human relation compiled digests

7/29/2019 human relation compiled digests

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1 | P a g eDIGEST: SPECIAL TORTS ON HUMAN RELATIONS and

Article 22 and 23

ARTICLE 19 PRINCIPLE OF ABUSE OF RIGHTS:

CARPIO V VALMONTE 438 SCRA 38September 9, 2004

FACTS- Respondent Valmonte is a wedding coordinator. Del Rosarioand Sierra engaged her services for their church wedding on10 October 1996. At about 4:30 p.m. on that day, Valmonte

went to the Manila Hotel where the bride and her family werebilleted. When she arrived at Suite 326-A, several persons werealready there including the bride, the bride's parents andrelatives, the make-up artist and his assistant, the officialphotographers, and the fashion designer. Among those presentwas petitioner Carpio, an aunt of the bride who was preparingto dress up for the occasion.- After reporting to the bride, Valmonte went out of the suitecarrying the items needed for the wedding rites and the giftsfrom the principal sponsors. She proceeded to the MaynilaRestaurant where the reception was to be held. She paid thesuppliers, gave the meal allowance to the band, and went back tothe suite. Upon entering the suite, Valmonte noticed the peoplestaring at her. It was at this juncture that petitionerallegedly uttered the following words to Valmonte: Ikaw langang lumabas ng kwarto, nasaan ang dala mong bag? Saan kapumunta? Ikaw lang ang lumabas ng kwarto, ikaw ang kumuha.Petitioner then ordered one of the ladies to search Valmonte'sbag. It turned out that after Valmonte left the room to attend toher duties, petitioner discovered that the pieces of jewelry whichshe placed inside the comfort room in a paper bag were lost. Thehotel security was called in to help in the search. The bags andpersonal belongings of all the people inside the room weresearched. Valmonte was allegedly bodily searched, interrogatedand trailed by a security guard throughout the evening. Later,police officers arrived and interviewed all persons who hadaccess to the suite and fingerprinted themincluding Valmonte. During all the time Valmonte was beinginterrogated by the police officers, petitioner kept on saying thewords Siya lang ang lumabas ng kwarto. Valmonte's carwhich was parked at the hotel premises was also searched butthe search yielded nothing.- A few days after the incident, petitioner received a letter

from Valmonte demanding a formal letter of apology whichshe wanted to be circulated to the newlyweds' relatives andguests to redeem her smeared reputation as a result ofpetitioner's imputations against her. Petitioner did not respond tothe letter. Thus, Valmonte filed a suit for damages againsther before the Regional Trial Court (RTC) of Pasig City,Branch 268. In her complaint, Valmonte prayed that petitionerbe ordered to pay actual, moral and exemplary damages, as wellas attorney's fees.- Responding to the complaint, petitioner denied having utteredwords or done any act to confront or single out Valmonte duringthe investigation and claimed that everything that transpiredafter the theft incident was purely a police matter in whichshe had no participation. Petitioner prayed for the dismissal ofthe complaint and for the court to adjudge Valmonte liable on hercounterclaim.- The trial court rendered its Decision dismissing Valmonte'scomplaint for damages. It ruled that when petitioner soughtinvestigation for the loss of her jewelry, she was merelyexercising her right and if damage results from a personexercising his legal right, it is damnum absque injuria. It addedthat no proof was presented by Valmonte to show that petitioneracted maliciously and in bad faith in pointing to her as the culprit.

The court said that Valmonte failed to show that she sufferedserious anxiety, moral shock, social humiliation, or that herreputation was besmirched due to petitioner's wrongful act.- Respondent appealed to the Court of Appeals alleging that thetrial court erred in finding that petitioner did not slander hergood name and reputation and in disregarding the evidenceshe presented. The Court of Appeals ruled differently. It opinedthat Valmonte has clearly established that she was singledout by petitioner as the one responsible for the loss of her

jewelry. The appellate court held that Valmonte's claim for

damages is not predicated on the fact that she was subjected tobody search and interrogation by the police but ratherpetitioner's act of publicly accusing her of taking the missing

jewelry. It categorized petitioner's utterance defamatoryconsidering that it imputed upon Valmonte the crime of theft.

The court concluded that petitioner's verbal assault uponValmonte was done with malice and in bad faith since it wasmade in the presence of many people without any solid proofexcept petitioner's suspicion. Such unfounded accusationentitles Valmonte to an award of moral damages in the amountof P100,000.00 for she was publicly humiliated, deeplyinsulted, and embarrassed. However, the court found nosufficient evidence to justify the award of actual damages.- Hence, this petition. Petitioner contends that the appellatecourt's conclusion that she publicly humiliated respondent

does not conform to the evidence presented. She adds thateven on the assumption that she uttered the words complainedof, it was not shown that she did so with malice and in bad faith.

ISSUEWON petitioner had willfully caused injury to respondent in amanner that is contrary to morals and good customs

HELD:YES- Petitioner's verbal reproach against respondent was certainlyuncalled for considering that by her own account nobodyknew that she brought such kind and amount of jewelry inside thepaper bag. This being the case, she had no right to attack

respondent with her innuendos which were not merelyinquisitive but out rightly accusatory. By openly accusingrespondent as the only person who went out of the room beforethe loss of the jewelry in the presence of all the guests therein,and ordering that she be immediately bodily searched,petitioner virtually branded respondent as the thief. True,petitioner had the right to ascertain the identity of themalefactor, but to malign respondent without an iota of proofthat she was the one who actually stole the jewelry is anact which, by any standard or principle of law is impermissible.Petitioner had willfully caused injury to respondent in a mannerwhich is contrary to morals and good customs. Her firmnessand resolve to find her missing jewelry cannot justify her actstoward respondent. She did not act with justice and good faith forapparently, she had no other purpose in mind but to prejudicerespondent. Certainly, petitioner transgressed the provisions of

Article 19 in relation to Article 21 for which she should beheld accountable. A person should be protected only when heacts in the legitimate exercise of his right, that is when he actswith prudence and good faith; but not when he acts withnegligence and abuse.- Respondent is clearly entitled to an award of moral damages.Moral damages may be awarded whenever the defendant'swrongful act or omission is the proximate cause of theplaintiff's physical suffering, mental anguish, fright, seriousanxiety, besmirched reputation, wounded feelings, moralshock, social humiliation, and similar injury in the cases specifiedor analogous to those provided in Article 2219 of the Civil Code.

Though no proof of pecuniary loss is necessary in order thatmoral damages may be adjudicated, courts are mandated totake into account all the circumstances obtaining in the caseand assess damages according to their discretion. Worthy ofnote is that moral damages are not awarded to penalize thedefendant, or to enrich a complainant, but to enable the latter toobtain means, diversions or amusements that will serve toalleviate the moral suffering he has undergone, by reason ofdefendant's culpable action. In any case, award of moraldamages must be proportionate to the sufferings inflicted.Considering respondent's social standing, and the fact thather profession is based primarily on trust reposed in her by herclients, the seriousness of the imputations made by petitioner hasgreatly tarnished her reputation and will in one way or the other,affect her future dealings with her clients, the award ofP100,000.00 as moral damages appears to be a fair andreasonable assessment of respondent's damages.DispositionPetition denied

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229 Sea Commercial vs. CA |G.R. 122823 November 25, 1999 |

FACTS SEACOM is a corporation engaged in the business of selling anddistributing agricultural machinery, products and equipment. OnSeptember 20, 1966, SEACOM and JII entered into a dealershipagreement whereby SEACOM appointed JII as its exclusive dealerin the City and Province of Iloilo. Tirso Jamandre executed asuretyship agreement binding himself jointly and severally with

JII to pay for all obligations of JII to SEACOM. The agreement wassubsequently amended to include Capiz in the territorial coverageand to make the dealership agreement on a non-exclusive basis.In the course of the business relationship arising from thedealership agreement, JII allegedly incurred a balance ofP18,843.85

for unpaid deliveries, and SEACOM brought action to recover saidamount plus interest and attorneys fees. JII filed an Answer denying the obligation and interposing acounterclaim for damages representing unrealized profits when JIIsold to the Farm System Development Corporation (FSDC) twentyone (21) units of Mitsubishi power tillers.In the counterclaim, JII alleged that as a dealer in Capiz, JIIcontracted to sell in 1977 twenty-four (24) units of Mitsubishipower tillers to a group of farmers to be financed by saidcorporation, which fact JII allegedly made known to petitioner, butthe latter taking advantage of said information and in bad faith,went directly to FSDC and dealt with it and sold twenty one (21)units of said tractors, thereby depriving JII of unrealized profit ofeighty-five thousand four hundred fifteen and 61/100 pesos(P85,415.61).


