application that she was single, that her purpose was to study, and she was domiciled inCebu City, and that she intended to return after two years. The application was approved,and she left for the United States. On 22 August 1950, she filed a verified complaint fordivorce against the herein plaintiff in the Second Judicial District Court of the State ofNevada in and for the County of Washoe, on the ground of "extreme cruelty, entirely mentalin character." On 21 October 1950, a decree of divorce, "final and absolute", was issued in

open court by the said tribunal.

In 1951 Mamerto and Mena Escaño filed a petition with the Archbishop of Cebu to annultheir daughter's marriage to Pastor (Exh. "D"). On 10 September 1954, Vicenta soughtpapal dispensation of her marriage (Exh. "D"-2).

On 13 September 1954, Vicenta married an American, Russell Leo Moran, in Nevada. Shenow lives with him in California, and, by him, has begotten children. She acquired Americancitizenship on 8 August 1958.

But on 30 July 1955, Tenchavez had initiated the proceedings at bar by a complaint in the

Court of First Instance of Cebu, and amended on 31 May 1956, against Vicenta F. Escaño,her parents, Mamerto and Mena Escaño, whom he charged with having dissuaded anddiscouraged Vicenta from joining her husband, and alienating her affections, and againstthe Roman Catholic Church, for having, through its Diocesan Tribunal, decreed theannulment of the marriage, and asked for legal separation and one million pesos indamages. Vicenta claimed a valid divorce from plaintiff and an equally valid marriage to herpresent husband, Russell Leo Moran; while her parents denied that they had in any wayinfluenced their daughter's acts, and counterclaimed for moral damages.

The appealed judgment did not decree a legal separation, but freed the plaintiff fromsupporting his wife and to acquire property to the exclusion of his wife. It allowed thecounterclaim of Mamerto Escaño and Mena Escaño for moral and exemplary damages and

attorney's fees against the plaintiff-appellant, to the extent of P45,000.00, and plaintiffresorted directly to this Court.

The appellant ascribes, as errors of the trial court, the following:

1. In not declaring legal separation; in not holding defendant Vicenta F. Escaño liablefor damages and in dismissing the complaint;.

2. In not holding the defendant parents Mamerto Escano and the heirs of DoñaMena Escaño liable for damages;.

3 In holding the plaintiff liable for and requiring him to pay the damages to thedefendant parents on their counterclaims; and.

4. In dismissing the complaint and in denying the relief sought by the plaintiff.

That on 24 February 1948 the plaintiff-appellant, Pastor Tenchavez, and the defendant-appellee, Vicenta Escaño, were validly married to each other, from the standpoint of ourcivil law, is clearly established by the record before us. Both parties were then above the



age of majority, and otherwise qualified; and both consented to the marriage, which wasperformed by a Catholic priest (army chaplain Lavares) in the presence of competentwitnesses. It is nowhere shown that said priest was not duly authorized under civil law tosolemnize marriages.

The chaplain's alleged lack of ecclesiastical authorization from the parish priest and theOrdinary, as required by Canon law, is irrelevant in our civil law, not only because of theseparation of Church and State but also because Act 3613 of the Philippine Legislature(which was the marriage law in force at the time) expressly provided that —

SEC. 1. Essential requisites. Essential requisites for marriage are the legal capacityof the contracting parties and consent. (Emphasis supplied)

The actual authority of the solemnizing officer was thus only a formal requirement, and,therefore, not essential to give the marriage civil effects,3 and this is emphasized by section27 of said marriage act, which provided the following:

SEC. 27. Failure to comply with formal requirements. No marriage shall be declaredinvalid because of the absence of one or several of the formal requirements of this

Act if, when it was performed, the spouses or one of them believed in good faith thatthe person who solemnized the marriage was actually empowered to do so, and thatthe marriage was perfectly legal.

The good faith of all the parties to the marriage (and hence the validity of their marriage) willbe presumed until the contrary is positively proved (Lao vs. Dee Tim, 45 Phil. 739, 745;Francisco vs. Jason, 60 Phil. 442, 448). It is well to note here that in the case at bar, doubtsas to the authority of the solemnizing priest arose only after the marriage, when Vicenta'sparents consulted Father Reynes and the archbishop of Cebu. Moreover, the very act of

Vicenta in abandoning her original action for annulment and subsequently suing for divorceimplies an admission that her marriage to plaintiff was valid and binding.

Defendant Vicenta Escaño argues that when she contracted the marriage she was underthe undue influence of Pacita Noel, whom she charges to have been in conspiracy withappellant Tenchavez. Even granting, for argument's sake, the truth of that contention, andassuming that Vicenta's consent was vitiated by fraud and undue influence, such vices didnot render her marriage ab initio void, but merely voidable, and the marriage remained validuntil annulled by a competent civil court. This was never done, and admittedly, Vicenta'ssuit for annulment in the Court of First Instance of Misamis was dismissed for non-prosecution.

It is equally clear from the record that the valid marriage between Pastor Tenchavez andVicenta Escaño remained subsisting and undissolved under Philippine law, notwithstandingthe decree of absolute divorce that the wife sought and obtained on 21 October 1950 fromthe Second Judicial District Court of Washoe County, State of Nevada, on grounds of"extreme cruelty, entirely mental in character." At the time the divorce decree was issued,Vicenta Escaño, like her husband, was still a Filipino citizen.4 She was then subject toPhilippine law, and Article 15 of the Civil Code of the Philippines (Rep. Act No. 386), alreadyin force at the time, expressly provided:

Laws relating to family rights and duties or to the status, condition and legal capacityof persons are binding upon the citizens of the Philippines, even though living

abroad.

The Civil Code of the Philippines, now in force, does not admit absolute divorce, quo advinculo matrimonii ; and in fact does not even use that term, to further emphasize itsrestrictive policy on the matter, in contrast to the preceding legislation that admittedabsolute divorce on grounds of adultery of the wife or concubinage of the husband (Act2710). Instead of divorce, the present Civil Code only provides for legal separation (Title IV,



Book 1, Arts. 97 to 108), and, even in that case, it expressly prescribes that "the marriagebonds shall not be severed" (Art. 106, subpar. 1).

For the Philippine courts to recognize and give recognition or effect to a foreign decree ofabsolute divorce betiveen Filipino citizens could be a patent violation of the declared publicpolicy of the state, specially in view of the third paragraph of Article 17 of the Civil Code thatprescribes the following:

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

Even more, the grant of effectivity in this jurisdiction to such foreign divorce decrees would,in effect, give rise to an irritating and scandalous discrimination in favor of wealthy citizens,to the detriment of those members of our polity whose means do not permit them to sojournabroad and obtain absolute divorces outside the Philippines.

From this point of view, it is irrelevant that appellant Pastor Tenchavez should haveappeared in the Nevada divorce court. Primarily because the policy of our law cannot benullified by acts of private parties (Civil Code,Art. 17, jam quot.); and additionally, becausethe mere appearance of a non-resident consort cannot confer jurisdiction where the courtoriginally had none (Area vs. Javier, 95 Phil. 579).

From the preceding facts and considerations, there flows as a necessary consequence thatin this jurisdiction Vicenta Escaño's divorce and second marriage are not entitled torecognition as valid; for her previous union to plaintiff Tenchavez must be declared to beexistent and undissolved. It follows, likewise, that her refusal to perform her wifely duties,

and her denial of consortium and her desertion of her husband constitute in law a wrongcaused through her fault, for which the husband is entitled to the corresponding indemnity(Civil Code, Art. 2176). Neither an unsubstantiated charge of deceit nor an anonymousletter charging immorality against the husband constitute, contrary to her claim, adequateexcuse. Wherefore, her marriage and cohabitation with Russell Leo Moran is technically"intercourse with a person not her husband" from the standpoint of Philippine Law, andentitles plaintiff-appellant Tenchavez to a decree of "legal separation under our law, on thebasis of adultery" (Revised Penal Code, Art. 333).

The foregoing conclusions as to the untoward effect of a marriage after an invalid divorceare in accord with the previous doctrines and rulings of this court on the subject, particularlythose that were rendered under our laws prior to the approval of the absolute divorce act

(Act 2710 of the Philippine Legislature). As a matter of legal history, our statutes did notrecognize divorces a vinculo before 1917, when Act 2710 became effective; and the presentCivil Code of the Philippines, in disregarding absolute divorces, in effect merely reverted tothe policies on the subject prevailing before Act 2710. The rulings, therefore, under the CivilCode of 1889, prior to the Act above-mentioned, are now, fully applicable. Of these, thedecision in Ramirez vs. Gmur , 42 Phil. 855, is of particular interest. Said this Court in thatcase:

As the divorce granted by the French Court must be ignored, it results that themarriage of Dr. Mory and Leona Castro, celebrated in London in 1905, could notlegalize their relations; and the circumstance that they afterwards passed for

husband and wife in Switzerland until her death is wholly without legal significance.The claims of the very children to participate in the estate of Samuel Bishop musttherefore be rejected. The right to inherit is limited to legitimate, legitimated andacknowledged natural children. The children of adulterous relations are whollyexcluded. The word "descendants" as used in Article 941 of the Civil Code cannot beinterpreted to include illegitimates born of adulterous relations. (Emphasis supplied)



Except for the fact that the successional rights of the children, begotten from Vicenta'smarriage to Leo Moran after the invalid divorce, are not involved in the case at bar,the Gmur case is authority for the proposition that such union is adulterous in this

jurisdiction, and, therefore, justifies an action for legal separation on the part of the innocentconsort of the first marriage, that stands undissolved in Philippine law. In not so declaring,the trial court committed error.

True it is that our ruling gives rise to anomalous situations where the status of a person(whether divorced or not) would depend on the territory where the question arises.

