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Special Torts (Human Relations) A. Abuse of Right (Article 19) Article 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith. 1. [G.R. No. L-7817. October 31, 1956.] ALFREDO M. VELAYO, in his capacity as Assignee of the insolvent COMMERCIAL AIR LINES, INC. (CALI), plaintiff-appellant, vs. SHELL COMPANY OF THE PHILIPPINE ISLANDS, LTD., defendant-appellee, YEK HUA TRADING CORPORATION, PAUL SYCIP and MABASA & CO., intervenors. FACTS: since the start of CALI’s operations, the defendant supplied all its fuel needs. Mr. Desmond Fitzgerald, its Credit Manager who extended credit to CALI, was in charge of the collection thereof. However, all matters referring to extensions of the term of payment had to be decided first by Mr. Stephen Crawford and later by Mr. Wildred Wooding, who represented in this country Defendant's Board of Directors, the residence of which is in London, England. As of August, 1948, the books of the Defendant showed a balance of P170,162.58 in its favor for goods it sold and delivered to CALI. Even before August 6, 1948, Defendant had reasons to believe that the financial condition of the CALI was for from being satisfactory. As a matter of fact, according to Mr. Fitzgerald, CALI's Douglas C-54 plane, then in California, was offered to him by Mr. Alfonso Sycip, CALI's President of the Board of Directors, in partial settlement of their accounts, which offer was, however, declined by Mr. Crawford. On August 6, 1948, the management of CALI informally convened its principal creditors (excepting only the insignificant small claims) who were invited to a luncheon that was held between 12:00 and 2:00 o'clock in the afternoon of that day in the Trade and Commerce Building at 123 Juan Luna St., Manila, and informed them that CALI was in a state of insolvency and had to stop operation. The persons present, including Mr. Desmond Fitzgerald, signed their names and the names of the companies they represented on a memorandum pad of the law firm Quisumbing, Sycip, and Quisumbing. In that meeting at noontime of August 6, 1948, out of the 194 creditors in all (Exh. OO) 15 were listed as principal creditors having big balances. Mr. Alexander Sycip, Secretary of the Board of Directors of the CALI explained the memorandum agreement executed by the CALI with the Philippine Air Lines, Inc., on August 4, 1948, regarding the proposed sale to the latter of the aviation equipment of the former. Mr. Alexander Sycip was assisted in the explanation by CPA Alfredo Velayo of Washington, Sycip & Company, Auditors of the CALI, who discussed the balance sheets and distributed copies thereof to the creditors present. The said balance sheet made mention of a C-54 plane in the United States, the property now involved in this suit. There was a general understanding among all the creditors present on the desirability of consummating the sale in favor of the Philippine Air Lines Inc. It was the sense of the persons present that, if possible, the insolvency court be avoided but that should the creditors not meet in agreement, then all the profits from the sale will be submitted to an insolvency court for proper division among the creditors." To this working committee, Mr. Desmond Fitzgerald, Credit Manager, of the Defendant Shell, Atty. Agcaoili of the National Airports Corporation and Atty. Alexander Sycip were appointed. After the creditors present knew the balance sheet and heard the explanations of the officers of the CALI, it was their unanimous opinion that it would be advantageous not to present suits against this corporation but to strive for a fair pro-rata division of its assets although the management of the CALI announced that in case of non-agreement of the creditors on a pro-rata division of the assets, it would file insolvency proceedings. VILLO, Viktoria Mary Antonette P. 5 th set cases
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Page 1: Special Torts (Human Relations)

Special Torts (Human Relations)

A. Abuse of Right (Article 19)

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

1. [G.R. No. L-7817. October 31, 1956.]ALFREDO M. VELAYO, in his capacity as Assignee of the insolvent COMMERCIAL AIR LINES, INC. (CALI), plaintiff-appellant, vs. SHELL COMPANY OF THE PHILIPPINE ISLANDS, LTD., defendant-appellee, YEK HUA TRADING CORPORATION, PAUL SYCIP and MABASA & CO., intervenors.

FACTS: since the start of CALI’s operations, the defendant supplied all its fuel needs. Mr. Desmond Fitzgerald, its Credit Manager who extended credit to CALI, was in charge of the collection thereof. However, all matters referring to extensions of the term of payment had to be decided first by Mr. Stephen Crawford and later by Mr. Wildred Wooding, who represented in this country Defendant's Board of Directors, the residence of which is in London, England.

As of August, 1948, the books of the Defendant showed a balance of P170,162.58 in its favor for goods it sold and delivered to CALI. Even before August 6, 1948, Defendant had reasons to believe that the financial condition of the CALI was for from being satisfactory. As a matter of fact, according to Mr. Fitzgerald, CALI's Douglas C-54 plane, then in California, was offered to him by Mr. Alfonso Sycip, CALI's President of the Board of Directors, in partial settlement of their accounts, which offer was, however, declined by Mr. Crawford.

On August 6, 1948, the management of CALI informally convened its principal creditors (excepting only the insignificant small claims) who were invited to a luncheon that was held between 12:00 and 2:00 o'clock in the afternoon of that day in the Trade and Commerce Building at 123 Juan Luna St., Manila, and informed them that CALI was in a state of insolvency and had to stop operation. The persons present, including Mr. Desmond Fitzgerald, signed their names and the names of the companies they represented on a memorandum pad of the law firm Quisumbing, Sycip, and Quisumbing. In that meeting at noontime of August 6, 1948, out of the 194 creditors in all (Exh. OO) 15 were listed as principal creditors having big balances.

Mr. Alexander Sycip, Secretary of the Board of Directors of the CALI explained the memorandum agreement executed by the CALI with the Philippine Air Lines, Inc., on August 4, 1948, regarding the proposed sale to the latter of the aviation equipment of the former. Mr. Alexander Sycip was assisted in the explanation by CPA Alfredo Velayo of Washington, Sycip & Company, Auditors of the CALI, who discussed the balance sheets and distributed copies thereof to the creditors present. The said balance sheet made mention of a C-54 plane in the United States, the property now involved in this suit. There was a general understanding among all the creditors present on the desirability of consummating the sale in favor of the Philippine Air Lines Inc. It was the sense of the persons present that, if possible, the insolvency court be avoided but that should the creditors not meet in agreement, then all the profits from the sale will be submitted to an insolvency court for proper division among the creditors."

To this working committee, Mr. Desmond Fitzgerald, Credit Manager, of the Defendant Shell, Atty. Agcaoili of the National Airports Corporation and Atty. Alexander Sycip were appointed.

After the creditors present knew the balance sheet and heard the explanations of the officers of the CALI, it was their unanimous opinion that it would be advantageous not to present suits against this corporation but to strive for a fair pro-rata division of its assets although the management of the CALI announced that in case of non-agreement of the creditors on a pro-rata division of the assets, it would file insolvency proceedings.

Defendant effected a telegraphic transfer of its credit against the CALI to the American corporation Shell Oil Company, Inc., assigning its credit, amounting to $79,440.00, which was subsequently followed by a deed of assignment of credit dated August 10, 1948, the credit amounting this time to the sum of $85,081.29.

On August 12, 1948, the American corporation Shell Oil Company, Inc., filed a complaint against the CALI in the Superior Court of the State of California, U.S.A. in and for the County of San Bernardino, for the collection of an assigned credit of $79,440.00 — Case No. 62576 of said Court.On September 17, 1948, an amended complaint was filed to recover an assigned credit of $85,081.29 and a supplemental attachment for a higher sum was applied for and issued against the C-54 plane, plus miscellaneous personal properties held by Pacific Overseas Air Lines for the CALI.

CALI, also prompted by Defendant's action in getting the alleged undue preference over the other creditors by attaching the C-54 plane in the United States, beyond the jurisdiction of the Philippines, filed on October 7, 1948, a petition for voluntary insolvency. On this date, an order of insolvency was issued by the court.

After properly qualifying as Assignee, Alfredo M. Velayo instituted this case (No. 6966 of the Court of First Instance of Manila) on December 17, 1948, against the Shell Company of P. I., Ltd., for the purpose of securing from the Court a writ of injunction restraining Defendant, its agents, servants, attorneys and solicitors from prosecuting in and for the County of San Bernardino in the Superior Court of the State of California, U.S.A and as an alternative remedy, in case the purported assignment of Defendant's alleged credit to the American corporation Shell Oil Company, Inc., and the attachment issued against CALI in the said Superior Court of California shall

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have the effect of defeating the procurement by plaintiff as Assignee in insolvency of the above- mentioned airplane, which is the property of the insolvent CALI, situated in the Ontario International Airport, with in the County of San Bernardino, State of California, U.S.A., that judgment for damages in double the value of the airplane be awarded in favor of plaintiff against Defendant, with costs.

ISSUES:1. Whether or not under the facts of the case, the defendant Shell Company of the P. I., Ltd., taking advantage of its knowledge of the existence of CALI's airplane C-54 at the Ontario International Airport within the Country of San Bernardino, State of California, U. S. A.,2. Whether or not by reason of said betrayal of confidence and trust, Defendant may be made under the law to answer for the damages prayed by the plaintiff; and if so, what should be the amount of such damages.

RULING:1. Yes, it took advantage. The telegraphic transfer made without knowledge and at the back of the other creditors of CALI may be a shrewd and surprise move that enabled Defendant to collect almost all if not the entire amount of its credit, but the Court of Justice cannot countenance such attitude at all, and much less from a foreign corporation to the detriment of our Government and local business.

Under the circumstances of the case, Defendant's transfer of its aforementioned credit would have been justified only if Mr. Fitzgerald had declined to take part in the Working Committee and frankly and honestly informed the other creditors present that he had no authority to bind his principal and that the latter was to be left free to collect its credit from CALI by whatever means his principal deemed wise and were available to it. But then such information would have immediately dissolved all attempts to come to an amicable conciliation among the creditors and would have precipitated the filing in court of CALI's voluntary insolvency proceedings and nullified the intended transfer of Defendant's credit to its above-mentioned sister corporation.

2. Yes, there is liability.

"Art 19. Any person must, in the exercise of his rights and in the performances of his duties, act with justice, give everyone his due and observe honesty and good faith".It may be said that this article only contains a mere declarations of principles and while such statement may be is essentially correct, yet We find that such declaration is implemented by Article 21 and sequence of the same Chapter which prescribe the following:

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

The Code Commission commenting on this article, says the following:"Thus at one stroke, the legislator, if the foregoing rule is approved (as it was approved), would vouchsafe adequate legal remedy for that untold numbers of moral wrongs which is impossible for human foresight to provide for specifically in the statutes."But, it may be asked, would this proposed article obliterate the boundary line between morality and law? The answer is that, in the last analysis, every good law draws its breath of life from morals, from those principles which are written with words of fire in the conscience of man. If this premises is admitted, then the proposed rule is a prudent earnest of justice in the face of the impossibility of enumerating, one by one, all wrongs which cause damages. When it is reflected that while codes of law and statutes have changed from age to age, the conscience of man has remained fixed to its ancient moorings, one can not but feel that it is safe and salutary to transmute, as far as may be, moral norms into legal rules, thus imparting to every legal system that enduring quality which ought to be one of its superlative attributes."Furthermore, there is no belief of more baneful consequence upon the social order than that a person may with impunity cause damage to his fellow-men so long as he does not break any law of the State, though he may be defying the most sacred postulates of morality. What is more, the victim loses faith in the ability of the government to afford him protection or relief.

From the Civil Code Annotated by Ambrosio Padilla, Vol. I, p. 51, 1956 edition, we also copy the following:"A moral wrong or injury, even if it does not constitute a violation of a statute law, should be compensated by damages. Moral damages (Art. 2217) may be recovered (Art. 2219). In Article 20, the liability for damages arises from a willful or negligent act contrary to law. In this article, the act is contrary to morals, good customs or public policy."Now, if Article 23 of the Civil Code goes as far as to provide that:"Even if an act or event causing damage to another's property was not due to the fault or negligence of the defendant, the latter shall be liable for indemnity if through the act or event he was benefited."with mere much more reason the Defendant should be liable for indemnity for acts it committed in bad faith and with betrayal of confidence.

There is no clear proof in the record about the real value of CALI's plane C-54 at the time when Defendant's credit was assigned to its sister corporation in the United States.

JudgmentWherefore, and on the strength of the foregoing considerations, the decision appealed from is reversed and Defendant-Appellee-, Shell Company of the Philippine Islands, Ltd., is hereby sentenced to pay to Plaintiff-Appellant, as Assignee of the insolvent CALI, damages in a sum double the amount of the value of the insolvent's airplane C-54 at the time Defendant's credit against the CALI was assigned to its sister corporation in the United States, which value shall be determined in the corresponding incident in the lower court after this decision becomes final. Costs are taxed against defendant-appellee. It is so ordered.

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B. Contrary to Law and Morals

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

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

2. [G.R. No. L-14628. September 30, 1960.]FRANCISCO HERMOSISIMA, petitioner, vs. THE HON. COURT OF APPEALS, ET AL., respondents.Regino Hermosisima for petitioner.

FACTS:Complainant Soledad Cagigas, was born in July 1917. Since 1950, Soledad then a teacher in the Sibonga Provincial High School in Cebu, and petitioner, who was almost ten (10) years younger than she, used to go around together and were regarded as engaged, although he had made no promise of marriage prior thereto. In 1951, she gave up teaching and became a life insurance underwriter in the City of Cebu, where intimacy developed among her and the petitioner, since one evening, in 1953, when after coming from the movies, they had sexual intercourse in his cabin on board M/V "Escaño" to which he was then attached as apprentice pilot. In February, 1954, Soledad advised petitioner that she was in the family way, whereupon he promised to marry her. Their child, Chris Hermosisima, was born on June 17, 1954, in a private maternity and clinic. However, subsequently, or on July 24, 1954, defendant married one Romanita Perez.

Hence, the present action, which was commenced on or about October 4, 1954.

On October 4, 1954, Soledad Cagigas, hereinafter referred to as complainant, filed with said court of first instance a complaint for the acknowledgment of her child, Chris Hermosisima, as natural child of said petitioner, as well as for support of said child and moral damages for alleged breach of promise. Petitioner admitted the paternity of child and expressed willingness to support the later, but denied having ever promised to marry the complainant. Upon her motion, said court ordered petitioner, on October 27, 1954, to pay, by way of alimony pendente lite, P50.00 a month, which was, on February 16, 1955, reduced to P30.00 a month.On appeal taken by petitioner, the Court of Appeals affirmed this decision, except as to the actual and compensatory damages and the moral damages, which were increased to P5,614.25 and P7,000.00, respectively.

ISSUE:whether moral damages are recoverable, under our laws, for breach of promise to marry

RULING:

That breach of promise to marry is not actionable has been definitely decided in the case of De Jesus vs. Syquia, 53 Phil., 366. The history of breach of promise suits in the United States and in England has shown that no other action lends itself more readily to abuse by designing women and unscrupulous man. It is this experience which has led to the abolition of rights of action in the so-called Balm suits in many of the American States.

1. DAMAGES; BREACH OF PROMISE TO MARRY; NOT ACTIONABLE. — It is the clear and manifest intent of Congress not to sanction actions for breach of promise to marry.2. ID.; ID.; SEDUCTION AS GROUND FOR AWARD OF MORAL DAMAGES; NATURE OF SEDUCTION CONTEMPLATED IN ARTICLE 2219 OF NEW CIVIL CODE. — The "seduction" contemplated in Article 2219 of the New Civil Code as one of the cases where moral damages may be recovered, is the crime punished as such in Articles 337 and 338 of the Revised Penal Code.3. ID.; ID.; ID.; ID.; WHEN SEDUCTION DOES NOT EXIST. — Where a woman, who was an insurance agent and former high school teacher, around 36 years of age and approximately 10 years older than the man, "overwhelmed by her love" for a man approximately 10 years younger then her, had intimate relations with him, because she "wanted to bind" him "by having a fruit of their engagement even before they had the benefit of clergy," it cannot be said that he is morally guilty of seduction.

The court of first instance sentenced petitioner to pay the following: (1) a monthly pension of P30.00 for the support of the child; (2) P4,500, representing the income that complainant had allegedly failed to earn during her pregnancy and shortly after the birth of the child, as actual and compensatory damages; (3) P5,000, as moral damages; and (4) P500.00, as attorney's fees. The Court of Appeals added to the second item the sum of P1,114.25 — consisting of P144.20, for hospitalization and medical attendance, in connection with the parturiation, and the balance representing expenses incurred to support the child — and increased the moral damages to P7,000.00.

With the elimination of this award for moral damages, the decision of the Court of Appeals is hereby affirmed, therefore, in all other respects, without special pronouncement as to costs in this instance. It is so ordered.

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3. [G.R. No. 79184. May 6, 1992.]ERLINDA L. PONCE, petitioner, vs. VALENTINO L. LEGASPI and THE HON. COURT OF APPEALS, respondents.

FACTS:

The present case stemmed from the filing before the Supreme Court on October 3, 1977 of a complaint for disbarment against respondent Atty. Valentino Legaspi by petitioner Erlinda Ponce.At the time of the filing of the disbarment proceedings, petitioner Ponce, together with her husband Manuel, owned forty three percent (43%) of the stockholdings of L'NOR Marine Services, Inc. (L'NOR). She was then Treasurer and director of the Board of Directors of L'NOR while her husband was a director. Forty eight percent (48%)) of L'NOR's stocks was owned by the spouses Edward and Norma Porter who were then serving as President/General Manager and Secretary respectively.

About July, 1976, said spouses Edward J. Porter and Norma Y. Porter, together with Zenaida T. Manaloto, facilitated, assisted and aided by herein respondent Legaspi (Annexes "B" and "B-1" herewith), incorporated the Yrasport Drydocks, Inc., YRASPORT, like Yrasport Enterprises, was launched without the knowledge of the minority stockholders owning 43% of L'NOR, and was really designed to compete, if not eliminate, L'NOR as a competitor.

On account of the aforecited flagrant fraud, a charge of Estafa was filed against Edward J. Porter and the office of the City Fiscal handed down a resolution to prosecute him in court

In view of the aforesaid illegal manipulations, illicit schemes, palpable frauds and estafa committed by said President-General Manager Edward J. Porter, in confabulation and conspiracy with the other officers of the corporation, namely: his wife Norma Y. Porter and Zenaida T. Manaloto, herein complainant requested respondent Valentino Legaspi to take and pursue appropriate legal steps and seasonable actions in order to protect the paramount interest of L'NOR of which he is the legal counsel by retainer, but the latter, without any valid excuse whatsoever, refused to do so, although he is still collecting his monthly retainer. On account of the refusal of said corporate attorney of L'NOR, respondent Legaspi, complainant was forced to retain the services of another counsel to prosecute the appropriate derivative suit in the Court of First Instance of Cebu.Up to the present time respondent is still collecting his monthly retainer, and for his appearance for Edward J. Porter, et. al. in the derivative suit, he collected the sum of P2,000.00 from L'NOR as payment for his illicit legal services in defending the Porters and Manaloto against the very interest of the corporation paying him monthly retainer.

ISSUE:Whether Ponce is liable for malicious prosecution

RULING:No.

In order, however, for the malicious prosecution suit to prosper, the plaintiff must prove: (1) the fact of the prosecution and the further fact that the defendant was himself the prosecutor, and that the action finally terminated with an acquittal; (2) that in bringing the action, the prosecutor acted without probable cause; and (3) that the prosecutor was actuated or impelled by legal malice, that is by improper or sinister motive

"Malice is essential to the maintenance of an action for malicious prosecution and not merely to the recovery of exemplary damages. But malice alone does not make one liable for malicious prosecution, where probable cause is shown, even where it appears that the suit was brought for the mere purpose of vexing, harassing and injuring his adversary. In other words malice and want of probable cause must both exist in order to justify the action."

Probable cause is the existence of such facts and circumstances as would excite the belief, in a reasonable mind, acting on the facts within the knowledge of the prosecutor, that the person charged was guilty of the crime.

The general rule is well settled that one cannot be held liable in damages for maliciously instituting a prosecution where he acted with probable cause. In other words, a suit will lie only in cases where a legal prosecution has been carried on without probable cause.

Since the petitioner, however, was of the honest perception that YRASPORT was actually organized to appropriate for itself some of L'NOR'S business, then we find that she had probable cause to file the disbarment suit.The existence of probable cause alone, regardless of considerations of malice, is sufficient to defeat the charge of malicious prosecution.

Atty. Legaspi may have suffered injury as a consequence of the disbarment proceedings. But the adverse result of an action does not per se make the action wrongful and subject the actor to make payment of damages for the law could not have meant to impose a penalty on the right to litigate. One who exercises his rights does no injury.

1. CIVIL LAW; DAMAGES; CLAIM THEREOF BASED ON THE GROUND OF MALICIOUS PROSECUTION; DISBARMENT PROCEEDINGS MAY BE THE BASIS FOR A SUBSEQUENT ACTION FOR MALICIOUS PROSECUTION. — Both the Court of Appeals and the petitioner are of the belief that the suit for damages filed by Atty. Legaspi is not one arising from malicious prosecution because "a disbarment proceeding is not a criminal action. (De Jesus-Paras v. Vailoces, 1 SCRA 954 [1961]." The obvious inference is

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that only an unsuccessful criminal action may subsequently give rise to a claim for damages based on malicious prosecution. This is not correct. While generally, malicious prosecution refers to unfounded criminal actions and has been expanded to include unfounded civil suits just to vex and humiliate the defendant despite the absence of a cause of action or probable cause (Equitable Banking Corporation v. Intermediate Appellate Court, 133 SCRA 13B [1984]) the foundation of an action for malicious prosecution is an original proceeding, judicial in character. (Lorber v. Storrow, 70 P. 2d 513 [1937]; Shigeru Hayashida v. Tsunehachi Kakimoto, 23 P. 2d 311 [1933]; Graves v. Rudman, 257 N.Y.S. 212 [1932]). A disbarment proceeding is, without doubt, judicial in character and therefore may be the basis for a subsequent action for malicious prosecution.

2. ID.; ID.; ID.; COVERAGE. — An action for damages arising from malicious prosecution is anchored on the provisions of Article 21, 2217 and 2219 [8] of the New Civil Code. Under these Articles: "Article 21. Any person who willfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for damages.

"Article 2217. Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation and similar injury. Though incapable of pecuniary computation, moral damages may be recovered if they are the proximate result of the defendant's wrongful act or omission. "

Article 2219. Moral damages may be recovered in the following and analogous cases: . . . (8) Malicious prosecution.

3. ID.; ID.; INJURY SUFFERED AS A CONSEQUENCE OF A PERSON'S RIGHT TO LITIGATE; WILL NOT AUTOMATICALLY RISE THERETO. — Atty. Legaspi may have suffered injury as a consequence of the disbarment proceedings. But the adverse result of an action does not per se make the action wrongful and subject the actor to make payment of damages for the law could not have meant to impose a penalty on the right to litigate (Saba v. Court of Appeals, 189 SCRA 50 [1990], citing Rubio v. Court of Appeals, 141 SCRA 488 [1986]. If damage results from a person's exercising his legal rights, it is damnum absque injuria.

C. Unjust enrichment

Article 22. Every person who through an act of performance by another, or any other means, acquires or comes into possession of something at the expense of the latter without just or legal ground, shall return the same to him.

Article 23. Even when an act or event causing damage to another's property was not due to the fault or negligence of the defendant, the latter shall be liable for indemnity if through the act or event he was benefited.

4. [G.R. No. 115814. May 26, 1995.]PEDRO P. PECSON, petitioner, vs. COURT OF APPEALS, SPOUSES JUAN NUGUID and ERLINDA NUGUID, respondents.