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2 | P a g eISSUES & ARGUMENTS

W/N SEACOM acted in bad faith when it competed withits own dealer as regards the sale of farm machineries toFSDCHOLDING & RATIO DECIDENDI "Art. 19. Every person must, in the exercise of his rights and inthe performance of his duties, act with justice, give everyone hisdue and observe honesty and good faith. Article 19 was intended to expand the concept of torts bygranting adequate legal remedy for the untold number of moralwrongs which is impossible for human foresight to providespecifically in statutory law. If mere fault or negligence in onesacts can make him liable for damages for injury caused thereby,with more reason should abuse or bad faith make him liable. Theabsence of good faith is essential to abuse of right. Good faith isan honest intention to abstain from taking any unconscientiousadvantage of another, even through the forms or technicalities ofthe law, together with an absence of all information or belief offact which would render the transaction unconscientious. Inbusiness relations, it means good faith as understood by men ofaffairs. While Article 19 may have been intended as a mere declarationof principle, the cardinal law on human conduct expressed insaid article has given rise to certain rules, e.g. that where aperson exercises his rights but does so arbitrarily or unjustly orperforms his duties in a manner that is not in keeping withhonesty and good

faith, he opens himself to liability. The elements of an abuse ofrights under Article 19 are: (1) there is a legal right or duty; (2)which is exercised in bad faith; (3) for the sole intent ofprejudicing or injuring another. Clearly, the bad faith of SEACOM was established. By appointingas a dealer of its agricultural equipment, SEACOM recognized therole and undertaking of JII to promote and sell said equipment.Under the dealership agreement, JII was to act as a middleman tosell SEACOMs products, in its area of operations, i.e. Iloilo andCapiz provinces, to the exclusion of other places, to send its mento Manila for training on repair, servicing and installation of theitems to be handled by it, and to comply with other personnel andvehicle requirements intended for the benefit of the dealershipAfter being informed of the demonstrations JII had conducted topromote the sales of SEACOM equipment, including theoperations at JIIs expense conducted for five months, and the

approval of its facilities (service and parts) by FSDC, SEACOMparticipated in the bidding for the said equipment at a lowerprice, placing itself in direct competition with its own dealer. Theactuations of SEACOM are tainted by bad faith. Even if the dealership agreement was amended to make it on anon-exclusive basis, SEACOM may not exercise its right unjustlyor in a manner that is not in keeping with honesty or good faith;otherwise it opens itself to liability under the abuse of right ruleembodied in Article 19 of the Civil Code above-quoted. Thisprovision, together with the succeeding article on human relation,was intended to embody certain basic principles that are to beobserved for the rightful relationship between human beings andfor the stability of the social order. What is sought to be writteninto the law is the pervading principle of equity and justice abovestrict legalism.

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City Trust Banking vs Villanueva 361 SCRA 446_____________________TITLE: Nikko Hotel Manila vs. ReyesFebruary 28, 2005

FACTS:Petitioners Nikko Hotel Manila and Ruby Lim assailed the decisionof the Court of Appeals in reversing the decision of RTC of QuezonCity. CA held petitioner liable for damages to Roberto Reyes akaAmang Bisaya, an entertainment artist.

There are two versions of the story:Mr. Reyes: On the eve of October 13, 1994, Mr. Reyes whilehaving coffee at the lobby of Nikko Hotel was approached by Dr.Violet Filart, a friend several years back. According to Mr. Reyes,Dr. Filart invited him to join a birthday party at the penthouse for

the hotels former General Manager, Mr. Tsuruoka. Plaintiffagreed as Dr. Filart agreed to vouch for him and carried a basketof fruits, the latters gift. He He lined up at the buffet table assoon as it was ready but to his great shock, shame andembarrassment, Ruby Lim, Hotels Executive Secretary, askedhim to leave in a loud voice enough to be heard by the peoplearound them. He was asked to leave the party and a Makatipoliceman accompanied him to step-out the hotel. All these time,Dr Filart ignored him adding to his shame and humiliation.

Ms. Ruby Lim: She admitted asking Mr. Reyes to leave the partybut not in the manner claimed by the plaintiff. Ms. Limapproached several people including Dr. Filarts sister, Ms.Zenaida Fruto, if Dr. Filart did invite him as the captain waiter toldMs. Lim that Mr. Reyes was with Dr. Filarts group. She wasntable to ask it personally with Dr. Filart since the latter was talking

over the phone and doesnt want to interrupt her. She asked Mr.Reyes to leave because the celebrant specifically ordered thatthe party should be intimate consisting only of those who part ofthe list. She even asked politely with the plaintiff to finish hisfood then leave the party.

During the plaintiffs cross-examination, he was asked how closewas Ms. Lim when she approached him at the buffet table. Mr.Reyes answered very close because we nearly kissed eachother. Considering the close proximity, it was Ms. Limsintention to relay the request only be heard by him. It was Mr.Reyes who made a scene causing everybody to know whathappened.

ISSUE: Whether or not petitioners acted abusively in asking Mr.Reyes to leave the party.

HELD:Supreme Court held that petitioners did not act abusively inasking Mr. Reyes to leave the party. Plaintiff failed to establishany proof of ill-motive on the part of Ms. Lim who did all thenecessary precautions to ensure that Mr. Reyes will not behumiliated in requesting him to leave the party. Consideringalmost 20 years of experience in the hotel industry, Ms. Lim isexperienced enough to know how to handle such matters.Hence, petitioners will not be held liable for damages broughtunder Article 19 and 20 of the Civil Code.

Topic: DEFENSES: ASSUMPTION OF RISKG.R. No. 154259 February 28, 2005NIKKO HOTEL MANILAGARDEN and RUBY LIM, petitioners,vs. ROBERTO REYES,a.k.a. "AMAY BISAYA," respondent.

Facts:The cause of action before the trial court was one for damagesbrought under the human relations provisions of the New CivilCode. Respondent Reyes Version: Mrs. Filart invited and assuredthat she can vouched for him in the birthday party of the hotelsmanager, Mr. Masakazu at the penthouse. When the buffet dinnerwas ready, Reyes lined up but, to his great shock, shame andembarrassment, he was stopped by Lim (Exec. Sec. of NikkoHotel), and in a loud voice w/in the presence and hearing of theother guests, told him to leave the party. Reyes tried to explainthat he was invited by Dr. Filart, but the latter completely ignored

him adding to his shame and humiliation. Not long after,policemen approached him and asked him to step out of thehotel. He now claims P1M for actual damages, P1M moral and/orexemplary damages and P200k for attys fees. Lims version: Atthe party she noticed Reyes at the bar counter ordering a drink.Mindful of Mr. Tsuruokas wishes to keep the party intimate, sheapproached the captain waiter to inquire as to the presence ofReyes who was uninvited. The waiter said that he saw Reyescame in w/ the group of Dr. Filart. Lim inquired Dr Filarts sisterabout Reyes and the sister said the latter was not invited by Dr.Filart. Lim requested the sister to tell Reyes to leave but the latter

just lingered. The same happened when one Capt. Batung askedReyes to leave. When Lim spotted Reyes by the buffet table, shedecided to speak to him herself as there were no guest in theimmediate vicinity. However, as Reyes was already helpinghimself to the food, she decided to wait.

When Reyes went to a corner and started to eat, Lim approachedhim and said: " alam ninyo, hindo ho kayodapat nandito. Perototal nakakuha na ho kayo ng pagkain, ubusin na lang ninyo atpagkatapos kung pwede lang po umalisna kayo."She then turned around trusting that Reyes would show enoughdecency to leave, but to her surprise, he began screaming andmaking a big scene, and even threatened to dump food onher.Dr. Filarts version: According to her, it was Reyes whovolunteered to carry the basket of fruits intended for thecelebrant as he was likewise going to take the elevator, not to thepenthouse but to Altitude 49. When they reached the penthouse,she reminded Reyes to go down as he was not properly dressedand was not invited.All the while, she thought that Reyes already left the place. Thenthere was a commotion and she saw Reyes shouting.

She ignored Reyes.She was embarrassed and didnot want the celebrant tothink that she invited him.RTC Ruling: After trial on the merits,the courta quo dismissed the complaint, giving more credence to thetestimony of Ms.Lim that she was discreet in asking Mr. Reyes toleave the party. The trial court likewise ratiocinated that Mr.Reyes assumed the risk of being thrown out of the party ashe was uninvited.CA Ruling: On appeal, CA reversed the ruling ofthe trial court as it found more commanding of belief thetestimony of Reyes that Lim ordered him to leave in a loud voicewithin hearing distance of several guests. It likewise ruled thatthe actuation of Lim in approaching several people to inquireinto the presence of Reyes exposed the latter to ridicule andwas uncalled for as she should have approached Dr. Filart firstand both of them should have talked to Reyes in private.