Anomalies of this kind are not new in the Philippines, and the answer to them was givenin Barretto vs. Gonzales, 58 Phil. 667:

The hardship of the existing divorce laws in the Philippine Islands are well known tothe members of the Legislature. It is the duty of the Courts to enforce the laws ofdivorce as written by Legislature if they are constitutional. Courts have no right tosay that such laws are too strict or too liberal. (p. 72)

The appellant's first assignment of error is, therefore, sustained.

However, the plaintiff-appellant's charge that his wife's parents, Dr. Mamerto Escaño andhis wife, the late Doña Mena Escaño, alienated the affections of their daughter andinfluenced her conduct toward her husband are not supported by credible evidence. Thetestimony of Pastor Tenchavez about the Escaño's animosity toward him strikes us to bemerely conjecture and exaggeration, and are belied by Pastor's own letters written beforethis suit was begun (Exh. "2-Escaño" and "Vicenta," Rec. on App., pp. 270-274). In theseletters he expressly apologized to the defendants for "misjudging them" and for the "greatunhappiness" caused by his "impulsive blunders" and "sinful pride," "effrontery andaudacity" [sic]. Plaintiff was admitted to the Escaño house to visit and court Vicenta, and the

record shows nothing to prove that he would not have been accepted to marry Vicente hadhe openly asked for her hand, as good manners and breeding demanded. Even afterlearning of the clandestine marriage, and despite their shock at such unexpected event, theparents of Vicenta proposed and arranged that the marriage be recelebrated in strictconformity with the canons of their religion upon advice that the previous one wascanonically defective. If no recelebration of the marriage ceremony was had it was not dueto defendants Mamerto Escaño and his wife, but to the refusal of Vicenta to proceed with it.That the spouses Escaño did not seek to compel or induce their daughter to assent to therecelebration but respected her decision, or that they abided by her resolve, does notconstitute in law an alienation of affections. Neither does the fact that Vicenta's parents senther money while she was in the United States; for it was natural that they should not wishtheir daughter to live in penury even if they did not concur in her decision to divorce

Tenchavez (27 Am. Jur. 130-132).

There is no evidence that the parents of Vicenta, out of improper motives, aided andabetted her original suit for annulment, or her subsequent divorce; she appears to haveacted independently, and being of age, she was entitled to judge what was best for her andask that her decisions be respected. Her parents, in so doing, certainly cannot be chargedwith alienation of affections in the absence of malice or unworthy motives, which have notbeen shown, good faith being always presumed until the contrary is proved.

SEC. 529. Liability of Parents, Guardians or Kin. — The law distinguishes betweenthe right of a parent to interest himself in the marital affairs of his child and the

absence of rights in a stranger to intermeddle in such affairs. However, suchdistinction between the liability of parents and that of strangers is only in regard towhat will justify interference. A parent isliable for alienation of affections resultingfrom his own malicious conduct, as where he wrongfully entices his son or daughterto leave his or her spouse, but he is not liable unless he acts maliciously, without

justification and from unworthy motives. He is not liable where he acts and adviseshis child in good faith with respect to his child's marital relations in the interest of hischild as he sees it, the marriage of his child not terminating his right and liberty to



interest himself in, and be extremely solicitous for, his child's welfare and happiness,even where his conduct and advice suggest or result in the separation of thespouses or the obtaining of a divorce or annulment, or where he acts under mistakeor misinformation, or where his advice or interference are indiscreet or unfortunate,although it has been held that the parent is liable for consequences resulting fromrecklessness. He may in good faith take his child into his home and afford him or herprotection and support, so long as he has not maliciously enticed his child away, ordoes not maliciously entice or cause him or her to stay away, from his or her spouse.This rule has more frequently been applied in the case of advice given to a marrieddaughter, but it is equally applicable in the case of advice given to a son.

Plaintiff Tenchavez, in falsely charging Vicenta's aged parents with racial or socialdiscrimination and with having exerted efforts and pressured her to seek annulment anddivorce, unquestionably caused them unrest and anxiety, entitling them to recoverdamages. While this suit may not have been impelled by actual malice, the charges werecertainly reckless in the face of the proven facts and circumstances. Court actions are notestablished for parties to give vent to their prejudices or spleen.

In the assessment of the moral damages recoverable by appellant Pastor Tenchavez fromdefendant Vicente Escaño, it is proper to take into account, against his patentlyunreasonable claim for a million pesos in damages, that (a) the marriage was celebrated insecret, and its failure was not characterized by publicity or undue humiliation on appellant'spart; (b) that the parties never lived together; and (c) that there is evidence that appellanthad originally agreed to the annulment of the marriage, although such a promise was legallyinvalid, being against public policy (cf. Art. 88, Civ. Code). While appellant is unable toremarry under our law, this fact is a consequence of the indissoluble character of the unionthat appellant entered into voluntarily and with open eyes rather than of her divorce and hersecond marriage. All told, we are of the opinion that appellant should recover P25,000 onlyby way of moral damages and attorney's fees.

With regard to the P45,000 damages awarded to the defendants, Dr. Mamerto Escaño andMena Escaño, by the court below, we opine that the same are excessive. While the filing ofthis unfounded suit must have wounded said defendants' feelings and caused them anxiety,the same could in no way have seriously injured their reputation, or otherwise prejudicedthem, lawsuits having become a common occurrence in present society. What is important,and has been correctly established in the decision of the court below, is that saiddefendants were not guilty of any improper conduct in the whole deplorable affair. ThisCourt, therefore, reduces the damages awarded to P5,000 only.

Summing up, the Court rules:

(1) That a foreign divorce between Filipino citizens, sought and decreed after the effectivityof the present Civil Code (Rep. Act 386), is not entitled to recognition as valid in this

jurisdiction; and neither is the marriage contracted with another party by the divorcedconsort, subsequently to the foreign decree of divorce, entitled to validity in the country;

(2) That the remarriage of divorced wife and her co-habitation with a person other than thelawful husband entitle the latter to a decree of legal separation conformably to Philippinelaw;

(3) That the desertion and securing of an invalid divorce decree by one consort entitles the

other to recover damages;

(4) That an action for alienation of affections against the parents of one consort does not liein the absence of proof of malice or unworthy motives on their part.

WHEREFORE, the decision under appeal is hereby modified as follows;



(1) Adjudging plaintiff-appellant Pastor Tenchavez entitled to a decree of legal separationfrom defendant Vicenta F. Escaño;

(2) Sentencing defendant-appellee Vicenta Escaño to pay plaintiff-appellant Tenchavez theamount of P25,000 for damages and attorneys' fees;

(3) Sentencing appellant Pastor Tenchavez to pay the appellee, Mamerto Escaño and theestate of his wife, the deceased Mena Escaño, P5,000 by way of damages and attorneys'fees.

Neither party to recover costs.



G.R. No. L-24803 May 26, 1977

PEDRO ELCANO and PATRICIA ELCANO, in their capacity as Ascendants of AgapitoElcano, deceased,plaintiffs-appellants,vs.REGINALD HILL, minor, and MARVIN HILL, as father and Natural Guardian of saidminor, defendants-appellees.

Cruz & Avecilla for appellants.

Marvin R. Hill & Associates for appellees.

BARREDO, J.:

Appeal from the order of the Court of First Instance of Quezon City dated January

29, 1965 in Civil Case No. Q-8102, Pedro Elcano et al. vs. Reginald Hill et al. dismissing,upon motion to dismiss of defendants, the complaint of plaintiffs for recovery of damagesfrom defendant Reginald Hill, a minor, married at the time of the occurrence, and his father,the defendant Marvin Hill, with whom he was living and getting subsistence, for the killing byReginald of the son of the plaintiffs, named Agapito Elcano, of which, when criminallyprosecuted, the said accused was acquitted on the ground that his act was not criminal,because of "lack of intent to kill, coupled with mistake."

Actually, the motion to dismiss based on the following grounds:

1. The present action is not only against but a violation of section 1, Rule 107,

which is now Rule III, of the Revised Rules of Court;

2. The action is barred by a prior judgment which is now final and or in res-adjudicata;

3. The complaint had no cause of action against defendant Marvin Hill,because he was relieved as guardian of the other defendant throughemancipation by marriage.

(P. 23, Record [p. 4, Record on Appeal.])

was first denied by the trial court. It was only upon motion for reconsideration of thedefendants of such denial, reiterating the above grounds that the following order wasissued:

Considering the motion for reconsideration filed by the defendants on January14, 1965 and after thoroughly examining the arguments therein contained,the Court finds the same to be meritorious and well-founded.

WHEREFORE, the Order of this Court on December 8, 1964 is herebyreconsidered by ordering the dismissal of the above entitled case.

SO ORDERED.

Quezon City, Philippines, January 29, 1965. (p. 40, Record [p. 21, Record on Appeal.)

Hence, this appeal where plaintiffs-appellants, the spouses Elcano, are presenting for Ourresolution the following assignment of errors:



THE LOWER COURT ERRED IN DISMISSING THE CASE BY UPHOLDINGTHE CLAIM OF DEFENDANTS THAT -

I

THE PRESENT ACTION IS NOT ONLY AGAINST BUT ALSO A VIOLATIONOF SECTION 1, RULE 107, NOW RULE 111, OF THE REVISED RULES OFCOURT, AND THAT SECTION 3(c) OF RULE 111, RULES OF COURT IS

APPLICABLE;

II

THE ACTION IS BARRED BY A PRIOR JUDGMENT WHICH IS NOW FINALOR RES-ADJUDICTA;

III

THE PRINCIPLES OF QUASI-DELICTS, ARTICLES 2176 TO 2194 OF THECIVIL CODE, ARE INAPPLICABLE IN THE INSTANT CASE; and

IV

THAT THE COMPLAINT STATES NO CAUSE OF ACTION AGAINSTDEFENDANT MARVIN HILL BECAUSE HE WAS RELIEVED AS GUARDIANOF THE OTHER DEFENDANT THROUGH EMANCIPATION BYMARRIAGE. (page 4, Record.)