FACTS:Petitioner Pedro P. Pecson was the owner of a commercial lot located in Kamias Street, Quezon City, on which he built a four-door two-storey apartment building. For his failure to pay realty taxes amounting to twelve thousand pesos (P12,000.00), the lot was sold at public auction by the City Treasurer of Quezon City to Mamerto Nepomuceno who in turn sold it on 12 October 1983 to the private respondents, the spouses Juan Nuguid and Erlinda Tan-Nuguid, for one hundred three thousand pesos (P103,000.00).

APPLICABLE LAWS:Art. 448. The owner of the land on which anything has been built, sown or planted in good faith, shall have the right to appropriate as his own the works, sowing or planting, after payment of the indemnity provided for in articles 546 and 548, or to oblige the one who built or planted to pay the price of the land, and the one who sowed, the proper rent. However, the builder or planter cannot be obliged to buy the land if its value is considerably more than that of the building or trees. In such case, he shall pay reasonable rent, if the owner of the land does not choose to appropriate the building or trees after proper indemnity. The parties shall agree upon the terms of the lease and in case of disagreement, the court shall fix the terms thereof. (361a)

xxx xxx xxxArt. 546. Necessary expenses shall be refunded to every possessor; but only the possessor in good faith may retain the thing until he has been reimbursed therefor.Useful expenses shall be refunded only to the possessor in good faith with the same right of retention, the person who has defeated him in the possession having the option of refunding the amount of the expenses or of paying the increase in value which the thing may have acquired by reason thereof. (453a)

ISSUE:How will Article 546 be applied to the present case?

RULING: The objective of Article 546 of the Civil Code is to administer justice between the parties involved. In this regard, this Court had long ago stated in Rivera vs. Roman Catholic Archbishop of Manila, (40 Phil. 717 [1920]) that the said provision was formulated in trying to adjust the rights of the owner and possessor in good faith of a piece of land, to administer complete justice to both of them in such a way as neither one nor the other may enrich himself of that which does not belong to him. Guided by this precept, it is therefore the current market value of the improvements which should be made the basis of reimbursement. A contrary ruling would unjustly enrich VILLO, Viktoria Mary Antonette P.5th set cases

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the private respondents who would otherwise be allowed to acquire a highly value income-yielding four-unit apartment building for a measly amount. Consequently, the parties should therefore be allowed to adduce evidence on the present market value of the apartment building upon which the trial court should base its finding as to the amount of reimbursement to be paid by the landowner. The trial court also erred in ordering the petitioner to pay monthly rentals equal to the aggregate rentals paid by the lessees of the apartment building.

Since the private respondents had opted to appropriate the apartment building, the petitioner is thus entitled to the possession and enjoyment of the apartment building, until he is paid the proper indemnity, as well as of the portion of the lot where the building has been constructed. This is so because the right to retain the improvements while the corresponding indemnity is not paid implies the tenancy or possession in fact of the land on which it is built, planted or sown. The petitioner not having been so paid, he was entitled to retain ownership of the building and, necessarily, the income therefrom.

The case is hereby remanded to the trial court for it to determine the current market value of the apartment building on the lot. For this purpose, the parties shall be allowed to adduce evidence on the current market value of the apartment building. The value so determined shall be forthwith paid by the private respondents to the petitioner otherwise the petitioner shall be restored to the possession of the apartment building until payment of the required indemnity.

5. FIRST DIVISION[G.R. No. 117009. October 11, 1995.]SECURITY BANK & TRUST COMPANY and ROSITO C. MANHIT, petitioners, vs. COURT OF APPEALS and YSMAEL C. FERRER, respondents.

FACTS:Private respondent Ysmael C. Ferrer was contracted by herein petitioners Security Bank and Trust Company (SBTC) and Rosito C. Manhit to construct the building of SBTC in Davao City for the price of P1,760,000.00. Respondent Ferrer was able to complete the construction of the building on 15 August 1980 (within the contracted period) but he was compelled by a drastic increase in the cost of construction materials to incur expenses of about P300,000.00 on top of the original cost. The additional expenses were made known to petitioner SBTC thru its Vice-President Fely Sebastian and Supervising Architect Rudy de la Rama as early as March 1980. Respondent Ferrer made timely demands for payment of the increased cost. Said demands were supported by receipts, invoices, payrolls and other documents proving the additional expenses.In March 1981, SBTC thru Assistant Vice-President Susan Guanio and a representative of an architectural firm consulted by SBTC, verified Ferrer's claims for additional cost. A recommendation was then made to settle Ferrer's claim but only for P200,000.00. SBTC, instead of paying the recommended additional amount, denied ever authorizing payment of any amount beyond the original contract price. SBTC likewise denied any liability for the additional cost based on Article IX of the building contract which states:"If at any time prior to the completion of the work to be performed hereunder, increase in prices of construction materials and/or labor shall supervene through no fault on the part of the contractor whatsoever or any act of the government and its instrumentalities which directly or indirectly affects the increase of the cost of the project, OWNER shall equitably make the appropriate adjustment on mutual agreement of both parties."

Ysmael C. Ferrer then filed a complaint for breach of contract with damages.

RULING:

Article 22 of the Civil Code which embodies the maxim, Nemo ex alterius incommodo debet lecupletari (no man ought to be made rich out of another's injury) states:"ARTICLE 22. Every person who through an act of performance by another, or any other means, acquires or comes into possession of something at the expense of the latter without just or legal ground, shall return the same to him."

Under Article 1182 of the Civil Code, a conditional obligation shall be void if its fulfillment depends upon the sole will of the debtor. In the present case, the mutual agreement, the absence of which petitioner bank relies upon to support its non-liability for the increased construction cost, is in effect a condition dependent on petitioner bank's sole will, since private respondent would naturally and logically give consent to such an agreement which would allow him recovery of the increased cost.Further, it cannot be denied that petitioner bank derived benefits when private respondent completed the construction even at an increased cost.Hence, to allow petitioner bank to acquire the constructed building at a price far below its actual construction cost would undoubtedly constitute unjust enrichment for the bank to the prejudice of private respondent. Such unjust enrichment, as previously discussed, is not allowed by law.

2. ID.; AWARD OF ATTORNEY'S FEES; REDUCED WHEN THE AMOUNT THEREOF APPEARS TO BE UNCONSCIONABLE OR UNREASONABLE; CASE AT BAR. — With respect to the award of attorney's fees to respondent, the Court has previously held that, "even with the presence of an agreement between the parties, the court may nevertheless reduce attorney's fees though fixed in the contract when the amount thereof appears to be unconscionable or unreasonable." As previously noted, the diligence and legal know-how exhibited by counsel for private respondent hardly justify an award of 25% of the principal amount due, which would be at least P60,000.00. Besides, the issues in this case are far from complex and intricate. The award of attorney's fees is thus reduced to P10,000.00.

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D. Judicial Vigilance (Article 24)

Article 24. In all contractual, property or other relations, when one of the parties is at a disadvantage on account of his moral dependence, ignorance, indigence, mental weakness, tender age or other handicap, the courts must be vigilant for his protection.

6. [G.R. No. 98273. October 28, 1991.]CLARITA V. CRUZ, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION (NLRC), PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION (POEA), EMS MANPOWER & PLACEMENT SERVICE (PHIL.), ABDUL KARIM AL YAHYA, and TRAVELLERS INSURANCE, respondents.

FACTS:Clarita V. Cruz * went abroad pursuant to an employment contract that she hoped would improve her future. Although a high school graduate, she agreed to work as a domestic helper in Kuwait in consideration of an attractive salary and vacation leave benefits she could not expect to earn in this country. But her foreign adventure proved to be a bitter disappointment. On March 18, 1988, after completing her two-year engagement, she was back home in the Philippines with her dead dreams and an angry grievance.

On March 23, 1988, she filed a complaint against EMS Manpower and Placement Services (Phil.) and its foreign principal, Abdul Karim Al Yahya, for underpayment of her salary and non-payment of her vacation leave. She also claimed that she was charged a placement fee of P7,000.00 instead of the legal maximum of only P5,000.00. She alleged that her foreign employer treated her as a slave and required her to work 18 hours a day. She was beaten up and suffered facial deformity, head trauma and decreased sensation in the right portion of her body. On top of all this, she was paid only $120 per month and her total salaries were given to her only three hours before her flight back to Manila. This was after the plane she was supposed to take had left and she had to stay in the airport for 24 hours before her employer finally heard her pleas and delivered her passport and ticket to her.

In its answer and position paper, the private respondent raised the principal defense of settlement as evidenced by the Affidavit of Desistance executed by the complainant on June 21, 1988.

On the basis of this affidavit, the Philippine Overseas Employment Administration (POEA) dismissed her complaint in a decision dated May 16, 1989. This was affirmed by the National Labor Relations Commission (NLRC) in its resolution dated December 28, 1990, reconsideration of which was denied on February 21, 1991.

ISSUE:Whether the POEA and the NLRC acted with grave abuse of discretion for having upheld the Affidavit of Desistance

RULING:Yes.

Indeed, even assuming that such assistance had been duly given, there is still the question of the intrinsic validity of the quitclaim in view of the gross disparity between the amount of the settlement and the petitioner's original claim. It is difficult to believe that the petitioner would agree to waive her total claim of P88,840.00 for the unseemly settlement of only P2,400.00. And even if she did, the waiver would still be null and void as violative of public policy.

This decision demonstrates once again the tenderness of the Court toward the worker subjected to the lawless exploitation and impositions of his employer. The protection of our overseas workers is especially necessary because of the inconveniences and even risks they have to undergo in their quest for a better life in a foreign land away from their loved ones and their own government.The domestic helper is particularly susceptible to abuse because she usually works only by herself in a private household unlike other workers employed in an open business concern who are able to share and discuss their problems and bear or solve them together. The domestic helper is denied that comfort. She has no companions in her misery. She usually broods alone. There is no one to turn to for help. That is why we must carefully listen to her when she is finally able to complain against those who would rob her of her just rewards and even of her dignity as a human being.

E. Thoughtless extravaganceArticle 25. Thoughtless extravagance in expenses for pleasure or display during a period of acute public want or emergency may be stopped by order of the courts at the instance of any government or private charitable institution.

F. Disrespect for person

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

(1) Prying into the privacy of another's residence;(2) Meddling with or disturbing the private life or family relations 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 in life, place of birth, physical defect, or other personal condition.

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7. Tenchavez v Escaño1965

o Article 15 of the Civil Code of the Philippines –

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

o Article 17 (3) Civil Code of the Philippines -

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

G.R. No. L-19671 November 29, 1965PASTOR B. TENCHAVEZ, plaintiff-appellant,vs.VICENTA F. ESCAÑO, ET AL., defendants-appellees.

FACTS:

On 24 February 1948 in the University of San Carlos, Cebu City, where she was then enrolled as a second year student of commerce, Vicenta Escaño, 27 years of age (scion of a well-to-do and socially prominent Filipino family of Spanish ancestry and a "sheltered colegiala"), exchanged marriage vows with Pastor Tenchavez, 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 the house of one Juan Alburo in the said city.

Although planned for the midnight following their marriage, the elopement did not, however, materialize because when Vicenta 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.As of June, 1948 the newlyweds were already estranged. Vicenta had gone to Jimenez, Misamis Occidental, to escape from the scandal that her marriage stirred in Cebu society. There, a lawyer filed for her a petition, drafted by then Senator Emmanuel Pelaez, to annul her marriage. She did not sign the petition. The case was dismissed without prejudice because of her non-appearance at the hearing.

On 22 August 1950, she filed a verified complaint for divorce against the herein plaintiff in the Second Judicial District Court of the State of Nevada in and for the County of Washoe, on the ground of "extreme cruelty, entirely mental in 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 annul their daughter's marriage to Pastor. On 10 September 1954, Vicenta sought papal dispensation of her marriage.

On 13 September 1954, Vicenta married an American, Russell Leo Moran, in Nevada. She now lives with him in California, and, by him, has begotten children. She acquired American citizenship 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 and discouraged Vicenta from joining her husband, and alienating her affections, and against the Roman Catholic Church, for having, through its Diocesan Tribunal, decreed the annulment of the marriage, and asked for legal separation and one million pesos in damages.

DECISION OF LOWER COURTS:(1) Court of First Instance: Cebu - did not decree a legal separation, but freed the plaintiff from supporting his wife and to acquire property to the exclusion of his wife. The court allowed the counterclaim 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 plaintiff resorted directly to this Court.

ISSUE:Whether plaintiff-appellant's charge that his wife's parents, Dr. Mamerto Escaño and his wife, the late Doña Mena Escaño, alienated the affections of their daughter and influenced her conduct toward her husband are supported by credible evidence.

RULING:No.

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 had he openly asked for her hand, as good manners and breeding demanded. Even after learning of the clandestine marriage, and despite their shock at such unexpected event, the parents of Vicenta proposed and arranged that the marriage be recelebrated in strict conformity with the canons of their religion upon advice that the previous one was canonically defective. If no recelebration of the marriage ceremony was had it was not due to 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 the recelebration but respected her decision, or that they abided by her resolve, does not constitute in law an alienation of affections.

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Neither does the fact that Vicenta's parents sent her money while she was in the United States; for it was natural that they should not wish their 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 and abetted her original suit for annulment, or her subsequent divorce; she appears to have acted independently, and being of age, she was entitled to judge what was best for her and ask that her decisions be respected. Her parents, in so doing, certainly cannot be charged with alienation of affections in the absence of malice or unworthy motives, which have not been shown, good faith being always presumed until the contrary is proved.

SEC. 529. Liability of Parents, Guardians or Kin. — The law distinguishes between the 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, such distinction between the liability of parents and that of strangers is only in regard to what will justify interference. A parent is liable for alienation of affections resulting from his own malicious conduct, as where he wrongfully entices his son or daughter to 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 advises his child in good faith with respect to his child's marital relations in the interest of his child 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 the spouses or the obtaining of a divorce or annulment, or where he acts under mistake or misinformation, or where his advice or interference are indiscreet or unfortunate, although it has been held that the parent is liable for consequences resulting from recklessness. He may in good faith take his child into his home and afford him or her protection and support, so long as he has not maliciously enticed his child away, or does 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 married daughter, 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 social discrimination and with having exerted efforts and pressured her to seek annulment and divorce, unquestionably caused them unrest and anxiety, entitling them to recover damages. While this suit may not have been impelled by actual malice, the charges were certainly reckless in the face of the proven facts and circumstances. Court actions are not established for parties to give vent to their prejudices or spleen.

With regard to the P45,000 damages awarded to the defendants, Dr. Mamerto Escaño and Mena Escaño, by the court below, we opine that the same are excessive. While the filing of this 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 prejudiced them, 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 said defendants were not guilty of any improper conduct in the whole deplorable affair. This Court, 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 effectivity of 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 divorced consort, 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 the lawful husband entitle the latter to a decree of legal separation conformably to Philippine law;(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 lie in the absence of proof of malice or unworthy motives on their part.

DISPOSITIVE:(1) Adjudging plaintiff-appellant Pastor Tenchavez entitled to a decree of legal separation from defendant Vicenta F. Escaño;(2) Sentencing defendant-appellee Vicenta Escaño to pay plaintiff-appellant Tenchavez the amount of P25,000 for damages and attorneys' fees;(3) Sentencing appellant Pastor Tenchavez to pay the appellee, Mamerto Escaño and the estate of his wife, the deceased Mena Escaño, P5,000 by way of damages and attorneys' fees.

G. DERELICITON OF DUTY

Article 27. Any person suffering material or moral loss because a public servant or employee refuses or neglects, without just cause, to perform his official duty may file an action for damages and other relief against the latter, without prejudice to any disciplinary administrative action that may be taken.

8. [G.R. No. L-18919. December 29, 1962.]ABELARDO JAVELLANA, TOMAS JONCO, RUDICO HABANA, EXEQUIEL GOLEZ, ALFREDO ANG, and FILIPINAS SOLEDAD, in their capacities as Councilors of the Municipality of Buenavista, Province of Iloilo, petitioners-appellees, vs. SUSANO TAYO, as Mayor of the Municipality of Buenavista, Iloilo, respondent -appellant.

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FACTS:That the petitioners are duly elected and qualified as members of the Municipal Council of the Municipality of Buenavista, Province of Iloilo, Philippines; and that the respondent, at the time the acts hereinbelow complained of took place, was and still is the duly-elected and qualified Mayor of the Municipality of Buenavista, Province of Iloilo, Philippines, where he resides and may be served with summons.

The petitioners made repeated demands for payment of their per diems for the sessions of June 1, June 15, July 6, July 20, August 3, August 17, September 7 and September 21, 1960, by presenting the payrolls; Provincial Forms No. 38 (A) to the respondent Mayor for the latter's signature, but that the respondent refused to affix his signature to the payrolls thus presented, covering the per diems of the petitioners, alleging that the proceedings were illegal due to his absence.

ISSUE:Whether Mayor Tayo is liable for dereliction of duty

RULING:Yes.Not to attend a meeting, constitutes an abandonment of the people's welfare. One may be in the minority group, but he can discharge his duty with honor and prestige as a fiscalizer, to fiscalize the doings and actuations of the majority. He may be overwhelmed in his plan or project by superior numerical majority, but if he could adduce good reasons and arguments in favor of the welfare of the people, his task as a fiscalizer is thereby attained. There is no fear of attending any session because if your project is not carried out, you may have the remedy, either by administrative or judicial relief, by questioning any ordinance or resolution passed by the majority, which may be null and void because they are excessive and unreasonable. So, there is no reason why the respondent in this case had refused to attend the sessions of the Council.if we adopt the literal interpretation of appellant that only the mayor, vice-mayor, or the councilor receiving the largest number of votes could preside the council's meeting, to be legal, irrespective of the presence of a quorum or the majority of the councilors elected. Such an interpretation would, indeed, be fraught with dangerous consequences. For it would, in effect, deprive the municipal council of its function, namely, the enactment of ordinances designed for the general welfare of its inhabitants. As the trial court aptly observed, "To declare that the proceedings of the petitioners (herein appellees) were null and void, is to encourage recalcitrant public officials who would frustrate valid sessions for political end or consideration. Public interest will immensely suffer, if a mayor who belongs to one political group refused to call or attend a session, because the council is controlled by another political group."

REFUSAL OF MUNICIPAL MAYOR TO PERFORM HIS DUTIES; AWARD OF MORAL DAMAGES TO AGGRIEVED PARTY. — The award of moral damages to a councilor as a consequences of the municipal mayor's refusal to perform his official duties, is proper under Article 27 of the new Civil Code.

H. UNFAIR COMPETITION

Article 28. Unfair competition in agricultural, commercial or industrial enterprises or in labor through the use of force, intimidation, deceit, machination or any other unjust, oppressive or highhanded method shall give rise to a right of action by the person who thereby suffers damage.

9. [G.R. No. L-4330. March 24, 1952.]MANILA ORIENTAL SAWMILL CO., petitioner, vs. NATIONAL LABOR UNION and COURT OF INDUSTRIAL RELATIONS, respondents.

FACTS:On May 4, 1950, the United Employees Welfare Association, a union duly registered in the Department of Labor and with members among the employees of the petitioner, entered into an agreement of working conditions with the petitioner pursuant to a settlement concluded in case No. 173-V of the Court of Industrial Relations. The said agreement was to last for one year.On August 14, 1950, thirty-six of the thirty-seven members of the said United Employees Welfare Association tendered their resignations from the same union and joined the local chapter of the respondent National Labor Union. There is no evidence that these resignations were made with the approval of petitioner.

On August 28, 1950, the members of the respondent union struck. On August 31, 1950, petitioner filed a petition in the Court of Industrial Relations to declare the strike illegal.DECISION OF LOWER COURTS:1. Court of Industrial Relations - issued an order denying petitioner's prayer that said strike be declared illegal and setting the case for hearing on the demands prayed for by respondent union.

ISSUE:Whether the strike is legal

RULING:No.The record shows that the local chapter of the respondent union is composed entirely, except one, of members who made up the total membership of the United Employees Welfare Association, a registered union in the petitioner's company. To be exact, thirty-six of the thirty-seven members of said association tendered their resignations and joined the local chapter of the respondent union without first

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securing the approval of their resignations. The new Union then sought to present a seven-point demand of the very same employees to petitioner, which in many respects differs from their previous demand. It is evident that the purpose of their transfer is merely to disregard and circumvent the contract entered into between the same employees and the petitioner on May 4, 1950, knowing full well that that contract was effective for one year, and was entered into with the sanction of the Court of Industrial Relations. If this move were allowed the result would be a subversion of a contract freely entered into without any valid and justifiable reason. Such act cannot be sanctioned in law or in equity as it is in derogation of the principle underlying the freedom of contract and the good faith that should exist in contractual relations.

A labor organization is wholesome if it serves its legitimate purpose of settling labor disputes. That is why it is given personality and recognition in concluding collective bargaining agreements. But if it is made use of as a subterfuge, or as a means to subvert valid commitments, it outlives its purpose for far from being an aid, it tends to undermine the harmonious relations between management and labor. Such is the move undertaken by the respondent union. Such a move cannot be considered lawful and cannot receive the sanction of the Court. Hence, the strike it has staged is illegal.

If employees are to enjoy actual liberty of contract through their labor organizations or other bona fide representatives, and their contracts are to be effective, their obligations may not be repudiated simply by the process of changing their representatives, and in their own interest they should not seek to do so.

10. [G.R. No. 31380. January 13, 1930.]E. SPINNER & COMPANY, plaintiff-appellant, vs. NEUSS HESSLEIN CORPORATION, defendant-appellee.Benj. S. Ohnick and John R. McFie, Jr., for appellant.

FACTS:This action was instituted in the Court of First Instance of Manila on November 23, 1926, by E. Spinner & Co., of Manchester, England, for the purpose of restraining the defendant, the Neuss Hesslein Corporation, organized under the laws of the Philippine Islands, from using the word "Wigan," as applied to khaki textiles sold by the defendant in the Philippine Islands, and to recover damages for violation of the plaintiff's trade-mark right in the word "Wigan" and for alleged unfair competition committed by the defendant in the use of the same.

The plaintiff, E. Spinner & Co., has long been engaged in the manufacture and sale of textile fabrics, including khaki cloth, with distributing business connections in different parts of the world. Soon after the American occupation of the Philippine Islands, or about 1900, the plaintiff began exporting its khaki into the Philippine Islands through local firms, notable Holiday, Wise & Co. (now Wise & Co.), Smith, Bell & Co., Ltd., and others. Because of the superior qualities of its goods, such as the fastness of its color, the consistency of its texture, and its proven durability, the plaintiff's khaki made favorable impression in the Philippine market, enjoying a popular favor and preference which resulted in a lucrative trade. Among the brands of khaki enjoying such favor was the grade indicated by the manufacturer as "Wigan." A higher grade was marketed by the plaintiff under the brand "Stockport;" while still other grades were put upon the market under the brands "Jackton" and "Ashford."All of these different grades of khaki were marketed by the plaintiff under a common trade-mark, which was first registered in the Bureau of Patents, Copyrights, and Trade-Marks of the Philippine Government in the year 1905. This label was pasted on the outside of each bolt of khaki sold by the plaintiff, the different grades being indicated by the words "Wigan," "Stockport," etc., inserted with stencil in the blank space following the word "Quality." The trade-mark proper, as thus used, was a general mark covering various brands. This practice was followed for more than twenty years, but the plaintiff learned in 1924 that the defendant, the Neuss Hesslein Corporation, was selling a brand of khaki in the Philippine Islands with the word "Wigan" stenciled on the bolts below the defendant's own trade-mark. As thus employed by the defendant, the word "Wigan" purports to show the color of the defendant's khaki, but the proof shows that the word was thus used by the defendant upon khaki of different shades.

After discovering this fact, the plaintiff, in April, 1925, caused its trade-mark, consisting of the two elephant heads, to be again registered in the Bureau of Commerce and Industry, as per certificate No. 4807. In its essential features, this trade-mark is identical with the trade-mark registered by the plaintiff in 1905, but in the latter trade-mark the word "Wigan" is inserted after the word "Quality." The purpose of this registration was of course to incorporate the word "Wigan" as an integral part of the registered trade-mark.