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3 | P a g eConsequently, CA imposed upon Hotel Nikko, Lim and Dr. Filartthe solidary obligation to pay Reyes (1) exemplary damages inthe amount of Two Hundred Thousand Pesos (P200,000); (2)moral damages in the amount of Two Hundred Thousand Pesos(P200,000); and (3) attorneys fees in the amount of Ten

Thousand Pesos (P10,000).On motion for reconsideration, the Court of Appeals affirmed itsearlier decision as the argument raised in the motion had "beenamply discussed and passed upon in the decision sought to bereconsidered. Hotel Nikko and Ruby Lim contend that the Court ofAppeals seriously erred in not applying the Doctrine of VolentiNon Fit Injuria considering that by its own findings, Reyes was a

great crasher.

Issue and Ruling:1)

Won the Doctrine of Volenti Non Fit Injuria is applicable in thecase at bar.

Petitioners Lim and Hotel Nikko contend that pursuant to thedoctrine of volenti non fit injuria, they cannot be made liable fordamages as respondent Reyes assumed the risk of being askedto leave (and being embarrassed and humiliated in the process)as he was a "gate-crasher." The doctrine of volenti non fit injuria("to which a person assents is not esteemed in law as injury" )refers to self-inflicted injury or to the consent to injury whichprecludes the recovery of damages by one who has knowinglyand voluntarily exposed himself to danger, even if he is not

negligent in doing so. As formulated by petitioners, however, thisdoctrine does not find application to the case at bar because evenif respondent Reyes assumed the risk of being asked to leave theparty, petitioners, under Articles 19 and 21 of the New Civil Code,were still under obligation to treat him fairly in order not toexpose him to unnecessary ridicule and shame.

2) Won Lim acted abusively in asking Reyes, a.k.a. "AmayBisaya," to leave the party where he was not invited by thecelebrant thereof thereby becoming liable under Articles 19 and21 of the Civil Code.No. In the absence of any proof of motive onthe part of Ms. Lim to humiliate Mr. Reyes and expose him toridicule and shame, it is highly unlikely that she would shout athim from a very close distance. Ms. Lim having been in the hotelbusiness for twenty years wherein being polite and discreet arevirtues to be emulated, the testimony of Mr. Reyes that she actedto the contrary does not inspire belief and is indeed incredible.

Thus, the lower court was correct in observing that Consideringthe closeness of defendant Lim to plaintiff when the request forthe latter to leave the party was made such that they nearlykissed each other, the request was meant to be heard by himonly and there could have been no intention on her part to causeembarrassment to him. It was plaintiffs reaction to the requestthat must have made the other guests aware of what transpiredbetween them. Had plaintiff simply left the party as requested,there was no need for the police to take him out. Moreover,another problem with Reyess version of the story is that it isunsupported. It is a basic rule in civil cases that he who allegesproves. Reyes, however, had not presented any witness toback his story up. All his witnesses Danny Rodinas, PepitoGuerrero and Alexander Silva - proved only that it was Dr. Filartwho invited him to the party. Lim, not having abused her right toask Mr. Reyes to leave the party to which he was not invited,

cannot be made liable to pay for damages under Articles 19 and21 of the Civil Code. Necessarily, neither can her employer, HotelNikko, be held liable as its liability springs from that of itsemployee.

Article 19, known to contain what is commonly referred to asthe principle of abuse of rights, is not a panacea for all humanhurts and social grievances. Art. 19. Every person must, in theexercise of his rights and in the performance of his duties, actwith justice, give everyone his due, and observe honesty andgood faith. The object of this article, therefore, is to set certainstandards which must be observed not only in the exercise ofones rights but also in the performance of ones duties. Thesestandards are the following: act with justice, give everyone hisdue and observe honesty and good faith. Its antithesis,necessarily, is any act evincing bad faith or intent to injure. Itselements are the following: (1) There is a legal right or duty; (2)which is exercised in bad faith; (3) for the sole intent ofprejudicing or injuring another. When Article 19 is violated, anaction for damages is proper under Articles 20 or 21 of the CivilCode. Article20 pertains to damages arising from a violation oflaw which does not obtain herein as Lim was perfectly within herright to ask Mr. Reyes to leave. Parenthetically, the mannerby which Lim asked Reyes to leave was likewise acceptable andhumane under the circumstances. In this regard, we cannot putour imprimatur on the appellate courts declaration that Lims actof personally approaching Mr. Reyes (without first verifying fromFilart if indeed she invited. Reyes) gave rise to a cause of action"predicated upon mere rudeness or lack of consideration ofone person, which calls not only protection of human dignity butrespect of such dignity." Without proof of any ill-motive on herpart, Lims act of by-passing Filart cannot amount to abusive

conduct especially because she did inquire from Mrs. Filartscompanion who told her that Filart did not invite Reyes. If at all,Lim is guilty only of bad judgment which, if done with goodintentions, cannot amount to bad faith. Not being liable for bothactual and moral damages, neither can petitioners Lim andHotel Nikko be made answerable for exemplary damagesespecially for the reason stated by the CA

______________________ARTICLE 21

RUIZ V SECRETARY

FACTS- Enrique Ruiz and Jose Herrera, both shareholders of Allied

Technilogists, Inc. filed an action against the Secretary ofNational Defense and also against their own company (togetherwith Pablo Panlilio who is also a shareholder of the company) inconnection with the 15% retention fund withheld by the DNDrelating to the construction of the Veterans Hospital. It turnedout that said retention was already released by the DND to theCompany. The Court then proceeded with the other cause ofaction which was deemed to be the controversy betweenRuiz and Panlilio over the said 15%.- As it turned out, the real issue was the credit as to the architectsof the building were. Under the contract and all other documentsrelating to the construction of the Veterans Hospital, the namedarchitect was only Panlilio. Ruiz and Herrera want to berecognized as architects of the building also citing Article 21 of

the Civil Code as their base for he cause of action.- The amended complaint of appellants claimed that the noninclusion of their names as architects resulted in theirprofessional prestige and standing being seriously impaired.Hence, they claim that even if the retention fund was in actreleased, their pleas for recognition as architects should havebeen heard bythe lower court.

ISSUE WON the lower court erred in dismissing the case

HELD NO- The sole object of the appellants was to secure for themselvesrecognition that they were co-architects of the Veterans Hospital,together with Panlilio, so as to enhance their standing andprestige. If this is so, there is no need or necessity for a

judicial declaration.Prestige and recognition are bestowed on the deserving even ifthere is no judicial declaration. On the other hand no amount ofdeclaration will help an incompetent person achieve prestigeand recognition. Article 21, which was used as basis of theaction, states; Any person who willfully causes loss or injuryto another in a manner that is contrary to morals, good customs,or public policy shall compensate the latter for damages.- While the word injury may also refer to honor or credit, thearticle envisions a situation where a person has a legal rightwhich was violated by another in a manner contrary to morals,good custom, or public policy. Hence it presupposes losses orinjuries which are suffered as a result of said violation. Thepleadings in this case do not show damages were ever asked oralleged. - And under the facts and circumstances obtaining, onecannot sustain the contention that the failure or refusal toextend recognition was an act contrary to morals, good

custom, or public policy.

Disposition Petition denied. Order appealed from is affirmed.he modified award of attorneys fees.

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260 Tenchavez vs. Ecano| JBL ReyesG.R. No. L-19671 November 29, 1965| 15 SCRA 355

FACTS Direct appeal, on factual and legal questions, from the

judgment of the Court of First Instance of Cebu, denying the claimof the plaintiff-appellant, Pastor B. Tenchavez, for legalseparation and one million pesos in damages against his wife andparents-in-law, the defendants-appellees, Vicente, Mamerto andMena,all surnamed "Escao," respectively Missing her late afternoon classes on 24 February 1948 in theUniversity of San Carlos, Cebu City, where she was then enrolledas a second year student of commerce, Vicenta Escao, 27 yearsof age (scion of a well-to-do and socially prominent Filipino familyof Spanish ancestry and a "sheltered colegiala"), exchangedmarriage vows with Pastor Tenchavez, 32 years of age, anengineer, ex-army officer and of undistinguished stock, withoutthe knowledge of her parents, before a Catholic chaplain, Lt.Moises Lavares, in the house of one Juan Alburo in the said city.

The marriage was the culmination of a previous love affair andwas duly registered with the local civil register. Her parents were disgusted when they found out about themarriage and considered a Re-celebration of the marriage as theybelieved it to be invalid.

The re-celebration never took place.


