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G.R. No. 141309 June 19, 2007 LIWAYWAY VINZONS-CHATO, petitioner, vs. FORTUNE TOBACCO CORPORATION, respondent. D E C I S I O N YNARES-SANTIAGO, J.: Petitioner assails the May 7, 1999 Decision1 of the Court of Appeals in CA-G.R. SP No. 47167, which affirmed the September 29, 1997 Order2 of the Regional Trial Court (RTC) of Marikina, Branch 272, in Civil Case No. 97-341-MK, denying petitioner’s motion to dismiss. The complaint filed by respondent sought to recover damages for the alleged violation of its constitutional rights arising from petitioner’s issuance of Revenue Memorandum Circular No. 37-93 (RMC 37-93), which the Court declared invalid in Commissioner of Internal Revenue v. Court of Appeals.3 Petitioner Liwayway Vinzons-Chato was then the Commissioner of Internal Revenue while respondent Fortune Tobacco Corporation is an entity engaged in the manufacture of different brands of cigarettes, among which are "Champion," "Hope," and "More" cigarettes. On June 10, 1993, the legislature enacted Republic Act No. 7654 (RA 7654), which took effect on July 3, 1993. Prior to its effectivity, cigarette brands ‘Champion," "Hope," and "More" were considered local brands subjected to an ad valorem tax at the rate of 20-45%. However, on July 1, 1993, or two days before RA 7654 took effect, petitioner issued RMC 37-93 reclassifying "Champion," "Hope," and "More" as locally manufactured cigarettes bearing a foreign brand subject to the 55% ad valorem tax.4 RMC 37-93 in effect subjected "Hope," "More," and "Champion" cigarettes to the provisions of RA 7654, specifically, to Sec. 142,5 (c)(1) on locally manufactured cigarettes which are currently classified and taxed at 55%, and which imposes an ad valorem tax of "55% provided that the minimum tax shall not be less than Five Pesos (P5.00) per pack."6 On July 2, 1993, at about 5:50 p.m., BIR Deputy Commissioner Victor A. Deoferio, Jr. sent via telefax a copy of RMC 37-93 to Fortune Tobacco but it was addressed to no one in particular. On July 15, 1993, Fortune Tobacco received, by ordinary mail, a certified xerox copy of RMC 37-93. On July 20, 1993, respondent filed a motion for reconsideration requesting the recall of RMC 37-93, but was denied in a letter dated July 30, 1993.7 The same letter assessed respondent for ad valorem tax deficiency amounting to P9,598,334.00 (computed on the basis of RMC 37-93) and demanded payment within 10 days from receipt thereof.8 On August 3, 1993, respondent filed a petition for review with the Court of Tax Appeals (CTA), which on September 30, 1993, issued an injunction enjoining the implementation of RMC 37-93.9 In its decision dated August 10, 1994, the CTA ruled that RMC 37-93 is defective, invalid, and unenforceable and further enjoined petitioner from collecting the deficiency tax assessment issued pursuant to RMC No. 37-93. This ruling was affirmed by the Court of Appeals, and finally by this Court in Commissioner of Internal Revenue v. Court of Appeals.10 It was held, among others, that RMC 37-93, has fallen short of the requirements for a valid administrative issuance. On April 10, 1997, respondent filed before the RTC a complaint11 for damages against petitioner in her private capacity. Respondent contended that the latter

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should be held liable for damages under Article 32 of the Civil Code considering that the issuance of RMC 37-93 violated its constitutional right against deprivation of property without due process of law and the right to equal protection of the laws. Petitioner filed a motion to dismiss12 contending that: (1) respondent has no cause of action against her because she issued RMC 37-93 in the performance of her official function and within the scope of her authority. She claimed that she acted merely as an agent of the Republic and therefore the latter is the one responsible for her acts; (2) the complaint states no cause of action for lack of allegation of malice or bad faith; and (3) the certification against forum shopping was signed by respondent’s counsel in violation of the rule that it is the plaintiff or the principal party who should sign the same. On September 29, 1997, the RTC denied petitioner’s motion to dismiss holding that to rule on the allegations of petitioner would be to prematurely decide the merits of the case without allowing the parties to present evidence. It further held that the defect in the certification against forum shopping was cured by respondent’s submission of the corporate secretary’s certificate authorizing its counsel to execute the certification against forum shopping. The dispositive portion thereof, states: WHEREFORE, foregoing premises considered, the motion to dismiss filed by the defendant Liwayway Vinzons-Chato and the motion to strike out and expunge from the record the said motion to dismiss filed by plaintiff Fortune Tobacco Corporation are both denied on the grounds aforecited. The defendant is ordered to file her answer to the complaint within ten (10) days from receipt of this Order. SO ORDERED.13 The case was elevated to the Court of Appeals via a petition for certiorari under Rule 65. However, same was dismissed on the ground that under Article 32 of the Civil Code, liability may arise even if the defendant did not act with malice or bad faith. The appellate court ratiocinated that Section 38, Book I of the Administrative Code is the general law on the civil liability of public officers while Article 32 of the Civil Code is the special law that governs the instant case. Consequently, malice or bad faith need not be alleged in the complaint for damages. It also sustained the ruling of the RTC that the defect of the certification against forum shopping was cured by the submission of the corporate secretary’s certificate giving authority to its counsel to execute the same. Undaunted, petitioner filed the instant recourse contending that the suit is grounded on her acts done in the performance of her functions as a public officer, hence, it is Section 38, Book I of the Administrative Code which should be applied. Under this provision, liability will attach only when there is a clear showing of bad faith, malice, or gross negligence. She further averred that the Civil Code, specifically, Article 32 which allows recovery of damages for violation of constitutional rights, is a general law on the liability of public officers; while Section 38, Book I of the Administrative Code is a special law on the superior public officers’ liability, such that, if the complaint, as in the instant case, does not allege bad faith, malice, or gross negligence, the same is dismissible for failure to state a cause of action. As to the defect of the certification against forum shopping, she urged the Court to strictly construe the rules and to dismiss the complaint. Conversely, respondent argued that Section 38 which treats in general the public officers’ "acts" from which civil liability may arise, is a general law; while Article