It appears that for the killing of the son, Agapito, of plaintiffs-appellants, defendant- appellee

Reginald Hill was prosecuted criminally in Criminal Case No. 5102 of the Court of FirstInstance of Quezon City. After due trial, he was acquitted on the ground that his act was notcriminal because of "lack of intent to kill, coupled with mistake." Parenthetically, none of theparties has favored Us with a copy of the decision of acquittal, presumably becauseappellants do not dispute that such indeed was the basis stated in the court's decision. Andso, when appellants filed their complaint against appellees Reginald and his father, Atty.Marvin Hill, on account of the death of their son, the appellees filed the motion to dismissabove-referred to.

As We view the foregoing background of this case, the two decisive issues presented forOur resolution are:

1. Is the present civil action for damages barred by the acquittal of Reginald in the criminalcase wherein the action for civil liability, was not reversed?

2. May Article 2180 (2nd and last paragraphs) of the Civil Code he applied against Atty. Hill,notwithstanding the undisputed fact that at the time of the occurrence complained of.Reginald, though a minor, living with and getting subsistenee from his father, was alreadylegally married?

The first issue presents no more problem than the need for a reiteration and furtherclarification of the dual character, criminal and civil, of fault or negligence as a source ofobligation which was firmly established in this jurisdiction in Barredo vs. Garcia, 73 Phil.

607. In that case, this Court postulated, on the basis of a scholarly dissertation by JusticeBocobo on the nature of culpa aquiliana in relation to culpa criminal or delito and mereculpa or fault, with pertinent citation of decisions of the Supreme Court of Spain, the worksof recognized civilians, and earlier jurisprudence of our own, that the same given act canresult in civil liability not only under the Penal Code but also under the Civil Code. Thus, theopinion holds:



The, above case is pertinent because it shows that the same act machinist. come underboth the Penal Code and the Civil Code. In that case, the action of the agent killethunjustified and fraudulent and therefore could have been the subject of a criminal action. And yet, it was held to be also a proper subject of a civil action under article 1902 of theCivil Code. It is also to be noted that it was the employer and not the employee who wasbeing sued. (pp. 615-616, 73 Phil.).

1

It will be noticed that the defendant in the above case could have been prosecuted in acriminal case because his negligence causing the death of the child was punishable bythe Penal Code. Here is therefore a clear instance of the same act of negligence being aproper subject matter either of a criminal action with its consequent civil liability arisingfrom a crime or of an entirely separate and independent civil action for fault or negligenceunder article 1902 of the Civil Code. Thus, in this jurisdiction, the separate individuality ofa cuasi-delito or culpa aquiliana, under the Civil Code has been fully and clearlyrecognized, even with regard to a negligent act for which the wrongdoer could have beenprosecuted and convicted in a criminal case and for which, after such a conviction, hecould have been sued for this civil liability arising from his crime. (p. 617, 73 Phil.)

2

It is most significant that in the case just cited, this Court specifically applied article 1902

of the Civil Code. It is thus that although J. V. House could have been criminallyprosecuted for reckless or simple negligence and not only punished but also made civillyliable because of his criminal negligence, nevertheless this Court awarded damages inan independent civil action for fault or negligence under article 1902 of the Civil Code. (p.618, 73 Phil.)

3

The legal provisions, authors, and cases already invoked should ordinarily besufficient to dispose of this case. But inasmuch as we are announcingdoctrines that have been little understood, in the past, it might not heinappropriate to indicate their foundations.

Firstly, the Revised Penal Code in articles 365 punishes not only reckless but

also simple negligence. If we were to hold that articles 1902 to 1910 of theCivil Code refer only to fault or negligence not punished by law, accordingly tothe literal import of article 1093 of the Civil Code, the legal institution of culpaaquiliana would have very little scope and application in actual life. Death orinjury to persons and damage to property- through any degree of negligence -even the slightest - would have to be Idemnified only through the principle ofcivil liability arising from a crime. In such a state of affairs, what sphere wouldremain for cuasi-delito or culpa aquiliana? We are loath to impute to thelawmaker any intention to bring about a situation so absurd and anomalous.Nor are we, in the interpretation of the laws, disposed to uphold the letter thatkilleth rather than the spirit that giveth life. We will not use the literal meaningof the law to smother and render almost lifeless a principle of such ancient

origin and such full-grown development as culpa aquiliana or cuasi-delito,which is conserved and made enduring in articles 1902 to 1910 of theSpanish Civil Code.

Secondary, to find the accused guilty in a criminal case, proof of guilt beyondreasonable doubt is required, while in a civil case, preponderance of evidenceis sufficient to make the defendant pay in damages. There are numerouscases of criminal negligence which can not be shown beyond reasonabledoubt, but can be proved by a preponderance of evidence. In such cases, thedefendant can and should be made responsible in a civil action under articles1902 to 1910 of the Civil Code. Otherwise. there would be many instances of

unvindicated civil wrongs. "Ubi jus Idemnified remedium." (p. 620,73 Phil.)

Fourthly, because of the broad sweep of the provisions of both the PenalCode and the Civil Code on this subject, which has given rise to theoverlapping or concurrence of spheres already discussed, and for lack ofunderstanding of the character and efficacy of the action for culpa aquiliana,there has grown up a common practice to seek damages only by virtue of thecivil responsibility arising from a crime, forgetting that there is another



remedy, which is by invoking articles 1902-1910 of the Civil Code. Althoughthis habitual method is allowed by, our laws, it has nevertheless renderedpractically useless and nugatory the more expeditious and effective remedybased on culpa aquiliana or culpa extra-contractual . In the present case, weare asked to help perpetuate this usual course. But we believe it is high timewe pointed out to the harms done by such practice and to restore theprinciple of responsibility for fault or negligence under articles 1902 et seq. ofthe Civil Code to its full rigor. It is high time we caused the stream of quasi-delict or culpa aquiliana to flow on its own natural channel, so that its watersmay no longer be diverted into that of a crime under the Penal Code. Thiswill, it is believed, make for the better safeguarding or private rights becauseit realtor, an ancient and additional remedy, and for the further reason that anindependent civil action, not depending on the issues, limitations and resultsof a criminal prosecution, and entirely directed by the party wronged or hiscounsel, is more likely to secure adequate and efficacious redress. (p. 621,73 Phil.)

Contrary to an immediate impression one might get upon a reading of the foregoingexcerpts from the opinion in Garcia that the concurrence of the Penal Code and the CivilCode therein referred to contemplate only acts of negligence and not intentional voluntaryacts - deeper reflection would reveal that the thrust of the pronouncements therein is not solimited, but that in fact it actually extends to fault or culpa. This can be seen in the referencemade therein to the Sentence of the Supreme Court of Spain of February 14, 1919, supra,which involved a case of fraud or estafa, not a negligent act. Indeed, Article 1093 of the CivilCode of Spain, in force here at the time of Garcia, provided textually that obligations "whichare derived from acts or omissions in which fault or negligence, not punishable by law ,intervene shall be the subject of Chapter II, Title XV of this book (which refers to quasi-delicts.)" And it is precisely the underline qualification, "not punishable by law", that JusticeBocobo emphasized could lead to an ultimo construction or interpretation of the letter of thelaw that "killeth, rather than the spirit that giveth lift- hence, the ruling that "(W)e will not usethe literal meaning of the law to smother and render almost lifeless a principle of suchancient origin and such full-grown development as culpa aquiliana or quasi-delito, which isconserved and made enduring in articles 1902 to 1910 of the Spanish Civil Code." And so,because Justice Bacobo was Chairman of the Code Commission that drafted the originaltext of the new Civil Code, it is to be noted that the said Code, which was enacted after theGarcia doctrine, no longer uses the term, 11 not punishable by law," thereby making it clearthat the concept of culpa aquiliana includes acts which are criminal in character or inviolation of the penal law, whether voluntary or matter. Thus, the corresponding provisionsto said Article 1093 in the new code, which is Article 1162, simply says, "Obligations derivedfrom quasi-delicto shall be governed by the provisions of Chapter 2, Title XVII of this Book,

(on quasi-delicts) and by special laws." More precisely, a new provision, Article 2177 of thenew code provides:

ART. 2177. Responsibility for fault or negligence under the preceding articleis entirely separate and distinct from the civil liability arising from negligenceunder the Penal Code. But the plaintiff cannot recover damages twice for thesame act or omission of the defendant.

According to the Code Commission: "The foregoing provision (Article 2177) through at firstsight startling, is not so novel or extraordinary when we consider the exact nature of criminaland civil negligence. The former is a violation of the criminal law, while the latter is a "culpaaquiliana" or quasi-delict, of ancient origin, having always had its own foundation andindividuality, separate from criminal negligence. Such distinction between criminalnegligence and "culpa extracontractual" or "cuasi-delito" has been sustained by decision ofthe Supreme Court of Spain and maintained as clear, sound and perfectly tenable byMaura, an outstanding Spanish jurist. Therefore, under the proposed Article 2177, acquittalfrom an accusation of criminal negligence, whether on reasonable doubt or not, shall not bea bar to a subsequent civil action, not for civil liability arising from criminal negligence, but



for damages due to a quasi-delict or 'culpa aquiliana'. But said article forestalls a doublerecovery.", (Report of the Code) Commission, p. 162.)