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4 | P a g e On 24 June 1950, without informing her husband, Vicentaapplied for a passport, indicating in her application that she wassingle, that her purpose was to study, and she was domiciled inCebu City, and that she intended to return after two years. Theapplication was approved, and she left for the United States.On 22 August 1950, she filed a verified complaint for divorce

against the herein plaintiff in the Second Judicial District Court ofthe State of Nevada in and for the County of Washoe, on theground of "extreme cruelty, entirely mental in character." On 21October 1950, a decree of divorce, "final and absolute", wasissued in open court by the said tribunal.In 1951 Mamerto and Mena Escao filed a petition with theArchbishop of Cebu to annul their daughter's marriage to Pastor

(Exh. "D"). On 10 September 1954, Vicenta sought papaldispensation of her marriage (Exh. "D"-2).On 13 September 1954, Vicenta married an American, Russell LeoMoran, in Nevada. She now lives with him in California, and, byhim, has begotten children. She acquired American citizenship on8 August 1958.But on 30 July 1955, Tenchavez had initiated the proceedings atbar by a complaint in the Court of First Instance of Cebu, andamended on 31 May 1956, against Vicenta F. Escao, herparents, Mamerto and Mena Escao, whom he charged withhaving dissuaded and discouraged Vicenta from joining herhusband, and alienating her affections, and against the RomanCatholic Church, for having, through its Diocesan Tribunal,decreed the annulment of the marriage, and asked for legalseparation and one million pesos in damages.Vicenta claimed a valid divorce from plaintiff and an equally valid

marriage to her present husband, Russell Leo Moran; while herparents denied that they had in any way influenced theirdaughter's acts, and counterclaimed for moral damages. Theappealed judgment did not decree a legal separation, but freedthe plaintiff from supporting his wife and to acquire property tothe exclusion of his wife. It allowed the counterclaim of MamertoEscao and Mena Escao for moral and exemplary damages andattorney's fees against the plaintiff-appellant, to the extent ofP45,000.00, and plaintiff resorted directly to this Court.

ISSUES & ARGUMENTS W/N Vicentas parents are liable for damages

HOLDING & RATIO DECIDENDI No. There is no evidence that the parents of Vicenta, out ofimproper motives, aided and abetted her original suit forannulment, or her subsequent divorce; she appears to have actedindependently, and being of age, she was entitled to judge whatwas best for her and ask that her decisions be respected. Herparents, in so doing, certainly cannot be charged with alienationof affections in the absence of malice or unworthy motives, whichhave not been shown, good faith being always presumed until thecontrary is proved. Plaintiff Tenchavez, in falsely charging Vicenta's aged parentswith racial or social discrimination and with having exerted effortsand pressured her to seek annulment and divorce,unquestionably caused them unrest and anxiety, entitling them torecover damages. While this suit may not have been impelled byactual malice, the charges were certainly reckless in the face ofthe proven facts and circumstances. Court actions are notestablished for parties to give vent to their prejudices or spleen.________________

Pe vs Pe5 SCRA 200

FACTS:Alfonso Pe, the defendant, was a married man, agent of La PerlaCigar and Cigarette Factory in Gasan Marinduque who wastreated like a son by Cecilio Pe, one of the petitioners. Ceciliointroduced Alfonso to his children and was given access to visittheir house. Alfonso got fond of Lolita, 24 year old single,daughter of Cecilio. The defendant frequented the house of Lolitasometime in 1952 on the pretext that he wanted her to teach himhow to pray the rosary. Eventually they fell in love with eachother.

Plaintiff brought action before lower court of Manila and failed toprove Alfonso deliberately and in bad faith tried to win Lolitasaffection. The case on moral damages was dismissed.

ISSUE: Whether or not defendant is liable to Lolitasfamily on the ground of moral, good custom and publicpolicy due to their illicit affair.

HELD:Alfonso committed an injury to Lolitas family in a mannercontrary to morals, good customs and public policy contemplatedin Article 20 of the civil code. The defendant took advantage ofthe trust of Cecilio and even used the praying of rosary as areason to get close with Lolita. The wrong caused by Alfonso isimmeasurable considering the fact that he is a married man.

WHEREFORE, the decision appealed from is reversed. Defendantis hereby sentenced to pay the plaintiffs the sum of P5,000.00 as

damages and P2,000.00 as attorney's fees and expenses oflitigations. Costs against appellee.

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244 Wassmer vs. Velez December 26, 1964

FACTS Velez and Wassmer decided to get married and set the weddingday for September 4, 1954. On September 2, 1954, Velez left anote for Wassmer stating that the wedding would have to bepostponed because his mother opposes it, and that he wasleaving for his hometown. The next day, however, he sent her a telegram stating that

nothing changed and that he would be returning very soon. Butthen, Velez did not appear nor was he heard from again. Wassmer sued him, and he was declared in default. Judgmentwas rendered ordering Velez to pay actual damages, moral andexemplary damages, and attorneys fees. Velez filed a petition for relief from judgment and motion fornew trial and reconsideration. Since he still failed to appearduring the hearings set by the lower court, and because hiscounsel had declared that there was no possibility for anamicable settlement between the parties, the court issued anorder denying his petition. Hence this appeal. Dante Capuno wasa member of the Boy Scouts organization and a student of theBalintawak Elementary School. He attended a parade in honor of

Jose Rizal upon instruction of the city schools supervisor. Heboarded a jeep, took hold of the wheel and drove it.

ISSUES & ARGUMENTS W/N Velez is liable to pay damages to Wassmer.HOLDING & RATIO DECIDENDIVELEZ LIABLE TO PAY DAMAGES.

In support of his motion for new trial and reconsideration, Velezasserts that the judgment is contrary to law because there is noprovision in the Civil Code authorizing an action for breach of apromise to marry. Moreover, the same thing was declared by thiscourt in the cases of Hermosisima and Estopa. It must not be overlooked, however, that the extent to whichacts not contrary to law may be perpetrated with impunity, is notlimitless for Article 21 of the NCC provides that any person whowillfully causes loss or injury to another in a manner that iscontrary to morals, good customs or public policy shallcompensate the latter for the damage. Here, the invitations had already been printed out anddistributed, and numerous things had been purchased for thebride and for wedding. Bridal showers were given and gifts hadbeen received. Surely this is not a case of mere breach of promise to marry. Toformally set a wedding and go through all the preparation andpublicity, only to walk out of it at the last minute, is quitedifferent. This is palpably and unjustifiably contrary to goodcustoms for which defendant must be held answerable fordamages.

Petition DENIED. Lower courts decision AFFIRMED.___________________

ARTICLES 22 AND 23 (DIGEST: SPECIAL TORTS ON HUMAN

RELATIONS)

VICENTE PEREZ, plaintiff-appellee, vs. EUGENIO POMAR,Agent of the Compaia General de Tabacos,

On August 27, 1902, Don Vicente Perez filed in the Court of FirstInstance of Laguna a complaint, which was amended on the 17thof January of this year, asking that the court determine theamount due the plaintiff, at the customary rate of compensationfor interpreting in these Islands, for services rendered in the

Tabacalera Company, and that, in view of the circumstances ofthe case, judgment be rendered in his favor for such sum. Thecomplaint also asked that the defendant be condemned to thepayment of damages in the sum of $3,200, gold, together withthe costs of suit. In this complaint it was alleged that Don EugenioPomar, as general agent of the Compaia General de Tabacos inthe said province, verbally requested the plaintiff on the 8th of

December, 1901, to act as interpreter between himself and themilitary authorities; that after the date mentioned the plaintiffcontinued to render such services up to and including May 31,1902; that he had accompanied the defendant, Pomar, duringthat time at conferences between the latter and the colonelcommanding the local garrison, and with various officers anddoctors residing in the capital, and at conferences with CaptainLemen in the town of Pilar, and with the major in command at thetown of Pagsanjan, concerning the shipment of goods fromManila, and with respect to Pagsanjan to this city; that theplaintiff during this period held himself in readiness to renderservices whenever required; that on this account his privatebusiness, and especially a soap factory established in the capital,was entirely abandoned; that to the end that such services mightbe punctually rendered, the agent, Pomar, assured him that the

Tabacalera Company always generously repaid services rendered


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5 | P a g eit, and that he therefore did not trouble himself about his inabilityto devote the necessary amount of time to his business, thedefendant going so far as to make him flattering promises ofemployment with the company, which he did not accept; thatthese statements were made in the absence of witnesses andthat therefore his only proof as to the same was Mr. Pomars wordas a gentleman; that the employees of the company did notunderstand English, and by reason of the plaintiffs mediationbetween the agent, and the military authorities large profits wereobtained, as would appear from the account and letterpressbooks of the agency corresponding to those dates. In theamended complaint it was added that the defendant, on behalf ofthe company, offered to renumerate the plaintiff for the services

rendered in the most advantageous manner in which suchservices are compensated, in view of the circumstances underwhich they were requested; and that the plaintiff, by renderingthe company such services, was obliged to abandon his ownbusiness, the manufacture of soap, and thereby suffereddamages in the sum of $3,200, United States currency.