It appears that the words "Wigan," "Stockport," "Jackton," and "Ashford," adopted by the plaintiff to indicate different qualities of khaki, are the names of manufacturing towns of minor importance in England; but the brand of khaki with which the defendant associates the name "Wigan" does not appear to be manufactured in the town of Wigan. It also appears that the term "Wigan" is used in commercial parlance as the name of a canvass-like cotton fabric used to stiffen parts of garments. But it is clear that in adopting the word "Wigan" to indicate a brand of khaki, the plaintiff did not use the word "Wigan" either in its geographical sense or in the trade sense of a material for stiffening. The use made by the plaintiff of the term "Wigan" is therefore arbitrary and artificial, in that it departs from any previously accepted sense.

ISSUE:A. whether, upon the facts above stated, the defendant corporation has a right to use the word "Wigan" on khaki sold by it in the Philippine Islands.B. Whether the plaintiff is entitled to damages

RULING:A. No. 1. TRADE-MARKS; INFRINGEMENT OF TRADE-MARK RIGHT; UNFAIR COMPETITION DISTINGUISHED. — Though the law

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concerning infringement of trade-marks and that concerning unfair competition have a common conception at their root, which is that one person shall not be permitted to misrepresent that his goods or his business are the goods or the business of another, the law concerning unfair competition is broader and more inclusive. On the other hand, the law concerning the infringement of trade-mark is of more limited range, but within its narrower range recognizes a more exclusive right derived from the adoption and registration of the trade-mark by the person whose goods or business are first associated therewith. One who has identified a peculiar symbol or mark with his goods thereby acquires a property right in such symbol or mark, and if another infringes the trade-mark he thereby invades this property right. Unfair competition cannot be placed on the plane of invasion of property right. The tort is strictly one of fraud.

2. ID.; WHAT CONSTITUTES UNFAIR COMPETITION; DEVICES BY WHICH UNFAIR COMPETITION MAY BE ACCOMPLISHED. — As the tort of unfair competition is broader than the wrong involved in the infringement of a trade- mark, one who fails to establish the exclusive property right which is essential to the validity of a trade-mark, may yet frequently obtain relief on the ground of his competitor's unfairness or fraud. Any conduct may be said to constitute unfair competition if the effect is to pass off on the public the goods of one man as the goods of another. It is not necessary that any particular means should be used to this end. The most usual devices are the simulation of labels and the reproduction of the form, color and general appearance of the package used by the pioneer manufacturer or dealer. But unfair competition is not limited to these forms. As stated in section 7 of Act No. 666, a person is guilty of unfair competition who "in selling his goods shall give them the general appearance of goods of another manufacturer or dealer, either in the wrapping of the packages in which they are contained, or the devices or words thereon, or in any other feature of their appearance, which would be likely to influence purchasers to believe that the goods offered are those of a manufacturer or dealer other than the actual manufacturer or dealer."

3. ID.; INFRINGEMENT OF TRADE-MARK AND UNFAIR COMPETITION; CASE AT BAR. — The plaintiff, a manufacturer and seller of khaki, introduced the word "Wigan" to indicate a particular quality of khaki sold by it in various parts of the world. This word was contained in the plaintiff's trade-mark and also commonly stenciled upon the bolts of khaki of the particular quality with which said word was identified. The defendant, using a different trade-mark, stamped the same word on bolts of khaki of inferior grade and different shades of color sold by it. Held, that such use of the word "Wigan" by the defendant was not only unfair competition but an infringement of the plaintiff's registered trade-mark in which this word was incorporated.

4. ID.; ID.; PERSON DECEIVED. — The circumstance that retail dealers are informed as to the exact origin and quality of the goods bearing false labels which are purchased by them from a manufacturer guilty of unfair competition will not prevent the injured party from obtaining relief, where it appears that the casual purchaser and ultimate consumer, who knows the goods only by name, is likely to be deceived as to the quality of the goods purchased by him.

5. ID.; ID.; INFRINGEMENT OF TRADE-MARK BY REPRODUCTION OF PART. — The illegitimate use of only one word in a registered trade-mark constitutes an infringement of the trade-mark. It is not necessary that all the words used in the trade-mark should be reproduced by the infringer.

6. ID.; ID.; ARTIFICIAL USE OF WORDS. — An artificial word used to indicate quality must not be pirated by a competitor for the purpose of selling an inferior product as the product of another dealer or manufacturer who has first associated such artificial word with his own superior product. The same rule applies to geographical terms which are artificially used to indicate quality.

7. ID.; ID.; DAMAGES; ACCOUNTING FOR PROFITS; ELECTION OF REMEDY. — A plaintiff who elects to sue for the damages resulting to his business from infringement of a trade-mark or from the unfair competition of another and who fails to prove any assessable damage is not entitled to an accounting for the profits obtained by the defendant upon goods sold by him in violation of the plaintiff's right. The right to recover damages and the right to an accounting are different remedies; and the election to sue for the first is a waiver of the second.

B. No.The plaintiff further seeks to recover damages in the estimated amount of P15,000 for the injury sustained by the plaintiff. As in Forbes, Munn & Co. vs. Ang San To (43 Phil., 724), the provision in the complaint referring to damages should, we think, be interpreted as a prayer for an assessment of the compensation to which the plaintiff might be entitled for the damage done to its business. The proof, however, shows that the plaintiff's business has shown a healthy growth during the period covered by the wrongful acts which are the subject of this action, and it is not proved that any assessable damage has been inflicted upon the plaintiff by the wrongful acts of the defendant, though the infringement of legal right is clear. We are therefore of the opinion that no damages should be awarded to the plaintiff. It will be noted that Act No. 666 gives the plaintiff a right to elect between the recovery of damages for the harm done to the plaintiff's business and the enforcement of an accounting against the defendant for the profits which may be shown to have accrued to it by reason of the sales made in violation of the plaintiff's right. But these two remedies are different and, where the plaintiff has elected to sue for damages and no damages are proved, none can be awarded. This makes it unnecessary to analyze the proof with a view to discovering the profits which the defendant may have earned by the illegitimate sales.

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I. VIOLATION OF CIVIL/POLITICAL RIGHT

Article 32. Any public officer or employee, or any private individual, who directly or indirectly obstructs, defeats, violates or in any manner impedes or impairs any of the following rights and liberties of another person shall be liable to the latter for damages:

(1) Freedom of religion;(2) Freedom of speech;(3) Freedom to write for the press or to maintain a periodical publication;(4) Freedom from arbitrary or illegal detention;(5) Freedom of suffrage;(6) The right against deprivation of property without due process of law;(7) The right to a just compensation when private property is taken for public use;(8) The right to the equal protection of the laws;(9) The right to be secure in one's person, house, papers, and effects against unreasonable searches and seizures; (10) The liberty of abode and of changing the same;(11) The privacy of communication and correspondence;(12) The right to become a member of associations or societies for purposes not contrary to law;(13) The right to take part in a peaceable assembly to petition the Government for redress of grievances;(14) The right to be a free from involuntary servitude in any form;(15) The right of the accused against excessive bail;(16) The right of the accused to be heard by himself and counsel, to be informed of the nature and cause of the accusation against him, to have a speedy and public trial, to meet the witnesses face to face, and to have compulsory process to secure the attendance of witness in his behalf;(17) Freedom from being compelled to be a witness against one's self, or from being forced to confess guilt, or from being induced by a promise of immunity or reward to make such confession, except when the person confessing becomes a State witness;(18) Freedom from excessive fines, or cruel and unusual punishment, unless the same is imposed or inflicted in accordance with a statute which has not been judicially declared unconstitutional; and(19) Freedom of access to the courts.

In any of the cases referred to in this article, whether or not the defendant's act or omission constitutes a criminal offense, the aggrieved party has a right to commence an entirely separate and distinct civil action for damages, and for other relief. Such civil action shall proceed independently of any criminal prosecution (if the latter be instituted), and may be proved by a preponderance of evidence.

The indemnity shall include moral damages. Exemplary damages may also be adjudicated.

The responsibility herein set forth is not demandable from a judge unless his act or omission constitutes a violation of the Penal Code or other penal statute.

11. [G.R. No. L-22554. August 29, 1975.]DELFIN LIM and JIKIL TAHA, plaintiffs-appellants, vs. FRANCISCO PONCE DE LEON AND ORLANDO MADDELA, defendants-appellees.

FACTS:On April 29, 1961, plaintiff-appellant Jikil Taha sold to a certain Alberto Timbangcaya of Brooke's Point, Palawan a motor launch named M/L "SAN RAFAEL". A year later or on April 9, 1962 Alberto Timbangcaya filed a complaint with the Office of the Provincial Fiscal of Palawan alleging that after the sale Jikil Taha forcibly took away the motor launch from him.

After the preliminary investigation, Fiscal Ponce de Leon filed an information for robbery with force and intimidation filed an information for robbery with force and intimidation upon person and directed the Provincial Commander of Palawan to impound the motor launch subject of the criminal offense. The Provincial Commander in turn directed Detachment Commander Orlando Maddela to seize the motor launch from Delfin Lim, a subsequent vendee, Jikil Taha and Delfin Lim filed a complaint for damages against Fiscal Ponce de Leon and Orlando Maddela alleging, among others, that the motor launch was seized without a search warrant. The trial court upheld the validity of the seizure and ordered plaintiffs to pay jointly and severally actual and exemplary damages plus attorney's fees. Hence, this appeal.

ISSUES:1. whether or not defendant-appellee Fiscal Ponce de Leon had the power to order the seizure of the motor launch in question without a warrant of search and seizure even if the same was admittedly the corpus delicti of the crime. 2. whether or not defendants-appellees are civilly liable to plaintiffs-appellants for damages allegedly suffered by them granting that the seizure of the motor launch was unlawful.

RULING:1. No. A search and seizure to be reasonable, must be effected by means of a valid search warrant. And for a search warrant to be valid: (1) it must be issued upon probable cause; (2) the probable cause must be determined by the judge himself and not by the applicant or any other person;

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(3) in the determination of probable cause, the judge must examine, under oath or affirmation, the complainant and such witnesses as the latter may produce; and (4) the warrant issued must particularly describe the place to be searched and persons or things to be seized.

There can be no question that without the proper search warrant, no public official has the right to enter the premises of another without his consent for the purpose of search and seizure. 6 And since in the present case defendants-appellees seized the motor launch without a warrant, they have violated the constitutional right of plaintiffs-appellants against unreasonable search and seizure.

At the time the act complained of was committed, there was no law or rule that recognized the authority of Provincial Fiscals to issue a search warrant. In his vain attempt to justify the seizure of the motor launch in question without a warrant Fiscal Ponce de Leon invoked the provisions of Republic Act No. 732, which amended Sections 1674 and 1687 of the Revised Administrative Code. But there is nothing in said law which confers upon the provincial fiscals the authority to issue warrants, much less to order without warrant the seizure of a personal property even if it is the corpus delicti of a crime. True, Republic Act No. 732 has broadened the power of provincial fiscals to conduct preliminary investigations, but said law did not divest the judge or magistrate of its power to determine, before issuing the corresponding warrant, whether or not probable cause exists therefor.

2. Yes, they are liable.

The Supreme Court reversed the ruling holding that the seizure without a warrant was illegal and violative of the constitutional provision against unreasonable searches and seizure even if the thing seized was the corpus delicti of a crime; and ordered fiscal Ponce de Leon to pay Delfin Lim actual and moral damages plus attorney's fees.

However, with respect to plaintiff Jikil Taha, he is not entitled to recover any damage which he alleged he had suffered from the unlawful seizure of the motor launch inasmuch as he had already transferred the ownership and possession of the motor launch to Delfin Lim at the time it was seized and therefore he has no legal standing to question the validity of the seizure. Well settled is the rule that the legality of a seizure can be contested only by the party whose rights have been impaired thereby, and that the objection to an unlawful search and seizure is purely personal and cannot be availed of by third parties. 17 Consequently, one who is not the owner, lessee, or lawful occupant of the premises searched cannot raise the question of validity of the search and seizure. 18 Jikil Taha is not without recourse though. He can still collect from his co-plaintiff, Delfin Lim the unpaid balance of P1,000.00.

DAMAGES; AWARD OF ACTUAL AND MORAL DAMAGES FOR VIOLATION OF CONSTITUTIONAL RIGHT. — Under Article 32 and 2219 of the New Civil Code, a person whose constitutional rights have been violated or impaired is entitled to actual and moral damages from the public officer or employee responsible therefore. In addition, exemplary damages may also be awarded.

ID.; ID.; MALICE AND BAD FAITH, NOT REQUIRED TO BE LIABLE UNDER ARTICLE 32 NEW CIVIL CODE. — To be liable under Article 32 of the New Civil Code it is enough that there is a violation of the constitutional rights of the plaintiffs and it is not required that defendants should have acted with malice or bad faith. Hence, fiscal Ponce de Leon is liable.

DEAN BOCOBO. Article 32, regarding individual rights, Attorney Cirilo Paredes proposes that Article 32 he so amended as to make a public official liable for violation of another person's constitutional rights only if the public official acted maliciously or in bad faith. The Code Commission opposes this suggestion for these reasons:"The very nature of Article 3219 that the wrong may be civil or criminal. It is not necessary therefore that there should be malice or bad faith. To make such a requisite would defeat the main purpose of Article 32 which is the effective protection of individual rights. Public officials in the past have abused their powers on the pretext of justifiable motives or good faith in the performance of their duties. Precisely, the object of the Article is to put an end to official abuse by the plea of good faith. In the United States this remedy is in the nature of a tort.

ID.; ID.; REASONS. — Public officials in the past have abused their powers on the pretext of justifiable motives or good faith in the performance of their duties. Precisely, the object of Article 32 of the Civil Code is to put an end to official abuse by the plea of good faith.

ID.; SUBORDINATE OFFICER MAY BE HELD LIABLE FOR EXECUTING UNLAWFUL ORDER; EXCEPTION. — But defendant-appellee Orlando Maddela cannot be held accountable because he impounded the motor launch upon the order of his superior officer.

While a subordinate officer may be held liable for executing an unlawful order of his superior officer, there are certain circumstances which would warrant exculpation from liability. Thus, where it is shown that the motor launch was impounded by a subordinate officer only after repeated request by the fiscal, after being shown a letter justifying the necessity of seizure, and after he was made to explain the delay of the seizure by his superior, he cannot be held liable for damages.

DISPOSITIVE:IN VIEW OF THE FOREGOING, the decision appealed from is hereby reversed and another one entered declaring the seizure illegal and ordering defendant-appellee Fiscal Francisco Ponce de Leon to pay to plaintiff-appellant Delfin Lim the sum of P3,000.00 as actual damages, plus P1,000.00 moral damages, and, in addition, P750.00 for attorney's fees. With costs against defendant-appellee Fiscal Ponce de Leon.

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12. [G.R. No. 86720. September 2, 1994.]MHP GARMENTS, INC., and LARRY C. DE GUZMAN, petitioners, vs. THE HONORABLE COURT OF APPEALS, AGNES VILLA CRUZ, MIRASOL, LUGATIMAN, and GERTRUDES GONZALES, respondents.

FACTS:On February 22, 1983, petitioner MHP Garments, Inc., was awarded by the Boy Scouts of the Philippines, the exclusive franchise to sell and distribute official Boy Scouts uniforms, supplies, badges, and insignias. In their Memorandum Agreement, petitioner corporation was given the authority to "undertake or cause to be undertaken the prosecution in court of all illegal sources of scout uniforms and other scouting supplies."

Sometime in October 1983, petitioner corporation received information that private respondents Agnes Villa Cruz, Mirasol Lugatiman, and Gertrudes Gonzales were selling Boy Scouts items and paraphernalia without any authority. Petitioner de Guzman, an employee of petitioner corporation, was tasked to undertake the necessary surveillance and to make a report of the Philippine Constabulary (PC).

On October 25, 1983, at about 10:30 A.M., petitioner de Guzman, Captain Renato M. Peñafiel, and two (2) other constabulary men of the Reaction Force Battalion, Sikatuna Village, Diliman, Quezon City went to the stores of respondents at the Marikina Public Market. Without any warrant, they seized the boy and girl scouts pants, dresses, and suits on display at respondents' stalls. The seizure caused a commotion and embarrassed private respondents. Receipts were issued for the seized items. The items were then turned over by Captain Peñafiel to petitioner corporation for safekeeping.A criminal complaint for unfair competition was then filed against private respondents. 2 During its pendency, petitioner de Guzman exacted from private respondent Lugatiman the sum of THREE THOUSAND ONE HUNDRED PESOS (P3,100.00) in order to be dropped from the complaint.

DECISION OF LOWER COURTS:1. Provincial Fiscal of Rizal - dismissed the complaint against all the private respondents

On February 6, 1984, he also ordered the return of the seized items. The seized items were not immediately returned despite demands. Private respondents had to go personally to petitioners' place of business to recover their goods. Even then, not all the seized items were turned. The other items returned were of inferior quality.Private respondent then filed Civil Case No. 51144 against the petitioners for sums of money and damages

ISSUE:Whether petitioner is liable

RULING:Yes. The evidence did not justify the warrantless search and seizure of private respondents' goods. Petitioner corporation received information that private respondents were illegally selling Boy Scouts items and paraphernalia in October 1983. The specific date and time are not established in the evidence adduced by the parties. Petitioner de Guzman then made a surveillance of the stores of private respondents. They reported to the Philippine Constabulary and on October 25, 1983, the raid was made on the stores of private respondents and the supposed illicit goods were seized. The progression of time between the receipt of the information and the raid of the stores of private respondents shows there was sufficient time for petitioners and the PC raiding party to apply for a judicial warrant.

Applying the aforecited provisions and leading cases, the respondent court correctly granted damages to private respondents. Petitioners were indirectly involved in transgressing the right of private respondents against unreasonable search and seizure. Firstly, they instigated the raid pursuant to their covenant in the Memorandum Agreement to undertake the prosecution in court of all illegal sources of scouting supplies. The raid was conducted with the active participation of their employee. Larry de Guzman did not lift a finger to stop the seizure of the boy and girl scouts items. By standing by and apparently assenting thereto, he was liable to the same extent as the officers themselves.

moral damages can be awarded in the case at bench. There can be no doubt that petitioners must have suffered sleepless nights, serious anxiety, and wounded feelings due the tortious raid caused by petitioners. Private respondents' avowals of embarrassment and humiliation during the seizure of their merchandise were supported by their testimonies.

Needles to state, the wantonness of the wrongful seizure justifies the award of exemplary damages. 21 It will also serve as a stern reminder to all and sundry that the constitutional protection against unreasonable search and seizure is a virile reality and not a mere burst of rhetoric. The all encompassing protection extends against intrusions directly done both by government and indirectly by private entities.

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13. [G.R. No. 128690. January 21, 1999.]ABS-CBN BROADCASTING CORPORATION, petitioner, vs. HONORABLE COURT OF APPEALS, REPUBLIC BROADCASTING CORP., VIVA PRODUCTIONS, INC., and VICENTE DEL ROSARIO, respondents.

FACTS:In 1990, ABS-CBN and VIVA executed a Film Exhibition Agreement whereby the latter gave the former an exclusive right to exhibit 24 VIVA Films for TV telecast. Later, VIVA, through respondent Vincent del Rosario, offered ABS-CBN a list of 3 film packages (36 titles) from which the latter may exercise its right of first refusal under their agreement. ABS-CBN ticked off 10 titles therefrom. Thereafter, in February 1992, Del Rosario offered ABS-CBN airing rights over a package of 104 movies for P60 million. In April, 1992, Del Rosario, and Eugenio Lopez of ABS-CBN, met at a restaurant to discuss the package proposal. According to Lopez, however, what they agreed upon was ABS-CBN's exclusive film rights to 14 films for P36 million. Del Rosario denied the same. He insisted that the discussion was on VIVA's offer of 104 films for P60 million, to which ABS-CBN later made a counter proposal but rejected by VIVA's Board of Directors. Hence, VIVA later granted RBS the exclusive right to air the 104 VIVA films, including the 14 films supposedly granted to ABS-CBN. ABS-CBN then filed a complaint for specific performance with prayer for injunction.

DECISION OF LOWER COURTS:1. RTC - granted the prayer and required ABS-CBN post a P35 million bond, But while ABS-CBN was moving for reduction of the bond, RBS offered to put up a counterbond and was allowed to post P30 million. Later, the RTC rendered a decision in favor of RBS and VIVA, ordering ABS-CBN to pay RBS the amount it paid for the print advertisement and premium on the counterbond, moral damages, exemplary damages and attorney's fee.2. CA - affirmed the RTC decision and sustained the monetary awards, VIVA's and Del Rosario's appeals were denied.

ISSUES:1. Whether there was a perfected contract between VIVA and ABS-CBN; and 2. Whether RBS is entitled to damages and attorney's fees

RULING:1. No. The first issue is resolved against ABS-CBN, in the absence of the requisites to make a valid contract. The alleged

agreement on the 14 films, if there is one, is not binding to VIVA as it is not manifested that Del Rosario has an authority to bind VIVA. Thus, when ABS-CBN made a counter-proposal to VIVA, the same was submitted to its Board of Directors, who rejected the same. Further, the Court agreed that the alleged agreement is not a continuation of the 1990 Contract as the right of first refusal under the said contract had already been exercised by ABS-CBN.

Mr. Lopez shows beyond doubt that he knew Mr. Del Rosario had no authority to bind Viva to a contract with ABS-CBN until and unless its Board of Directors approved it. The complaint, in fact, alleges that Mr. Del Rosario "is the Executive Producer of defendant Viva" which "is a corporation." (par. 2, complaint). As a mere agent of Viva, Del Rosario could not bind Viva unless what he did is ratified by its Board of Directors.

2. No. RBS is not entitled to actual damages as the claim thereof did not arise from that which allows the same to be recovered. Neither is RBS entitled to attorney's fees as there is no showing of bad faith in the other party's persistence in his case. Also, being a corporation, RBS is not entitled to moral damages as the same is awarded to compensate actual injuries suffered. Lastly, exemplary damages cannot be awarded in the absence of proof that ABS-CBN was inspired by malice or bad faith.

There is no adequate proof that ABS-CBN was inspired by malice or bad faith. It was honestly convinced of the merits of its cause after it had undergone serious negotiations culminating in its formal submission of a draft contract. Settled is the rule that the adverse result of an action does not per se make the action wrongful and subject the actor to damages, for the law could not have meant to impose a penalty on the right to litigate. If damages result from a person's exercise of a right, it is damnum absque injuria.

It may be reiterated that the claim of RBS against ABS-CBN is not based on contract, quasi-contract, delict, or quasi-delict. Hence, the claims for moral and exemplary damages can only be based on Articles 19, 20, and 21 of the Civil Code.

14. [G.R. No. 112182. December 12, 1994.]BRICKTOWN DEVELOPMENT CORP. (its new corporate name MULTINATIONAL REALTY DEVELOPMENT CORPORATION) and MARIANO Z. VERALDE, petitioners, vs. AMOR TIERRA DEVELOPMENT CORPORATION and the HON. COURT OF APPEALS, respondents.

FACTS:On 31 March 1981, Bricktown Development Corporation (herein petitioner corporation), represented by its President and co-petitioner Mariano Z. Velarde, executed two Contracts to Sell (Exhs. "A" and "b") in favor of Amor Tierra Development Corporation (herein private respondent), represented in these acts by its Vice-President, Moises G. Petilla, covering a total of 96 residential lots, situated at the Multinational Village Subdivision, La Huerta, Parañaque, Metro Manila, with an aggregate area of 82,888 square meters, with total price of P21,639,875.00. Private respondent was only able to pay petitioner corporation the cum of P1,334,443.21 (Exhs. "A" to "K"). In the meanwhile, however, the parties continued to negotiate for a possible modification of their agreement, although nothing conclusive would appear to have ultimately been arrived at.