Although, again, this Article 2177 does seem to literally refer to only acts of negligence, thesame argument of Justice Bacobo about construction that upholds "the spirit that giveth lift-rather than that which is literal that killeth the intent of the lawmaker should be observed inapplying the same. And considering that the preliminary chapter on human relations of thenew Civil Code definitely establishes the separability and independence of liability in a civilaction for acts criminal in character (under Articles 29 to 32) from the civil responsibilityarising from crime fixed by Article 100 of the Revised Penal Code, and, in a sense, theRules of Court, under Sections 2 and 3 (c), Rule 111, contemplate also the sameseparability, it is "more congruent with the spirit of law, equity and justice, and more inharmony with modern progress"- to borrow the felicitous relevant language in Rakes vs.

Atlantic. Gulf and Pacific Co., 7 Phil. 359, to hold, as We do hold, that Article 2176, where itrefers to "fault or negligencia covers not only acts "not punishable by law" but also actscriminal in character, whether intentional and voluntary or negligent. Consequently, aseparate civil action lies against the offender in a criminal act, whether or not he is criminally

prosecuted and found guilty or acquitted, provided that the offended party is not allowed, ifhe is actually charged also criminally, to recover damages on both scores, and would beentitled in such eventuality only to the bigger award of the two, assuming the awards madein the two cases vary. In other words, the extinction of civil liability referred to in Par. (e) ofSection 3, Rule 111, refers exclusively to civil liability founded on Article 100 of the RevisedPenal Code, whereas the civil liability for the same act considered as a quasi-delict only andnot as a crime is not estinguished even by a declaration in the criminal case that thecriminal act charged has not happened or has not been committed by the accused. Brieflystated, We here hold, in reiteration of Garcia, thatculpa aquiliana includes voluntary andnegligent acts which may be punishable by law.4

It results, therefore, that the acquittal of Reginal Hill in the criminal case has notextinguished his liability for quasi-delict , hence that acquittal is not a bar to the instant actionagainst him.

Coming now to the second issue about the effect of Reginald's emancipation by marriageon the possible civil liability of Atty. Hill, his father, it is also Our considered opinion that theconclusion of appellees that Atty. Hill is already free from responsibility cannot be upheld.

While it is true that parental authority is terminated upon emancipation of the child (Article327, Civil Code), and under Article 397, emancipation takes place "by the marriage of theminor (child)", it is, however, also clear that pursuant to Article 399, emancipation bymarriage of the minor is not really full or absolute. Thus "(E)mancipation by marriage or by

voluntary concession shall terminate parental authority over the child's person. It shallenable the minor to administer his property as though he were of age, but he cannot borrowmoney or alienate or encumber real property without the consent of his father or mother, orguardian. He can sue and be sued in court only with the assistance of his father, mother orguardian."

Now under Article 2180, "(T)he obligation imposed by article 2176 is demandable not onlyfor one's own acts or omissions, but also for those of persons for whom one is responsible.The father and, in case of his death or incapacity, the mother, are responsible. The fatherand, in case of his death or incapacity, the mother, are responsible for the damages causedby the minor children who live in their company." In the instant case, it is not controvertedthat Reginald, although married, was living with his father and getting subsistence from himat the time of the occurrence in question. Factually, therefore, Reginald was still subservientto and dependent on his father, a situation which is not unusual.

It must be borne in mind that, according to Manresa, the reason behind the joint andsolidary liability of presuncion with their offending child under Article 2180 is that is theobligation of the parent to supervise their minor children in order to prevent them fromcausing damage to third persons. 5 On the other hand, the clear implication of Article 399, in



providing that a minor emancipated by marriage may not, nevertheless, sue or be suedwithout the assistance of the parents, is that such emancipation does not carry with itfreedom to enter into transactions or do any act that can give rise to judicial litigation. (SeeManresa, Id., Vol. II, pp. 766-767, 776.) And surely, killing someone else invites judicialaction. Otherwise stated, the marriage of a minor child does not relieve the parents of theduty to see to it that the child, while still a minor, does not give answerable for theborrowings of money and alienation or encumbering of real property which cannot be doneby their minor married child without their consent. (Art. 399; Manresa, supra.)

Accordingly, in Our considered view, Article 2180 applies to Atty. Hill notwithstanding theemancipation by marriage of Reginald. However, inasmuch as it is evident that Reginald isnow of age, as a matter of equity, the liability of Atty. Hill has become milling, subsidiary tothat of his son.

WHEREFORE, the order appealed from is reversed and the trial court is ordered to proceedin accordance with the foregoing opinion. Costs against appellees.



G.R. No. 165732 December 14, 2006

SAFEGUARD SECURITY AGENCY, INC., and ADMER PAJARILLO, petitioners,vs.LAURO TANGCO, VAL TANGCO, VERN LARRY TANGCO, VAN LAURO TANGCO,VON LARRIE TANGCO, VIEN LARI TANGCO and VIVIEN LAURIZTANGCO, respondent.

D E C I S I O N

AUSTRIA-MARTINEZ, J .:

Before us is a petition for review on certiorari filed by Safeguard Security Agency, Inc.(Safeguard) and Admer Pajarillo (Pajarillo) assailing the Decision1 dated July 16, 2004 andthe Resolution2 dated October 20, 2004 issued by the Court of Appeals (CA) in CA-G.R. CVNo. 77462.

On November 3, 1997, at about 2:50 p.m., Evangeline Tangco (Evangeline) went toEcology Bank, Katipunan Branch, Quezon City, to renew her time deposit per advise of thebank's cashier as she would sign a specimen card. Evangeline, a duly licensed firearmholder with corresponding permit to carry the same outside her residence, approachedsecurity guard Pajarillo, who was stationed outside the bank, and pulled out her firearm

from her bag to deposit the same for safekeeping. Suddenly, Pajarillo shot Evangeline withhis service shotgun hitting her in the abdomen instantly causing her death.

Lauro Tangco, Evangeline's husband, together with his six minor children (respondents)filed with the Regional Trial Court (RTC) of Quezon City, a criminal case of Homicideagainst Pajarillo, docketed as Criminal Case No. 0-97-73806 and assigned to Branch 78.Respondents reserved their right to file a separate civil action in the said criminal case. TheRTC of Quezon City subsequently convicted Pajarillo of Homicide in its Decision datedJanuary 19, 2000.3 On appeal to the CA, the RTC decision was affirmed with modificationas to the penalty in a Decision4dated July 31, 2000. Entry of Judgment was made on August25, 2001.

Meanwhile, on January 14, 1998, respondents filed with RTC, Branch 273, Marikina City, acomplaint5 for damages against Pajarillo for negligently shooting Evangeline and againstSafeguard for failing to observe the diligence of a good father of a family to prevent thedamage committed by its security guard. Respondents prayed for actual, moral andexemplary damages and attorney's fees.

In their Answer ,6 petitioners denied the material allegations in the complaint and alleged thatSafeguard exercised the diligence of a good father of a family in the selection andsupervision of Pajarillo; that Evangeline's death was not due to Pajarillo's negligence as thelatter acted only in self-defense. Petitioners set up a compulsory counterclaim for moraldamages and attorney's fees.

Trial thereafter ensued. On January 10, 2003, the RTC rendered its Decision,7 thedispositive portion of which reads:

WHEREFORE, judgment is hereby rendered in favor of the plaintiffs, the heirs ofEvangeline Tangco, and against defendants Admer Pajarillo and Safeguard Security

Agency, Inc. ordering said defendants to pay the plaintiffs, jointly and severally, thefollowing:



























1. ONE HUNDRED FIFTY SEVEN THOUSAND FOUR HUNDRED THIRTYPESOS (P157,430.00), as actual damages

2. FIFTY THOUSAND PESOS (P50,000.00) as death indemnity;

3. ONE MILLION PESOS (P1,000,000.00), as moral damages;

4. THREE HUNDRED THOUSAND PESOS (P300,000.00), as exemplary

damages;

5. THIRTY THOUSAND PESOS (P30,000.00), as attorney's fees; and

6. costs of suit.

For lack of merit, defendants' counterclaim is hereby DISMISSED.

SO ORDERED. 8

The RTC found respondents to be entitled to damages. It rejected Pajarillo's claim that hemerely acted in self-defense. It gave no credence to Pajarillo's bare claim that Evangelinewas seen roaming around the area prior to the shooting incident since Pajarillo had notmade such report to the head office and the police authorities. The RTC further ruled thatbeing the guard on duty, the situation demanded that he should have exercised properprudence and necessary care by asking Evangeline for him to ascertain the matter insteadof shooting her instantly; that Pajarillo had already been convicted of Homicide in CriminalCase No. 0-97-73806; and that he also failed to proffer proof negating liability in the instantcase.

The RTC also found Safeguard as employer of Pajarillo to be jointly and severally liable withPajarillo. It ruled that while it may be conceded that Safeguard had perhaps exercised carein the selection of its employees, particularly of Pajarillo, there was no sufficient evidence toshow that Safeguard exercised the diligence of a good father of a family in the supervisionof its employee; that Safeguard's evidence simply showed that it required its guards toattend trainings and seminars which is not the supervision contemplated under the law; thatsupervision includes not only the issuance of regulations and instructions designed for theprotection of persons and property, for the guidance of their servants and employees, butalso the duty to see to it that such regulations and instructions are faithfully complied with.