The defendant, on the 25th of September, 1902, filed an answerasking for the dismissal of the complaint, with costs to theplaintiff. In his answer the defendant denied the allegation in thefirst paragraph of the complaint, stating that it was wholly untruethat the company, and the defendant as its agent, had solicitedthe services of the plaintiff as interpreter before the militaryauthorities for the period stated, or for any other period, or thatthe plaintiff had accompanied Pomar at the conferencesmentioned, concerning shipments from Manila and exports fromsome of the towns of the province to this capital. He stated that

he especially denied paragraphs 2 of the complaint, as it wasabsolutely untrue that the plaintiff had been at the disposal of thedefendant for the purpose of rendering such services; that hetherefore had not been obliged to abandon his occupation or hissoap factory, and that the statement that an offer of employmentwith the company had been made to him was false. Thedefendant also denied that through the mediation of the plaintiffthe company and himself had obtained large profits. Thestatements in paragraphs 6, 7, 8, and 9 of the complaint werealso denied. The defendant stated that, on account of the friendlyrelations which sprang up between the plaintiff and himself, theformer borrowed from him from time to time money amounting to$175 for the purposes of his business, and that he had alsodelivered to the plaintiff 36 arrobas of oil worth $106, and threepackages of resin for use in coloring his soap; that the plaintiffaccompanied the defendant to Pagsanjan, Pilar, and other townswhen the latter made business trips to them for the purpose ofextending his business and mercantile relations therein; that onthese excursions, as well as on private and official visits which hehad to make, the plaintiff occasionally accompanied him throughmotives of friendship, and especially because of the freetransportation given him, and not on behalf of the company ofwhich he was never interpreter and for which he rendered noservices; that the plaintiff in these conferences acted asinterpreter of his own free will, without being requested to do soby the defendant and without any offer of payment orcompensation; that therefore there existed no legal relationwhatever between the company and the plaintiff, and that thedefendant, when accepting the spontaneous, voluntary andofficious services of the plaintiff, did so in his private capacity andnot as agent of the company, and that it was for this reason thathe refused to enter into negotiations with the plaintiff, he being inno way indebted to the latter. The defendant concluded by saying

that he answered in his individual capacity.A complaint having been filed against the Compaia General de

Tabacos and Don Eugenio Pomar, its agent in the Province ofLaguna, the latter, having been duly summoned, replied to thecomplaint, which was subsequently amended, and stated that hemade such reply in his individual capacity and not as agent of thecompany, with which the plaintiff had had no legal relations. Thesuit was instituted between the plaintiff and Pomar, who, as such,accepted the issue and entered into the controversy withoutobjection, opposed the claim of the plaintiff, and concluded byasking that the complaint be dismissed, with the costs to theplaintiff. Under these circumstances and construing the statutesliberally, we think it proper to decide the case pending betweenboth parties in accordance with law and the strict principles of

justice.From the oral testimony introduced at the trial, it appears thatthe plaintiff, Perez, did on various occasions render Don EugenioPomar services as interpreter of English; and that he obtainedpasses and accompanied the defendant upon his journeys tosome of the towns in the Province of Laguna. It does not appearfrom the evidence, however, that the plaintiff was constantly atthe disposal of the defendant during the period of six months, orthat he rendered services as such interpreter continuously anddaily during that period of time.It does not appear that any written contract was entered intobetween the parties for the employment of the plaintiff asinterpreter, or that any other innominate contract was enteredinto; but whether the plaintiffs services were solicited or whetherthey were offered to the defendant for his assistance, inasmuchas these services were accepted and made use of by the latter,we must consider that there was a tacit and mutual consent as tothe rendition of the services. This gives rise to the obligation upon

the person benefited by the services to make compensationtherefor, since the bilateral obligation to render services asinterpreter, on the one hand, and on the other to pay for theservices rendered, is thereby incurred. (Arts. 1088, 1089, and1262 of the Civil Code). The supreme court of Spain in its decisionof February 12, 1889, holds, among other things, that not only isthere an express and tacit consent which produces real contractbut there is also a presumptive consent which is the basis ofquasi contracts, this giving rise to the multiple juridical relationswhich result in obligations for the delivery of a thing or therendition of a service.Notwithstanding the denial of that defendant, it is unquestionablethat it was with his consent that the plaintiff rendered him

services as interpreter, thus aiding him at a time when, owing tothe existence of an insurrection in the province, the mostdisturbed conditions prevailed. It follows, hence, that there wasconsent on the part of both in the rendition of such services asinterpreter. Such service not being contrary to law or to goodcustom, it was a perfectly licit object of contract, and such acontract must necessarily have existed between the parties, asalleged by the plaintiff. (Art. 1271, Civil Code.)

The consideration for the contract is also evident, it being clearthat a mutual benefit was derived in consequence of the servicerendered. It is to be supposed that the defendant accepted theseservices and that the plaintiff in turn rendered them with theexpectation that the benefit would be reciprocal. This shows theconcurrence of the three elements necessary under article 1261of the Civil Code to constitute a contract of lease of service, orother innominate contract, from which an obligation has arisen

and whose fulfillment is now demanded.Article 1254 of the Civil Code provides that a contract exists themoment that one or more persons consent to be bound, withrespect to another or others, to deliver some thing or to rendersome service. Article 1255 provides that the contracting partiesmay establish such covenants, terms, and conditions as theydeem convenient, provided they are not contrary to law, moralsor public policy. Whether the service was solicited or offered, thefact remains that Perez rendered to Pomar services asinterpreter. As it does not appear that he did this gratuitously, theduty is imposed upon the defendant, having accepted the benefitof the service, to pay a just compensation therefor, by virtue ofthe innominate contract offacio ut des implicitly established.

The obligations arising from this contract are reciprocal, and,apart from the general provisions with respect to contracts andobligations, the special provisions concerning contracts for leaseof services are applicable by analogy.In this special contract, as determined by article 1544 of the CivilCode, one of the parties undertakes to render the other a servicefor a price certain. The tacit agreement and consent of bothparties with respect to the service rendered by the plaintiff, andthe reciprocal benefits accruing to each, are the best evidence ofthe fact that there was an implied contract sufficient to create alegal bond, from which arose enforceable rights and obligations ofa bilateral character.In contracts the will of the contracting parties is law, this being alegal doctrine based upon the provisions of articles 1254, 1258,1262, 1278, 1281, 1282, and 1289 of the Civil Code. If it is a factsufficiently proven that the defendant, Pomar, on variousoccasions consented to accept an interpreters services, renderedin his behalf and not gratuitously, it is but just that he should paya reasonable remuneration therefor, because it is a well-knownprinciple of law that no one should be permitted to enrich himself

to the damage of another.With respect to the value of the services rendered on differentoccasions, the most important of which was the first, as it doesnot appear that any salary was fixed upon by the parties at thetime the services were accepted, it devolves upon the court todetermine, upon the evidence presented, the value of suchservices, taking into consideration the few occasions on whichthey were rendered. The fact that no fixed or determinedconsideration for the rendition of the services was agreed upondoes not necessarily involve a violation of the provisions of article1544 of the Civil Code, because at the time of the agreement thisconsideration was capable of being made certain. Thediscretionary power of the court, conferred upon it by the law, isalso supported by the decisions of the supreme court of Spain,among which may be cited that of October 18, 1899, which holdsas follows: That as stated in the article of the Code cited, whichfollows the provisions of law 1, title 8, of the fifth partida, thecontract for lease of services is one in which one of the partiesundertakes to make some thing or to render some service to theother for a certain price, the existence of such a price beingunderstood, as this court has held not only when the price hasbeen expressly agreed upon but also when it may be determinedby the custom and frequent use of the place in which suchservices were rendered.No exception was taken to the judgment below by the plaintiff onaccount of the rejection of his claim for damages. The decisionupon this point is, furthermore, correct.Upon the supposition that the recovery of the plaintiff should notexceed 200 Mexican pesos, owing to the inconsiderable numberof times he acted as interpreter, it is evident that the contractthus implicitly entered into was not required to be in writing andthat therefore it does not fall within article 1280 of the Civil Code;


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6 | P a g enor is it included within the provisions of section 335 of the Codeof Civil Procedure, as this innominate contract is not covered bythat section. The contract of lease of services is not included inany of the cases expressly designated by that section of theprocedural law, as affirmed by the appellant. The interpretation ofthe other articles of the Code alleged to have been infringed hasalso been stated fully in this opinion.For the reasons stated, we are of the opinion that judgmentshould be rendered against Don Eugenio Pomar for the paymentto the plaintiff of the sum of 200 Mexican pesos, from which willbe deducted the sum of 50 pesos is made as to the costs of thisinstance. The judgment below is accordingly affirmed in so far asit agrees with this opinion, and reversed in so far as it may be in

conflict therewith. Judgment will be entered accordingly twentydays after this decision is filed.