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Finally, on 12 October 1981, petitioner corporation, through its legal counsel, sent private respondent a "Notice of Cancellation of Contract" (Exh. "D") on account of the latter's continued failure to pay the installment due 30 June 1981 and the interest on the unpaid balance of the stipulated initial payment. Several months later, or on 26 September 1983, private respondent, through counsel, demanded (Exh. "E") the refund of private respondent's various payments to petitioner corporation, allegedly "amounting to P2,455,497.71," with interest within fifteen days from receipt of said letter, or, in lieu of a cash payment, to assign to private respondent an equivalent number of unencumbered lots at the same price fixed in the contracts. The demand, not having been heeded, private respondent commenced, on 18 November 1983, its action with the court a quo.

ISSUES:(a) whether or not the contracts to sell were validly rescinded or cancelled by petitioner corporation and, in the affirmative(b) whether or not the amounts already remitted by private respondent under said contracts were rightly forfeited by petitioner corporation.

RULING:(a) Yes, the contracts are rescinded. The sixty-day grace period under the terms of the contracts to sell became ipso facto operative from the moment the due payments were not met at their stated maturities. On this score, the provisions of Article 1169 of the Civil Code would find no relevance whatsoever.The cancellation of the contracts to sell by petitioner corporation with the contractual covenants of the parties, and such cancellation must be respected. It may be noteworthy to add that in a contract to sell, the non-payment of the purchase price (which is normally the condition for the final sale) can prevent the obligation to convey title from acquiring any obligatory force.

(b) No, it would be unconscionable, in our view, to likewise sanction the forfeiture by petitioner corporation of payments made to it by private respondent. Indeed, in the opening statement of this ponencia, we have intimated that the relationship between parties in any contract must always be characterized and punctuated by good faith and fair dealing. Judging from what the courts below have said, petitioners did fall well behind that standard. We do not find it equitable, however, to adjudge any interest payment by petitioners on the amount to be thus refunded, computed from judicial demand, for, indeed, private respondent should not be allowed to totally free itself from its own breach.

15. [G.R. No. L-63559. May 30, 1986.]NEWSWEEK, INC., petitioner, vs. THE INTERMEDIATE APPELLATE COURT, and NATIONAL FEDERATION OF SUGARCANE PLANTERS INC., BINALBAGAN-ISABELA PLANTERS ASSOCIATION, INC., ASOCIACION DE AGRICULTORES DE LA CARLOTA, LA CASTELLANA y PONTEVEDRA, INC., DONEDCO PLANTERS ASSOCIATION INC., ARMANDO GUSTILO, ENRIQUE ROJAS, ALFREDO MONTELIBANO, JR., PABLO SOLA, JOSE MONTALVO, VICENTE GUSTILO, JOSEPH MARANON, ROBERTO CUENCA, JOSE SICANGCO, FLORENCIO ALONSO, MIGUEL GATUSLAO, PEDRO YULO, MARINO RUBIN and BENJAMIN BAUTISTA, respondents.

FACTS:on March 5, 1981, private respondents, incorporated associations of sugarcane planters in Negros Occidental claiming to have 8,500 members and several individual sugar planters, filed Civil Case No. 15812 in their own behalf and/or as a class suit in behalf of all sugarcane planters in the province of Negros Occidental, against petitioner and two of petitioners' non-resident correspondents/reporters Fred Bruning and Barry Came. The complaint alleged that petitioner and the other defendants committed libel against them by the publication of the article "An Island of Fear" in the February 23, 1981 issue of petitioner's weekly news magazine Newsweek. The article supposedly portrayed the island province of Negros Occidental as a place dominated by big landowners or sugarcane planters who not only exploited the impoverished and underpaid sugarcane workers/laborers, but also brutalized and killed them with impunity. Complainants therein alleged that said article, taken as a whole, showed a deliberate and malicious use of falsehood, slanted presentation and/or misrepresentation of facts intended to put them (sugarcane planters) in bad light, expose them to public ridicule, discredit and humiliation here in the Philippines and abroad, and make them objects of hatred, contempt and hostility of their agricultural workers and of the public in general. They prayed that defendants be ordered to pay them P1M as actual and compensatory damages, and such amounts for moral, exemplary and corrective damages as the court may determine, plus expenses of litigation, attorney's fees and costs of suit. A photo copy of the article was attached to the complaint.

On November 5, 1981, petitioner filed a motion to dismiss on the grounds that (1) the printed article sued upon is not actionable in fact and in law; and (2) the complaint is bereft of allegations that state, much less support a cause of action. It pointed out the non-libelous nature of the article and, consequently, the failure of the complaint to state a cause of action.

DECISION OF LOWER COURTS:1. Trial Court - denied the motion to dismiss, stating that the grounds on which the motion to dismiss are predicated are not

indubitable as the complaint on its face states a valid cause of action2. CA - Court affirmed the trial court's Orders

ISSUE:whether or not the private respondents' complaint failed to state a cause of action; and

RULING:No. where a group or class of persons, as in the case at bar, claim to have been defamed, for it is evident that the larger the collectivity, the more difficult it is for the individual member to prove that the defamatory remarks apply to him. Defamatory remarks directed at a class or group of persons in general language only, are not actionable by individuals composing the class or group unless the

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statements are sweeping; and it is very probable that even then no action would be where the body is composed of so large a number of persons that common sense would tell those to whom the publication was made that there was room for persons connected with the body to pursue an upright and law abiding course and that it would be unreasonable and absurd to condemn all because of the actions of a part.

The case at bar is not a class suit. It is not a case where one or more may sue for the benefit of all (Mathay vs. Consolidated Bank and Trust Company, 58 SCRA 559) or where the representation of class interest affected by the judgment or decree is indispensable to make each member of the class an actual party (Borlaza vs. Polistico, 47 Phil. 348). We have here a case where each of the plaintiffs has a separate and distinct reputation in the community. They do not have a common or general interest in the subject matter of the controversy. The disputed portion of the article which refers to plaintiff Sola and which was claimed to be libelous never singled out plaintiff Sola as a sugar planter. The news report merely stated that the victim had been arrested by members of a special police unit brought into the area by Pablo Sola, the mayor of Kabankalan. Hence, the report, referring as it does to an official act performed by an elective public official, is within the realm of privilege and protected by the constitutional guarantees of free speech and press.

The article further stated that Sola and the commander of the special police unit were arrested. The Court takes judicial notice of this fact.

it would be unreasonable and absurd to condemn the majority of the sugarcane planters, who have at heart the welfare of their workers, because of the actions of a part. Nonetheless, articles such as the one in question may also serve to prick the consciences of those who have but are not doing anything or enough for those who do not have.

On the other hand, petitioner would do well to heed the admonition of the President to media that they should check the sources of their information to ensure the publication of the truth. Freedom of the press, like all freedoms, should be exercised with responsibility.

16. [G.R. No. 135306. January 28, 2003.]MVRS PUBLICATIONS, INC., MARS C. LACONSAY, MYLA C. AGUJA and AGUSTINO G. BINEGAS, JR., petitioners, vs. ISLAMIC DA'WAH COUNCIL OF THE PHILIPPINES, INC., ABDUL-RAHMAN R.T. LINZAG, IBRAHIM F.P. ARCILLA, ABDUL RASHID DE GUZMAN, AL-FARED DA SILVA and IBRAHIM B.A. JUNIO, respondents.

FACTS:Respondents, the ISLAMIC DA'WAH COUNCIL OF THE PHILIPPINES, INC., a local federation of more than 70 Muslim religious organizations and individual Muslims, filed a complaint for damages in their own behalf and as a class suit, against MVRS Publications, Inc. (MVRS) arising from an article published in Bulgar, a daily tabloid, which allegedly contained libelous statement that alluded to the pig as the God of the Muslims, and this was published with intent to disparage the Muslims and Islam, as a religion in this country. The article reads: "ALAM BA NINYO?Na ang mga baboy at kahit anong uri ng hayop sa Mindanao ay hindi kinakain ng mga Muslim?Para sa kanila ang mga ito ay isang sagradong bagay. Hindi nila ito kailangang kainin kahit na sila pa ay magutom at mawalan ng ulam sa tuwing sila ay kakain. Ginagawa nila itong Diyos at sinasamba pa nila ito sa tuwing araw ng kanilang pangingilin lalung-lalo na sa araw na tinatawag nilang 'Ramadan'."

DECISION OF LOWER COURTS:1. Trial court - dismissed the complaint since the persons allegedly defamed by the article were not specifically identified. 2. CA - ordered the petitioners to pay damages to private respondents Muslims to whom it was clear the defamation was directed.

ISSUES:Whether Bulgar is liable

RULING:No. It must be stressed that words which are merely insulting are not actionable as libel or slander per se, and mere words of general abuse however opprobrious, ill-natured, or vexatious, whether written or spoken, do not constitute a basis for an action for defamation in the absence of an allegation for special damages. 9 The fact that the language is offensive to the plaintiff does not make it actionable by itself.

statements published by the petitioners did not specifically identify nor refer to any particular individual who was purportedly the subject of the alleged libelous publication; and that absent circumstances specifically pointing to a particular member of a class, no member of such class has a right of action without impairing the equally demanding right of free speech and expression as well as of the press under the Bill of Rights.

An individual Muslim has a reputation that is personal, separate and distinct in the community. Each Muslim, as part of the larger Muslim community in the Philippines of over five (5) million people, belongs to a different trade and profession; each has a varying interest and a divergent political and religious view — some may be conservative, others liberal. A Muslim may find the article dishonorable, even blasphemous; others may find it as an opportunity to strengthen their faith and educate the non-believers and the "infidels."

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If the group is a very large one, then the alleged libelous statement is considered to have no application to anyone in particular, since one might as well defame all mankind.

. This principle is said to embrace two (2) important public policies: first, where the group referred to is large, the courts presume that no reasonable reader would take the statements as so literally applying to each individual member; and second, the limitation on liability would satisfactorily safeguard freedom of speech and expression, as well as of the press, effecting a sound compromise between the conflicting fundamental interests involved in libel cases.

The law of defamation protects the interest in reputation — the interest in acquiring, retaining and enjoying one's reputation as good as one's character and conduct warrant. The mere fact that the plaintiff's feelings and sensibilities have been offended is not enough to create a cause of action for defamation.

Consequently as a prerequisite to recovery, it is necessary for the plaintiff to prove as part of his prima facie case that the defendant (1) published a statement that was (2) defamatory (3) of and concerning the plaintiff.

Emotional distress tort actionA contrary view is expressed that what is involved in the present case is an intentional tortious act causing mental distress and not an action for libel. Primarily, an "emotional distress" tort action is personal in nature, i.e., it is a civil action filed by an individual 24 to assuage the injuries to his emotional tranquility due to personal attacks on his character. It has no application in the instant case since no particular individual was identified in the disputed article of Bulgar.

, to recover for the intentional infliction of emotional distress the plaintiff must show that: (a) The conduct of the defendant was intentional or in reckless disregard of the plaintiff; (b) The conduct was extreme and outrageous; (c) There was a causal connection between the defendant's conduct and the plaintiff's mental distress; and, (d) The plaintiff's mental distress was extreme and severe. 26 "Extreme and outrageous conduct" means conduct that is so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in civilized society. 29 "Severe emotional distress," in some jurisdictions, refers to any type of severe and disabling emotional or mental condition which may be generally recognized and diagnosed by professionals trained to do so, including posttraumatic stress disorder, neurosis, psychosis, chronic depression, or phobia.

In a pluralistic society like the Philippines where misinformation about another individual's religion is as commonplace as self-appointed critics of government, it would be more appropriate to respect the fair criticism of religious principles, including those which may be outrageously appalling, immensely erroneous, or those couched as fairly informative comments. The greater danger in our society is the possibility that it may encourage the frequency of suits among religious fundamentalists, whether Christian, Muslim, Hindu, Buddhist, Jewish, or others. This would unnecessarily make the civil courts a battleground to assert their spiritual ideas, and advance their respective religious agenda.

Courts must be viewpoint-neutral when it comes to religious matters if only to affirm the neutrality principle of free speech rights under modern jurisprudence.

17. [G.R. No. 163087. February 20, 2006.]SILAHIS INTERNATIONAL HOTEL, INC. and JOSE MARCEL PANLILIO, petitioners, vs. ROGELIO S. SOLUTA, JOSELITO SANTOS, EDNA BERNATE, VICENTA DELOLA, FLORENTINO MATILLA, and GLOWHRAIN-SILAHIS UNION CHAPTER, respondents.

FACTS:Petitioners' version of the antecedents of the case is as follows:

In late 1987, as Coronel Floro Maniego (Maniego), General Manager of the Rapier Enforcement Professional Investigation and Security Agency, Inc. (REPISA) which the hotel contracted to provide its security force, had been receiving reports that sale and/or use of marijuana, dollar smuggling, and prostitution were going on in the union office at the hotel and that there existed a theft syndicate, he conducted a surveillance, with the approval of Panlilio, of suspected members and officers of the union. 2 In the morning of January 11, 1988, Panlilio, his personal secretary Andy Dizon, Maniego, Bulletin reporter Nonoy Rosales, and REPISA security guard Steve Villanueva (Villanueva) entered the union office located at the hotel basement, with the permission of union officer Henry Babay (Babay) who was apprised about the suspected illegal activities, and searched the premises in the course of which Villanueva found a plastic bag under a table. When opened, the plastic bag yielded dry leaves of marijuana. 3 Panlilio thereupon ordered Maniego to investigate and report the matter to the authorities. On the other hand, respondents' version follows:On January 10, 1988, Loida Somacera (Loida), a laundrywoman of the hotel, stayed overnight at the female locker room at the basement of the hotel. At dawn of January 11, 1988, she heard pounding sounds outside, prompting her to open the door of the locker room upon which she saw five men in barong tagalog whom she failed to recognize but she was sure were not employees of the hotel, 4 forcibly opening the door of the union office. 5 She even saw one of the men hid something behind his back. She then closed the door and went back to bed. Soon after she heard the door of the union office opened.In the morning of January 11, 1988, as union officer Soluta was trying in vain to open the door of the union office, Loida narrated to him what she had witnessed at dawn.

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Soluta thus immediately lodged a complaint before the Security Officer. And he fetched a locksmith, Efren Guevarra, who tried to assist him, Edna, Arnold Ilustrisimo and Ed Bautista open the door. At that instant, men in barong tagalog armed with clubs arrived and started hitting Soluta and his companions, drawing them to run to the female locker room, and to thereafter proceed to the Engineering Office where they called for police assistance. While awaiting the arrival of the police, Babay and Panlilio, on the latter's request, met. At the meeting, Panlilio told Babay that they proceed to the union office where they would settle the mauling incident, to which Babay replied that the door of the office could not be opened. Panlilio thereupon instructed Villanueva to force open the door, and the latter did. Once inside, Panlilio and his companions began searching the office, over the objection of Babay who even asked them if they had a search warrant. 7 A plastic bag was found containing marijuana flowering tops.As a result of the discovery of the presence of marijuana in the union office and after the police conducted an investigation of the incident, a complaint against the 13 union officers

DECISION OF LOWER COURTS:1. RTC - acquitted the accused Soluta and his fellow union officers, together with the union, thereafter filed before the Manila RTC a Complaint against petitioners et al. including prosecuting Fiscal Jose Bautista and Atty. Eduardo Tutaan who assisted in the prosecution of the case against them, for malicious prosecution and violation of their constitutional right against illegal search. 2. RTC - held the hotel, Panlilio, Maniego and Villanueva jointly and severally liable for damages as a result of malicious prosecution and illegal search of the union office.3. CA - affirmed with modification the trial court's decision. It found herein petitioners et al. civilly liable for damages for violation of individual respondents' constitutional right against illegal search, not for malicious prosecution, set aside the award of actual damages to respondent union, and reduced the award of actual damages to individual respondents to P50,000.

ISSUE:Whether petitioners are liable

RULING:Yes.

— Article 32 of the New Civil Code provides: "ART. 32. Any public officer or employee, or any private individual, who directly or indirectly obstructs, defeats, violates or in any manner impedes or impairs any of the following rights and liberties of another person shall be liable to the latter for damages: . . . (9) The right to be secure in one's person, house, papers, and effects against unreasonable searches and seizures; . . . The indemnity shall include moral damages. Exemplary damages may also be adjudicated."

As constitutional rights, like the right to be secure in one's person, house, papers, and effects against unreasonable search and seizures, occupy a lofty position in every civilized and democratic community and not infrequently susceptible to abuse, their violation, whether constituting a penal offense or not, must be guarded against. As the Code Commission noted, . . . "(3) Direct and open violations of the Penal Code trampling upon the freedoms named are not so frequent as those subtle, clever and indirect ways which do not come within the pale of the penal law. It is in these cunning devices of suppressing or curtailing freedom, which are not criminally punishable, where the greatest danger to democracy lies. The injured citizen will always have, under the new Civil Code, adequate civil remedies before the courts because of the independent civil action, even in those instances where the act or omission complained of does not constitute a criminal offense."

The Code Commission thus deemed it necessary to hold not only public officers but also private individuals civilly liable for violation of rights enumerated in Article 32 of the Civil Code. That is why it is not even necessary that the defendant under this Article should have acted with malice or bad faith, otherwise, it would defeat its main purpose, which is the effective protection of individual rights. It suffices that there is a violation of the constitutional right of the plaintiff.

— Article 32 speaks of an officer or employee or person "directly or indirectly" responsible for the violation of the constitutional rights and liberties of another. Hence, it is not the actor alone who must answer for damages under Article 32; the person indirectly responsible has also to answer for the damages or injury caused to the aggrieved party. Such being the case, petitioners, together with Maniego and Villanueva, the ones who orchestrated the illegal search, are jointly and severally liable for actual, moral and exemplary damages to herein individual respondents in accordance with the earlier-quoted pertinent provision of Article 32, in relation to Article 2219 (6) and (10) of the Civil Code which provides: "Art. 2219. Moral damages may be recovered in the following and analogous cases: . . . (6) Illegal search; . . . (10) Acts and action referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34 and 35."

18. [G.R. No. 164349. January 31, 2006.]RADIO COMMUNICATIONS OF THE PHILIPPINES, INC. (RCPI), petitioner, vs. ALFONSO VERCHEZ, GRACE VERCHEZ-INFANTE, MARDONIO INFANTE, ZENAIDA VERCHEZ-CATIBOG, AND FORTUNATO CATIBOG, respondents.

FACTS:On January 21, 1991, Editha Hebron Verchez (Editha) was confined at the Sorsogon Provincial Hospital due to an ailment. On even date, her daughter Grace Verchez-Infante (Grace) immediately hied to the Sorsogon Branch of the Radio Communications of the Philippines, Inc. (RCPI) whose services she engaged to send a telegram to her sister Zenaida Verchez-Catibog (Zenaida) who was residing at 18 Legal St., GSIS Village, Quezon City 1 reading: "Send check money Mommy hospital." For RCPI's services, Grace paid P10.50 2 for which she was issued a receipt. 3 As three days after RCPI was engaged to send the telegram to Zenaida no response was received from her, Grace sent a letter to Zenaida, this time thru JRS Delivery Service, reprimanding her for not sending any financial aid.

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Immediately after she received Grace's letter, Zenaida, along with her husband Fortunato Catibog, left on January 26, 1991 for Sorsogon. On her arrival at Sorsogon, she disclaimed having received any telegram.The telegram was finally delivered to Zenaida 25 days later or on February 15, 1991. On inquiry from RCPI why it took that long to deliver it, a messenger of RCPI replied that he had nothing to do with the delivery thereof as it was another messenger who previously was assigned to deliver the same but the address could not be located, hence, the telegram was resent on February 2, 1991, and the second messenger finally found the address on February 15, 1991.

On September 8, 1993, Verchez, along with his daughters Grace and Zenaida and their respective spouses, filed a complaint against RCPI before the Regional Trial Court (RTC) of Sorsogon for damages. In their complaint, the plaintiffs alleged that, inter alia, the delay in delivering the telegram contributed to the early demise of the late Editha to their damage and prejudice, 8 for which they prayed for the award of moral and exemplary damages 9 and attorney's fees.

DECISION OF LOWER COURTS:1. RTC - judgment is hereby rendered in favor of the plaintiffs and against the defendant2. CA - affirmed the trial court's decision

ISSUE:Is the award of moral damages proper even if the trial court found that there was no direct connection between the injury and the alleged negligent acts?

RULING:Yes. A breach upon the contract confers upon the injured party a valid cause for recovering that which may have been lost or suffered. The remedy serves to preserve the interests of the promissee that may include his "expectation interest," which is his interest in having the benefit of his bargain by being put in as good a position as he would have been in had the contract been performed, or his "reliance interest," which is his interest in being reimbursed for loss caused by reliance on the contract by being put in as good a position as he would have been in had the contract not been made; or his "restitution interest," which is his interest in having restored to him any benefit that he has conferred on the other party. Indeed, agreements can accomplish little, either for their makers or for society, unless they are made the basis for action. The effect of every infraction is to create a new duty, that is, to make recompense to the one who has been injured by the failure of another to observe his contractual obligation unless he can show extenuating circumstances, like proof of his exercise of due diligence . . . or of the attendance of fortuitous event, to excuse him from his ensuing liability.

In the case at bar, RCPI bound itself to deliver the telegram within the shortest possible time. It took 25 days, however, for RCPI to deliver it.

Assuming arguendo that fortuitous circumstances prevented RCPI from delivering the telegram at the soonest possible time, it should have at least informed Grace of the non-transmission and the non-delivery so that she could have taken steps to remedy the situation. But it did not. There lies the fault or negligence. Messages sent by cable or wireless means are usually more important and urgent than those which can wait for the mail. People depend on telecommunications companies in times of deep emotional stress or pressing financial needs. Knowing that messages about the illnesses or deaths of loved ones, births or marriages in a family, important business transactions, and notices of conferences or meetings as in this case, are coursed through the petitioner and similar corporations, it is incumbent upon them to exercise a greater amount of care and concern than that shown in this case. Every reasonable effort to inform senders of the non-delivery of messages should be undertaken. 26

For it is its breach of contract upon which its liability is, it bears repeating, anchored. Since RCPI breached its contract, the presumption is that it was at fault or negligent. It, however, failed to rebut this presumption.

For breach of contract then, RCPI is liable to Grace for damages.

The failure of RCPI to deliver the telegram containing the message of appellees on time, disturbed their filial tranquillity. Family members blamed each other for failing to respond swiftly to an emergency that involved the life of the late Mrs. Verchez, who suffered from diabetes.

Willful injury to property may be a legal ground for awarding moral damages if the court should find that, under the circumstances, such damages are justly due. The same rule applies to breaches of contract where the defendant acted fraudulently or in bad faith.

19. [G.R. No. 145291. September 21, 2005.]PUBLIC ESTATES AUTHORITY, petitioner, vs. ROSARIO GANAC CHU, respondent.Office of the Government Corporate Counsel for petitioner.

FACTS:This case originated from a complaint for damages with prayer for the issuance of a writ of injunction and temporary restraining order filed by respondent against petitioner and the National Housing Authority (NHA). The complaint was lodged in the Regional Trial Court of Imus, Cavite (Branch 20). In her complaint, respondent alleged that she is the owner of a parcel of land situated in Paliparan, Dasmariñas, Cavite covered by Transfer Certificate of Title (TCT) Nos. T-231966, T-231967, T-231968, T-231969, and T-231970, VILLO, Viktoria Mary Antonette P.5th set cases

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measuring 70,410 square meters. According to respondent, some time in June 1993, without notice and due process, petitioner entered her property and bulldozed the land, destroying her black pepper plantation, causing damage to her operations and depriving her of her means of livelihood. Thus, she asked for the following amounts: (1) P5,000,000.00 as actual damages; (2) P200,000.00 as moral damages; (3) P100,000.00 as exemplary damages; (4) P50,000.00 as attorney's fees; and (5) P30,000.00 for litigation expenses.