Petitioners appealed the RTC decision to the CA. On July 16, 2004, the CA issued itsassailed Decision, the dispositive portion of which reads:

IN VIEW OF ALL THE FOREGOING, the appealed decision is hereby AFFIRMED,with the modification that Safeguard Security Agency, Inc.'s civil liability in this caseis only subsidiary under Art. 103 of the Revised Penal Code. No pronouncement asto costs.9

In finding that Safeguard is only subsidiarily liable, the CA held that the applicableprovisions are not Article 2180 in relation to Article 2176 of the Civil Code, on quasi -delicts,but the provisions on civil liability arising from felonies under the Revised Penal Code; thatsince Pajarillo had been found guilty of Homicide in a final and executory judgment and issaid to be serving sentence in Muntinlupa, he must be adjudged civilly liable under the

provisions of Article 100 of the Revised Penal Code since the civil liability recoverable in thecriminal action is one solely dependent upon conviction, because said liability arises fromthe offense charged and no other; that this is also the civil liability that is deemedextinguished with the extinction of the penal liability with a pronouncement that the fact fromwhich the civil action might proceed does not exist; that unlike in civil liability arisingfrom quasi-delict , the defense of diligence of a good father of a family in the employmentand supervision of employees is inapplicable and irrelevant in civil liabilities based on











crimes or ex-delicto; that Article 103 of the Revised Penal Code provides that the liability ofan employer for the civil liability of their employees is only subsidiary, not joint or solidary.

Petitioners filed their Motion for Reconsideration which the CA denied in a Resolution datedOctober 20, 2004.

Hence, the instant Petition for Review on Certiorari with the following assignment of errors,to wit:

The Honorable Court of Appeals gravely erred in finding petitioner Pajarillo liable torespondents for the payment of damages and other money claims.

The Honorable Court of Appeals gravely erred when it applied Article 103 of theRevised Penal Code in holding petitioner Safeguard solidarily [sic] liable withpetitioner Pajarillo for the payment of damages and other money claims.

The Honorable Court of Appeals gravely erred in failing to find that petitioner

Safeguard Security Agency, Inc. exercised due diligence in the selection andsupervision of its employees, hence, should be excused from any liability.10

The issues for resolution are whether (1) Pajarillo is guilty of negligence in shootingEvangeline; and (2) Safeguard should be held solidarily liable for the damages awarded torespondents.

Safeguard insists that the claim for damages by respondents is basedon culpa aquiliana under Article 217611 of the Civil Code, in which case, its liability is jointlyand severally with Pajarillo. However, since it has established that it had exercised duediligence in the selection and supervision of Pajarillo, it should be exonerated from civil

liability.

We will first resolve whether the CA correctly held that respondents, in filing a separate civilaction against petitioners are limited to the recovery of damages arising from a crimeor delict , in which case the liability of Safeguard as employer under Articles 102 and 103 ofthe Revised Penal Code12 is subsidiary and the defense of due diligence in the selectionand supervision of employee is not available to it.

The CA erred in ruling that the liability of Safeguard is only subsidiary.

The law at the time the complaint for damages was filed is Rule 111 of the 1985 Rules onCriminal Procedure, as amended, to wit:

SECTION 1. Institution of criminal and civil actions. - When a criminal action isinstituted, the civil action for the recovery of civil liability is impliedly instituted withthe criminal action, unless the offended party waives the civil action, reserves hisright to institute it separately, or institutes the civil action prior to the criminal action.

Such civil action includes recovery of indemnity under the Revised Penal Code, anddamages under Articles 32, 33, 34, and 2176 of the Civil Code of the Philippinesarising from the same act or omission of the accused.

Respondents reserved the right to file a separate civil action and in fact filed the same on

January 14, 1998.

The CA found that the source of damages in the instant case must be the crime ofhomicide, for which he had already been found guilty of and serving sentence thereof, thusmust be governed by the Revised Penal Code.

We do not agree.














An act or omission causing damage to another may give rise to two separate civil liabilitieson the part of the offender, i.e., (1) civil liability ex delicto, under Article 100 of the RevisedPenal Code; and (2) independent civil liabilities, such as those (a) not arising from an act oromission complained of as a felony, e.g ., culpa contractual or obligations arising from lawunder Article 31 of the Civil Code, intentional torts under Articles 32 and 34, and culpa

aquil iana under Article 2176 of the Civil Code; or (b) where the injured party is granted aright to file an action independent and distinct from the criminal action under Article 33 ofthe Civil Code. Either of these liabilities may be enforced against the offender subject to thecaveat under Article 2177 of the Civil Code that the offended party cannot recover damagestwice for the same act or omission or under both causes.13

It is important to determine the nature of respondents' cause of action. The nature of acause of action is determined by the facts alleged in the complaint as constituting the causeof action.14 The purpose of an action or suit and the law to govern it is to be determined notby the claim of the party filing the action, made in his argument or brief, but rather by thecomplaint itself, its allegations and prayer for relief .15

The pertinent portions of the complaint read:

7. That Defendant Admer A. Pajarillo was the guard assigned and posted in theEcology Bank – Katipunan Branch, Quezon City, who was employed and underemployment of Safeguard Security Agency, Inc. hence there is employer-employeerelationship between co-defendants.

The Safeguard Security Agency, Inc. failed to observe the diligence of a good fatherof a family to prevent damage to herein plaintiffs.

8. That defendant Admer Pajarillo upon seeing Evangeline Tangco, who brought her

firearm out of her bag, suddenly without exercising necessary caution/care, and inidiotic manner, with the use of his shotgun, fired and burst bullets upon EvangelineM. Tangco, killing her instantly. x x x

x x x x

16. That defendants, being employer and the employee are jointly and severallyliable for the death of Evangeline M. Tangco.16

Thus, a reading of respondents' complaint shows that the latter are invoking their right torecover damages against Safeguard for their vicarious responsibility for the injury caused byPajarillo's act of shooting and killing Evangeline under Article 2176, Civil Code which

provides:

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

The scope of Article 2176 is not limited to acts or omissions resulting from negligence.In Dulay v. Court of Appeals,17 we held:

x x x Well-entrenched is the doctrine that Article 2176 covers not only acts

committed with negligence, but also acts which are voluntary and intentional. As farback as the definitive case of Elcano v. Hill (77 SCRA 98 [1977]), this Court alreadyheld that:

"x x x Article 2176, where it refers to "fault or negligence," covers not only acts"not punishable by law" but also acts criminal in character, whetherintentional and voluntary or negligent.Consequently, a separate civil action liesagainst the offender in a criminal act, whether or not he is criminally prosecuted and























found guilty or acquitted, provided that the offended party is not allowed, if he isactually charged also criminally, to recover damages on both scores, and would beentitled in such eventuality only to the bigger award of the two, assuming the awardsmade in the two cases vary. In other words, the extinction of civil liability referred toin Par. (e) of Section 3, Rule 111, refers exclusively to civil liability founded on Article100 of the Revised Penal Code, whereas the civil liability for the same actconsidered as quasi-delict only and not as a crime is not extinguished even by adeclaration in the criminal case that the criminal act charged has not happened orhas not been committed by the accused. Briefly stated, We here hold, in reiterationof Garcia, that culpa aquiliana includes voluntary and negligent acts which may bepunishable by law." (Emphasis supplied)

The civil action filed by respondents was not derived from the criminal liability of Pajarillo inthe criminal case but one based on culpa aquiliana or quasi-delict which is separate anddistinct from the civil liability arising from crime.18 The source of the obligation sought to beenforced in the civil case is a quasi-delict not an act or omission punishable by law.

In Bermudez v. Melencio-Herrera,19

where the issue involved was whether the civil actionfiled by plaintiff-appellants is founded on crime or on quasi-delict, we held:

x x x The trial court treated the case as an action based on a crime in view of thereservation made by the offended party in the criminal case (Criminal Case No.92944), also pending before the court, to file a separate civil action. Said the trialcourt:

It would appear that plaintiffs instituted this action on the assumption that defendantPontino's negligence in the accident of May 10, 1969 constituted a quasi -delict . TheCourt cannot accept the validity of that assumption. In Criminal Case No. 92944 of

this Court, plaintiffs had already appeared as complainants. While that case waspending, the offended parties reserved the right to institute a separate civil action. If,in a criminal case, the right to file a separate civil action for damages is reserved,such civil action is to be based on crime and not on tort. That was the ruling inJoaquin vs. Aniceto, L-18719, Oct. 31, 1964.

We do not agree. The doctrine in the case cited by the trial court is inapplicable tothe instant case x x x.

x x x x

In cases of negligence, the injured party or his heirs has the choice between an

action to enforce the civil liability arising from crime under Article 100 of the RevisedPenal Code and an action for quasi -delict under Article 2176-2194 of the Civil Code.If a party chooses the latter, he may hold the employer solidarily liable for thenegligent act of his employee, subject to the employer's defense of exercise of thediligence of a good father of the family.

In the case at bar, the action filed by appellant was an action for damages basedon quasi -delict . The fact that appellants reserved their right in the criminal caseto file an independent civil action did not preclude them from choosing to file acivil action for quasi -delict .20 (Emphasis supplied)

Although the judgment in the criminal case finding Pajarillo guilty of Homicide is alreadyfinal and executory, such judgment has no relevance or importance to this case.21 It wouldhave been entirely different if respondents' cause of action was for damages arising froma delict , in which case the CA is correct in finding Safeguard to be only subsidiary liablepursuant to Article 103 of the Revised Penal Code.22

As clearly shown by the allegations in the complaint, respondents' cause of action is basedon quasi -delict . Under Article 2180 of the Civil Code, when the injury is caused by the






















negligence of the employee, there instantly arises a presumption of law that there wasnegligence on the part of the master or the employer either in the selection of the servant oremployee, or in the supervision over him after selection or both. The liability of the employerunder Article 2180 is direct and immediate. Therefore, it is incumbent upon petitioners toprove that they exercised the diligence of a good father of a family in the selection andsupervision of their employee.

We must first resolve the issue of whether Pajarillo was negligent in shooting Evangeline.