_____________

G.R. No. L-30204 October 29, 1976PACIFIC MERCHANDISING CORPORATION, plaintiff-appellee, vs.CONSOLACION INSURANCE & SURETY CO.,INC., defendant-appellee, vs GREGORIO V. PAJARILLO,third party defendant-appellant.

In Civil Case No. 117811, which was an action instituted by PacificMerchandising Corporation (plaintiff-appellee) to collect the sumof P2,562.88 from Consolacion Insurance & Surety Co., Inc.,(defendant- appellee) who in turn filed a third-party complaint

against Gregorio V. Pajarillo (third-party defendant-appellant). theCity Court of Manila rendered judgment on April 6, 1964, thedispositive portion of which reads, in part, thus:WHEREFORE, in view of the foregoing, judgment is herebyrendered in favor of the plaintiff and against the defendant,ordering the latter to pay the former the sum of P2,562.88 withinterest thereon at the rate of 12% per annum from May 30, 1963until fully paid, P100.00 as for attorney's fees, plus the costs ofsuit; condemning third defendant to pay third-party plaintiff forwhatever sums or amounts tlie latter paid the plaintiff on accountof this judgment.By virtue of the appeal interposed by the third-party defendantGregorio V. Pajarillo, the case was elevated, on May 12, 1964, tothe Court of First Instance of Manila. On July 21, 1964, the parties,through their respective counsel, submitted the followingStipulation of Facts:1. That on the 19th day of October, 1962, a Writ of Execution asisstica Iy the Court of First Instance of Manila under Civil Case No.49691, entitled Pacific Merchandising Corporation vs. LeoEnterprises, Inc., a copy of the said Writ of Execution is attachedas ANNEX Ato the complaint;2. That by virtue of the aforesaid Writ of Execution, the Sheriff ofManila levied and attached the following:'l. Second Hand AUTOMATICKET Machine No. MG-31833;and'2. Cinema Projectors Complete, trademark SIMPLEX PEERLESSMAGNARC NOS. 52625 and 62387' which items were advertisedfor sale on March 2, 1963, copy of Notice of sale attached asANNEX 'B' to the Complaint;3. That Atty. Greg V. Pajarillo was appointed on March 2, 1963 asReceiver of all the assets, properties and equipment of Paris

Theatre, olwrated by Leo Enterprises, Inc. under Civil Case No.50201 entitled Gregorio V. Pajarillo vs. Leo Enterprises, Inc.;4. That the sale at public auction of the above described

properties was postponed and was later cancelled due to thcrepresentation of Atty. Greg V. Pajarillo as Receiver of Paris

Theatre operated by Leo Enterprises, Inc. in which he undertookthe 1anient of the judgment rendered in favor of the plaintiffagainst Leo Enterprises, Inc. as Ier undertaking dated March 11,1963, copy of which is attached as ANNEX 'C' to the complaint;5. That on or about hie third of March, 1963, third-partydefendant Pajarillo approached the third-party plaintiff andapplied for a surety bond in the amount of P5,000.00 to be ratedin favor of the abovenamed plaintiff in order to guarantee to saidplaintiff the payment of obligations in its favor by the LeoEnterprises, Inc.;6. That the bond applied for was in fact executed in favor of thepIaintiff rith third-party defendant Pajarillo as principal and third-party plaintiff as surety in the context of the allegations of thepreceding paragraph and a copy of the said bond is attached aANNEX 'A' to the third party complaint;7. That to protect thirrd party plaintiff against damage and injury,the third party defendant Pajarillo executed in favor of the formeran INDEMNITY AGREEMENT, copy of which is attached as ANNEX'B' to third party complaint; tlie trms of which aie incorporated byreference;8. That the plaintiff received from hie aid principal, Greg V.Pajarillo the sum of P2,000.00 leaving a balance of P2,562.88 stillunpaid aside from interest at the rate of 1% per month and attolnen s f cluiaient to 25% of tht amount due as provided for in saidundertaking (ANNEX 'C' to tlie complaint);9. That on July 1, 1963, a decision was rendered tne court of FirstInstance of Manila in Civil case No. 50201, copy of' which isattached its ANNEX 'A' to Answer to Third Party Complaint, byvirtue of which Greg V. Pajarillo, as said Received stololcl makingpayments to plaintiff;

10. That the said decision in Civl Case No. 50201 dated July 1,1963 was appealed lix defendant Leo Enterprises, Inc. to thecourt of Appeals and that the records kere eleattd to the aidApiIiat court on August 27, 1963;11. That on October 9, 1963, plaintiff's counsel demanded fromthe said principal, Greg V. Paiarillo, the payment of theinstallments corresponding to the months of May, June, July,August and September, 1963, which remain unpaid in spite ofsaid demand, copy of said letter being, attached as ANNEX 'E' tothe complaint;12. That the defendant was duly notified of the demand made onthe principal, Greg V. Pajarillo and in spite of said notice thedefendant has failed and refused to pay the unpaid obligation;

13. That on December 19, 1963, plaintiff's counsel demandedfrom the defendant the payment of the unpaid obligation of theprincipal, Greg V. Pajarillo but refused and failed to pay the samein spite of said demand;14. That when reminded by third-party plaintiff regarding hisobligations in favor of the plaintiff, the third-party defendant,Greg V. Pajarillo replied that he no longer was bound to paybecause he had ceased to be the receiver of Paris Theatreoperated by Leo Enterprises, Inc. by virtue of the decision of theCourt in Civil Case No. 50201 cited above, and for this reason,third- party plaintiff refused to pay the demand of the plaintiff2

On the basis of the foregoing Stipulation of Facts, the Court ofFirst Instance rendered judgment on August 8, 1964, which

judgment was amended on August 25, 1964, affirming theappealed decision of the City Court . 2*

The trial court predicated its judgment on the following

considerations: (1) Since the unpaid claim represents the cost ofcertain materials used in the construction of the Paris Theatre,the possession of which reverted to Gregorio V. Pajarillo as ownerof said property by virtue of the judgment in Civil Case No.50201, "it is only simple justice that Pajarillo should pay for thesaid claim. otherwise he would be enriching himself by having thesaid building without paying plaintiff for the cost of certainmaterials that went into its construction"; (2) "under Section 7 ofRule 61 of the former Rules of Court, one of the powers of areceiver i8 to pay outstanding debts, and since the said plaintiff'sclaim has been outstanding since August 27, 1962, if not before,Pajarillo should have paid the same long before the allegedtermination of the receivership on July 1, 1963"; (3) the procedureoutlined in Section 8 of the Rule, namely, that whenever the court"shall determine that the necessity for a receiver no longer exists,it shall, after due notice to all interested parties and hearing,settle the accounts of the receiver, direct the delivery of thefunds and other property in his hands to the persons adjudgedentitled to receive them, and order the discharge of the receiverfrom further duty as such," has not been followed; and (4) whenGregorio V. Pajarillo undertook to pay the amount owed toplaintiff (Annex "C") and executed the surety bond (Annex "D") infavor of plaintiff, he 4 6 stepped into the shoes" of the dr LeoEnterprises, Inc., .4 and the properties of the said debtor havingall subsequently passed on to Pajarillo, there is no reason, legalor otherwise, for relieving defendants of their said undertaking."

The court a quo likewise declared that (1) "the receivership wasnot terminated by virtue of the appeal interposed by LeoEnterprises, Inc., one of the defendants in Civil Case No. 50201,because a decision which is appealed cannot be the subject ofexecution"; (2) "granting arguendo that the decision is final andexecutory, the said decision cannot bind nor can it be enforcedagainst the plaintiff in the present case because it is not a party

in Civil Case No. 50201"; and (3) "when Atty. Pajarillo assumedthe obligation of Leo Enterprises, Inc., as a Receiver, there was asubrogation of the party liable and, therefore, the plaintiff cannotenforce the judgment in Civil Case No. 49691 against LeoEnterprises, Inc."From the foregoing judgment, third-party defendant Gregorio V.Pajarillo interposed an appeal to the Court of Appeals. Theaforesaid Appellate Court, in turn certified the same to this Courton the ground that there is no question of fact involved, but onlyone of law.