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32 which deals specifically with the public officers’ violation of constitutional rights, is a special provision which should determine whether the complaint states a cause of action or not. Citing the case of Lim v. Ponce de Leon,14 respondent alleged that under Article 32 of the Civil Code, it is enough that there was a violation of the constitutional rights of the plaintiff and it is not required that said public officer should have acted with malice or in bad faith. Hence, it concluded that even granting that the complaint failed to allege bad faith or malice, the motion to dismiss for failure to state a cause of action should be denied inasmuch as bad faith or malice are not necessary to hold petitioner liable. The issues for resolution are as follows: (1) May a public officer be validly sued in his/her private capacity for acts done in connection with the discharge of the functions of his/her office? (2) Which as between Article 32 of the Civil Code and Section 38, Book I of the Administrative Code should govern in determining whether the instant complaint states a cause of action? (3) Should the complaint be dismissed for failure to comply with the rule on certification against forum shopping? (4) May petitioner be held liable for damages? On the first issue, the general rule is that a public officer is not liable for damages which a person may suffer arising from the just performance of his official duties and within the scope of his assigned tasks.15 An officer who acts within his authority to administer the affairs of the office which he/she heads is not liable for damages that may have been caused to another, as it would virtually be a charge against the Republic, which is not amenable to judgment for monetary claims without its consent.16 However, a public officer is by law not immune from damages in his/her personal capacity for acts done in bad faith which, being outside the scope of his authority, are no longer protected by the mantle of immunity for official actions.17 Specifically, under Section 38, Book I of the Administrative Code, civil liability may arise where there is bad faith, malice, or gross negligence on the part of a superior public officer. And, under Section 39 of the same Book, civil liability may arise where the subordinate public officer’s act is characterized by willfulness or negligence. Thus – Sec. 38. Liability of Superior Officers. – (1) A public officer shall not be civilly liable for acts done in the performance of his official duties, unless there is a clear showing of bad faith, malice or gross negligence. x x x x Section 39. Liability of Subordinate Officers. – No subordinate officer or employee shall be civilly liable for acts done by him in good faith in the performance of his duties. However, he shall be liable for willful or negligent acts done by him which are contrary to law, morals, public policy and good customs even if he acts under orders or instructions of his superior. In addition, the Court held in Cojuangco, Jr. v. Court of Appeals,18 that a public officer who directly or indirectly violates the constitutional rights of another, may be validly sued for damages under Article 32 of the Civil Code even if his acts were not so tainted with malice or bad faith. Thus, the rule in this jurisdiction is that a public officer may be validly sued in his/her private capacity for acts done in the course of the performance of the functions of the office, where said public officer: (1) acted with malice, bad faith,

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or negligence; or (2) where the public officer violated a constitutional right of the plaintiff. Anent the second issue, we hold that the complaint filed by respondent stated a cause of action and that the decisive provision thereon is Article 32 of the Civil Code. A general statute is one which embraces a class of subjects or places and does not omit any subject or place naturally belonging to such class. A special statute, as the term is generally understood, is one which relates to particular persons or things of a class or to a particular portion or section of the state only.19 A general law and a special law on the same subject are statutes in pari materia and should, accordingly, be read together and harmonized, if possible, with a view to giving effect to both. The rule is that where there are two acts, one of which is special and particular and the other general which, if standing alone, would include the same matter and thus conflict with the special act, the special law must prevail since it evinces the legislative intent more clearly than that of a general statute and must not be taken as intended to affect the more particular and specific provisions of the earlier act, unless it is absolutely necessary so to construe it in order to give its words any meaning at all.20 The circumstance that the special law is passed before or after the general act does not change the principle. Where the special law is later, it will be regarded as an exception to, or a qualification of, the prior general act; and where the general act is later, the special statute will be construed as remaining an exception to its terms, unless repealed expressly or by necessary implication.21 Thus, in City of Manila v. Teotico,22 the Court held that Article 2189 of the Civil Code which holds provinces, cities, and municipalities civilly liable for death or injuries by reason of defective conditions of roads and other public works, is a special provision and should prevail over Section 4 of Republic Act No. 409, the Charter of Manila, in determining the liability for defective street conditions. Under said Charter, the city shall not be held for damages or injuries arising from the failure of the local officials to enforce the provision of the charter, law, or ordinance, or from negligence while enforcing or attempting to enforce the same. As explained by the Court: Manila maintains that the former provision should prevail over the latter, because Republic Act 409 is a special law, intended exclusively for the City of Manila, whereas the Civil Code is a general law, applicable to the entire Philippines. The Court of Appeals, however, applied the Civil Code, and, we think, correctly. It is true that, insofar as its territorial application is concerned, Republic Act No. 409 is a special law and the Civil Code a general legislation; but, as regards the subject matter of the provisions above quoted, Section 4 of Republic Act 409 establishes a general rule regulating the liability of the City of Manila for "damages or injury to persons or property arising from the failure of" city officers "to enforce the provisions of" said Act "or any other law or ordinance, or from negligence" of the city "Mayor, Municipal Board, or other officers while enforcing or attempting to enforce said provisions." Upon the other hand, Article 2189 of the Civil Code constitutes a particular prescription making "provinces, cities and municipalities . . . liable for damages for the death of, or injury suffered by, any person by reason" — specifically — "of the defective condition of roads, streets, bridges, public buildings, and other public works under their control or supervision." In other words, said section 4 refers to liability arising from negligence, in general,

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regardless of the object thereof, whereas Article 2189 governs liability due to "defective streets," in particular. Since the present action is based upon the alleged defective condition of a road, said Article 2189 is decisive thereon.23 In the case of Bagatsing v. Ramirez,24 the issue was which law should govern the publication of a tax ordinance, the City Charter of Manila, a special act which treats ordinances in general and which requires their publication before enactment and after approval, or the Tax Code, a general law, which deals in particular with "ordinances levying or imposing taxes, fees or other charges," and which demands publication only after approval. In holding that it is the Tax Code which should prevail, the Court elucidated that: There is no question that the Revised Charter of the City of Manila is a special act since it relates only to the City of Manila, whereas the Local Tax Code is a general law because it applies universally to all local governments. Blackstone defines general law as a universal rule affecting the entire community and special law as one relating to particular persons or things of a class. And the rule commonly said is that a prior special law is not ordinarily repealed by a subsequent general law. The fact that one is special and the other general creates a presumption that the special is to be considered as remaining an exception of the general, one as a general law of the land, the other as the law of a particular case. However, the rule readily yields to a situation where the special statute refers to a subject in general, which the general statute treats in particular. Th[is] exactly is the circumstance obtaining in the case at bar. Section 17 of the Revised Charter of the City of Manila speaks of "ordinance" in general, i.e., irrespective of the nature and scope thereof, whereas, Section 43 of the Local Tax Code relates to "ordinances levying or imposing taxes, fees or other charges" in particular. In regard, therefore, to ordinances in general, the Revised Charter of the City of Manila is doubtless dominant, but, that dominant force loses its continuity when it approaches the realm of "ordinances levying or imposing taxes, fees or other charges" in particular. There, the Local Tax Code controls. Here, as always, a general provision must give way to a particular provision. Special provision governs. Let us examine the provisions involved in the case at bar. Article 32 of the 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: x x x x (6) The right against deprivation of property without due process of law; x x x x (8) The right to the equal protection of the laws; x x x x The rationale for its enactment was explained by Dean Bocobo of the Code Commission, as follows: "DEAN BOCOBO. Article 32, regarding individual rights, Attorney Cirilo Paredes proposes that Article 32 be 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:

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"The very nature of Article 32 is 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. "Mr. Chairman, this article is firmly one of the fundamental articles introduced in the New Civil Code to implement democracy. There is no real democracy if a public official is abusing and we made the article so strong and so comprehensive that it concludes an abuse of individual rights even if done in good faith, that official is liable. As a matter of fact, we know that there are very few public officials who openly and definitely abuse the individual rights of the citizens. In most cases, the abuse is justified on a plea of desire to enforce the law to comply with one’s duty. And so, if we should limit the scope of this article, that would practically nullify the object of the article. Precisely, the opening object of the article is to put an end to abuses which are justified by a plea of good faith, which is in most cases the plea of officials abusing individual rights."25 The Code Commission deemed it necessary to hold not only public officers but also private individuals civilly liable for violation of the rights enumerated in Article 32 of the Civil Code. It is not 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.26 Article 32 was patterned after the "tort" in American law.27 A tort is a wrong, a tortious act which has been defined as the commission or omission of an act by one, without right, whereby another receives some injury, directly or indirectly, in person, property, or reputation.28 There are cases in which it has been stated that civil liability in tort is determined by the conduct and not by the mental state of the tortfeasor, and there are circumstances under which the motive of the defendant has been rendered immaterial. The reason sometimes given for the rule is that otherwise, the mental attitude of the alleged wrongdoer, and not the act itself, would determine whether the act was wrongful.29 Presence of good motive, or rather, the absence of an evil motive, does not render lawful an act which is otherwise an invasion of another’s legal right; that is, liability in tort is not precluded by the fact that defendant acted without evil intent.30 The clear intention therefore of the legislature was to create a distinct cause of action in the nature of tort for violation of constitutional rights, irrespective of the motive or intent of the defendant.31 This is a fundamental innovation in the Civil Code, and in enacting the Administrative Code pursuant to the exercise of legislative powers, then President Corazon C. Aquino, could not have intended to obliterate this constitutional protection on civil liberties. In Aberca v. Ver,32 it was held that with the enactment of Article 32, the principle of accountability of public officials under the Constitution acquires added meaning and assumes a larger dimension. No longer may a superior official relax his vigilance or abdicate his duty to supervise his subordinates, secure in the thought that he does not have to answer for the transgressions committed by the latter against the constitutionally protected rights and liberties of the citizen. Part of the factors that propelled people power in February 1986 was the widely held

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perception that the government was callous or indifferent to, if not actually responsible for, the rampant violations of human rights. While it would certainly be too naive to expect that violators of human rights would easily be deterred by the prospect of facing damage suits, it should nonetheless be made clear in no uncertain terms that Article 32 of the Civil Code makes the persons who are directly, as well as indirectly, responsible for the transgression, joint tortfeasors. On the other hand, Sections 38 and 39, Book I of the Administrative Code, laid down the rule on the civil liability of superior and subordinate public officers for acts done in the performance of their duties. For both superior and subordinate public officers, the presence of bad faith, malice, and negligence are vital elements that will make them liable for damages. Note that while said provisions deal in particular with the liability of government officials, the subject thereof is general, i.e., "acts" done in the performance of official duties, without specifying the action or omission that may give rise to a civil suit against the official concerned. Contrarily, Article 32 of the Civil Code specifies in clear and unequivocal terms a particular specie of an "act" that may give rise to an action for damages against a public officer, and that is, a tort for impairment of rights and liberties. Indeed, Article 32 is the special provision that deals specifically with violation of constitutional rights by public officers. All other actionable acts of public officers are governed by Sections 38 and 39 of the Administrative Code. While the Civil Code, specifically, the Chapter on Human Relations is a general law, Article 32 of the same Chapter is a special and specific provision that holds a public officer liable for and allows redress from a particular class of wrongful acts that may be committed by public officers. Compared thus with Section 38 of the Administrative Code, which broadly deals with civil liability arising from errors in the performance of duties, Article 32 of the Civil Code is the specific provision which must be applied in the instant case precisely filed to seek damages for violation of constitutional rights. The complaint in the instant case was brought under Article 32 of the Civil Code. Considering that bad faith and malice are not necessary in an action based on Article 32 of the Civil Code, the failure to specifically allege the same will not amount to failure to state a cause of action. The courts below therefore correctly denied the motion to dismiss on the ground of failure to state a cause of action, since it is enough that the complaint avers a violation of a constitutional right of the plaintiff. Anent the issue on non-compliance with the rule against forum shopping, the subsequent submission of the secretary’s certificate authorizing the counsel to sign and execute the certification against forum shopping cured the defect of respondent’s complaint. Besides, the merits of the instant case justify the liberal application of the rules.33 WHEREFORE, in view of the foregoing, the petition is DENIED. The Decision of the Court of Appeals dated May 7, 1999 which affirmed the Order of the Regional Trial Court of Marikina, Branch 272, denying petitioner’s motion to dismiss, is AFFIRMED. The Presiding Judge, Regional Trial Court of Marikina, Branch 272, is herebyDIRECTED to continue with the proceedings in Civil Case No. 97-341-MK with dispatch. With costs. SO ORDERED.

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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. Benjamin M. Dacanay for petitioners. Emmanuel O. Tansingco for private respondents. PUNO, J.: The constitutional protection of our people against unreasonable search and seizure is not merely a pleasing platitude. It vouchsafes our right to privacy and dignity against undesirable intrusions committed by any public officer or private individual. An infringement of this right justifies an award for damages. 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." 1 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 to 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. On December 6, 1983, after a preliminary investigation, the 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. 3 Private respondents had to go personally to petitioners' place of business to recover their goods. Even then, not all the seized items were returned. The other items returned were of inferior quality. Private respondents then filed Civil Case No. 51144 against the petitioners for sums of money and damages. 4 In its Decision dated January 9, 1987, the trial court ruled for the private respondents, thus: WHEREFORE, judgment is hereby rendered in favor of plaintiffs and against defendants, ordering the latter jointly and severally:

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1. To return the amount of P3,100.00 to plaintiff Mirasol Lugatiman with interest at 12% per annum from January 12, 1984, the date of the last receipt issued, until fully paid; 2. To pay plaintiff Agnes Villa Cruz the sum of P2,000.00 for the 26 pieces of girl scout items not returned; 3. To pay plaintiffs the amount of P50,000.00 for and as moral damages and P15,000.00 for and as exemplary damages; and 4. P5,000.00 for and as attorney's fees and litigation expenses. Costs against the defendants. SO ORDERED. The decision was appealed to the respondent court. On January 18, 1989, its Fifth Division, 5 affirmed the Decision with modification, thus: WHEREFORE, the decision appealed from is AFFIRMED with MODIFICATION; and, as modified, the dispositive portion thereof now reads as follows: Judgment is hereby rendered in favor of plaintiffs (private respondents) and against defendants (petitioners), ordering the latter jointly and severally; 1. To return the amount of P3,100.00 to plaintiff (respondent) Mirasol Lugatiman and cancel her application for distributor's license; 2. To pay plaintiff (respondent) Agnes Villa Cruz the sum of P2,000.00 for the unreturned 26 pieces of girl scouts items with interest at 12% per annum from June 4, 1984 (date the complaint was filed) until it is fully paid; 3. To pay plaintiffs (respondents) the amount of P10,000.00 each, or a total of P30,000.00, for and as moral damages; and P5,000.00 each, or a total of P15,000.00, for and as exemplary damages; and 4. To pay plaintiffs (respondents) P5,000.00 for and as attorney's fees and litigation expenses. Costs of the case a quo and the instant appeal are assessed jointly and severally against defendants-appellants (petitioners) MHP Garments, Inc. and Larry de Guzman. SO ORDERED. In this petition for certiorari, petitioners contend: FIRST ASSIGNMENT OF ERROR THE COURT OF APPEALS ERRED IN IMPUTING LIABILITY FOR DAMAGES TO THE PETITIONERS WHO DID NOT EFFECT THE SEIZURE OF THE SUBJECT MERCHANDISE. SECOND ASSIGNMENT OF ERROR THE COURT OF APPEALS ERRED WHEN IT MADE A FINDING THAT THE MANNER WITH WHICH THE CONFISCATION OF PRIVATE RESPONDENTS WAS TORTIOUS BUT PENALIZED INSTEAD THE PETITIONERS WHO DID NOT COMMIT THE ACT OF CONFISCATION. THIRD ASSIGNMENT OF ERROR THE COURT OF APPEALS ERRED WHEN IT FOUND FOR THE PRIVATE RESPONDENTS AND AGAINST THE PETITIONERS. We affirm. Article III, section 2, of the Constitution protects our people from unreasonable search and seizure. It provides: The right of the people to be secure in their persons, houses, papers, and effects against unreasonable searches and seizures of whatever nature for any purpose

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shall be inviolable, and no search warrant or warrant of arrest shall issue except upon probable cause to be determined personally by the judge after examination under oath or affirmation of the complainant and the witnesses he may produce, and particularly describing the place to be searched and the persons or things to be seized. This provision protects not only those who appear to be innocent but also those who appear to be guilty but are nevertheless to be presumed innocent until the contrary is proved. 6 In the case at bench, the seizure was made without any warrant. Under the Rules of Court, 7 a warrantless search can only be undertaken under the following circumstance: Sec. 12. Search incident to a lawful arrest. - A person lawfully arrested may be searched for dangerous weapons or anything which may be used as proof of the commission of an offense, without a search warrant. We hold that 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. Despite the sufficiency of time, they did not apply for a warrant and seized the goods of private respondents. In doing so, they took the risk of a suit for damages in case the seizure would be proved to violate the right of private respondents against unreasonable search and seizure. In the case at bench, the search and seizure were clearly illegal. There was no probable cause for the seizure. Probable cause for a search has been defined as "such facts and circumstances which would lead a reasonably discreet and prudent man to believe that an offense has been committed and that the objects sought in connection with the offense are in the place sought to be searched." 8 These facts and circumstances were not in any way shown by the petitioners to justify their warrantless search and seizure. Indeed, after a preliminary investigation, the Provincial Fiscal of Rizal dismissed their complaint for unfair competition and later ordered the return of the seized goods. Petitioners would deflect their liability with the argument that it was the Philippine Constabulary that conducted the raid and their participation was only to report the alleged illegal activity of private respondents. While undoubtedly, the members of the PC raiding team should have been included in the complaint for violation of the private respondents' constitutional rights, still, the omission will not exculpate petitioners. In the case of Lim vs. Ponce de Leon, 9 we ruled for the recovery of damages for violation of constitutional rights and liberties from public officer or private individual, thus: 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.

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xxx xxx xxx (9) The rights to be secure in one's person, house, papers, and effects against unreasonable searches and seizures. xxx xxx xxx The indemnity shall include moral damages. Exemplary damages may also be adjudged. Art. 2219. Moral damages may be recovered in the following and analogous cases: xxx xxx xxx (6) Illegal search; (1) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35. Pursuant to the foregoing provisions, a person whose constitutional rights have been violated or impaired is entitled to actual and moral damages from the public officer or employee responsible therefor. In addition, exemplary damages may also be awarded. xxx xxx xxx The very nature of Article 32 is 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 plea of the good faith. In the United States this remedy is in the nature of a tort. (emphasis supplied) In the subsequent case of Aberca vs. Ver, 10 the Court En Banc explained the liability of persons indirectly responsible,viz: [T]he decisive factor in this case, in our view, is the language of Article 32. The law speaks of an officer or employee or person "directly or indirectly" responsible for the violation of the constitutional rights and liberties of another. Thus, it is not the actor alone (i.e., the one directly responsible) 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. xxx xxx xxx While it would certainly be too naive to expect that violators of human rights would easily be deterred by the prospect of facing damages suits, it should nonetheless be made clear in no uncertain terms that Article 32 of the Civil Code makes the persons who are directly, as well as indirectly, responsible for the transgression joint tortfeasors. xxx xxx xxx [N]either can it be said that only those shown to have participated "directly" should be held liable. Article 32 of the Civil Code encompasses within the ambit of its provisions those directly, as well as indirectly, responsible for its violations. (emphasis supplied) 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. 11 As correctly observed by respondent court:

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Indeed, the acts committed by the PC soldiers of unlawfully seizing appellees' (respondents') merchandise and of filing the criminal complaint for unfair competition against appellees (respondents) were for the protection and benefit of appellant (petitioner) corporation. Such being the case, it is, thus, reasonably fair to infer from those acts that it was upon appellant (petitioner) corporation's instance that the PC soldiers conducted the raid and effected the illegal seizure. These circumstances should answer the trial court's query — posed in its decision now under consideration — as to why the PC soldiers immediately turned over the seized merchandise to appellant (petitioner) corporation. 12 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. 13 So with the petitioner corporation which even received for safekeeping the goods unreasonably seized by the PC raiding team and de Guzman, and refused to surrender them for quite a time despite the dismissal of its complaint for unfair competition. Secondly, Letter of Instruction No. 1299 was precisely crafted on March 9, 1983 to safeguard not only the privilege of franchise holder of scouting items but also the citizen's constitutional rights, to wit: TITLE: APPREHENSION OF UNAUTHORIZED MANUFACTURERS AND DISTRIBUTORS OF SCOUT PARAPHERNALIA AND IMPOUNDING OF SAID PARAPHERNALIA. ABSTRACT: Directs all law enforcement agencies of the Republic of the Philippines, to apprehend immediately unauthorized manufacturers and distributors of Scout paraphernalia, upon proper application by the Boy Scouts of the Philippines and/or Girl Scouts of the Philippines for warrant of arrest and/or search warrant with a judge, or such other responsible officer as may be authorized by law; and to impound the said paraphernalia to be used as evidence in court or other appropriate administrative body. Orders the immediate and strict compliance with the Instructions. 14 Under the above provision and as aforediscussed, petitioners miserably failed to report the unlawful peddling of scouting goods to the Boy Scouts of the Philippines for the proper application of a warrant. Private respondents' rights are immutable and cannot be sacrificed to transient needs. 15 Petitioners did not have the unbridled license to cause the seizure of respondents' goods without any warrant. And thirdly, if petitioners did not have a hand in the raid, they should have filed a third-party complaint against the raiding team for contribution or any other relief, 16 in respect of respondents' claim for Recovery of Sum of Money with Damages. Again, they did not. We have consistently ruled that moral damages are not awarded to penalize the defendant but to compensate the plaintiff for the injuries he may have suffered. 17 Conformably with our ruling in Lim vs. Ponce de Leon, op. cit., 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. Respondent Cruz declared:

!13!

I felt very nervous. I was crying to loss (sic) my goods and capital because I am doing business with borrowed money only, there was commotion created by the raiding team and they even stepped on some of the pants and dresses on display for sale. All passersby stopped to watch and stared at me with accusing expressions. I was trembling and terribly ashamed, sir. 18 Respondent Lugatiman testified: I felt very nervous. I was crying and I was very much ashamed because many people have been watching the PC soldiers hauling my items, and many/I (sic) heard say "nakaw pala ang mga iyan" for which I am claiming P25,000.00 for damages. 19 While respondent Gonzalez stated thus: I do not like the way the raid was conducted by the team sir because it looked like that what I have been selling were stolen items that they should be confiscated by uniformed soldiers. Many people were around and the more the confiscation was made in a scandalous manner; every clothes, T-shirts, pants and dresses even those not wrapped dropped to the ground. I was terribly shamed in the presence of market goers that morning. 20 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. IN VIEW WHEREOF, the appealed decision is AFFIRMED WITH MODIFICATION. We impose a SIX PERCENT (6%) interest from January 9, 1987 on the TWO THOUSAND PESOS (P2,000.00) for the unreturned twenty-six (26) pieces of girl scouts items and a TWELVE PERCENT (12%) interest, in lieu of SIX PERCENT (6%), on the said amount upon finality of this Decision until the payment thereof. 22 Costs against petitioners. SO ORDERED. G.R. No. L-69866 April 15, 1988 ROGELIO ABERCA, RODOLFO BENOSA, NESTOR BODINO NOEL ETABAG DANILO DE LA FUENTE, BELEN DIAZ-FLORES, MANUEL MARIO GUZMAN, ALAN JAZMINEZ, EDWIN LOPEZ, ALFREDO MANSOS, ALEX MARCELINO, ELIZABETH PROTACIO-MARCELINO, JOSEPH OLAYER, CARLOS PALMA, MARCO PALO, ROLANDO SALUTIN, BENJAMIN SESGUNDO, ARTURO TABARA, EDWIN TULALIAN and REBECCA TULALIAN petitioners, vs. MAJ. GEN. FABIAN VER, COL. FIDEL SINGSON, COL. ROLANDO ABADILLA, COL. GERARDO B. LANTORIA, COL. GALILEO KINTANAR, 1ST LT. COL. PANFILO M. LACSON, MAJ. RODOLFO AGUINALDO, CAPT. DANILO PIZARRO, 1ST LT. PEDRO TANGO, 1ST LT. ROMEO RICARDO, 1ST LT. RAUL BACALSO, MSGT BIENVENIDO BALABA and REGIONAL TRIAL COURT, National Capital Judicial Region, Branch XCV (95), Quezon City, respondents.

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YAP, J.: This petition for certiorari presents vital issues not heretofore passed upon by this Court. It poses the question whether the suspension of the privilege of the writ of habeas corpus bars a civil action for damages for illegal searches conducted by military personnel and other violations of rights and liberties guaranteed under the Constitution. If such action for damages may be maintained, who can be held liable for such violations: only the military personnel directly involved and/or their superiors as well. This case stems from alleged illegal searches and seizures and other violations of the rights and liberties of plaintiffs by various intelligence units of the Armed Forces of the Philippines, known as Task Force Makabansa (TFM) ordered by General Fabian Ver "to conduct pre-emptive strikes against known communist-terrorist (CT) underground houses in view of increasing reports about CT plans to sow disturbances in Metro Manila," Plaintiffs allege, among others, that complying with said order, elements of the TFM raided several places, employing in most cases defectively issued judicial search warrants; that during these raids, certain members of the raiding party confiscated a number of purely personal items belonging to plaintiffs; that plaintiffs were arrested without proper warrants issued by the courts; that for some period after their arrest, they were denied visits of relatives and lawyers; that plaintiffs were interrogated in violation of their rights to silence and counsel; that military men who interrogated them employed threats, tortures and other forms of violence on them in order to obtain incriminatory information or confessions and in order to punish them; that all violations of plaintiffs constitutional rights were part of a concerted and deliberate plan to forcibly extract information and incriminatory statements from plaintiffs and to terrorize, harass and punish them, said plans being previously known to and sanctioned by defendants. Plaintiffs sought actual/compensatory damages amounting to P39,030.00; moral damages in the amount of at least P150,000.00 each or a total of P3,000,000.00; exemplary damages in the amount of at least P150,000.00 each or a total of P3,000,000.00; and attorney's fees amounting to not less than P200,000.00. A motion to dismiss was filed by defendants, through their counsel, then Solicitor-General Estelito Mendoza, alleging that (1) plaintiffs may not cause a judicial inquiry into the circumstances of their detention in the guise of a damage suit because, as to them, the privilege of the writ of habeas corpus is suspended; (2) assuming that the courts can entertain the present action, defendants are immune from liability for acts done in the performance of their official duties; and (3) the complaint states no cause of action against the defendants. Opposition to said motion to dismiss was filed by plaintiffs Marco Palo, Danilo de la Fuente, Benjamin Sesgundo, Nel Etabag, Alfredo Mansos and Rolando Salutin on July 8, 1983, and by plaintiffs Edwin Lopez, Manuel Mario Guzman, Alan Jasminez, Nestor Bodino, Carlos Palma, Arturo Tabara, Joseph Olayer, Rodolfo Benosa, Belen Diaz, Flores, Rogelio Aberca, Alex Marcelino and Elizabeth Marcelino on July 21, 1983. On November 7, 1983, a Consolidated Reply was filed by defendants' counsel. Then, on November 8, 1983, the Regional Trial Court, National Capital Region, Branch 95, Judge Willelmo C. Fortun, Presiding, 1 issued a resolution granting the motion to dismiss. I sustained, lock, stock and barrel, the defendants' contention (1) the plaintiffs may not cause a judicial inquiry into the circumstances of their