ISSUE:whether there is a valid basis for the award of damages in favor of respondent

RULING:Yes.

There is no question that respondent is entitled to damages. However, respondent's cause of action before the trial court is not premised on any contract, quasi-contract, delict or quasi-delict. At best, her demand for damages can be anchored on the "abuse of rights" principle under Article 19 of the Civil Code, which provides:Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due and observe honesty and good faith.The foregoing provision sets standards which must be observed in the exercise of one's rights as well as in the performance of its duties, to wit: to act with justice; give everyone his due; and observe honesty and good faith. When a right is exercised in a manner which discards these norms resulting in damage to another, a legal wrong is committed for which the actor can be held accountable. Respondent's ownership of the property on which the pepper trees stand is immaterial in this petition. There is no dispute that respondent owned the pepper trees that were destroyed by petitioner. Even assuming that petitioner owns the property or that it bulldozed the land within its boundaries, still, as the trial court aptly reasoned, there was no excuse for petitioner to disregard respondent's rights over her trees. The exercise of one's rights is not without limitations. Having the right should not be confused with the manner by which such right is to be exercised.

In this instance, the issue is not so much about the existence of the right or validity of the order of demolition as the question of whether or not petitioners have acted in conformity with, and not in disregard of, the standard set by Article 19 of the Civil Code.

There is nothing in the records of this case that will support the finding that respondent suffered actual damages in the amount of P2,000,000.00. There must be competent proof of the actual amount of loss, and credence can be given only to claims that are duly supported by receipts. 30 Save for respondent's bare testimony and the pictures taken on the property, she did not present any other competent and independent proof to corroborate her claim.

In lieu of actual damages, temperate damages, which are more than nominal but less than compensatory damages, should have been awarded by the trial court considering that respondent, indeed, had suffered some pecuniary loss but its amount cannot be proved with certainty. The amount of P250,000.00 is sufficient and reasonable under the circumstances of this case.

The Court deems, however, that the award cannot be more than what was prayed for in respondent's complaint, which in this case is P50,000.00 for attorney's fees and P30,000.00 for litigation expenses. Thus, the award of attorney's fees and costs of suit is reduced in accord with respondent's prayer in her Complaint.

VI. INTERFERENCE IN CONTRACTUAL RELATION

Article 1314. Any third person who induces another to violate his contract shall be liable for damages to the other contracting party. (n)

20. [G.R. No. 86683. January 21, 1993.]PHILIP S. YU, petitioner, vs. THE HONORABLE COURT OF APPEALS. THE HONORABLE PRESIDING JUDGE, RTC OF MANILA, BRANCH XXXIV (34) and UNISIA MERCHANDISING CO., INC., respondents.

FACTS:Petitioner, the exclusive distributor of the House of Mayfair wallcovering products in the Philippines, cried foul when his former dealer of the same goods, herein private respondent, purchased the merchandise from the House of Mayfair in England through FNF Trading in West Germany and sold said merchandise in the Philippines. In the suit for injunction which petitioner filed before the Regional Trial Court of the National Capital Judicial Region stationed at Manila, petitioner pressed the idea that he was practically by-passed and that private respondent acted in concert with the FNF Trading in misleading Mayfair into believing that the goods ordered by the trading firm were intended for shipment to Nigeria although they were actually shipped to and sold in the Philippines.

DECISION OF LOWER COURTS:Both the court of origin and the appellate court rejected petitioner's thesis that private respondent was engaged in a sinister form of unfair competition within the context of Article 28 of the New Civil Code

ISSUE:Did respondent appellate court correctly agree with the lower court in disallowing the writ solicited by herein petitioner?

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RULING:No.

That the exclusive sales contract which links petitioner and the House of Mayfair is solely the concern of the privies thereto and cannot thus extend its chain as to bind private respondent herein is, We believe, beside the point. Verily, injunction is the appropriate remedy to prevent a wrongful interference with contracts by strangers to such contracts where the legal remedy is insufficient and the resulting injury is irreparable.

The right to perform an exclusive distributorship agreement and to reap the profits resulting from such performance are proprietary rights which a party may protect. (30 Am. Jur. Section 19, pp. 71-72; Jurado, Comments and Jurisprudence on Obligations and Contracts, 1983 8th Rev. Ed., p. 336) which may otherwise not be dismissed, nay, rendered illusory by the expedient act of utilizing or interposing a person or firm to obtain goods from the supplier to defeat the very purpose for which the exclusive distributorship was conceptualized, at the expense of the sole authorized distributor (43 C.J.S. 597)

This brings Us to the irreparable mischief which respondent court misappreciated when it refused to grant the relief simply because of the observation that petitioner can be fully compensated for the damage. A contrario, the injury is irreparable where it is continuous and repeated since from its constant and frequent recurrence, no fair and reasonable redress can be had therefor by petitioner insofar as his goodwill and business reputation as sole distributor are concerned. Withal, to expect petitioner to file a complaint for every sale effected by private respondent will certainly court multiplicity of suits.

21. [G.R. No. 120554. September 21, 1999.]SO PING BUN, petitioner, vs. COURT OF APPEALS, TEK HUA ENTERPRISING CORP. and MANUEL C. TIONG, respondents.

FACTS:In 1963, Tek Hua Trading Co., through its managing partner, So Pek Giok, entered into lease agreements with lessor Dee C. Chuan & Sons Inc. (DCCSI). Subjects of four (4) lease contracts were premises located at Nos. 930, 930-Int., 924-B and 924-C, Soler Street, Binondo, Manila. Tek Hua used the areas to store its textiles. The contracts each had a one-year term. They provided that should the lessee continue to occupy the premises after the term, the lease shall be on a month-to-month basis.When the contracts expired, the parties did not renew the contracts, but Tek Hua continued to occupy the premises. In 1976, Tek Hua Trading Co. was dissolved. Later, the original members of Tek Hua Trading Co. including Manuel C. Tiong, formed Tek Hua Enterprising Corp., herein respondent corporation.So Pek Giok, managing partner of Tek Hua Trading, died in 1986. So Pek Giok's grandson, petitioner So Ping Bun, occupied the warehouse for his own textile business, Trendsetter Marketing.

petitioner requested formal contracts of lease with DCCSI in favor of Trendsetter Marketing. So Ping Bun claimed that after the death of his grandfather, So Pek Giok, he had been occupying the premises for his textile business and religiously paid rent. DCCSI acceded to petitioner's request. The lease contracts in favor of Trendsetter were executed.

In a suit for injunction, private respondents pressed for the nullification of the lease contracts between DCCSI and petitioner, and for damages.

DECISION OF LOWER COURTS:1. Trial court- ruled in favor of private respondents2. CA - affirmed by the Court of Appeals

ISSUE:Whether there was tort interference

RULING:Yes.

The elements of tort interference are: (1) existence of a valid contract; (2) knowledge on the part of the third person of the existence of contract; and (3) interference of the third person is without legal justification or excuse

There was tort interference in the case at bar as petitioner deprived respondent corporation of the latter's property right. However, nothing on record imputed malice on petitioner; thus, precluding damages. But although the extent of damages was not quantifiable, it does not relieve petitioner of the legal liability for entering into contracts and causing breach of existing ones. Hence, the Court confirmed the permanent injunction and nullification of the lease contracts between DCCSI and Trendsetter Marketing.

Moreover, justification for protecting one's financial position should not be made to depend on a comparison of his economic interest in the subject matter with that of others. It is sufficient if the impetus of his conduct lies in a proper business interest rather than in wrongful motives. As early as Gilchrist vs. Cuddy, we held that where there was no malice in the interference of a contract, and the impulse behind one's conduct lies in a proper business interest rather than in wrongful motives, a party cannot be a malicious interferer. Where the alleged interferer is financially interested, and such interest motivates his conduct, it cannot be said that he is an officious or malicious intermeddler. In the instant case, it is clear that petitioner So Ping Bun prevailed upon DCCSI to lease the warehouse to his

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enterprise at the expense of respondent corporation. Though petitioner took interest in the property of respondent corporation and benefited from it, nothing on record imputes deliberate wrongful motives or malice on him

22. [G.R. No. 119107. March 18, 2005.]JOSE V. LAGON, petitioner, vs. HONORABLE COURT OF APPEALS and MENANDRO V. LAPUZ, respondents.

FACTS:On June 23, 1982, petitioner Jose Lagon purchased from the estate of Bai Tonina Sepi, through an intestate court, 1 two parcels of land located at Tacurong, Sultan Kudarat. A few months after the sale, private respondent Menandro Lapuz filed a complaint for torts and damages against petitioner before the Regional Trial Court (RTC) of Sultan Kudarat.In the complaint, private respondent, as then plaintiff, claimed that he entered into a contract of lease with the late Bai Tonina Sepi Mengelen Guiabar over three parcels of land (the "property") in Sultan Kudarat, Maguindanao beginning 1964. One of the provisions agreed upon was for private respondent to put up commercial buildings which would, in turn, be leased to new tenants.

When Bai Tonina Sepi died, private respondent started remitting his rent to the court-appointed administrator of her estate. But when the administrator advised him to stop collecting rentals from the tenants of the buildings he constructed, he discovered that petitioner, representing himself as the new owner of the property, had been collecting rentals from the tenants. He thus filed a complaint against the latter, accusing petitioner of inducing the heirs of Bai Tonina Sepi to sell the property to him, thereby violating his leasehold rights over it.

ISSUE:whether the purchase by petitioner of the subject property, during the supposed existence of private respondent's lease contract with the late Bai Tonina Sepi, constituted tortuous interference for which petitioner should be held liable for damages

RULING:No. After a careful perusal of the records, we find the contention of petitioner meritorious. He conducted his own personal investigation and inquiry, and unearthed no suspicious circumstance that would have made a cautious man probe deeper and watch out for any conflicting claim over the property. An examination of the entire property's title bore no indication of the leasehold interest of private respondent. Even the registry of property had no record of the same

Article 1314 of the Civil Code provides that any third person who induces another to violate his contract shall be liable for damages to the other contracting party. The tort recognized in that provision is known as interference with contractual relations. 7 The interference is penalized because it violates the property rights of a party in a contract to reap the benefits that should result therefrom.

The Court, in the case of So Ping Bun v. Court of Appeals, laid down the elements of tortuous interference with contractual relations: (a) existence of a valid contract; (b) knowledge on the part of the third person of the existence of the contract and (c) interference of the third person without legal justification or excuse.

after undergoing the rigid scrutiny of petitioner's counsel and after the trial court declared it to be valid and subsisting, the notarized copy of the lease contract presented in court appeared to be incontestable proof that private respondent and the late Bai Tonina Sepi actually renewed their lease contract. Settled is the rule that until overcome by clear, strong and convincing evidence, a notarized document continues to be prima facie evidence of the facts that gave rise to its execution and delivery.

Knowledge of the subsistence of the contract is an essential element to state a cause of action for tortuous interference. A defendant in such a case cannot be made liable for interfering with a contract he is unaware of. While it is not necessary to prove actual knowledge, he must nonetheless be aware of the facts which, if followed by a reasonable inquiry, will lead to a complete disclosure of the contractual relations and rights of the parties in the contract.

To sustain a case for tortuous interference, the defendant must have acted with malice or must have been driven by purely impious reasons to injure the plaintiff. In other words, his act of interference cannot be justified. — In our view, petitioner's purchase of the subject property was merely an advancement of his financial or economic interests, absent any proof that he was enthused by improper motives. In the very early case of Gilchrist v. Cuddy, the Court declared that a person is not a malicious interferer if his conduct is impelled by a proper business interest. In other words, a financial or profit motivation will not necessarily make a person an officious interferer liable for damages as long as there is no malice or bad faith involved.

This case is one of damnun absque injuria or damage without injury. "Injury" is the legal invasion of a legal right while "damage" is the hurt, loss or harm which results from the injury.

23. OLD CASEGILCHRIST V CUDDY February 18, 1915 G.R. No. L-9356 C. S. GILCHRIST, plaintiff-appellee, vs. E. A. CUDDY, ET AL., defendants. JOSE FERNANDEZ ESPEJO and MARIANO ZALDARRIAGA, appellants.

FACTS:One Cuddy, the owner of a cinematographic film “Zigomar”, let it under a rental contract to the plaintiff Gilchrist, the owner of a cinematograph theater in Iloilo, for a specified period of time or for a number of days beginning May 26. In violation of the terms of this

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agreement, Cuddy proceeded to turn over the film also under a rental contract, to the defendants Espejo and Zaldarriaga The arrangement between Cuddy and the appellants for the exhibition of the film by the latter on the 26th of May were perfected after April 26, so that the six weeks would include and extend beyond May 26. Gilchrist thereupon restored to the Court of First Instance

DECISION OF LOWER COURTS:1. CFI - produced an injunction restraining the defendants from exhibiting the film in question in their theater during the period specified in the contract of Cuddy with Gilchrist

ISSUE:

Whether the injunction was properly granted; Whether Cuddy is liable for damages to Gilchrist

RULING:Yes, although the defendants did not, at the time their contract was made, know the identity of the plaintiff as the person holding the prior contract but did know of the existence of a contract in favor of someone In the case at bar the only motive for the interference with the Gilchrist - Cuddy contract on the part of the appellants was a desire to make a profit by exhibiting the film in their theater. There was no malice beyond this desire; but this fact does not relieve them of the legal liability for interfering with that contract and causing its breach. It is, therefore, clear, under the above authorities, that they were liable to Gilchrist for the damages caused by their acts, unless they are relieved from such liability by reason of the fact that they did not know at the time the identity of the original lessee (Gilchrist) of the film.

Article 1902 of that code provides that a person who, by act or omission, causes damages to another when there is fault or negligence, shall be obliged to repair the damage do done. There is nothing in this article which requires as a condition precedent to the liability of a tort-feasor that he must know the identity of a person to whom he causes damages. In fact, the chapter wherein this article is found clearly shows that no such knowledge is required in order that the injured party may recover for the damage suffered.

One who buys something which he knows has been sold to some other person can be restrained from using that thing to the prejudice of the person having the prior and better right.

Chief Justice Wells: “Everyone has a right to enjoy the fruits and advantages of his own enterprise, industry, skill and credit. He has no right to be free from malicious and wanton interference, disturbance or annoyance. If disturbance or loss come as a result of competition, or the exercise of like rights by others, it is damnum absque injuria, unless some superior right by contract or otherwise is interfered with."

"One who wrongfully interferes in a contract between others, and, for the purpose of gain to himself induces one of the parties to break it, is liable to the party injured thereby; and his continued interference may be ground for an injunction where the injuries resulting will be irreparable."

24. OLD CASEDAYWALT v LA CORPORACION G.R. No. L-13505 February 4, 1919 GEO. W. DAYWALT, plaintiff-appellant, vs. LA CORPORACION DE LOS PADRES AGUSTINOS RECOLETOS, ET AL., defendants-appellees.

FACTS:1. In the year 1902, Teodorica Endencia, an unmarried woman, resident in the Province of Mindoro, executed a contract whereby she obligated herself to convey to Geo. W. Daywalt, a tract of land situated in the barrio of Mangarin, municipality of Bulalacao, now San Jose, in said province. It was agreed that a deed should be executed as soon as the title to the land should be perfected by proceedings in the Court of Land Registration and a Torrens certificate should be produced therefore in the name of Teodorica Endencia.2. They had several contracts to this effect. The Torrens certificate was in time issued to Teodorica Endencia, but in the course of the proceedings relative to the registration of the land, it was found by official survey that the area of the tract inclosed in the boundaries stated in the contract was about 1.248 hectares of 452 hectares as stated in the contract. In view of this development Teodorica Endencia became reluctant to transfer the whole tract to the purchaser, asserting that she never intended to sell so large an amount of land and that she had been misinformed as to its area.3. (Supreme Court) This attitude of hers led to litigation in which Daywalt finally succeeded, upon appeal to the Supreme Court, in obtaining a decree for specific performance; and Teodorica Endencia was ordered to convey the entire tract of land to Daywalt pursuant to the contract of October 3, 1908, which contract was declared to be in full force and effect. This decree appears to have become finally effective in the early part of the year 1914.

The defendant, La Corporacion de los Padres Recoletos, is a religious corporation, with its domicile in the city of Manila. The same corporation was at this time also the owner of another estate on the same island immediately adjacent to the land which Teodorica Endencia had sold to Geo. W. Daywalt. When the Torrens certificate was finally issued in 1909 in favor of Teodorica Endencia, she delivered it for safekeeping to the defendant corporation, and it was then taken to Manila where it remained in the custody and under the control of P. Juan Labarga the procurador and chief official of the defendant corporation, until the deliver thereof to the plaintiff was made compulsory by reason of the decree of the Supreme Court in 1914. As Teodorica still retained possession of said property Father Sanz entered into an arrangement with her whereby large numbers of cattle belonging to the defendant corporation were pastured upon said land during a period extending from June 1, 1909, to May 1, 1914.

Under the first cause stated in the complaint in the present action the plaintiff seeks to recover from the defendant corporation the sum of P24,000, as damages for the use and occupation of the land in question by reason of the pasturing of cattle thereon during the

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period stated.

DECISION OF LOWER COURTS:1. Trial Court - defendant corporation was liable for damages by reason of the use and occupation of the premises in the manner stated; and fixed the amount to be recovered at P2,497.plaintiff seeks to recover from the defendant corporation the sum of P500,000, as damages, on the ground that said corporation, for its own selfish purposes, unlawfully induced Teodorica Endencia to refrain from the performance of her contract for the sale of the land

ISSUE: whether the damages allowed should be increased due to the alleged unjustified interference

RULING:No. Damages assessed are sufficient to compensate the plaintiff for the use and occupation of the land during the whole time it was used

Article 1902 of the Civil Code declares that any person who by an act or omission, characterized by fault or negligence, causes damage to another shall be liable for the damage so done. Ignoring so much of this article as relates to liability for negligence, we take the rule to be that a person is liable for damage done to another by any culpable act; and by "culpable act" we mean any act which is blameworthy when judged by accepted legal standards.

the stranger cannot become more extensively liable in damages for the nonperformance of the contract than the party in whose behalf he intermeddles. To hold the stranger liable for damages in excess of those that could be recovered against the immediate party to the contract would lead to results at once grotesque and unjust.

Damages recoverable in case of the breach of a contract are two sorts, namely, (1) the ordinary, natural, and in a sense necessary damage; and (2) special damages.

The consideration paid for an unperformed promise is an instance of ordinary damage. Special damages are found in case where some external condition, apart from the actual terms to the contract exists or intervenes, as it were, to give a turn to affairs and to increase damage in a way that the promisor, without actual notice of that external condition, could not reasonably be expected to foresee.

The damages in question are special damages which were not within contemplation of the parties when the contract was made, and secondly, because said damages are too remote to be the subject of recovery. This conclusion is also necessarily fatal to the right of the plaintiff to recover such damages from the defendant corporation, for, as already suggested, by advising Teodorica not to perform the contract, said corporation could in no event render itself more extensively liable than the principle in the contract.

To our mind a fair conclusion on this feature of the case is that father Juan Labarga and his associates believed in good faith that the contract cold not be enforced and that Teodorica would be wronged if it should be carried into effect. Any advice or assistance which they may have given was, therefore, prompted by no mean or improper motive.

25. G.R. No. 134971. March 25, 2004.]HERMINIO TAYAG, petitioner, vs. AMANCIA LACSON, ROSENDO LACSON, ANTONIO LACSON, JUAN LACSON, TEODOSIA LACSON-ESPINOSA and THE COURT OF APPEALS, respondents.

FACTS:Respondents Angelica Tiotuyco Vda. de Lacson, 3 and her children Amancia, Antonio, Juan, and Teodosia, all surnamed Lacson, were the registered owners of three parcels of land located in Mabalacat, Pampanga, covered by Transfer Certificates of Title (TCT) Nos. 35922-R, 35923-R, and 35925-R, registered in the Register of Deeds of San Fernando, Pampanga. The properties, which were tenanted agricultural lands, 4 were administered by Renato Espinosa for the owner.

On March 17, 1996, a group of original farmers/tillers individually executed in favor of the petitioner separate Deeds of Assignment 6 in which the assignees assigned to the petitioner their respective rights as tenants/tillers of the landholdings possessed and tilled by them for and in consideration of P50.00 per square meter. The said amount was made payable "when the legal impediments to the sale of the property to the petitioner no longer existed." The petitioner was also granted the exclusive right to buy the property if and when the respondents, with the concurrence of the defendants-tenants, agreed to sell the property. In the interim, the petitioner gave varied sums of money to the tenants as partial payments, and the latter issued receipts for the said amounts.On July 24, 1996, the petitioner called a meeting of the defendants-tenants to work out the implementation of the terms of their separate agreements. 7 However, on August 8, 1996, the defendants-tenants, through Joven Mariano, wrote the petitioner stating that they were not attending the meeting and instead gave notice of their collective decision to sell all their rights and interests, as tenants/lessees, over the landholding to the respondents.On August 19, 1996, the petitioner filed a complaint with the Regional Trial Court of San Fernando, Pampanga, Branch 44, against the defendants-tenants, as well as the respondents, for the court to fix a period within which to pay the agreed purchase price of P50.00 per square meter to the defendants, as provided for in the Deeds of Assignment and that the defendants TIAMSON, et. al., have no right to deal with the defendants LACSON or with any third persons while their contracts with the plaintiff are subsisting; defendants LACSONS are inducing or have induced the defendants TIAMSON, et. al., to violate their contracts with the plaintiff;

ISSUE:Whether there was interference to which injunction was proper

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RULING:No. For the court to issue a writ of preliminary injunction, the petitioner was burdened to establish the following: (1) a right in esse or a clear and unmistakable right to be protected; (2) a violation of that right; (3) that there is an urgent and permanent act and urgent necessity for the writ to prevent serious damage. 36 Thus, in the absence of a clear legal right, the issuance of the injunctive writ constitutes a grave abuse of discretion.

We cannot see our way clear on how or why injunction should lie against petitioners. As owners of the lands being tilled by TIAMSON, et al., petitioners, under the law, have the right to enjoy and dispose of the same. Thus, they have the right to possess the lands, as well as the right to encumber or alienate them. This principle of law notwithstanding, private respondent in the lower court sought to restrain the petitioners from encumbering and/or alienating the properties covered by TCT No. 35922-R, 35923-R and TCT No. 35925-R of the Registry of Deeds of San Fernando, Pampanga. This cannot be allowed to prosper since it would constitute a limitation or restriction, not otherwise established by law on their right of ownership, more so considering that petitioners were not even privy to the alleged transaction between private respondent and TIAMSON, et al.

There is no showing in the petitioner's complaint that the respondents had agreed to sell their property, and that the legal impediments to the agreement no longer existed. The petitioner and the defendants-tenants had yet to submit the Deeds of Assignment to the Department of Agrarian Reform which, in turn, had to act on and approve or disapprove the same.

Unless and until the Department of Agrarian Reform approved the said deeds, if at all, the petitioner had no right to enforce the same in a court of law by asking the trial court to fix a period within which to pay the balance of the purchase price and praying for injunctive relief.

Nemo dat quod non habet, literally meaning "no one gives what he doesn't have"

VIII. CIVIL LIABILITY ARISING FROM CRIME (RULES OF COURT)

A. REMEDIES1. Civil Action with criminal action (Rule 111(1) Rules of Court)

RULE 111Prosecution of Civil Action

Section 1. Institution of criminal and civil actions. — (a) When a criminal action is instituted, the civil action for the recovery of civil liability arising from the offense charged shall be deemed instituted with the criminal action unless the offended party waives the civil action, reserves the right to institute it separately or institutes the civil action prior to the criminal action.