The issue of negligence is factual in nature. Whether a person is negligent or not is aquestion of fact, which, as a general rule, we cannot pass upon in a petition for reviewon certiorari , as our jurisdiction is limited to reviewing errors of law.23 Generally, factualfindings of the trial court, affirmed by the CA, are final and conclusive and may not bereviewed on appeal. The established exceptions are: (1) when the inference made ismanifestly mistaken, absurd or impossible; (2) when there is grave abuse of discretion; (3)when the findings are grounded entirely on speculations, surmises or conjectures; (4) whenthe judgment of the CA is based on misapprehension of facts; (5) when the findings of fact

are conflicting; (6) when the CA, in making its findings, went beyond the issues of the caseand the same is contrary to the admissions of both appellant and appellee; (7) when thefindings of fact are conclusions without citation of specific evidence on which they arebased; (8) when the CA manifestly overlooked certain relevant facts not disputed by theparties and which, if properly considered, would justify a different conclusion; and (9) whenthe findings of fact of the CA are premised on the absence of evidence and are contradictedby the evidence on record. [24]

A thorough review of the records of the case fails to show any cogent reason for us todeviate from the factual finding of the trial court and affirmed by the CA that petitionerPajarillo was guilty of negligence in shooting Evangeline.

Respondents' evidence established that Evangeline's purpose in going to the bank was torenew her time deposit.25 On the other hand, Pajarillo claims that Evangeline drew a gunfrom her bag and aimed the same at him, thus, acting instinctively, he shot her in self-defense.

Pajarillo testified that when Evangeline aimed the gun at him at a distance of about onemeter or one arm's length26 he stepped backward, loaded the chamber of his gun and shother .27 It is however unimaginable that petitioner Pajarillo could still make such movements ifindeed the gun was already pointed at him. Any movement could have promptedEvangeline to pull the trigger to shoot him.

Petitioner Pajarillo would like to justify his action in shooting Evangeline on his mereapprehension that Evangeline will stage a bank robbery. However, such claim is befuddledby his own testimony. Pajarillo testified that prior to the incident, he saw Evangeline roamingunder the fly over which was about 10 meters away from the bank28 and saw her talking to aman thereat;29 that she left the man under the fly-over, crossed the street and approachedthe bank. However, except for the bare testimony of Pajarillo, the records do not show thatindeed Evangeline was seen roaming near the vicinity of the bank and acting suspiciouslyprior to the shooting incident. In fact, there is no evidence that Pajarillo called the attentionof his head guard or the bank's branch manager regarding his concerns or that he reportedthe same to the police authorities whose outpost is just about 15 meters from the bank.

Moreover, if Evangeline was already roaming the vicinity of the bank, she could havealready apprised herself that Pajarillo, who was posted outside the bank, was armed with ashotgun; that there were two guards inside the bank30 manning the entrance door. Thus, it isquite incredible that if she really had a companion, she would leave him under the fly-overwhich is 10 meters far from the bank and stage a bank robbery all by herself without a back-up. In fact, she would have known, after surveying the area, that aiming her gun at Pajarillowould not ensure entrance to the bank as there were guards manning the entrance door.































Evidence, to be believed, must not only proceed from the mouth of a credible witness, but itmust be credible in itself — such as the common experience and observation of mankindcan approve as probable under the circumstances. We have no test of the truth of humantestimony, except its conformity to our knowledge, observation and experience. Whatever isrepugnant to these belongs to the miraculous and is outside judicial cognizance.31

That Evangeline just wanted to deposit her gun before entering the bank and was actually inthe act of pulling her gun from her bag when petitioner Pajarillo recklessly shot her, findssupport from the contentions raised in petitioners' petition for review where they argued thatwhen Evangeline approached the bank, she was seen pulling a gun from inside her bag andpetitioner Pajarillo who was suddenly beset by fear and perceived the act as a dangerousthreat, shot and killed the deceased out of pure instinct;32 that the act of drawing a gun is athreatening act, regardless of whether or not the gun was intended to be used againstpetitioner Pajarillo;33 that the fear that was created in the mind of petitioner Pajarillo as hesaw Evangeline Tangco drawing a gun from her purse was suddenly very real and theformer merely reacted out of pure self-preservation.34

Considering that unlawful aggression on the part of Evangeline is absent, Pajarillo's claim ofself-defense cannot be accepted specially when such claim was uncorroborated by anyseparate competent evidence other than his testimony which was even doubtful. Pajarillo'sapprehension that Evangeline will shoot him to stage a bank robbery has no basis at all. It istherefore clear that the alleged threat of bank robbery was just a figment of Pajarillo'simagination which caused such unfounded unlawful aggression on his part.

Petitioners argue that Evangeline was guilty of contributory negligence. Although she was alicensed firearm holder, she had no business bringing the gun in such establishment wherepeople would react instinctively upon seeing the gun; that had Evangeline been prudent,she could have warned Pajarillo before drawing the gun and did not conduct herself withsuspicion by roaming outside the vicinity of the bank; that she should not have held the gunwith the nozzle pointed at Pajarillo who mistook the act as hold up or robbery.

We are not persuaded.

As we have earlier held, Pajarillo failed to substantiate his claim that Evangeline was seenroaming outside the vicinity of the bank and acting suspiciously prior to the shootingincident. Evangeline's death was merely due to Pajarillo's negligence in shooting her on hisimagined threat that Evangeline will rob the bank.

Safeguard contends that it cannot be jointly held liable since it had adequately shown that ithad exercised the diligence required in the selection and supervision of its employees. It

claims that it had required the guards to undergo the necessary training and to submit therequisite qualifications and credentials which even the RTC found to have been compliedwith; that the RTC erroneously found that it did not exercise the diligence required in thesupervision of its employee. Safeguard further claims that it conducts monitoring of theactivities of its personnel, wherein supervisors are assigned to routinely check the activitiesof the security guards which include among others, whether or not they are in their properpost and with proper equipment, as well as regular evaluations of the employees'performances; that the fact that Pajarillo loaded his firearm contrary to Safeguard'soperating procedure is not sufficient basis to say that Safeguard had failed its duty of propersupervision; that it was likewise error to say that Safeguard was negligent in seeing to it thatthe procedures and policies were not properly implemented by reason of one unfortunate

event.

We are not convinced.

Article 2180 of the Civil Code provides:

Art. 2180. The obligation imposed by Article 2176 is demandable not only for one'sown acts or omissions, but also for those of persons for whom one is responsible.



















x x x x

Employers shall be liable for the damages caused by their employees andhousehold helpers acting within the scope of their assigned tasks, even though theformer are not engaged in any business or industry.

x x x x

The responsibility treated of in this article shall cease when the persons hereinmentioned prove that they observed all the diligence of a good father of a family toprevent damage.

As the employer of Pajarillo, Safeguard is primarily and solidarily liable for the quasi-delict committed by the former. Safeguard is presumed to be negligent in the selection andsupervision of his employee by operation of law. This presumption may be overcome onlyby satisfactorily showing that the employer exercised the care and the diligence of a goodfather of a family in the selection and the supervision of its employee.

In the selection of prospective employees, employers are required to examine them as totheir qualifications, experience, and service records.35 On the other hand, due diligence inthe supervision of employees includes the formulation of suitable rules and regulations forthe guidance of employees and the issuance of proper instructions intended for theprotection of the public and persons with whom the employer has relations through his or itsemployees and the imposition of necessary disciplinary measures upon employees in caseof breach or as may be warranted to ensure the performance of acts indispensable to thebusiness of and beneficial to their employer. To this, we add that actual implementation andmonitoring of consistent compliance with said rules should be the constant concern of theemployer, acting through dependable supervisors who should regularly report on their

supervisory functions.

36

To establish these factors in a trial involving the issue of vicariousliability, employers must submit concrete proof, including documentary evidence.

We agree with the RTC's finding that Safeguard had exercised the diligence in the selectionof Pajarillo since the record shows that Pajarillo underwent a psychological and neuro-psychiatric evaluation conducted by the St. Martin de Porres Center where no psychosesideations were noted, submitted a certification on the Pre-licensing training course forsecurity guards, as well as police and NBI clearances.

The RTC did not err in ruling that Safeguard fell short of the diligence required in thesupervision of its employee, particularly Pajarillo. In this case, while Safeguard presentedCapt. James Camero, its Director for Operations, who testified on the issuance of company

rules and regulations, such as the Guidelines of Guards Who Will Be Assigned ToBanks,37 Weapons Training,38 Safeguard Training Center Marksmanship Training LessonPlan,39Disciplinary/Corrective Sanctions,40 it had also been established during Camero'scross-examination that Pajarillo was not aware of such rules andregulations.41 Notwithstanding Camero's clarification on his re-direct examination that thesecompany rules and regulations are lesson plans as a basis of guidelines of the instructorsduring classroom instructions and not necessary to give students copy of the same,42 therecords do not show that Pajarillo had attended such classroom instructions.

The records also failed to show that there was adequate training and continuous evaluationof the security guard's performance. Pajarillo had only attended an in-service training on

March 1, 1997 conducted by Toyota Sta. Rosa, his first assignment as security guard ofSafeguard, which was in collaboration with Safeguard. It was established that the conceptof such training was purely on security of equipments to be guarded and protection of thelife of the employees.43

It had not been established that after Pajarillo's training in Toyota, Safeguard had everconducted further training of Pajarillo when he was later assigned to guard a bank whichhas a different nature of business with that of Toyota. In fact, Pajarillo testified that being on






































duty in a bank is different from being on duty in a factory since a bank is a very sensitivearea.44

Moreover, considering his reactions to Evangeline's act of just depositing her firearm forsafekeeping, i.e., of immediately shooting her, confirms that there was no training orseminar given on how to handle bank clients and on human psychology.

Furthermore, while Safeguard would like to show that there were inspectors who go aroundthe bank two times a day to see the daily performance of the security guards assignedtherein, there was no record ever presented of such daily inspections. In fact, if there wasreally such inspection made, the alleged suspicious act of Evangeline could have beentaken noticed and reported.