!15!

detention in the guise of a damage suit because, as to them, the privilege of the writ of habeas corpus is suspended; (2) that assuming that the court can entertain the present action, defendants are immune from liability for acts done in the performance of their official duties; and (3) that the complaint states no cause of action against defendants, since there is no allegation that the defendants named in the complaint confiscated plaintiffs' purely personal properties in violation of their constitutional rights, and with the possible exception of Major Rodolfo Aguinaldo and Sergeant Bienvenido Balabo committed acts of torture and maltreatment, or that the defendants had the duty to exercise direct supervision and control of their subordinates or that they had vicarious liability as employers under Article 2180 of the Civil Code. The lower court stated, "After a careful study of defendants' arguments, the court finds the same to be meritorious and must, therefore, be granted. On the other hand, plaintiffs' arguments in their opposition are lacking in merit." A motion to set aside the order dismissing the complaint and a supplemental motion for reconsideration was filed by the plaintiffs on November 18, 1983, and November 24, 1983, respectively. On December 9, 1983, the defendants filed a comment on the aforesaid motion of plaintiffs, furnishing a copy thereof to the attorneys of all the plaintiffs, namely, Attys. Jose W. Diokno, Procopio Beltran, Rene Sarmiento, Efren Mercado, Auguso Sanchez, Antonio L. Rosales, Pedro B. Ella Jr., Arno V. Sanidad, Alexander Padilla, Joker Arroyo, Rene Saguisag, Ramon Esguerra and Felicitas Aquino. On December 15, 1983, Judge Fortun issued an order voluntarily inhibiting himself from further proceeding in the case and leaving the resolution of the motion to set aside the order of dismissal to Judge Lising, "to preclude any suspicion that he (Judge Fortun) cannot resolve [the] aforesaid pending motion with the cold neutrality of an impartial judge and to put an end to plaintiffs assertion that the undersigned has no authority or jurisdiction to resolve said pending motion." This order prompted plaintiffs to reesolve an amplificatory motion for reconsideration signed in the name of the Free Legal Assistance Group (FLAG) of Mabini Legal Aid Committee, by Attys. Joker P. Arroyo, Felicitas Aquino and Arno Sanidad on April 12, 1984. On May 2,1984, the defendants filed a comment on said amplificatory motion for reconsideration. In an order dated May 11, 1984, the trial court, Judge Esteban Lising, Presiding, without acting on the motion to set aside order of November 8, 1983, issued an order, as follows: It appearing from the records that, indeed, the following plaintiffs, Rogelio Aberca, Danilo de la Fuente and Marco Palo, represented by counsel, Atty. Jose W. Diokno, Alan Jasminez represented by counsel, Atty. Augusta Sanchez, Spouses Alex Marcelino and Elizabeth Protacio-Marcelino, represented by counsel, Atty. Procopio Beltran, Alfredo Mansos represented by counsel, Atty. Rene Sarmiento, and Rolando Salutin, represented by counsel, Atty. Efren Mercado, failed to file a motion to reconsider the Order of November 8, 1983, dismissing the complaint, nor interposed an appeal therefrom within the reglementary period, as prayed for by the defendants, said Order is now final against said plaintiffs. Assailing the said order of May 11, 1984, the plaintiffs filed a motion for reconsideration on May 28,1984, alleging that it was not true that plaintiffs Rogelio Aberca, Danilo de la Fuente, Marco Palo, Alan Jasminez, Alex Marcelino, Elizabeth Protacio-Marcelino, Alfredo Mansos and Rolando Salutin failed to file a

! 16!

motion to reconsider the order of November 8, 1983 dismissing the complaint, within the reglementary period. Plaintiffs claimed that the motion to set aside the order of November 8, 1983 and the amplificatory motion for reconsideration was filed for all the plaintiffs, although signed by only some of the lawyers. In its resolution of September 21, 1984, the respondent court dealt with both motions (1) to reconsider its order of May 11, 1984 declaring that with respect to certain plaintiffs, the resolution of November 8, 1983 had already become final, and (2) to set aside its resolution of November 8, 1983 granting the defendants' motion to dismiss. In the dispositive portion of the order of September 21, 1984, the respondent court resolved: (1) That the motion to set aside the order of finality, dated May 11, 1984, of the Resolution of dismissal of the complaint of plaintiffs Rogelio Aberca, Danilo de la Fuente, Marco Palo, Alan Jasminez Alex Marcelino, Elizabeth Protacio-Marcelino, Alfredo Mansos and Rolando Salutin is deed for lack of merit; (2) For lack of cause of action as against the following defendants, to wit: 1. Gen Fabian Ver 2. Col. Fidel Singson 3. Col. Rolando Abadilla 4. Lt. Col. Conrado Lantoria, Jr. 5. Col. Galileo Montanar 6. Col. Panfilo Lacson 7. Capt. Danilo Pizaro 8. 1 Lt Pedro Tango 9. Lt. Romeo Ricardo 10. Lt. Raul Bacalso the motion to set aside and reconsider the Resolution of dismissal of the present action or complaint, dated November 8, 1983, is also denied but in so far as it affects and refers to defendants, to wit: 1. Major Rodolfo Aguinaldo, and 2. Master Sgt. Bienvenido Balaba the motion to reconsider and set aside the Resolution of dismissal dated November 3, 1983 is granted and the Resolution of dismissal is, in this respect, reconsidered and modified. Hence, petitioners filed the instant petition for certiorari on March 15, 1985 seeking to annul and set aside the respondent court's resolution of November 8, 1983, its order of May 11, 1984, and its resolution dated September 21, 1984. Respondents were required to comment on the petition, which it did on November 9, 1985. A reply was filed by petitioners on August 26, 1986. We find the petition meritorious and decide to give it due course. At the heart of petitioners' complaint is Article 32 of the Civil Code which 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: (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;

!17!