The legal question is whether or not third party defendant-appellant Gregorio V. Pajarillo is, under the facts andcircumstances obtaining, liable to plaintiff for the unpaid amountclaimed. Upon the resolution of this issue will in turn depend theliability of defendant-third-party plaintiff Consolacion Insurance &surety Co., Inc. under the Surety Bond, on the basis of which itwas ordered by the court a quo to pay the amount involved toplaintiff-appellee.1. A receiver is not an agent or representative of any party to theaction. He is an officer of the court exercising his functions in theinterest of neither plaintiff nor defendant, but for the commonbenefit of all the parties in interest. 3He performs his duties"subject to the control of the Court," and every question involvedin the receivership may be determined by the court takingcognizance of the receivership proceedings. 4 Thus, "a receiver,strictly speaking, has no right or power to make any contractbinding the property or fund in his custody or to pay out funds inhis hands without the authority or approval of the court ... . 5 Asexplained by Justice Moran, speaking for the Court in a 1939 case6 ... The custody of the receiver is the custody of the court. Hisacts and possession are the acts and possession of the court, andhis contracts and liabilities are, in contemplation of law,


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7 | P a g ethe contractsand liabilities of the court. As a necessaryconsequence, receiver is f subject to the control and supervisionof the court at every step in his management of the property orfunds placed in his hands. ... 7 He cannot operate independentlyof the court, and cannot enter into any contract without itsapproval.... El depositario no puede obrar independientemente del jusgado;contrata bajo el control del mismo; sin su autorizacion oaprobaci6n expresa, el depositario no puede perfeccionar ninguncontrato. ... 8

2. In the case at bar, appellant Pajarillo does not dispute the factthat he never secured the court's approal of either the agreementof March 11, 1963, with Pacific Merchandising Corporation or of

his Indemnity Agreement with the Consolacion Insurance &Surety Co., Inc. on March 14, 1963, in consideration of theperformance bond submitted by the latter to PacificMerchandising Corporation to guarantee the payment of theobligation. As the person to whom the possession of the theaterand its equipment was awarded by the court in Civil Case No.50201, it was certainly to his personal profit and advantage thatthe sale at public auction of the liquipment of the theater wasprevented by his execution of the aforesaid agreement andsubmission of the afore-mentioned bond. In order to bind theproperty or fund in his hands as receiver, he should have appliedfor and obtained from the court authority to enter into theaforesaid contract. 9 Unauthorized contracts of a receiver do notbind the court in charge of receivership. They are the receiver'sown contracts and are not recognized by the courts as contractsof the receivership. 10 Consequently, the aforesaid agreement and

undertaking entered into by appellant Pajarillo not having beenapproved or authorized by the receivership court should,therefore, be considered as his personal undertaking orobligation. Certainly, if such agreements were known by thereceivership court, it would not have terminated the receivershipwithout due notice to the judgment creditor as required bySection 8 of Rule 59 of the Rules of Court. This must be assumedbecause of the legal presumption that official duty has beenregularly performed. 11 Indeed, if it were true that he entered intothe agreement and undertaking as a receiver, he should have, assuch receiver, submitted to the court an account of the status ofthe properties in his hands including the outstanding obligationsof the receivership. 12 Had he done so, it is reasonable to assumethat the judgment creditor would have opposed the terminationof the receivership, unless its claim was paid. Having failed toperform his duty, to the prejudice of the creditor, appellantshould not be permitted to take advantage of his own wrong. The

judgment creditor having been induced to enter into the aforesaidagreement by appellant Pajarillo it was the duty of the latter tocomply with is end of the bargain. He not only failed to performhis undertaking, but now attempts to evade completely hisliability. Under such circumstances, appellant is not entitled toequitable relief. No ground for equitable relief can be found in acase where a party has not only failed to perform the conditionsupon which he alone obtained the execution of the contract, butwhere it is clear that he never, at any time, intended to performthem. 13

3. Moreover, it will be recalled that the obligation due the PacificMerchandising Corporation represented the cost of materialsused in the construction of the Paris Theatre. There can not beany question that such improvements, in the final analysis,redounded to the advantage and personal profit of appellantPajarillo because the judgment in Civil Case No. 50201, which was

in substance affirmed by the Appellate Court, ordered that the"possession of the lands, building equipment, furniture, andaccessories ..." of the theater be transferred to said appellant asowner thereof.As the trial court aptly observed "... it is only simple justice thatPajarillo should pay for the said claim, otherwise he would beenriching himself without paying plaintiff for the cost of certainmaterials that went into its construction. ... It is argLicd however,that he did so only as a receiver of Leo Pajarillo by virtue of the

judgment in Civil Case No. 50201 all of the properties of LeoEnterprises, Inc. passed on to Pajarillo by virtue of the judgmentin Civil Case No. %201 ...". This Roman Law principle of "NemoCum alterious detrimento locupletari protest" is embodied inArticle 22 (Human Relations), 14 and Articles 2142 to 2175(QuasiContracts) of the New Civil Code. Long before theenactment of this Code, however, the principle of unjustenrichment which is basic in every legal system, was alreadyexpressly recognized in this jurisdiction.As early as as 1903, in Perez v. Pomar, 15 this Court ruled thatwhere one has rendered services to another, and these servicesare accepted by the latter, in the absence of proof that theservice ",as rendered gratuitously, it is but just that he should paya reasonable remuneration therefore because "it is a wellknownprinciple of law, that no one should be permitted to enrich himselfto the damage of another." Similarly in 1914, this Court declaredthat in this jurisdiction, even in the absence of statute," ... underthe general principle that one person may not enrich himself atthe expense of another, a judgment creditor would not bepermitted to retain the purchase price of land sold as theproperty of the judgment debtor after it has been made to appearthat the judgment debtor had no title to the land and that thepurchaser had failed to secure title thereto ... 16 The foregoing

equitable principle which springs from hie fountain of goodconscience are applicable to the case at bar.ACCORDINGLY, in view of the foregoing, the judgment unirilleal ishttcf AFFIRMED. Costs against appellant.

____________________CIR vs. Firemans Fund Insurance [G.R. No. L-30644.March 9, 1987.]

Facts:Firemans Fund Insurance Company is a resident foreigninsurance corporation organized under the laws of the UnitedStates, authorized and duly licensed to do business in the

Philippines. It is a member of the American Foreign InsuranceAssociation, through which its business is cleared. From

January 1952 to December 1958, Firemans Fund entered intovarious insurance contracts involving casualty, fire and marinerisks, for which the corresponding insurance policies were issued.From January 1952 to 1956, documentary stamps were boughtand affixed to the monthly statements of policies issued;and from 1957 to 1958 documentary stamps were bought andaffixed to the corresponding pages of the policy register, insteadof on the insurance policies issued. On 3 July 1959, the companydiscovered that its monthly statements of business and policyregister were lost. The loss was reported to the BuildingAdministration of Ayala Building and the National Bureau ofInvestigation on 6 July 1959. The Commissioner of InternalRevenue was also informed of such loss by the company, throughthe latters auditors, Sycip, Gorres and Velayo, in a letter dated

14 July 1959. After conducting an investigation of said loss, thecompanys examiners examiner ascertained that the companyfailed to affix the required documentary stamps to the insurancepolicies issued by it and failed to preserve its accounting recordswithin the time prescribed by Section 337 of the Revenue Codeby using loose leaf forms as registers of documentary stampswithout written authority from the Commissioner as required bySection 4 of Revenue Regulations V-1. As a consequence of thesefindings, the Commissioner, in a letter dated 7 December 1962,assessed and demanded from petitioner the payment ofdocumentary stamp taxes for the years 1952 to 1958 in thetotal amount of P79,806.87 and plus compromise penalties,a total of P81,406.87. The compromise penalties consisted ofthe sum of P1,000.00 as penalty for the alleged failure to affixdocumentary stamps and the further sum of P600.00 as penaltyfor an alleged violation of Revenue Regulations V-1 otherwiseknown as the Bookkeeping Regulations. In a letter dated 14

January 1963, the company contested the assessment.After the Commissioner denied the protest in a decision dated 17March 1965, the company appealed to the Court of Tax Appealson 8 May 1965 (CTA Case 1629). After hearing the court renderedits decision dated 24 May 1969 reversing the decision of theCommissioner of Internal Revenue. Hence, the petition filed on26

June 1969.

The Supreme Court resolved to dismiss the petition and to affirmthe assailed decision of the Court of Tax Appeals.

1. CTA Ruling: affixture of documentary stamps topaper other those authorized by law not tantamount tofailure to pay the same

The affixture of documentary stamps to papers other than those

authorized by law is not tantamount to failure to pay the same. Itis true that the mode of affixing the stamps as prescribed by lawwas not followed, but the fact remains that the documentarystamps corresponding to the various insurance policies werepurchased and paid by the company. There is no legal

justification for the Commissioner to require the company to payagain the documentary stamp tax which it had already paid. Tosustain the Commissioners stand would require the company topay the same tax twice. If at all, the company should beproceeded against for failure to comply with the requirement ofaffixing the documentary stamps to the taxable insurance policiesand not for failure to pay the tax. (See Sec. 239 and 332, Rev.Code).