Turning now to the award of damages, we find that the award of actual damages in theamount P157,430.00 which were the expenses incurred by respondents in connection with

the burial of Evangeline were supported by receipts. The award of P50,000.00 as civil

indemnity for the death of Evangeline is likewise in order.

As to the award of moral damages, Article 2206 of the Civil Code provides that the spouse,legitimate children and illegitimate descendants and ascendants of the deceased maydemand moral damages for mental anguish by reason of the death of the deceased. Moraldamages are awarded to enable the injured party to obtain means, diversions oramusements that will serve to alleviate the moral suffering he/she has undergone, byreason of the defendant's culpable action. Its award is aimed at restoration, as much aspossible, of the spiritual status quo ante;thus it must be proportionate to the sufferinginflicted.45 The intensity of the pain experienced by the relatives of the victim isproportionate to the intensity of affection for him and bears no relation whatsoever with thewealth or means of the offender .46

In this case, respondents testified as to their moral suffering caused by Evangeline's deathwas so sudden causing respondent Lauro to lose a wife and a mother to six children whowere all minors at the time of her death. InPeople v. Teehankee, Jr.,47 we awarded onemillion pesos as moral damages to the heirs of a seventeen-year-old girl who wasmurdered. In Metro Manila Transit Corporation v. Court of Appeals,48 we likewise awardedthe amount of one million pesos as moral damages to the parents of a third year highschool student and who was also their youngest child who died in a vehicular accident sincethe girl's death left a void in their lives. Hence, we hold that the respondents are alsoentitled to the amount of one million pesos as Evangeline's death left a void in the lives ofher husband and minor children as they were deprived of her love and care by her untimelydemise.

We likewise uphold the award of exemplary damages in the amount of P300,000.00. Under

Article 2229 of the Civil Code, exemplary damages are imposed by way of example orcorrection for the public good, in addition to moral, temperate, liquidated or compensatorydamages.49 It is awarded as a deterrent to socially deleterious actions. Inquasi-delict ,exemplary damages may be granted if the defendant acted with gross negligence.50

Pursuant to Article 2208 of the Civil Code, attorney's fees may be recovered when, as in theinstant case, exemplary damages are awarded. Hence, we affirm the award of attorney'sfees in the amount of P30,000.00.

WHEREFORE, the petition for review is DENIED. The Decision dated July 16, 2004 of theCourt of Appeals isAFFIRMED with MODIFICATION that the civil liability of petitionerSafeguard Security Agency, Inc. is SOLIDARYand PRIMARY under Article 2180 of the CivilCode.

SO ORDERED.































In his answer 10 to the complaint, petitioner denied that he offered a loan to respondent. Heaverred that in 1992, respondent approached and asked him if he could grant her a loan, asshe needed money to finance her business venture with the PNO. At first, he was reluctantto deal with respondent, because the latter had a spotty record as a supplier of the PNO.However, since respondent was an acquaintance of his officemate, he agreed to grant her aloan. Respondent paid the loan in full.11

Subsequently, respondent again asked him to give her a loan. As respondent had beenable to pay the previous loan in full, he agreed to grant her another loan. Later, respondentrequested him to restructure the payment of the loan because she could not give fullpayment on the due date. He acceded to her request. Thereafter, respondent pleaded foranother restructuring of the payment of the loan. This time he rejected her plea. Thus,respondent proposed to execute a promissory note wherein she would acknowledge herobligation to him, inclusive of interest, and that she would issue several postdated checks toguarantee the payment of her obligation. Upon his approval of respondent’s request forrestructuring of the loan, respondent executed a promissory note dated 12 September 1994wherein she admitted having borrowed an amount of P1,240,000.00, inclusive of interest,

from petitioner and that she would pay said amount in March 1995. Respondent also issuedto him six postdated checks amounting to P1,240,000.00 as guarantee of compliance with

her obligation. Subsequently, he presented the six checks for encashment but only onecheck was honored. He demanded that respondent settle her obligation, but the latter failedto do so. Hence, he filed criminal cases for Violation of the Bouncing Checks Law (BatasPambansa Blg. 22) against respondent. The cases were assigned to the Metropolitan TrialCourt of Makati City, Branch 65 (MeTC).12

Petitioner insisted that there was no overpayment because respondent admitted in thelatter’s promissory note that her monetary obligation as of 12 September 1994 amountedto P1,240,000.00 inclusive of interests. He argued that respondent was already estopped

from complaining that she should not have paid any interest, because she was givenseveral times to settle her obligation but failed to do so. He maintained that to rule in favorof respondent is tantamount to concluding that the loan was given interest-free. Based onthe foregoing averments, he asked the RTC to dismiss respondent’s complaint.

After trial, the RTC rendered a Decision on 26 January 2001 holding that respondent madean overpayment of her loan obligation to petitioner and that the latter should refund theexcess amount to the former. It ratiocinated that respondent’s obligation was only to pay theloaned amount of P540,000.00, and that the alleged interests due should not be included in

the computation of respondent’s total monetary debt because there was no agreementbetween them regarding payment of interest. It concluded that since respondent made anexcess payment to petitioner in the amount of P660,000.00 through mistake, petitioner

should return the said amount to respondent pursuant to the principle of solutio indebiti .13

The RTC also ruled that petitioner should pay moral damages for the sleepless nights andwounded feelings experienced by respondent. Further, petitioner should pay exemplarydamages by way of example or correction for the public good, plus attorney’s fees andcosts of suit.

The dispositive portion of the RTC Decision reads:

WHEREFORE, in view of the foregoing evidence and in the light of the provisions of lawand jurisprudence on the matter, judgment is hereby rendered in favor of the plaintiff and

against the defendant as follows:

(1) Ordering defendant to pay plaintiff the amount of P660,000.00 plus legal interest

of 12% per annum computed from 3 March 1998 until the amount is paid in full;

(2) Ordering defendant to pay plaintiff the amount of P300,000.00 as moral

damages;

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(3) Ordering defendant to pay plaintiff the amount of P50,000.00 as exemplary

damages;

(4) Ordering defendant to pay plaintiff the amount equivalent to 25% of P660,000.00

as attorney’s fees; and

(5) Ordering defendant to pay the costs of suit.14

Petitioner appealed to the Court of Appeals. On 16 December 2005, the appellate courtpromulgated its Decision affirming in toto the RTC Decision, thus:

WHEREFORE, the foregoing considered, the instant appeal is hereby DENIED and theassailed decision [is] AFFIRMED in toto.15

Petitioner filed a motion for reconsideration of the appellate court’s decision but this wasdenied.16 Hence, petitioner lodged the instant petition before us assigning the followingerrors:

I.

THE RTC AND THE COURT OF APPEALS ERRED IN RULING THAT NO INTERESTWAS DUE TO PETITIONER;

II.

THE RTC AND THE COURT OF APPEALS ERRED IN APPLYING THE PRINCIPLEOF SOLUTIO INDEBITI .17

Interest is a compensation fixed by the parties for the use or forbearance of money. This isreferred to as monetary interest. Interest may also be imposed by law or by courts aspenalty or indemnity for damages. This is called compensatory interest.18 The right tointerest arises only by virtue of a contract or by virtue of damages for delay or failure to paythe principal loan on which interest is demanded.19

Article 1956 of the Civil Code, which refers to monetary interest,20 specifically mandates thatno interest shall be due unless it has been expressly stipulated in writing. As can begleaned from the foregoing provision, payment of monetary interest is allowed only if: (1)there was an express stipulation for the payment of interest; and (2) the agreement for thepayment of interest was reduced in writing. The concurrence of the two conditions isrequired for the payment of monetary interest. Thus, we have held that collection of interestwithout any stipulation therefor in writing is prohibited by law.21

It appears that petitioner and respondent did not agree on the payment of interest for theloan. Neither was there convincing proof of written agreement between the two regardingthe payment of interest. Respondent testified that although she accepted petitioner’s offer ofloan amounting to P540,000.00, there was, nonetheless, no verbal or written agreement for

her to pay interest on the loan.22

Petitioner presented a handwritten promissory note dated 12 September 199423 whereinrespondent purportedly admitted owing petitioner "capital and interest." Respondent,however, explained that it was petitioner who made a promissory note and she was told to

copy it in her own handwriting; that all her transactions with the PNO were subject to theapproval of petitioner as comptroller of the PNO; that petitioner threatened to disapproveher transactions with the PNO if she would not pay interest; that being unaware of the lawon interest and fearing that petitioner would make good of his threats if she would not obeyhis instruction to copy the promissory note, she copied the promissory note in her ownhandwriting; and that such was the same promissory note presented by petitioner asalleged proof of their written agreement on interest.24 Petitioner did not rebut the foregoingtestimony. It is evident that respondent did not really consent to the payment of interest for














































the loan and that she was merely tricked and coerced by petitioner to pay interest. Hence, itcannot be gainfully said that such promissory note pertains to an express stipulation ofinterest or written agreement of interest on the loan between petitioner and respondent.

Petitioner, nevertheless, claims that both the RTC and the Court of Appeals found that heand respondent agreed on the payment of 7% rate of interest on the loan; that the agreed7% rate of interest was duly admitted by respondent in her testimony in the BatasPambansa Blg. 22 cases he filed against respondent; that despite such judicial admissionby respondent, the RTC and the Court of Appeals, citing Article 1956 of the Civil Code, stillheld that no interest was due him since the agreement on interest was not reduced inwriting; that the application of Article 1956 of the Civil Code should not be absolute, and anexception to the application of such provision should be made when the borrower admitsthat a specific rate of interest was agreed upon as in the present case; and that it would beunfair to allow respondent to pay only the loan when the latter very well knew and evenadmitted in the Batas Pambansa Blg. 22 cases that there was an agreed 7% rate of intereston the loan.25

We have carefully examined the RTC Decision and found that the RTC did not make aruling therein that petitioner and respondent agreed on the payment of interest at the rate of7% for the loan. The RTC clearly stated that although petitioner and respondent enteredinto a valid oral contract of loan amounting to P540,000.00, they, nonetheless, never

intended the payment of interest thereon.26 While the Court of Appeals mentioned in itsDecision that it concurred in the RTC’s ruling that petitioner and respondent agreed on acertain rate of interest as regards the loan, we consider this as merely an inadvertencebecause, as earlier elucidated, both the RTC and the Court of Appeals ruled that petitioneris not entitled to the payment of interest on the loan. The rule is that factual findings of thetrial court deserve great weight and respect especially when affirmed by the appellatecourt.27 We found no compelling reason to disturb the ruling of both courts.