(5) Freedom of suffrage; (6) The right against deprivation of property without due process (7) of law; (8) The right to a just compensation when private property is taken for public use; (9) The right to the equal protection of the laws; (10) The right to be secure in one's person, house, papers, and effects against unreasonable searches and seizures; (11) The liberty of abode and of changing the same; (12) The privacy of cmmunication and correspondence; (13) The right to become a member of associations or societies for purposes not contrary to law; (14) The right to take part in a peaceable assembly to petition the Government for redress of grievances; (15) The right to be free from involuntary servitude in any form; (16) The rigth of the accused against excessive bail; (17) The rigth of the aaccused 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 behalf; (18) Freedom from being compelled to be a witness against ones 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; (19) 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 (20) 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 against grieved 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. It is obvious that the purpose of the above codal provision is to provide a sanction to the deeply cherished rights and freedoms enshrined in the Constitution. Its message is clear; no man may seek to violate those sacred rights with impunity. In times of great upheaval or of social and political stress, when the temptation is strongest to yield — borrowing the words of Chief Justice Claudio Teehankee — to the law of force rather than the force of law, it is necessary to remind ourselves that certain basic rights and liberties are immutable and cannot be sacrificed to the transient needs or imperious demands of the ruling power. The rule of law must prevail, or else liberty will perish. Our commitment to democratic principles and to the rule of law compels us to reject the view which reduces law to nothing but the expression of the will of the predominant power in the community. "Democracy cannot be a reign of progress, of liberty, of justice, unless the law is respected by him who makes it and by him for whom it is made. Now this respect implies a

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maximum of faith, a minimum of Idealism. On going to the bottom of the matter, we discover that life demands of us a certain residuum of sentiment which is not derived from reason, but which reason nevertheless controls. 2 Seeking to justify the dismissal of plaintiffs' complaint, the respondents postulate the view that as public officers they are covered by the mantle of state immunity from suit for acts done in the performance of official duties or function In support of said contention, respondents maintain that — Respondents are members of the Armed Forces of the Philippines. Their primary duty is to safeguard public safety and order. The Constitution no less provides that the President may call them "to prevent or supress lawless violence, invasion, insurrection or rebellion, or imminent danger thereof." (Constitution, Article VII, Section 9). On January 17, 1981, the President issued Proclamation No. 2045 lifting martial law but providing for the continued suspension of the privilege of the writ of habeas corpus in view of the remaining dangers to the security of the nation. The proclamation also provided "that the call to the Armed Forces of the Philippines to prevent or suppress lawless violence, insuitection rebellion and subversion shall continue to be in force and effect." Petitioners allege in their complaint that their causes of action proceed from respondent General Ver's order to Task Force Makabansa to launch pre-emptive strikes against communist terrorist underground houses in Metro Manila. Petitioners claim that this order and its subsequent implementation by elements of the task force resulted in the violation of their constitutional rights against unlawful searches, seizures and arrest, rights to counsel and to silence, and the right to property and that, therefore, respondents Ver and the named members of the task force should be held liable for damages. But, by launching a pre-emptive strike against communist terrorists, respondent members of the armed forces merely performed their official and constitutional duties. To allow petitioners to recover from respondents by way of damages for acts performed in the exercise of such duties run contrary to the policy considerations to shield respondents as public officers from undue interference with their duties and from potentially disabling threats of hability (Aarlon v. Fitzgerald 102 S. Ct. 2731-1 Forbes v. Chuoco Tiaco, 16 Phil. 634), and upon the necessity of protecting the performance of governmental and public functions from being harassed unduly or constantly interrupted by private suits (McCallan v. State, 35 Cal. App. 605; Metran v. Paredes, 79 Phil. 819). xxx xxx xxx The immunity of public officers from liability arising from the performance of their duties is now a settled jurisprudence Alzua v. Johnson, 21 Phil. 308; Zulueta v. Nicolas, 102 Phil. 944; Spalding v. Vilas, 161 US 483; 40 L. Ed. 780, 16 S. Ct. 631; Barr v. Mateo, 360; Butz v. Economon, 438 US 478; 57 L. Ed. 2d 895, 98 S. Ct. 2894; Scheuer v. Rhodes, 416 US 232; Forbes v. Chuoco Tiaco, supra; Miller v. de Leune, 602 F. 2d 198; Sami v. US, 617 F. 2d 755). Respondents-defendants who merely obeyed the lawful orders of the President and his call for the suppression of the rebellion involving petitioners enjoy such immunity from Suit. 3 We find respondents' invocation of the doctrine of state immunity from suit totally misplaced. The cases invoked by respondents actually involved acts done by

!19!

officers in the performance of official duties written the ambit of their powers. As held in Forbes, etc. vs. Chuoco Tiaco and Crossfield: 4 No one can be held legally responsible in damages or otherwise for doing in a legal manner what he had authority, under the law, to do. Therefore, if the Governor-General had authority, under the law to deport or expel the defendants, and circumstances justifying the deportation and the method of carrying it out are left to him, then he cannot be held liable in damages for the exercise of this power. Moreover, if the courts are without authority to interfere in any manner, for the purpose of controlling or interferring with the exercise of the political powers vested in the chief executive authority of the Government, then it must follow that the courts cannot intervene for the purpose of declaring that he is liable in damages for the exeercise of this authority. It may be that the respondents, as members of the Armed Forces of the Philippines, were merely responding to their duty, as they claim, "to prevent or suppress lawless violence, insurrection, rebellion and subversion" in accordance with Proclamation No. 2054 of President Marcos, despite the lifting of martial law on January 27, 1981, and in pursuance of such objective, to launch pre- emptive strikes against alleged communist terrorist underground houses. But this cannot be construed as a blanket license or a roving commission untramelled by any constitutional restraint, to disregard or transgress upon the rights and liberties of the individual citizen enshrined in and protected by the Constitution. The Constitution remains the supreme law of the land to which all officials, high or low, civilian or military, owe obedience and allegiance at all times. Article 32 of the Civil Code which renders any public officer or employee or any private individual liable in damages for violating the Constitutional rights and liberties of another, as enumerated therein, does not exempt the respondents from responsibility. Only judges are excluded from liability under the said article, provided their acts or omissions do not constitute a violation of the Penal Code or other penal statute. This is not to say that military authorities are restrained from pursuing their assigned task or carrying out their mission with vigor. We have no quarrel with their duty to protect the Republic from its enemies, whether of the left or of the right, or from within or without, seeking to destroy or subvert our democratic institutions and imperil their very existence. What we are merely trying to say is that in carrying out this task and mission, constitutional and legal safeguards must be observed, otherwise, the very fabric of our faith will start to unravel. In the battle of competing Ideologies, the struggle for the mind is just as vital as the struggle of arms. The linchpin in that psychological struggle is faith in the rule of law. Once that faith is lost or compromised, the struggle may well be abandoned. We do not find merit in respondents' suggestion that plaintiffs' cause of action is barred by the suspension of the privilege of the writ of habeas corpus. Respondents contend that "Petitioners cannot circumvent the suspension of the privilege of the writ by resorting to a damage suit aimed at the same purpose-judicial inquiry into the alleged illegality of their detention. While the main relief they ask by the present action is indemnification for alleged damages they suffered, their causes of action are inextricably based on the same claim of violations of their constitutional rights that they invoked in the habeas corpus case as grounds for release from detention. Were the petitioners allowed the present suit, the judicial inquiry barred by the suspension of the privilege of the writ will take place. The net result is that