The reservation of the right to institute separately the civil action shall be made before the prosecution starts presenting its evidence and under circumstances affording the offended party a reasonable opportunity to make such reservation.When the offended party seeks to enforce civil liability against the accused by way of moral, nominal, temperate, or exemplary damages without specifying the amount thereof in the complaint or information, the filing fees thereof shall constitute a first lien on the judgment awarding such damages.

Where the amount of damages, other than actual, is specified in the complaint or information, the corresponding filing fees shall be paid by the offended party upon the filing thereof in court.Except as otherwise provided in these Rules, no filing fees shall be required for actual damages.No counterclaim, cross-claim or third-party complaint may be filed by the accused in the criminal case, but any cause of action which could have been the subject thereof may be litigated in a separate civil action. (1a)(b) The criminal action for violation of Batas Pambansa Blg. 22 shall be deemed to include the corresponding civil action. No reservation to file such civil action separately shall be allowed.Upon filing of the aforesaid joint criminal and civil actions, the offended party shall pay in full the filing fees based on the amount of the check involved, which shall be considered as the actual damages claimed. Where the complaint or information also seeks to recover liquidated, moral, nominal, temperate or exemplary damages, the offended party shall pay additional filing fees based on the amounts alleged therein. If the amounts are not so alleged but any of these damages are subsequently awarded by the court, the filing fees based on the amount awarded shall constitute a first lien on the judgment.Where the civil action has been filed separately and trial thereof has not yet commenced, it may be consolidated with the criminal action upon application with the court trying the latter case. If the application is granted, the trial of both actions shall proceed in accordance with section 2 of this Rule governing consolidation of the civil and criminal actions. (cir. 57-97)

2. Separate civil action (Rule 111 [2a])

Section 2. When separate civil action is suspended. — After the criminal action has been commenced, the separate civil action arising therefrom cannot be instituted until final judgment has been entered in the criminal action.If the criminal action is filed after the said civil action has already been instituted, the latter shall be suspended in whatever stage it may be found before judgment on the merits. The suspension shall last until final judgment is rendered in the criminal action. Nevertheless, before judgment on the merits is rendered in the civil action, the same may, upon motion of the offended party, be consolidated with the

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criminal action in the court trying the criminal action. In case of consolidation, the evidence already adduced in the civil action shall be deemed automatically reproduced in the criminal action without prejudice to the right of the prosecution to cross-examine the witnesses presented by the offended party in the criminal case and of the parties to present additional evidence. The consolidated criminal and civil actions shall be tried and decided jointly.During the pendency of the criminal action, the running of the period of prescription of the civil action which cannot be instituted separately or whose proceeding has been suspended shall be tolled. (n)The extinction of the penal action does not carry with it extinction of the civil action. However, the civil action based on delict shall be deemed extinguished if there is a finding in a final judgment in the criminal action that the act or omission from which the civil liability may arise did not exist. (2a)

3. Independent civil action

Article 30. When a separate civil action is brought to demand civil liability arising from a criminal offense, and no criminal proceedings are instituted during the pendency of the civil case, a preponderance of evidence shall likewise be sufficient to prove the act complained of.

Article 31. When the civil action is based on an obligation not arising from the act or omission complained of as a felony, such civil action may proceed independently of the criminal proceedings and regardless of the result of the latter.

Rule 111, Section 3. When civil action may proceeded independently. — In the cases provided for in Articles 32, 33, 34 and 2176 of the Civil Code of the Philippines, the independent civil action may be brought by the offended party. It shall proceed independently of the criminal action and shall require only a preponderance of evidence. In no case, however, may the offended party recover damages twice for the same act or omission charged in the criminal action. (3a)

26. [G.R. No. 129282. November 29, 2001.]DMPI EMPLOYEES CREDIT COOPERATIVE, INC., (DMPI-ECCI), petitioner, vs. HON. ALEJANDRO M. VELEZ, as Presiding Judge of the RTC, Misamis Oriental, Br. 20, and ERIBERTA VILLEGAS, respondents.

FACTS:

Carmen Mandawe is an employee of DMPI-ECCI. Allegedly, respondent Villegas entrusted money to Mandawe for deposit with DMPI Employees Credit Corporation, Inc. DMPI-ECCI. Mandawe, however, failed to account the entrusted amount and hence, an information for estafa was filed against her. Subsequently, when Villegas also filed a complaint for sum of money and damages against Mandawe and DMPI-ECCI, DMPI-ECCI sought the dismissal of the same on the ground that there is a pending criminal case and the civil complaint failed to contain a certification against forum shopping as required under Circular No. 28-91.

DECISION OF LOWER COURTS:1. Trial Court - issued an order dismissing Civil Case No. CV-94-214

ISSUES:(1) whether the plaintiff's failure to attach a certification against forum shopping in the complaint is a ground to dismiss the case; and, (2) whether the civil case could proceed independently of the criminal case for estafa without having reserved the filing of the civil action.

RULING:1. No, there was no violation of the circular. At the time of the filing of the civil complaint, the requirement of certification on forum

shopping is not yet applicable to the lower courts. 2. As a general rule, an offense causes two (2) classes of injuries. The first is the social injury produced by the criminal act which

is sought to be repaired thru the imposition of the corresponding penalty, and the second is the personal injury caused to the victim of the crime which injury is sought to be compensated through indemnity which is civil in nature.

Thus, "every person criminally liable for a felony is also civilly liable." 15 This is the law governing the recovery of civil liability arising from the commission of an offense. Civil liability includes restitution, reparation for damage caused, and indemnification of consequential damages.

On the issue of the pending criminal case, under the present rule, only the civil liability arising from the offense charged is deemed instituted with the criminal action unless the same is waived or its filing reserved. This does not include recovery of civil liability under Arts. 32, 33, 34 and 2176 of the Civil Code arising from the same act or omission which may be prosecuted separately without reservation. Thus, the independent civil action for damages on account of the fraud committed against Villegas under Art. 33 of the Civil Code may proceed independently even if without reservation as to its filing.

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27. [G.R. No. 145391. August 26, 2002.]AVELINO CASUPANAN and ROBERTO CAPITULO, petitioners, vs. MARIO LLAVORE LAROYA, respondent.

FACTS:As a result of a vehicular accident between two vehicles, one driven by Mario Llavore Laroya and the other owned by Roberto Capitulo and driven by Avelino Casupanan, two cases were filed before the Municipal Circuit Trial Court (MCTC) of Capas, Tarlac. Laroya filed a criminal case against Casupanan for reckless imprudence resulting in damage to property. This case was on its preliminary investigation stage when Casupanan and Capitulo filed a civil case against Laroya for quasi-delict. However, upon motion of Laroya on the ground of forum-shopping, the MCTC dismissed the civil case. Casupanan and Capitulo then filed a petition for certiorari before the Regional Trial Court (RTC) of Capas, Tarlac. But the RTC ruled that the order of dismissal issued by the MCTC is a final order which disposes of the case and therefore, the proper remedy should have been an appeal. Hence, Casupanan and Capitulo filed this petition.

ISSUE:Whether an accused in a pending criminal case for reckless imprudence can validly file, simultaneously and independently, a separate civil action for quasi-delict against the private complainant in the criminal case

RULING:Yes.The Court held that the MCTC dismissed the civil action for quasi-delict on the ground of forum-shopping under Supreme Court Administrative Circular No. 04-94. The MCTC did not state in its order of dismissal that the dismissal was with prejudice. Under the Administrative Circular, the order of dismissal is without prejudice to refiling the complaint, unless the order of dismissal expressly states that it is with prejudice. Thus, the MCTC's dismissal, being silent on the matter, is a dismissal without prejudice. Section 1 of Rule 41 provides that an order dismissing an action without prejudice is not appealable. The remedy of the aggrieved party is to file a special civil action under Rule 65. Clearly, the Capas RTC's order dismissing the petition for certiorari on the ground that the proper remedy is an ordinary appeal, is erroneous.Further, the accused can file a civil action for quasi-delict for the same act or omission he is accused of in the criminal case. This is expressly allowed in paragraph 6, Section 1 of the present Rule 111 which states that the counterclaim of the accused "may be litigated in a separate civil action." Thus, the civil action based on quasi-delict filed separately by Casupanan and Capitulo is proper. The order of dismissal by the MCTC of the civil case on the ground of forum shopping is erroneous.

— Under Section 1 of the present Rule 111, what is "deemed instituted" with the criminal action is only the action to recover civil liability arising from the crime or ex-delicto. All the other civil actions under Articles 32, 33, 34 and 2176 of the Civil Code are no longer "deemed instituted," and may be filed separately and prosecuted independently even without any reservation in the criminal action. The failure to make a reservation in the criminal action is not a waiver of the right to file a separate and independent civil action based on these articles of the Civil Code. The prescriptive period on the civil actions based on these articles of the Civil Code continues to run even with the filing of the criminal action. Verily, the civil actions based on these articles of the Civil Code are separate, distinct and independent of the civil action "deemed instituted" in the criminal action.

Under Section 2, Rule 111 of the amended 1985 Rules, a separate civil action, if reserved in the criminal action, could not be filed until after final judgment was rendered in the criminal action. If the separate civil action was filed before the commencement of the criminal action, the civil action, if still pending, was suspended upon the filing of the criminal action until final judgment was rendered in the criminal action. This rule applied only to the separate civil action filed to recover liability ex-delicto. The rule did not apply to independent civil actions based on Articles 32, 33, 34 and 2176 of the Civil Code, which could proceed independently regardless of the filing of the criminal action. . . . Thus, Section 2, Rule 111 of the present Rules did not change the rule that the separate civil action, filed to recover damages ex-delicto, is suspended upon the filing of the criminal action. Section 2 of the present Rule 111 also prohibits the filing, after commencement of the criminal action, of a separate civil action to recover damages ex-delicto.

Under Section I of the present Rule 111, the independent civil action in Articles 32, 33, 34 and 2176 of the Civil Code is not deemed instituted with the criminal action but may be filed separately by the offended party even without reservation. The commencement of the criminal action does not suspend the prosecution of the independent civil action under these articles of the Civil Code. The suspension in Section 2 of the present Rule 111 refers only to the civil action arising from the crime, if such civil action is reserved or filed before the commencement of the criminal action.

[T]he accused can file a civil action for quasi-delict for the same act or omission he is accused of in the criminal case. This is expressly allowed in paragraph 6, Section 1 of the present Rule 111 which states that the counterclaim of the accused "may be litigated in a separate civil action." This is only fair for two reasons. First, the accused is prohibited from setting up any counterclaim in the civil aspect that is deemed instituted in the criminal case. The accused is therefore forced to litigate separately his counterclaim against the offended party. If the accused does not file a separate civil action for quasi-delict, the prescriptive period may set in since the period continues to run until the civil action for quasi-delict is filed. Second, the accused, who is presumed innocent, has a right to invoke Article 2177 of the Civil Code, in the same way that the offended party can avail of this remedy which is independent of the criminal action. To disallow the accused from filing a separate civil action for quasi-delict, while refusing to recognize his counterclaim in the criminal case, is to deny him due process of law, access to the courts, and equal protection of the law.

The Revised Rules on Criminal Procedure took effect on December 1, 2000 while the MCTC issued the order of dismissal on December 28, 1999 or before the amendment of the rules. The Revised Rules on Criminal Procedure must be given retroactive effect considering the well-settled rule that — ". . . statutes regulating the procedure of the court will be construed as applicable to actions pending and undetermined at the time of their passage. Procedural laws are retroactive in that sense and to that extent."VILLO, Viktoria Mary Antonette P.5th set cases

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28. [G.R. No. 141538. March 23, 2004.]HERMANA R. CEREZO, petitioner, vs. DAVID TUAZON, respondent.

FACTS:Respondent herein filed a complaint for damages against petitioner as owner of the bus line wherein he collided while driving his tricycle. The respondent did not include Foronda, the driver of the bus, in his complaint. For failure to file an answer the petitioner herein was declared in default and later, the trial court ordered petitioner to pay damages to the respondent. At the time of the incident, plaintiff [Tuazon] was in his proper lane when the second-named defendant [Foronda], being then the driver and person in charge of the Country Bus with plate number NYA 241, did then and there willfully, unlawfully, and feloniously operate the said motor vehicle in a negligent, careless, and imprudent manner without due regard to traffic rules and regulations, there being a "Slow Down" sign near the scene of the incident, and without taking the necessary precaution to prevent loss of lives or injuries, his negligence, carelessness and imprudence resulted to severe damage to the tricycle and serious physical injuries to plaintiff thus making him unable to walk and becoming disabled, with his thumb and middle finger on the left hand being cut.

Petitioner filed a petition for relief from judgment, which was denied by the trial court. It was then elevated to the Court of Appeals via petition for certiorari. The petition questioned that the jurisdiction was not acquired by the trial court because there was no service of summons on Foronda, whom the petitioner claimed was an indispensable party. The Court of Appeals affirmed the trial court's order denying the petition for relief from judgment. The Court of Appeals' decision was affirmed by the Supreme Court; hence, it became final and executory. Refusing to concede, petitioner filed a petition for annulment of judgment, which was denied by the Court of Appeals. Hence, this petition for review on certiorari was filed before the Supreme Court.

RULING:The Supreme Court denied this petition for review. According to the Court, evidently there was no fraud, accident, mistake, or excusable negligence that prevented petitioner from filing an appeal, a motion for new trial or a petition for certiorari. It was error for her to avail of a petition for relief from judgment. Petitioner could have availed of a new trial or appeal but through her own fault she erroneously availed of the remedy of a petition for relief, which was denied with finality. Thus, petitioner may no longer avail of the remedy of annulment of judgment. In any event, the trial court clearly acquired jurisdiction over the petitioner's person because she actively participated in the proceedings before the trial court, submitting herself to the jurisdiction of the said court. The Court also held contrary to petitioner's contention, Foronda was not an indispensable party to the present case. It was not necessary for respondent to reserve the filing of a separate civil action because he opted to file a civil action for damages against petition who was primarily and directly liable for her own civil negligence.

The same negligent act may produce civil liability arising from a delict under Article 103 of the Revised Penal Code, or may give rise to an action for a quasi-delict under Article 2180 of the Civil Code. An aggrieved party may choose between the two remedies. An action based on a quasi-delict may proceed independently from the criminal action. There is, however, a distinction between civil liability arising from a delict and civil liability arising from a quasi-delict. The choice of remedy, whether to sue for a delict or a quasi-delict, affects the procedural and jurisdictional issues of the action. Tuazon chose to file an action for damages based on a quasi-delict. In his complaint, Tuazon alleged that Mrs. Cerezo, "without exercising due care and diligence in the supervision and management of her employees and buses," hired Foronda as her driver. Tuazon became disabled because of Foronda's "recklessness, gross negligence and imprudence," aggravated by Mrs. Cerezo's "lack of due care and diligence in the selection and supervision of her employees, particularly Foronda." The trial court thus found Mrs. Cerezo liable under Article 2180 of the Civil Code. Article 2180 states in part: Employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks, even though the former are not engaged in any business or industry. Moreover, an employer's liability based on a quasi-delict is primary and direct, while the employer's liability based on a delict is merely subsidiary. The words "primary and direct," as contrasted with "subsidiary," refer to the remedy provided by law for enforcing the obligation rather than to the character and limits of the obligation. Although liability under Article 2180 originates from the negligent act of the employee, the aggrieved party may sue the employer directly. When an employee causes damage, the law presumes that the employer has himself committed an act of negligence in not preventing or avoiding the damage. This is the fault that the law condemns. While the employer is civilly liable in a subsidiary capacity for the employee's criminal negligence, the employer is also civilly liable directly and separately for his own civil negligence in failing to exercise due diligence in selecting and supervising his employee. The idea that the employer's liability is solely subsidiary is wrong. The action can be brought directly against the person responsible (for another), without including the author of the act. The action against the principal is accessory in the sense that it implies the existence of a prejudicial act committed by the employee, but it is not subsidiary in the sense that it can not be instituted till after the judgment against the author of the act or at least, that it is subsidiary to the principal action; the action for responsibility (of the employer) is in itself a principal action. Thus, there is no need in this case for the trial court to acquire jurisdiction over Foronda. The trial court's acquisition of jurisdiction over Mrs. Cerezo is sufficient to dispose of the present case on the merits.

29. [G.R. Nos. 155531-34. July 29, 2005.]MARY ANN RODRIGUEZ, petitioner, vs. Hon. THELMA A. PONFERRADA, in Her Official Capacity as Presiding Judge of the Regional Trial Court of Quezon City, Branch 104; PEOPLE OF THE PHILIPPINES; and GLADYS NOCOM, respondents.

FACTS:On 10 December 2001, the Honorable Assistant City Prosecutor Rossana S. Morales-Montojo of Quezon City Prosecutor's Office issued her Resolution in I.S. No. 01-15902, the dispositive portion of which reads as follows:

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'Premises considered, there being PROBABLE CAUSE to charge respondent for ESTAFA under Article 315 paragraph 2(d) as amended by PD 818 and for Violation of Batas Pambansa Blg. 22, it is respectfully recommended that the attached Information be approved and filed in Court.'"As a consequence thereof, separate informations were separately filed against herein [p]etitioner before proper [c]ourts, for Estafa and [v]iolation of Batas Pambansa Blg. 22.

ISSUE:Whether or not a [p]rivate [p]rosecutor can be allowed to intervene and participate in the proceedings of the above-entitled [e]stafa cases for the purpose of prosecuting the attached civil liability arising from the issuance of the checks involved which is also subject matter of the pending B.P. 22 cases."

RULING:Settled is the rule that the single act of issuing a bouncing check may give rise to two distinct criminal offenses: estafa and violation of Batas Pambansa Bilang 22 (BP 22). The Rules of Court allow the offended party to intervene via a private prosecutor in each of these two penal proceedings. However, the recovery of the single civil liability arising from the single act of issuing a bouncing check in either criminal case bars the recovery of the same civil liability in the other criminal action. While the law allows two simultaneous civil remedies for the offended party, it authorizes recovery in only one. In short, while two crimes arise from a single set of facts, only one civil liability attaches to it.

PROSECUTION OF CIVIL LIABILITY; BASIS THEREOF, EXPLAINED. — True, each of the overt acts in these instances may give rise to two criminal liabilities — one for estafa and another for violation of BP 22. But every such act of issuing a bouncing check involves only one civil liability for the offended party, who has sustained only a single injury. This is the import of Banal v. Tadeo, which we quote in part as follows: "Generally, the basis of civil liability arising from crime is the fundamental postulate of our law that 'Every man criminally liable is also civilly liable' (Art. 100, The Revised Penal Code). Underlying this legal principle is the traditional theory that when a person commits a crime he offends two entities namely (1) the society in which he lives in or the political entity called the State whose law he had violated; and (2) the individual member of that society whose person, right, honor, chastity or property was actually or directly injured or damaged by the same punishable act or omission. However, this rather broad and general provision is among the most complex and controversial topics in criminal procedure. It can be misleading in its implications especially where the same act or omission may be treated as a crime in one instance and as a tort in another or where the law allows a separate civil action to proceed independently of the course of the criminal prosecution with which it is intimately intertwined. Many legal scholars treat as a misconception or fallacy the generally accepted notion that the civil liability actually arises from the crime when, in the ultimate analysis, it does not. While an act or omission is felonious because it is punishable by law, it gives rise to civil liability not so much because it is a crime but because it caused damage to another. Viewing things pragmatically, we can readily see that what gives rise to the civil liability is really the obligation and the moral duty of everyone to repair or make whole the damage caused to another by reason of his own act or omission, done intentionally or negligently, whether or not the same be punishable by law. In other words, criminal liability will give rise to civil liability only if the same felonious act or omission results in damage or injury to another and is the direct and proximate cause thereof. Damage or injury to another is evidently the foundation of the civil action. Such is not the case in criminal actions for, to be criminally liable, it is enough that the act or omission complained of is punishable, regardless of whether or not it also causes material damage to another. (See Sangco, Philippine Law on Torts and Damages, 1978, Revised Edition, pp. 246-247)." Thus, the possible single civil liability arising from the act of issuing a bouncing check can be the subject of both civil actions deemed instituted with the estafa case and the BP 22 violation prosecution. In the crimes of both estafa and violation of BP 22, Rule 111 of the Rules of Court expressly allows, even automatically in the present case, the institution of a civil action without need of election by the offended party. As both remedies are simultaneously available to this party, there can be no forum shopping.

This Court, through Justice J.B.L. Reyes, opined that while some American authorities hold that the mere initiation of proceedings constitutes a binding choice of remedies that precludes pursuit of alternative courses, the better rule is that no binding election occurs before a decision on the merits is had or a detriment to the other party supervenes. 18 This is because the principle of election of remedies is discordant with the modern procedural concepts embodied in the Code of Civil Procedure which permits a party to seek inconsistent remedies in his claim for relief without being required to elect between them at the pleading stage of the litigation."

In the present cases before us, the institution of the civil actions with the estafa cases and the inclusion of another set of civil actions with the BP 22 cases are not exactly repugnant or inconsistent with each other. Nothing in the Rules signifies that the necessary inclusion of a civil action in a criminal case for violation of the Bouncing Checks Law 20 precludes the institution in an estafa case of the corresponding civil action, even if both offenses relate to the issuance of the same check.

30. [G.R. No. 163597. July 29, 2005.]HYATT INDUSTRIAL MANUFACTURING CORP., petitioner, vs. ASIA DYNAMIC ELECTRIX CORP. and COURT OF APPEALS, respondents.

FACTS:On April 4, 2001, petitioner Hyatt Industrial Manufacturing Corporation filed before the Regional Trial Court of Mandaluyong City a complaint for recovery of sum of money against respondent Asia Dynamic Electrix Corporation. The complaint alleged that respondent purchased from petitioner various electrical conduits and fittings amounting P1,622,467.14. Respondent issued several checks in favor of petitioner as payment. The checks, however, were dishonored by the drawee bank on the ground of insufficient funds/account closed. The complaint further alleged that respondent failed to pay despite demand. It prayed that respondent be ordered to pay the amount of purchase, plus interest and attorney's fees

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ISSUE:Whether civil actions are deemed instituted with the filing of the criminal cases for violation of B.P. 22

RULING:Yes. We agree with the ruling of the Court of Appeals that upon filing of the criminal cases for violation of B.P. 22, the civil action for the recovery of the amount of the checks was also impliedly instituted under Section 1 (b) of Rule 111 of the 2000 Rules on Criminal Procedure. Under the present revised Rules, the criminal action for violation of B.P. 22 shall be deemed to include the corresponding civil action. The reservation to file a separate civil action is no longer needed.

Section 1 (b) of Rule 111 of the 2000 Rules on Criminal Procedure was adopted from Circular No. 57-97 of this Court. It specifically states that the criminal action for violation of B.P. 22 shall be deemed to include the corresponding civil action. It also requires the complainant to pay in full the filing fees based on the amount of the check involved. Generally, no filing fees are required for criminal cases, but because of the inclusion of the civil action in complaints for violation of B.P. 22, the Rules require the payment of docket fees upon the filing of the complaint. This rule was enacted to help declog court dockets which are filled with B.P. 22 cases as creditors actually use the courts as collectors. Because ordinarily no filing fee is charged in criminal cases for actual damages, the payee uses the intimidating effect of a criminal charge to collect his credit gratis and sometimes, upon being paid, the trial court is not even informed thereof. The inclusion of the civil action in the criminal case is expected to significantly lower the number of cases filed before the courts for collection based on dishonored checks. It is also expected to expedite the disposition of these cases. Instead of instituting two separate cases, one for criminal and another for civil, only a single suit shall be filed and tried. It should be stressed that the policy laid down by the Rules is to discourage the separate filing of the civil action. The Rules even prohibit the reservation of a separate civil action, which means that one can no longer file a separate civil case after the criminal complaint is filed in court. The only instance when separate proceedings are allowed is when the civil action is filed ahead of the criminal case. Even then, the Rules encourage the consolidation of the civil and criminal cases. We have previously observed that a separate civil action for the purpose of recovering the amount of the dishonored checks would only prove to be costly, burdensome and time-consuming for both parties and would further delay the final disposition of the case. This multiplicity of suits must be avoided. Where petitioners' rights may be fully adjudicated in the proceedings before the trial court, resort to a separate action to recover civil liability is clearly unwarranted. In view of this special rule governing actions for violation of B.P. 22, Article 31 of the Civil Code cited by the trial court will not apply to the case at bar.