Petitioner’s reliance on respondent’s alleged admission in the Batas Pambansa Blg. 22cases that they had agreed on the payment of interest at the rate of 7% deserves scantconsideration. In the said case, respondent merely testified that after paying the totalamount of loan, petitioner ordered her to pay interest.28 Respondent did not categoricallydeclare in the same case that she and respondent made an express stipulation in writing asregards payment of interest at the rate of 7%. As earlier discussed, monetary interest is dueonly if there was anexpress stipulation in writing for the payment of interest.

There are instances in which an interest may be imposed even in the absence of expressstipulation, verbal or written, regarding payment of interest. Article 2209 of the Civil Codestates that if the obligation consists in the payment of a sum of money, and the debtor

incurs delay, a legal interest of 12% per annum may be imposed as indemnity for damagesif no stipulation on the payment of interest was agreed upon. Likewise, Article 2212 of theCivil Code provides that interest due shall earn legal interest from the time it is judiciallydemanded, although the obligation may be silent on this point.

All the same, the interest under these two instances may be imposed only as a penalty ordamages for breach of contractual obligations. It cannot be charged as a compensation forthe use or forbearance of money. In other words, the two instances apply only tocompensatory interest and not to monetary interest.29 The case at bar involves petitioner’sclaim for monetary interest.

Further, said compensatory interest is not chargeable in the instant case because it was notduly proven that respondent defaulted in paying the loan. Also, as earlier found, no interestwas due on the loan because there was no written agreement as regards payment ofinterest.

Apropos the second assigned error, petitioner argues that the principle of solutioindebiti does not apply to the instant case. Thus, he cannot be compelled to return thealleged excess amount paid by respondent as interest.30



























Under Article 1960 of the Civil Code, if the borrower of loan pays interest when there hasbeen no stipulation therefor, the provisions of the Civil Code concerning solutio indebiti shallbe applied. Article 2154 of the Civil Code explains the principle of solutio indebiti . Saidprovision provides that if something is received when there is no right to demand it, and itwas unduly delivered through mistake, the obligation to return it arises. In such a case, acreditor-debtor relationship is created under a quasi-contract whereby the payor becomesthe creditor who then has the right to demand the return of payment made by mistake, andthe person who has no right to receive such payment becomes obligated to return thesame. The quasi-contract of solutio indebiti harks back to the ancient principle that no oneshall enrich himself unjustly at the expense of another .31 The principle of solutioindebiti applies where (1) a payment is made when there exists no binding relation betweenthe payor, who has no duty to pay, and the person who received the payment; and (2) thepayment is made through mistake, and not through liberality or some other cause.32 Wehave held that the principle of solutio indebiti applies in case of erroneous payment ofundue interest.33

It was duly established that respondent paid interest to petitioner. Respondent was under

no duty to make such payment because there was no express stipulation in writing to thateffect. There was no binding relation between petitioner and respondent as regards thepayment of interest. The payment was clearly a mistake. Since petitioner receivedsomething when there was no right to demand it, he has an obligation to return it.

We shall now determine the propriety of the monetary award and damages imposed by theRTC and the Court of Appeals.

Records show that respondent received a loan amounting to P540,000.00 from

petitioner .34 Respondent issued two checks with a total worth of P700,000.00 in favor of

petitioner as payment of the loan.35 These checks were subsequently encashed bypetitioner .36 Obviously, there was an excess of P160,000.00 in the payment for the loan.

Petitioner claims that the excess of P160,000.00 serves as interest on the loan to which he

was entitled. Aside from issuing the said two checks, respondent also paid cash in the totalamount of P175,000.00 to petitioner as interest.37 Although no receipts reflecting the same

were presented because petitioner refused to issue such to respondent, petitioner,nonetheless, admitted in his Reply-Affidavit38 in the Batas Pambansa Blg. 22 cases thatrespondent paid him a total amount of P175,000.00 cash in addition to the two checks.

Section 26 Rule 130 of the Rules of Evidence provides that the declaration of a party as to arelevant fact may be given in evidence against him. Aside from the amounts of P160,000.00

and P175,000.00 paid as interest, no other proof of additional payment as interest was

presented by respondent. Since we have previously found that petitioner is not entitled topayment of interest and that the principle of solutio indebiti applies to the instant case,

petitioner should return to respondent the excess amount of P160,000.00 and P175,000.00

or the total amount of P335,000.00. Accordingly, the reimbursable amount to respondent

fixed by the RTC and the Court of Appeals should be reduced fromP660,000.00

to P335,000.00.

As earlier stated, petitioner filed five (5) criminal cases for violation of Batas Pambansa Blg.22 against respondent. In the said cases, the MeTC found respondent guilty of violatingBatas Pambansa Blg. 22 for issuing five dishonored checks to petitioner. Nonetheless,respondent’s conviction therein does not affect our ruling in the instant case. The twochecks, subject matter of this case, totaling P700,000.00 which respondent claimed as

payment of the P540,000.00 worth of loan, were not among the five checks found to be

dishonored or bounced in the five criminal cases. Further, the MeTC found that respondentmade an overpayment of the loan by reason of the interest which the latter paid topetitioner .39

Article 2217 of the Civil Code provides that moral damages may be recovered if the partyunderwent physical suffering, mental anguish, fright, serious anxiety, besmirchedreputation, wounded feelings, moral shock, social humiliation and similar injury. Respondenttestified that she experienced sleepless nights and wounded feelings when petitioner







































refused to return the amount paid as interest despite her repeated demands. Hence, theaward of moral damages is justified. However, its corresponding amount of P300,000.00, as

fixed by the RTC and the Court of Appeals, is exorbitant and should be equitably reduced. Article 2216 of the Civil Code instructs that assessment of damages is left to the discretionof the court according to the circumstances of each case. This discretion is limited by theprinciple that the amount awarded should not be palpably excessive as to indicate that itwas the result of prejudice or corruption on the part of the trial court.40 To our mind, theamount of P150,000.00 as moral damages is fair, reasonable, and proportionate to the

injury suffered by respondent.

Article 2232 of the Civil Code states that in a quasi-contract, such as solutio indebiti ,exemplary damages may be imposed if the defendant acted in an oppressive manner.Petitioner acted oppressively when he pestered respondent to pay interest and threatenedto block her transactions with the PNO if she would not pay interest. This forced respondentto pay interest despite lack of agreement thereto. Thus, the award of exemplary damages isappropriate. The amount of P50,000.00 imposed as exemplary damages by the RTC and

the Court is fitting so as to deter petitioner and other lenders from committing similar and

other serious wrongdoings.41

Jurisprudence instructs that in awarding attorney’s fees, the trial court must state thefactual, legal or equitable justification for awarding the same.42 In the case underconsideration, the RTC stated in its Decision that the award of attorney’s fees equivalent to25% of the amount paid as interest by respondent to petitioner is reasonable and moderateconsidering the extent of work rendered by respondent’s lawyer in the instant case and thefact that it dragged on for several years.43 Further, respondent testified that she agreed tocompensate her lawyer handling the instant case such amount.44 The award, therefore, ofattorney’s fees and its amount equivalent to 25% of the amount paid as interest byrespondent to petitioner is proper.

Finally, the RTC and the Court of Appeals imposed a 12% rate of legal interest on theamount refundable to respondent computed from 3 March 1998 until its full payment. This iserroneous.

We held in Eastern Shipping Lines, Inc. v. Court of Appeals,45 that when an obligation, notconstituting a loan or forbearance of money is breached, an interest on the amount ofdamages awarded may be imposed at the rate of 6% per annum. We further declared thatwhen the judgment of the court awarding a sum of money becomes final and executory, therate of legal interest, whether it is a loan/forbearance of money or not, shall be 12% perannum from such finality until its satisfaction, this interim period being deemed equivalent toa forbearance of credit.

In the present case, petitioner’s obligation arose from a quasi-contract of solutio indebiti andnot from a loan or forbearance of money. Thus, an interest of 6% per annum should beimposed on the amount to be refunded as well as on the damages awarded and on theattorney’s fees, to be computed from the time of the extra-judicial demand on 3 March1998,46 up to the finality of this Decision. In addition, the interest shall become 12% perannum from the finality of this Decision up to its satisfaction.

WHEREFORE, the Decision of the Court of Appeals in CA-G.R. CV No. 71814, dated 16December 2005, is hereby AFFIRMED with the following MODIFICATIONS: (1) the amountof P660,000.00 as refundable amount of interest is reduced to THREE HUNDRED THIRTY

FIVE THOUSAND PESOS (P335,000.00); (2) the amount ofP300,000.00 imposed as moral

damages is reduced to ONE HUNDRED FIFTY THOUSAND PESOS (P150,000.00); (3) an

interest of 6% per annum is imposed on the P335,000.00, on the damages awarded and on

the attorney’s fees to be computed from the time of the extra-judicial demand on 3 March1998 up to the finality of this Decision; and (4) an interest of 12% per annum is alsoimposed from the finality of this Decision up to its satisfaction. Costs against petitioner.

SO ORDERED.





























Civil Rv w Cases

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