2. CTA Ruling: Compromise penalties cannot beimposed if the company has not consented thereto

With respect to the compromise penalties in the total sum ofP1,600.00, the penalties cannot be imposed in the absence of ashowing that the company consented thereto. A compromiseimplies agreement. If the offer is rejected by the taxpayer, theCommissioner cannot enforce it except through a criminal action.(See Comm. of Int. Rev. vs. Abad, L-19627, 27 June 1968.)

3. Documentary taxes, when deemed paid

Documentary tax is deemed paid by: (a) the purchase ofdocumentary stamps; (b) affixture of documentary stamps tothe document or instrument taxed or to such other paper as maybe indicated by law or regulations; and (c) cancellation of thestamps as required by law.


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8 | P a g e4. Purpose of the law is to collect tax; Documentarystamps paid for and cancelled

The over-riding purpose of these provisions of law is thecollection of taxes. The three steps involving documentarystamps are but the means to that end. Thus, the purchase of thestamps is the form of payment made; the affixture thereof on thedocument or instrument taxed is to insure that the correspondingtax has been paid for such document while the cancellation ofthe stamps is to obviate the possibility that said stamps will bereused for similar documents for similar purposes. In the presentcase, there appears to be no dispute on the fact that thedocumentary stamps corresponding to the various policies were

purchased and paid for by the Company. Neither is there anyargument that the same were cancelled as required by law. Thisconclusion are also the findings of the Commissionersexaminer (Amando B. Melgar), and confirmed by theMemorandum of Acting Commissioner of Internal Revenue Jose B.Lingad, dated 7 November 1962 to the Chief of Business TaxDivision. The purchase of documentary stamps and their beingaffixed to the monthly statements of business and policy registerswere also admitted by counsel for the Government as couldclearlybe gleaned from his Memorandum submitted to the Court of

Tax Appeals. Simply said, the purpose of imposing documentarystamp taxes is to raise revenue and the corresponding amounthas already been paid by the company and has actually becomepart of the revenue of the government.

5. Evidence to prove payment of documentary stamp tax

The insurance policies with the corresponding documentarystamps affixed are the best evidence to prove payment of saiddocumentary stamp tax. This rule however does not preclude theadmissibility of other proofs which are uncontradicted and ofconsiderable weight, such as: copies of the applications formanagers checks, copies of the managers check vouchers ofthe bank showing the purchases of documentary stampscorresponding to the various insurance policies issued, in thepresent case, during the years 1952-1958 duly and properlyidentified by the witnesses for the company during the hearingand admitted by the Court of TaxAppeals.

6. Statutes levying taxes or duties, in case of doubt,construed strongly against the government

It is a general rule in the interpretation of statutes levying taxesor duties, that in case of doubt, such statutes are to be construedmost strongly against the government and in favor of thesubjects or citizens, because burdens are not to be imposed, norpresumed to be imposed beyond what statutes expressly andclearly import (Manila Railroad Co. v. Collector of Customs, 52Phil. 950 [1929]).

7. Affixture of signature not attended by bad faith;Justification for the acts of agents claimed for the acts ofthe principal itself

The affixture of the stamps on documents not authorized by lawis not attended by bad faith as the practice was adopted from theauthority granted to Wise & Company, one of the companys

general agents. Indeed, the Commissioner argued that suchauthority was not given to the company specifically, but underthegeneral principle of agency, where the acts of the agents bind theprincipal, the conclusion is inescapable that the justification forthe acts of the agents may also be claimed for the acts of theprincipal itself.

8. Doctrine that no person shall unjustly enrich himself atthe expense of another applies also to the Government

There is no justification for the government which has alreadyrealized the revenue which is the object of the imposition ofsubject stamp tax, to require the payment of the same tax for thesame documents.Enshrined in our basic legal principles is the time honoreddoctrine that no person shall unjustly enrich himself at theexpense of another. It goes without saying that thegovernment is not exempted from the application of thisdoctrine (Ramie Textiles, Inc. v. Mathay Sr., 89 SCRA 587 [1979]).

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Alfredo Velayo vs Shell Company

Prior to 1948, CommercialAirlines (CALI) owed P170k (abt. $79k)to Shell and CAL offered its C-54 plane as paymentto ShellCompany (the plane was in California) but Shell at thattime declined as it thought CALI had sufficient money to pay itsdebt. In 1948 however, CALI was going bankrupt so it called uponan informal meeting of its creditors. In that meeting, the creditorsagreed to appoint representatives to a working committee thatwould determine the order of preference as to how each creditor

should be paid. They also agreed not to file suit against CALI butCALI did reserve that it will file insolvency proceedings should itsassets be not enough to pay them up. Shell Company wasrepresented by a certain Fitzgerald to the three man workingcommittee. Later, the working committee convened to discusshow CALIs asset should be divided amongst the creditors butwhile such was pending, Fitzgerald sent a telegraph message toshell USAadvising the latter that Shell Philippines is assigningits creditto Shell USA in the amount of $79k, thereby effectivelycollecting almost all if not the entire indebtedness of CALI to ShellPhilippines. Shell USA got wind of the fact that CALI has a C-54plane is California and so Shell USA petitioned beforea Californiacourt to have the plane be the subject of a writ of

attachment which was granted.

Meanwhile, the stockholders of CALI were unaware of theassignment of credit made by Shell Philippines to Shell USA andthey went on to approve the sale of CALIs asset to the PhilippineAirlines. In September 1948, the other creditors learned of theassignment made by Shell. This prompted these other creditorsto file their own complaint of attachment against CALIs assets.CALI then filed for insolvency proceedings to protect its assets inthe Philippines from being attached. Velayos appointment asCALIs assignee was approved in lieu of the insolvencyproceeding. In order for him to recover the C-54 plane inCalifornia, it filed for a writ of injunction against Shell Philippinesin order for the latter to restrain Shell USA from proceeding withthe attachment and in the alternative that judgment be awardedin favor of CALI for damages double the amount of the C-54

plane. The C-54 plane was not recovered. Shell Company arguedit is not liable for damages because there is nothing in the lawwhich prohibits a company from assigning its credit, it being acommon practice.

ISSUE:

Whether or not Shell is liable for damages considering that it didnot violate any law.

HELD:

Yes. The basis of such liability, in the absence of law, is Article 21of the Civil Code which states:Art. 21. Any person who willfullycauses loss or injury to anotherin a manner that is contrary to morals, good customs or publicpolicy shall compensate the latter for the damage.

Thus at onestroke, the legislator, if the forgoing rule is approved(as it was approved), would vouchsafe adequate legalremedy forthat untold numbers of moral wrongs which is impossible forhuman foresight to provide for specifically in the statutes. Amoral wrong or injury, even if it does not constitute a violation ofa statute law, should be compensated by damages.Moraldamages (Art. 2217) may be recovered (Art. 2219). InArticle 20, the liability for damages arises from a willful ornegligent act contrary to law. In this article, the act is contrary tomorals, good customs or public policy.

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St. Louis Realty Corp. vs. CA

FACTS:Dr. Conrado Aramil, a neuropsychiatrist and member of the

faculty of UE Ramon Magsaysay Medical Center, seek to recoverdamage for a wrongful advertisement in the Sunday Times whereSt Louis Realty Corp. misrepresented his house with Mr. Arcadio.

St. Louis published an ad on December 15, 1968 with the headingwhere the heart is. This was republished on January 5, 1969.In the advertisement, the house featured was Dr Aramils houseand not Mr. Arcadio with whom the company asked permissionand the intended house to be published. After Dr Aramil noticedthe mistake, he wrote a letter to St. Louis demanding anexplanation 1 week after such receipt. No rectification or apologywas published despite that it was received by Ernesto Magtoto,the officer in charge of the advertisement. This prompted Dr.Aramils counsel to demand actual, moral and exemplarydamages. On March 18, 1969, St Louis published an ad now withMr. Arcadios real house but nothing on the apology orexplanation of the error. Dr Aramil filed a complaint for damageson March 29. During the April 15 ad, the notice of rectificationwas published.

ISSUE: Whether St. Louis is liable to pay damages to Dr. Aramil.

HELD:

St Louis was grossly negligent in mixing up residences in a widelycirculated publication. Furthermore, it never made any writtenapology and explanation of the mix-up. It just contented itselfwith a cavalier "rectification ".

The trial court awarded Aramil P8,000 as actual damages,P20,000 as moral damages and P2,000 as attorney's fees. WhenSt. Louis Realty appealed to the Court of Appeals, CA affirmed the


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9 | P a g ejudgement for the reason that St. Louis Realty committed anactionable quasi-delict under articles 21 and 26 of the Civil Codebecause the questioned advertisements pictured a beautifulhouse which did not belong to Arcadio but to Doctor Aramil who,naturally, was annoyed by that contretemps.

WHEREFORE, the judgment of the Appellate Court is affirmed.Costs against the petitioner.

___________NO DIGEST FOR DANAO VS CA

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