31. [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 LAURIZ TANGCO, respondents.

FACTS:On November 3, 1997, at about 2:50 p.m., Evangeline Tangco (Evangeline) went to Ecology Bank, Katipunan Branch, Quezon City, to renew her time deposit per advise of the bank's cashier as she would sign a specimen card. Evangeline, a duly licensed firearm holder with corresponding permit to carry the same outside her residence, approached security 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 with his 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.

Meanwhile, on January 14, 1998, respondents filed with RTC, Branch 273, Marikina City, a complaint 5 for damages against Pajarillo for negligently shooting Evangeline and against Safeguard for failing to observe the diligence of a good father of a family to prevent the damage committed by its security guard.

ISSUES:Whether the CA correctly held that respondents, in filing a separate civil action against petitioners are limited to the recovery of damages arising from a crime or delict, in which case the liability of Safeguard as employer under Articles 102 and 103 of the Revised Penal Code 12 is subsidiary and the defense of due diligence in the selection and supervision of employee is not available to it.

RULING: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 on Criminal Procedure, as amended, to wit:SECTION 1. Institution of criminal and civil actions. — When a criminal action is instituted, the civil action for the recovery of civil liability is impliedly instituted with the criminal action, unless the offended party waives the civil action, reserves his right 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, and damages under Articles 32, 33, 34, and 2176 of the Civil Code of the Philippines arising 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.

As clearly shown by the allegations in the complaint, respondents' cause of action is based on 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 was negligence on the part of the master or the employer either in the selection of the servant or employee, or in the supervision over him

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after selection or both. The liability of the employer under Article 2180 is direct and immediate. Therefore, it is incumbent upon petitioners to prove that they exercised the diligence of a good father of a family in the selection and supervision of their employee.

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 and supervision of his employee by operation of law. This presumption may be overcome only by satisfactorily showing that the employer exercised the care and the diligence of a good father of a family in the selection and the supervision of its employee.

32. [G.R. No. 147703. April 14, 2004.]PHILIPPINE RABBIT BUS LINES, INC., petitioner, vs. PEOPLE OF THE PHILIPPINES, respondent.

FACTS:Accused Napoleon Roman y Macadangdang, driver-employee of petitioner, figured in a vehicle mishap and was convicted for the crime of reckless imprudence resulting to triple homicide, multiple physical injuries and damage to property. He was ordered by the trial court to pay damages to his victims; otherwise, petitioner-employer shall be liable therefor. Thereafter, accused jumped bail and remained at large.

ISSUEWhether petitioner-employer may appeal the judgment independently of the accused

RULING:No. Petitioner's appeal, if allowed, would violate the right of accused-employee against double jeopardy since the judgment against him could become subject to modification without his consent. By jumping bail, accused impliedly waived his right to appeal making the assailed judgment, final and executory. To allow employers to dispute the civil liability fixed in a criminal case is to enable them to defeat a final judgment. The decision convicting an employee in a criminal case is binding and conclusive upon the employer not only with regard to the former's civil liability but also to its amount. The liability of an employer cannot be separated from that of the employee. The subsidiary liability of petitioner employer is incidental to and dependent on the pecuniary civil liability of accused-employee.

Article 102 of the Revised Penal Code states the subsidiary civil liabilities of innkeepers, as follows: "In default of the persons criminally liable, innkeepers, tavernkeepers, and any other persons or corporations shall be civilly liable for crimes committed in their establishments, in all cases where a violation of municipal ordinances or some general or special police regulation shall have been committed by them or their employees. . . ." This applies to employers according to Article 103 which reads: "The subsidiary liability established in the next preceding article shall also apply to employers . . . for felonies committed by their . . . employees in the discharge of their duties."

— Under Article 103 of the Revised Penal Code, employers are subsidiarily liable for the adjudicated civil liabilities of their employees in the event of the latter's insolvency. The provisions of the Revised Penal Code on subsidiary liability — Articles 102 and 103 — are deemed written into the judgments in the cases to which they are applicable. Thus, in the dispositive portion of its decision, the trial court need not expressly pronounce the subsidiary liability of the employer. In the absence of any collusion between the accused-employee and the offended party, the judgment of conviction should bind the person who is subsidiarily liable. In effect and implication, the stigma of a criminal conviction surpasses mere civil liability. The decision convicting an employee in a criminal case is binding and conclusive upon the employer not only with regard to the former's civil liability, but also as to its amount. The liability of an employer cannot be separated from that of the employee. Before the employers' subsidiary liability is exacted, however, there must be adequate evidence establishing that (1) they are indeed the employers of the convicted employees; (2) that the former are engaged in some kind of industry; (3) that the crime was committed by the employees in the discharge of their duties; and (4) that the execution against the latter has not been satisfied due to insolvency. The resolution of these issues need not be done in a separate civil action. But the determination must be based on the evidence that the offended party and the employer may fully and freely present. Such determination may be done in the same criminal action in which the employee's liability, criminal and civil, has been pronounced; and in a hearing set for that precise purpose, with due notice to the employer, as part of the proceedings for the execution of the judgment. Just because the present petitioner participated in the defense of its accused-employee does not mean that its liability has transformed its nature; its liability remains subsidiary. Neither will its participation erase its subsidiary liability. The fact remains that since the accused-employee's conviction has attained finality, then the subsidiary liability of the employer ipso facto attaches.Here are some direct consequences of such revision and omission:1. The right to bring the foregoing actions based on the Civil Code need not be reserved in the criminal prosecution, since they are not deemed included therein.2. The institution or the waiver of the right to file a separate civil action arising from the crime charged does not extinguish the right to bring such action.3. The only limitation is that the offended party cannot recover more than once for the same act or omission.

E. EFFECTS1. ACQUITTAL/DISMISSAL (ART. 29, CC; R111 [2b] & 120 [2], ROC)2. Extinction of civil liability (Rule 111 [2b] ROC)

Article 29. When the accused in a criminal prosecution is acquitted on the ground that his guilt has not been proved beyond reasonable doubt, a civil action for damages for the same act or omission may be instituted. Such action requires only a preponderance of evidence. Upon motion of the defendant, the court may require the plaintiff to file a bond to answer for damages in case the

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complaint should be found to be malicious.

If in a criminal case the judgment of acquittal is based upon reasonable doubt, the court shall so declare. In the absence of any declaration to that effect, it may be inferred from the text of the decision whether or not the acquittal is due to that ground.

Rule 111, Section 2. When separate civil action is suspended. — After the criminal action has been commenced, the separate civil action arising therefrom cannot be instituted until final judgment has been entered in the criminal action.If the criminal action is filed after the said civil action has already been instituted, the latter shall be suspended in whatever stage it may be found before judgment on the merits. The suspension shall last until final judgment is rendered in the criminal action. Nevertheless, before judgment on the merits is rendered in the civil action, the same may, upon motion of the offended party, be consolidated with the criminal action in the court trying the criminal action. In case of consolidation, the evidence already adduced in the civil action shall be deemed automatically reproduced in the criminal action without prejudice to the right of the prosecution to cross-examine the witnesses presented by the offended party in the criminal case and of the parties to present additional evidence. The consolidated criminal and civil actions shall be tried and decided jointly.During the pendency of the criminal action, the running of the period of prescription of the civil action which cannot be instituted separately or whose proceeding has been suspended shall be tolled. (n)The extinction of the penal action does not carry with it extinction of the civil action. However, the civil action based on delict shall be deemed extinguished if there is a finding in a final judgment in the criminal action that the act or omission from which the civil liability may arise did not exist. (2a)

Rule 120, Section 2. Contents of the judgment. — If the judgment is of conviction, it shall state (1) the legal qualification of the offense constituted by the acts committed by the accused and the aggravating or mitigating circumstances which attended its commission; (2) the participation of the accused in the offense, whether as principal, accomplice, or accessory after the fact; (3) the penalty imposed upon the accused; and (4) the civil liability or damages caused by his wrongful act or omission to be recovered from the accused by the offended party, if there is any, unless the enforcement of the civil liability by a separate civil action has been reserved or waived.In case the judgment is of acquittal, it shall state whether the evidence of the prosecution absolutely failed to prove the guilt of the accused or merely failed to prove his guilt beyond reasonable doubt. In either case, the judgment shall determine if the act or omission from which the civil liability might arise did not exist. (2a)

33. [G.R. No. 107125. January 29, 2001.]GEORGE MANANTAN, petitioner, vs. THE COURT OF APPEALS, SPOUSES MARCELINO NICOLAS and MARIA NICOLAS, respondents.

FACTS:Petitioner was charged with the crime of homicide through reckless imprudence. After trial, petitioner was acquitted, but the trial court did not rule on his civil liability. On appeal, the appellate court found petitioner civilly liable and ordered him to indemnify private respondents Marcelino Nicolas and Maria Nicolas the sum of P104,400.00 representing loss of support, P50,000.00 as death indemnity, and moral damages of P20,000.00, or a total of P174,400.00 for the death of their son, Ruben Nicolas. Hence, the present petition. Petitioner insisted that he was acquitted on a finding that he was neither criminally negligent nor recklessly imprudent. Inasmuch as his civil liability is predicated on the criminal offense, he argues that when the latter is not proved, civil liability cannot be demanded. He concludes that his acquittal bars any civil action.

ISSUE:Did the court a quo err in finding that petitioner's acquittal did not extinguish his civil liability?

RULING:No, the Court of Appeals is correct.The Supreme Court dismissed the petition. According to the Court, the trial court's decision supported the conclusion of the appellate court that the acquittal was based on reasonable doubt; hence, petitioner's civil liability was not extinguished by his discharge. The Court noted the trial court's declaration that did not discount the possibility that "the accused was really negligent." However, it found that "a hypothesis inconsistent with the negligence of the accused presented itself before the Court" and since said "hypothesis is consistent with the record . . . the Court's mind cannot rest on a verdict of conviction." Said pronouncement by the appellate court clearly showed that petitioner's acquittal was predicated on the conclusion that his guilt had not been established with moral certainty. Stated differently, it is an acquittal based on reasonable doubt, and a suit to enforce civil liability for the same act or omission lies. Our scrutiny of the lower court's decision in Criminal Case No. 066 supports the conclusion of the appellate court that the acquittal was based on reasonable doubt; hence, petitioner's civil liability was not extinguished by his discharge. We note the trial court's declaration that did not discount the possibility that "the accused was really negligent." However, it found that "a hypothesis inconsistent with the negligence of the accused presented itself before the Court" and since said "hypothesis is consistent with the record . . . the Court's mind cannot rest on a verdict of conviction." The foregoing clearly shows that petitioner's acquittal was predicated on the conclusion that his guilt had not been established with moral certainty. Stated differently, it is an acquittal based on reasonable doubt and a suit to enforce civil liability for the same act or omission lies.

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34. [G.R. No. 155309. November 15, 2005.]JOSEPHINE M. SANCHEZ, petitioner, vs. FAR EAST BANK AND TRUST COMPANY, 1 respondent.

FACTS:Kai J. Chin was the director and representative of Chemical Bank. Its subsidiary, the Chemical International Finance Limited (CIFL), was an investor in [Respondent] Far East Bank and Trust [C]ompany (FEBTC), . . . . In representing the interest of CIFL in FEBTC, Chin was made a director and sr. vice president of FEBTC. [Petitioner] Josephine Sanchez was, in turn, assigned as secretary of Chin. CIFL also maintained a checking account (CA# 0009-04212-1) in FEBTC's investment arm, the Far East Bank Investment, Inc. (FEBII). Chin was one of the authorized signatories in the said current and money market accounts. According to [respondent], [petitioner] made unauthorized withdrawals from the account of CIFL in FEBTC through the use of forged or falsified applications for cashier's checks which were deposited to her personal accounts. Once credited to her account, she withdrew the amounts and misappropriated, misapplied and converted them to her personal benefit and advantage, to the damage of FEBTC.

All of Chin's signatures borne on all the checks and applications were found to have been good forgeries. With the damage done, FEBTC had to reimburse the CIFL account and ultimately suffered the total misappropriated amount of P3,787,530.86.

DECISION OF LOWER COURTS:1. RTC - Court finds and so holds that the prosecution failed to prove the culpability of the accused in any of these cases with moral

certainty, and consequently acquits her from all the charges, with costs de oficio2. CA - Granting respondent's appeal, the appellate court ruled that the trial court's judgment of acquittal did not preclude recovery of

civil indemnity based on a quasi delict.

ISSUES:1. Whether an appeal on the civil aspect may be made from a decision in a criminal case acquitting the accused for being not the author of the crime?2. Whether a separate civil action is necessary to be instituted after the accused is acquitted in a criminal case based on reasonable doubt?3. Whether the civil aspect of the criminal offenses where the accused was acquitted may be pursued by a party other than the offended parties? Otherwise stated, whether the civil liability may be pursued by a party which is not a real party in interest after the acquittal of the accused of the offenses charged?(Discussed together)

RULING:Article 100 of the RPC states that every person criminally liable for a felony is also civilly liable. This rule holds true, except in instances when no actual damage results from an offense, such as espionage, violation of neutrality, flight to an enemy country, and crime against popular representation. 35 Clearly, the extinction of the penal liability does not always carry with it the extinction of the civil. 36 According to Article 29 of the Civil Code, if the acquittal is made on the ground that the guilt has not been proved beyond reasonable doubt, the accused may be held civilly liable for damages arising from the same act or omission constituting the offense. As in any ordinary civil case, the liability may be established by a mere preponderance of evidence.

under the foregoing 1985 rule, an action for the recovery of civil liability arising from an offense charged is necessarily included in the criminal proceedings, unless (1) there is an express waiver of the civil action, or (2) there is a reservation to institute a separate one, or (3) the civil action was filed prior to the criminal complaint.

In the present case, the original action involved a prosecution for estafa or swindling through falsification of commercial documents, an offense defined under the RPC. Records do not show — and respondent does not claim — the presence of any of the three instances precluding the automatic institution of the civil action together with the criminal complaint. Ineluctably, respondent's right to damages, if any, was deemed prosecuted in the criminal proceeding. Thus, a separate civil action may no longer be instituted.

"Our law recognizes two kinds of acquittal, with different effects on the civil liability of the accused. First is an acquittal on the ground that the accused is not the author of the act or omission complained of. This instance closes the door to civil liability, for a person who has been found to be not the perpetrator of any act or omission cannot and can never be held liable for such act or omission. There being no delict, civil liability ex delicto is out of the question, and the civil action, if any, which may be instituted must be based on grounds other than the delict complained of. This is the situation contemplated in Rule 111 of the Rules of Court. The second instance is an acquittal based on reasonable doubt on the guilt of the accused. In this case, even if the guilt of the accused has not been satisfactorily established, he is not exempt from civil liability which may be proved by preponderance of evidence only. This is the situation contemplated in Article 29 of the Civil Code, where the civil action for damages is 'for the same act or omission.' . . . ."

In sum, we hold that petitioner's acquittal was based on the fact that she had not committed the offense imputed to her. Consequently, she cannot be held civilly liable. In concluding that she, as well as her testimony, was credible, the trial court cannot be faulted with arbitrariness or negligence. Tellingly, her testimony that she turned over the proceeds of the subject checks to Kai Chin stands unrebutted.

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35. [G.R. No. 150157. January 25, 2007.]MAURICIO MANLICLIC and PHILIPPINE RABBIT BUS LINES, INC., petitioners, vs. MODESTO CALAUNAN, respondent.

FACTS:At around 6:00 to 7:00 o'clock in the morning of 12 July 1988, respondent Calaunan, together with Marcelo Mendoza, was on his way to Manila from Pangasinan on board his owner-type jeep. The Philippine Rabbit Bus was likewise bound for Manila from Concepcion, Tarlac. At approximately Kilometer 40 of the North Luzon Expressway in Barangay Lalangan, Plaridel, Bulacan, the two vehicles collided. The front right side of the Philippine Rabbit Bus hit the rear left side of the jeep causing the latter to move to the shoulder on the right and then fall on a ditch with water resulting to further extensive damage. The bus veered to the left and stopped 7 to 8 meters from point of collision.Respondent suffered minor injuries while his driver was unhurt. He was first brought for treatment to the Manila Central University Hospital in Kalookan City by Oscar Buan, the conductor of the Philippine Rabbit Bus, and was later transferred to the Veterans Memorial Medical Center.By reason of such collision, a criminal case was filed before the RTC of Malolos, Bulacan, charging petitioner Manliclic with Reckless Imprudence Resulting in Damage to Property with Physical Injuries.

Subsequently on 2 December 1991, respondent filed a complaint for damages against petitioners Manliclic and PRBLI before the RTC of Dagupan City, docketed as Civil Case No. D-10086. The criminal case was tried ahead of the civil case. Among those who testified in the criminal case were respondent Calaunan, Marcelo Mendoza and Fernando Ramos.

DECISION OF LOWER COURTS:1. RTC - defendants to pay plaintiff jointly and solidarily the amount of P40,838.00 as actual damages for the towing as well as

the repair and the materials used for the repair of the jeep in question; P100,000.00 as moral damages and another P100,000.00 as exemplary damages and P15,000.00 as attorney's fees, including appearance fees of the lawyer. In addition, the defendants are also to pay costs

2. CA – affirmed RTC

ISSUE: What is the effect of petitioner Manliclic's acquittal in the civil case.

RULING:In spite of said ruling, petitioner Manliclic can still be held liable for the mishap. The afore-quoted section applies only to a civil action arising from crime or ex delicto and not to a civil action arising from quasi-delict or culpa aquiliana. The extinction of civil liability referred to in Par. (e) of Section 3, Rule 111 [now Section 2 (b) of Rule 111], refers exclusively to civil liability founded on Article 100 of the Revised Penal Code, whereas the civil liability for the same act considered as a quasi-delict only and not as a crime is not extinguished even by a declaration in the criminal case that the criminal act charged has not happened or has not been committed by the accused.

B. Prejudicial question (Article 36, CC; R111, Sec. 6, ROC)

Section 6. Suspension by reason of prejudicial question. — A petition for suspension of the criminal action based upon the pendency of a prejudicial question in a civil action may be filed in the office of the prosecutor or the court conducting the preliminary investigation. When the criminal action has been filed in court for trial, the petition to suspend shall be filed in the same criminal action at any time before the prosecution rests. (6a)Section 7. Elements of prejudicial question. — The elements of a prejudicial question are: (a) the previously instituted civil action involves an issue similar or intimately related to the issue raised in the subsequent criminal action, and (b) the resolution of such issue determines whether or not the criminal action may proceed. (5a)

Article 36. Pre-judicial questions, which must be decided before any criminal prosecution may be instituted or may proceed, shall be governed by rules of court which the Supreme Court shall promulgate and which shall not be in conflict with the provisions of this Code.

36. [G.R. No. 48157. March 16, 1988.]RICARDO QUIAMBAO, petitioner, vs. HON. ADRIANO OSORIO, ZENAIDA GAZA BUENSUCERO, JUSTINA GAZA BERNARDO, and FELIPE GAZA, respondents-appellees, LAND AUTHORITY, intervenor-appellant.

FACTS:In a complaint for forcible entry filed by herein private respondents Zenaida Gaza Buensucero, Justina Gaza Bernardo and Felipe Gaza against herein petitioner Ricardo Quiambao before the then Municipal Court of Malabon, Rizal, docketed therein as Civil Case No. 2526, it was alleged that private respondents were the legitimate possessors of a 30,835 sq. m. lot known as Lot No. 4, Block 12, Bca 2039 of the Longos Estate situated at Barrio Longos, Malabon Rizal, by virtue of the Agreement to Sell No. 3482 executed in their favor by the former Land Tenure Administration [which later became the Land Authority, then the Department of Agrarian Reform]; that under cover of darkness, petitioner surreptitiously and by force, intimidation, strategy and stealth, entered into a 400 sq. m. portion thereof, placed bamboo posts "staka" over said portion and thereafter began the construction of a house thereon; and that these acts of petitioner, which were unlawful per se, entitled private respondents to a writ of preliminary injunction and to the ejectment of petitioner from the lot in question. Petitioner asserted that this administrative case was determinative of private respondents' right to eject petitioner from the lot in question; hence a prejudicial question which bars a judicial action until after its termination.

DECISION OF LOWER COURTS:1. Municipal court - denied the motion to dismiss contained in petitioner's affirmative defenses.

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ISSUE:whether or not the administrative case between the private parties involving the lot subject matter of the ejectment case constitutes a prejudicial question which would operate as a bar to said ejectment case.

RULING:NO. — A prejudicial question is understood in law to be that which arises in a case the resolution of which is a logical antecedent of the issue involved in said case and the cognizance of which pertains to another tribunal. The doctrine of prejudicial question comes into play generally in a situation where civil and criminal actions are pending and the issues involved in both cases are similar or so closely-related that an issue must be preemptively resolved in the civil case before the criminal action can proceed. Thus, the existence of a prejudicial question in a civil case is alleged in the criminal case to cause the suspension of the latter pending final determination of the former.

— The actions involved in the case at bar being respectively civil and administrative in character, it is obvious that technically, there is no prejudicial question to speak of. Equally apparent, however, is the intimate correlation between said two [2] proceedings, stemming from the fact that the right of private respondents to eject petitioner from the disputed portion depends primarily on the resolution of the pending administrative case. Whether or not private respondents can continue to exercise their right of possession is but a necessary, logical consequence of the issue involved in the pending administrative case assailing the validity of the cancellation of the Agreement to Sell and the subsequent award of the disputed portion to petitioner. If the cancellation of the Agreement to Sell and the subsequent award to petitioner are voided, then private respondents would have every right to eject petitioner from the disputed area. Otherwise, private respondent's right of possession is lost and so would their right to eject petitioner from said portion.

37. [G.R. No. 101236. January 30, 1992.]JULIANA P. YAP, petitioner, vs. MARTIN PARAS and ALFREDO D. BARCELONA, SR., Judge of the 3rd MTC of Glan Malapatan, South Cotabato, respondents.

FACTS:Petitioner Juliana P. Yap was the sister of private respondent Martin Paras. * On October 31, 1971, according to Yap, Paras sold to her his share in the intestate estate of their parents for P300.00. The sale was evidenced by a private document. Nineteen years later, on May 2, 1990, Paras sold the same property to Santiago Saya-ang for P5,000.00. This was evidenced by a notarized Deed of Absolute Sale.When Yap learned of the second sale, she filed a complaint for estafa against Paras and Saya-ang with the Office of the Provincial Prosecutor of General Santos City. 1 On the same date, she filed a complaint for the nullification of the said sale with the Regional Trial Court of General Santos City.

DECISION OF LOWER COURTS:1. Trial Court - motu proprio issued an order dismissing the criminal case on the ground of prejudicial question

ISSUE:Whether the respondent judge commit grave abuse of discretion in motu proprio issuing the order of dismissal

RULING:Yes.

SECTION 6. Suspension by reason of prejudicial question. — A petition for suspension of the criminal action based upon the pendency of a prejudicial question in a civil action may be filed in the office of the fiscal or the court conducting the preliminary investigation. When the criminal action has been filed in court for trial, the petition to suspend shall be filed in the same criminal action at any time before the prosecution rests.Judge Barcelona's precipitate action is intriguing, to say the least, in light of the clear provision of the above-quoted rule. The rule is not even new, being only a rewording of the original provision in the Rules of Court before they were amended. It plainly says that the suspension may be made only upon petition and not at the instance of the judge alone, and it also says suspension, and not dismissal.

In the Ras case, there was a motion to suspend the criminal action on the ground that the defense in the civil case — forgery of his signature in the first deed of sale — had to be threshed out first. Resolution of that question would necessarily resolve the guilt or innocence of the accused in the criminal case. By contrast, there was no motion for suspension in the case at bar; and no less importantly, the respondent judge had not been informed of the defense Paras was raising in the civil action. Judge Barcelona could not have ascertained then if the issue raised in the civil action would determine the guilt or innocence of the accused in the criminal case.

We have held that "for a civil case to be considered prejudicial to a criminal action as to cause the suspension of the criminal action pending the determination of the civil action, it must appear not only that the civil case involves the same facts upon which the criminal prosecution is based, but also that the resolution of the issues raised in said civil action would be necessarily determinative of the guilt or innocence of the accused." It is the issue in the civil action that is prejudicial to the continuation of the criminal action, not the criminal action that is prejudicial to the civil action. It is worth remarking that not every defense raised in the civil action will raise a prejudicial

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question to justify suspension of the criminal action. The defense must involve an issue similar or intimately related to the same issue raised in the criminal action and its resolution should determine whether or not the latter action may proceed.

38. [G.R. No. 97477. May 8, 1992.]RTC JUDGE CAMILO E. TAMIN, Presiding Judge, Regional Trial Court, Branch 23, Molave, Zamboanga del Sur and the MUNICIPALITY OF DUMINGAG, ZAMBOANGA DEL SUR, represented by MAYOR DOMICIANO E. REAL, petitioners, vs. COURT OF APPEALS, VICENTE MEDINA and FORTUNATA ROSELLON, respondents.

FACTS:the plaintiff (petitioner municipality herein) is the owner of a parcel of residential land located at Poblacion, Dumingag, Zamboanga del Sur with an area of 5,894 square meters more or less; that the parcel of land was reserved for public plaza under Presidential Proclamation No. 365 dated March 15, 1968; that during the incumbency of the late Mayor Isidoro E. Real, Sr. or in 1958, the municipality leased an area of 1,350 square meters to the defendants (respondents herein) subject to the condition that they should vacate the place in case it is needed for public purposes; that the defendants religiously paid the rentals until 1967; that thereafter, the defendants refused to pay the rentals; that the incumbent mayor discovered that the defendants filed a "Cadastral Answer" over said lot; that the defendants refused to vacate the place despite efforts of the municipality; that the national government had alloted an appropriation for the construction of a municipal gymnasium within the public plaza but the said construction which was already started could not continue because of the presence of the buildings constructed by the defendants; that the appropriation for the construction of the gymnasium might be reverted back to the national government which would result to "irreparable damage, injury and prejudice" to the municipality and its people who are expected to derive benefit from the accomplishment of the project.Instead of filing an answer, the respondents filed a motion to dismiss alleging the lack of jurisdiction of the trial court, since the complaint is for illegal detainer which is within the original jurisdiction of the municipal court and the pendency of a cadastral case (Cadastral Case No. N-10, LRC Cad. Rec. No. N-108, Lot 9481 [Pls-61] TS-218) between the parties over the ownership of the same parcel of land.

DECISION OF LOWER COURTS:1. RTC - denied the motion to dismiss. The second order granted the petitioner municipality's motion for a writ of possession

"with the ancillary writ of demolition to place in possession the plaintiff on the land subject of this case, to the end that the public construction thereon will not be jeopardized."

2. CA - petition was given due course and a temporary restraining order was issued enjoining the petitioner Judge from proceeding with the hearing of the case and from enforcing the October 10, and 19, 1990 orders

RULING:Under the cadastral system, the government through the Director of Lands initiates the proceedings by filing a petition in court after which all owners or claimants are compelled to act and present their answers otherwise they lose their right to their own property. The purpose is to serve the public interests by requiring that the titles to any lands "be settled and adjudicated." (Section 1 Cadastral Act [No. 2259] Government of the Philippine Islands v. Abural, 39 Phil. 996 [1919]. It is a proceeding in rem somewhat akin to a judicial inquiry and investigation leading to a judicial decree. (Director of Lands v. Roman Archbishop of Manila, 41 Phil. 120 [1920]).Considering therefore, the nature and purpose of the cadastral proceedings, the outcome of said proceedings becomes a prejudicial question which must be addressed in the resolution of the instant case.

Considering therefore, the nature and purpose of the cadastral proceedings, the outcome of said proceedings becomes a prejudicial question which must be addressed in the resolution of the instant case. Technically, a prejudicial question shall not rise in the instant case since the two actions involved are both civil in nature. However, we have to consider the fact that the cadastral proceedings will ultimately settle the real owner/s of the disputed parcel of land. In case respondent Vicente Medina is adjudged the real owner of the parcel of land, then the writ of possession and writ of demolition would necessarily be null and void. Not only that. The demolition of the constructions in the parcel of land would prove truly unjust to the private respondents. Parenthetically, the issuance of the writ of possession and writ of demolition by the petitioner Judge in the ejectment proceedings was premature. What the petitioner should have done was to stop the proceedings in the instant case and wait for the final outcome of the cadastral proceedings.

39. [G.R. No. 147902. March 17, 2006.]SPOUSES VICENTE YU AND DEMETRIA LEE-YU, petitioners, vs. PHILIPPINE COMMERCIAL INTERNATIONAL BANK, respondent.

FACTS:Under a Real Estate Mortgage dated August 15, 1994 2 and Amendments of Real Estate Mortgage dated April 4, 1995 3 and December 4, 1995, 4 spouses Vicente Yu and Demetria Lee-Yu (petitioners) and spouses Ramon T. Yu and Virginia A. Tiu, or Yu Tian Hock aka Victorino/Vicente Yu, mortgaged their title, interest, and participation over several parcels of land located in Dagupan City and Quezon City, in favor of the Philippine Commercial International Bank (respondent) as security for the payment of a loan in the amount of P9,000,000.00. 5 As the petitioners failed to pay the loan, the interest, and the penalties due thereon, respondent filed on July 21, 1998 with the Office of the Clerk of Court and Ex-Officio Sheriff of the Regional Trial Court of Dagupan City a Petition for Extra-Judicial Foreclosure of Real Estate Mortgage on the Dagupan City properties.

On September 30, 1999, petitioners filed a Motion to Dismiss and to Strike Out Testimony of Rodante Manuel stating that the Certificate of Sale dated September 14, 1998 is void because respondent violated Article 2089 of the Civil Code on the indivisibility of the

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mortgaged by conducting two separate foreclosure proceedings on the mortgage properties

In the meantime, petitioners filed a complaint for Annulment of Certificate of Sale before the Regional Trial Court of Dagupan City, docketed as Civil Case No. 99-03169-D and raffled to Branch 44 (RTC Branch 44).

On February 24, 2000, petitioners filed a Motion for Reconsideration, further arguing that the pendency of Civil Case No. 99-03169-D in RTC Branch 44 is a prejudicial issue to Spec. Proc. No. 99-00988-D in RTC Branch 43, the resolution of which is determinative on the propriety of the issuance of a writ of possession

DECISION OF LOWER COURTS:1. RTC - principle of prejudicial question is not applicable because the case pending before RTC Branch 44 is also a civil case

and not a criminal case

ISSUE:Whether or not the pendency of a prejudicial issue renders the issues in Special Proceedings No. 99-00988-D as [sic] moot and academic.

RULING:No.In the present case, the complaint of the petitioners for Annulment of Extrajudicial Sale is a civil action and the respondent's petition for the issuance of a writ of possession of Lot No. 3-A, Block 1, Psd-07-021410, TCT No. 44668 is but an incident in the land registration case and, therefore, no prejudicial question can arise from the existence of the two actions.

Also, no prejudicial question can arise from the existence of a civil case for annulment of a certificate of sale and a petition for the issuance of a writ of possession in a special proceeding since the two cases are both civil in nature which can proceed separately and take their own direction independently of each other.

Furthermore, since the one-year period to redeem the foreclosed properties lapsed on October 1, 1999, title to the foreclosed properties had already been consolidated under the name of the respondent. As the owner of the properties, respondent is entitled to its possession as a matter of right. 40 The issuance of a writ of possession over the properties by the trial court is merely a ministerial function. As such, the trial court neither exercises its official discretion nor judgment. 41 Any question regarding the validity of the mortgage or its foreclosure cannot be a legal ground for refusing the issuance of a writ of possession. 42 Regardless of the pending suit for annulment of the certificate of sale, respondent is entitled to a writ of possession, without prejudice of course to the eventual outcome of said case.

40. [G.R. No. 138509. July 31, 2000.]IMELDA MARBELLA-BOBIS, petitioner, vs. ISAGANI D. BOBIS, respondent.

FACTS:An information for bigamy was filed against respondent on February 25, 1998 for having contracted a second marriage with petitioner Imelda Marbella-Bobis on January 25, 1996 and allegedly a third marriage with a certain Julia Sally Hernandez. Thereafter, respondent initiated a civil action for the judicial declaration of absolute nullity of his first marriage on the ground that it was celebrated without a marriage license. Respondent then filed a motion to suspend the proceedings in the criminal case for bigamy invoking the pending civil case for nullity of the first marriage as a prejudicial question to the criminal case. The trial judge granted the motion to suspend the criminal case. Petitioner filed a motion for reconsideration, but the same was denied. Hence, the petition.

ISSUE:Whether respondent should have first obtained a judicial declaration of nullity of his first marriage before entering into the second marriage, inasmuch as the alleged prejudicial question justifying suspension of the bigamy case is no longer a legal truism pursuant to Article 40 of the Family Code.

RULING:Yes.The Supreme Court upheld petitioner's contention and reversed and set aside the order of the trial court suspending the criminal proceeding on the ground of prejudicial question. The Court ruled that Article 40 of the Family Code, which was effective at the time of celebration of the second marriage, requires a prior judicial declaration of nullity of a previous marriage before a party may remarry. The clear implication of the law is that it is not for the parties, particularly the accused, to determine the validity or invalidity of the marriage. Whether or not respondent's first marriage was void for lack of a license is a matter of defense because there is still no judicial declaration of its nullity at the time the second marriage was contracted, and any decision in the civil action for nullity would not erase the fact that respondent entered into a second marriage during the subsistence of a first marriage. A decision in the civil case is not essential to the determination of the criminal charge for bigamy against respondent. It is, therefore, not a prejudicial question.

D. SUBSIDIARY LIABILITY (Arts 102-103, RPC, Arts 106-109, Labor Code)

Revised Penal Code provisionsArt. 102. Subsidiary civil liability of innkeepers, tavernkeepers and proprietors of establishments. — In default of the persons criminally liable, innkeepers, tavernkeepers, and any other persons or corporations shall be civilly liable for crimes committed in their

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establishments, in all cases where a violation of municipal ordinances or some general or special police regulation shall have been committed by them or their employees.

Innkeepers are also subsidiarily liable for the restitution of goods taken by robbery or theft within their houses from guests lodging therein, or for the payment of the value thereof, provided that such guests shall have notified in advance the innkeeper himself, or the person representing him, of the deposit of such goods within the inn; and shall furthermore have followed the directions which such innkeeper or his representative may have given them with respect to the care and vigilance over such goods. No liability shall attach in case of robbery with violence against or intimidation of persons unless committed by the innkeeper's employees.

Art. 103. Subsidiary civil liability of other persons. — The subsidiary liability established in the next preceding article shall also apply to employers, teachers, persons, and corporations engaged in any kind of industry for felonies committed by their servants, pupils, workmen, apprentices, or employees in the discharge of their duties.

Labor Code provisions

Art. 106. Contractor or subcontractor. Whenever an employer enters into a contract with another person for the performance of the former’s work, the employees of the contractor and of the latter’s subcontractor, if any, shall be paid in accordance with the provisions of this Code.

In the event that the contractor or subcontractor fails to pay the wages of his employees in accordance with this Code, the employer shall be jointly and severally liable with his contractor or subcontractor to such employees to the extent of the work performed under the contract, in the same manner and extent that he is liable to employees directly employed by him.

The Secretary of Labor and Employment may, by appropriate regulations, restrict or prohibit the contracting- out of labor to protect the rights of workers established under this Code. In so prohibiting or restricting, he may make appropriate distinctions between labor-only contracting and job contracting as well as differentiations within these types of contracting and determine who among the parties involved shall be considered the employer for purposes of this Code, to prevent any violation or circumvention of any provision of this Code.

There is "labor-only" contracting where the person supplying workers to an employer does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among others, and the workers recruited and placed by such person are performing activities which are directly related to the principal business of such employer. In such cases, the person or intermediary shall be considered merely as an agent of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him.

Art. 107. Indirect employer. The provisions of the immediately preceding article shall likewise apply to any person, partnership, association or corporation which, not being an employer, contracts with an independent contractor for the performance of any work, task, job or project.

Art. 108. Posting of bond. An employer or indirect employer may require the contractor or subcontractor to furnish a bond equal to the cost of labor under contract, on condition that the bond will answer for the wages due the employees should the contractor or subcontractor, as the case may be, fail to pay the same.

Art. 109. Solidary liability. The provisions of existing laws to the contrary notwithstanding, every employer or indirect employer shall be held responsible with his contractor or subcontractor for any violation of any provision of this Code. For purposes of determining the extent of their civil liability under this Chapter, they shall be considered as direct employers.

41. [G.R. No. 84516. December 5, 1989.]DIONISIO CARPIO, petitioner, vs. HON. SERGIO DOROJA, (Presiding Judge, MTC Branch IV, Zamboanga City) and EDWIN RAMIREZ Y WEE, respondents.

FACTS:Sometime on October 23, 1985, accused-respondent Edwin Ramirez, while driving a passenger Fuso Jitney owned and operated by Eduardo Toribio, bumped Dionisio Carpio, a pedestrian crossing the street, as a consequence of which the latter suffered from a fractured left clavicle as reflected in the medico-legal certificate and sustained injuries which required medical attention for a period of (3) three months. An information for Reckless Imprudence Resulting to Serious Physical Injuries was filed against Edwin Ramirez with the Municipal Trial Court of Zamboanga City, Branch IV. On January 14, 1987, the accused voluntarily pleaded guilty to a lesser offense and was accordingly convicted for Reckless Imprudence Resulting to Less Serious Physical Injuries under an amended information punishable under Article 365 of the Revised Penal Code

DECISION OF LOWER COURTS:1. Trial Court - finding the accused EDWIN RAMIREZ y WEE guilty as a principal beyond reasonable doubt2. CA - modified the trial court's decision, granting the appellant moral damages in the amount of Five Thousand Pesos (P5,000.00), while affirming all other civil liabilities.

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ISSUE:whether or not the subsidiary liability of the owner-operator may be enforced in the same criminal proceeding against the driver where the award was given, or in a separate civil action.

RULING:The filing of a separate complaint against the operator for recovery of subsidiary liability is not necessary since his liability is clear from the decision against the accused.

In order that an employer may be held subsidiarily liable for the employee's civil liability in the criminal action, it should be shown (1) that the employer, etc. is engaged in any kind of industry, (2) that the employee committed the offense in the discharge of his duties and (3) that he is insolvent (Basa Marketing Corp. v. Bolinao, 117 SCRA 156). The subsidiary liability of the employer, however, arises only after conviction of the employee in the criminal action. All these requisites present, the employer becomes ipso facto subsidiarily liable upon the employee's conviction and upon proof of the latter's insolvency. Needless to say, the case at bar satisfies all these requirements.

We are not convinced that the owner-operator has been deprived of his day in court, because the case before us is not one wherein the operator is sued for a primary liability under the Civil Code but one in which the subsidiary civil liability incident to and dependent upon his employee's criminal negligence is sought to be enforced. Considering the subsidiary liability imposed upon the employer by law, he is in substance and in effect a party to the criminal case. Ergo, the employer's subsidiary liability may be determined and enforced in the criminal case as part of the execution proceedings against the employee.

The position taken by the respondent appellate court that to grant the motion for subsidiary writ of execution would in effect be to amend its decision which has already become final and executory cannot be sustained. Compelling the owner-operator to pay on the basis of his subsidiary liability does not constitute an amendment of the judgment because in an action under Art. 103 of the Revised Penal Code, once all the requisites as earlier discussed are met, the employer becomes ipso facto subsidiarily liable, without need of a separate action. Such being the case, the subsidiary liability can be enforced in the same case where the award was given, and this does not constitute an act of amending the decision. It becomes incumbent upon the court to grant a motion for subsidiary writ of execution (but only after the employer has been heard), upon conviction of the employee and after execution is returned unsatisfied due to the employee's insolvency.

The filing of a separate complaint against the operator for recovery of subsidiary liability is not necessary since his liability is clear from the decision against the accused. Such being the case, it is not indispensable for the question of subsidiary liability to be passed upon by the appellate court. Such subsidiary liability is already implied from the appellate court's decision. In the recent case of Vda. de Paman v. Señeris, 115 SCRA 709, this Court reiterated the following pronouncement: "A judgment of conviction sentencing a defendant employer to pay an indemnity in the absence of any collusion between the defendant and the offended party, is conclusive upon the employer in an action for the enforcement of the latter's subsidiary liability not only with regard to the civil liability, but also with regard to its amount." This being the case, this Court stated in Rotea v. Halili, 109 Phil. 495, that the court has no other function than to render decision based upon the indemnity awarded in the criminal case and has no power to amend or modify it even if in its opinion an error has been committed in the decision. A separate and independent action is, therefore, unnecessary and would only unduly prolong the agony of the heirs of the victim."

Compelling the owner-operator to pay on the basis of his subsidiary liability does not constitute an amendment of the judgment because in an action under Art. 103 of the Revised Penal Code, once all the requisites as earlier discussed are met, the employer becomes ipso facto subsidiarily liable, without need of a separate action.

42. [G.R. No. L-18966. November 22, 1966.]VICENTE BANTOTO, ET AL., plaintiffs-appellees, vs. SALVADOR BOBIS, ET AL., defendants. CRISPIN VALLEJO, defendant-appellant.

FACTS:Appellant Crispin Vallejo was the registered owner of a "jeepney" named "Jovil 11", with plate TPU-20948, that was operated by him in Bacolod City through driver Salvador Bobis. On 24 October 1948, through the driver's negligence, the "jeepney" struck a 3-year old girl, Damiana Bantoto, a daughter of appellees, inflicting serious injuries that led to her death a few days later. The City Fiscal of Bacolod filed an information charging Bobis with homicide through reckless imprudence, to which Bobis pleaded guilty. By amended complaint of 8 October 1959, appellees Vicente Bantoto and Florita Lanceta, for themselves and their other children, instituted the present action against Salvador Bobis, Juan Maceda (later absolved) and Crispin Vallejo in the court of first instance, pleading the foregoing facts and seeking to have the three defendants declared solidarily responsible for damages, consisting of the civil indemnity required of the driver Bobis in the judgment of conviction, plus moral and exemplary damages and attorneys' fees and costs.

ISSUE:Whether the amended complaint should aver that the driver, Bobis was insolvent.

RULING:No.The master's liability, under the Revised Penal Code, for the crimes committed by his servants and employees in the discharge of their

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duties, is not predicated upon the insolvency of the latter. Such insolvency is required only when the liability of the master is being made effective by execution levy, but not for the rendition of judgment against the master. The subsidiary character of the employer's responsibility merely imports that the latter's property is not to be seized without first exhausting that of the servant. And by analogy to a regular guarantor, the master may not demand prior exhaustion of the servant's properties if he can not "point out to the creditor available property of the debtor within Philippine territory, sufficient to cover the amount of the debt" (Cf. Civil Code, Article 1060). This rule is logical, for as between the offended party (as creditor) and the culprit's master or employer, it is the latter who is in a better position to determine the resources and solvency of the servant or employee.

The writ of execution and the sheriff's return in the criminal case against the employee are material and admissible when issuance of a writ of execution of the appealed judgment is demanded. It is well to note that the Supreme Court has ruled that in the absence of collusion the judgment convicting and sentencing the servant to pay indemnity is conclusive in an action to enforce the subsidiary liability of the master or employer.

43. [G.R. No. 112346. March 29, 1996.]EVELYN YONAHA, petitioner, vs. HON. COURT OF APPEALS and HEIRS OF HECTOR CAÑETE, respondents.

FACTS:That on April 14, 1990, at or about 11:45 A.M., in Basak, Lapulapu City, Philippines, within the jurisdiction of this Honorable Court, the aforenamed accused, while driving a Toyota Tamaraw sporting Plate No. GCX-237 duly registered in the name of Raul Cabahug and owned by EK SEA Products, did then and there unlawfully and feloniously maneuver and operate it in a negligent and reckless manner, without taking the necessary precaution to avoid injuries to person and damage to property, as a result thereof the motor vehicle he was then driving bumped and hit Hector Cañete, which caused the latter's instantaneous death, due to the multiple severe traumatic injuries at different parts of his body."On 27 April 1992, a writ of execution was issued for the satisfaction of the monetary award. In his Return of Service, dated 07 May 1992, the MTCC Deputy City Sheriff stated that he had served the writ on accused Elmer Ouano but that the latter had manifested his inability to pay the money obligation.Forthwith, private respondents presented a "motion for subsidiary execution" with neither a notice of hearing nor notice to petitioner. Acting on the motion, nevertheless, the trial court issued an order, dated 29 May 1992, directing the issuance of a writ of subsidiary execution. Petitioner filed a motion to stay and to recall the subsidiary writ of execution principally anchored on the lack of prior notice to her and on the fact that the employer's liability had yet to be established.

DECISION OF LOWER COURTS –1. RTC - denied petitioner's motion2. CA - dismissed the petition for lack of merit and thereby lifted the writ of preliminary injunction

ISSUE:Whether the fact Ouano's conviction was not the result of a finding of proof beyond reasonable doubt but from his spontaneous plea of guilt has relevance in subsidiary liability

RULING:The statutory basis for an employer's subsidiary liability is found in Article 103 of the Revised Penal Code. This Court has since sanctioned the enforcement of this subsidiary liability in the same criminal proceedings in which the employee is adjudged guilty, on the thesis that it really is a part of, and merely an incident in, the execution process of the judgment. But, execution against the employer must not issue as just a matter of course, and it behooves the court, as a measure of due process to the employer, to determine and resolve a priori, in a hearing set for the purpose, the legal applicability and propriety of the employer's liability. The requirement is mandatory even when it appears prima facie that execution against the convicted employee cannot be satisfied. The court must convince itself that the convicted employee is in truth in the employ of the employer; that the latter is engaged in an industry of some kind; that the employee has committed the crime to which civil liability attaches while in the performance of his duties as such; and that execution against the employee is unsuccessful by reason of insolvency. The assumption that, since petitioner in this case did not aver any exculpatory facts in her "motion to stay and recall," as well as in her motion for reconsideration, which could save her from liability, a hearing would be a futile and a sheer rigmarole is unacceptable. The employer must be given his full day in court.

The subsidiary liability of an employer under Article 103 of the Revised Penal Code requires (a) the existence of an employer-employee relationship; (b) that the employer is engaged in some kind of industry; (c) that the employee is adjudged guilty of the wrongful act and found to have committed the offense in the discharge of his duties (not necessarily any offense he commits "while" in the discharge of such duties); and (d) that said employee is insolvent. The judgment of conviction of the employee, of course, concludes the employer and the subsidiary liability may be enforced in the same criminal case, but to afford the employer due process, the court should hear and decide that liability on the basis of the conditions required therefor by law.

The case is REMANDED to the trial court for further proceedings.

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