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what the courts cannot do, i.e. override the suspension ordered by the President, petitioners will be able to do by the mere expedient of altering the title of their action." We do not agree. We find merit in petitioners' contention that the suspension of the privilege of the writ of habeas corpus does not destroy petitioners' right and cause of action for damages for illegal arrest and detention and other violations of their constitutional rights. The suspension does not render valid an otherwise illegal arrest or detention. What is suspended is merely the right of the individual to seek release from detention through the writ of habeas corpus as a speedy means of obtaining his liberty. Moreover, as pointed out by petitioners, their right and cause of action for damages are explicitly recognized in P.D. No. 1755 which amended Article 1146 of the Civil Code by adding the following to its text: However, when the action (for injury to the rights of the plaintiff or for a quasi-delict) arises from or out of any act, activity or conduct of any public officer involving the exercise of powers or authority arising from Martial Law including the arrest, detention and/or trial of the plaintiff, the same must be brought within one (1) year. Petitioners have a point in contending that even assuming that the suspension of the privilege of the writ of habeas corpus suspends petitioners' right of action for damages for illegal arrest and detention, it does not and cannot suspend their rights and causes of action for injuries suffered because of respondents' confiscation of their private belongings, the violation of their right to remain silent and to counsel and their right to protection against unreasonable searches and seizures and against torture and other cruel and inhuman treatment. However, we find it unnecessary to address the constitutional issue pressed upon us. On March 25, 1986, President Corazon C. Aquino issued Proclamation No. 2, revoking Proclamation Nos. 2045 and 2045-A and lifting the suspension of the privilege of the writ of habeas corpus. The question therefore has become moot and academic. This brings us to the crucial issue raised in this petition. May a superior officer under the notion of respondent superior be answerable for damages, jointly and severally with his subordinates, to the person whose constitutional rights and liberties have been violated? Respondents contend that the doctrine of respondent superior is applicable to the case. We agree. The doctrine of respondent superior has been generally limited in its application to principal and agent or to master and servant (i.e. employer and employee) relationship. No such relationship exists between superior officers of the military and their subordinates. Be that as it may, however, the decisive factor in this case, in our view, is the language of Article 32. The law speaks of an officer or employee or person 'directly' or "indirectly" responsible for the violation of the constitutional rights and liberties of another. Thus, it is not the actor alone (i.e. the one directly responsible) 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. By this provision, the principle of accountability of public officials under the Constitution 5 acquires added meaning and asgilrnes a larger dimension. No longer may a superior official relax his vigilance or abdicate his duty to supervise his subordinates, secure in the thought that he does not have to answer for the

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transgressions committed by the latter against the constitutionally protected rights and liberties of the citizen. Part of the factors that propelled people power in February 1986 was the widely held perception that the government was callous or indifferent to, if not actually responsible for, the rampant violations of human rights. While it would certainly be go naive to expect that violators of human rights would easily be deterred by the prospect of facing damage suits, it should nonetheless be made clear in no ones terms that Article 32 of the Civil Code makes the persons who are directly, as well as indirectly, responsible for the transgression joint tortfeasors. In the case at bar, the trial court dropped defendants General Fabian Ver, Col. Fidel Singson, Col. Rolando Abadilla, Col. Gerardo Lantoria, Jr., Col. Galileo Kintanar, Col. Panfilo Lacson, Capt. Danilo Pizarro, lst Lt. Pedro Tango, Lt. Romeo Ricardo and Lt. Ricardo Bacalso from the acts of their subordinates. Only Major Rodolfo Aguinaldo and Master Sgt. Bienvenido Balaba were kept as defendants on the ground that they alone 'have been specifically mentioned and Identified to have allegedly caused injuries on the persons of some of the plaintiff which acts of alleged physical violence constitute a delict or wrong that gave rise to a cause of action. But such finding is not supported by the record, nor is it in accord with law and jurisprudence. Firstly, it is wrong to at the plaintiffs' action for damages 5 Section 1, Article 19. to 'acts of alleged physical violence" which constituted delict or wrong. Article 32 clearly specifies as actionable the act of violating or in any manner impeding or impairing any of the constitutional rights and liberties enumerated therein, among others — 1. Freedom from arbitrary arrest or illegal detention; 2. The right against deprivation of property without due process of law; 3. The right to be secure in one's person, house, papers and effects against unreasonable searches and seizures; 4. The privacy of communication and correspondence; 5. 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 a confession, except when the person confessing becomes a state witness. The complaint in this litigation alleges facts showing with abundant clarity and details, how plaintiffs' constitutional rights and liberties mentioned in Article 32 of the Civil Code were violated and impaired by defendants. The complaint speaks of, among others, searches made without search warrants or based on irregularly issued or substantially defective warrants; seizures and confiscation, without proper receipts, of cash and personal effects belonging to plaintiffs and other items of property which were not subversive and illegal nor covered by the search warrants; arrest and detention of plaintiffs without warrant or under irregular, improper and illegal circumstances; detention of plaintiffs at several undisclosed places of 'safehouses" where they were kept incommunicado and subjected to physical and psychological torture and other inhuman, degrading and brutal treatment for the purpose of extracting incriminatory statements. The complaint contains a detailed recital of abuses perpetrated upon the plaintiffs violative of their constitutional rights. Secondly, neither can it be said that only those shown to have participated "directly" should be held liable. Article 32 of the Civil Code encompasses within

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the ambit of its provisions those directly, as well as indirectly, responsible for its violation. The responsibility of the defendants, whether direct or indirect, is amply set forth in the complaint. It is well established in our law and jurisprudence that a motion to dismiss on the ground that the complaint states no cause of action must be based on what appears on the face of the complaint. 6 To determine the sufficiency of the cause of action, only the facts alleged in the complaint, and no others, should be considered. 7 For this purpose, the motion to dismiss must hypothetically admit the truth of the facts alleged in the complaint. 8 Applying this test, it is difficult to justify the trial court's ruling, dismissing for lack of cause of action the complaint against all the defendants, except Major Rodolfo Aguinaldo and Master Sgt. Bienvenido Balaba. The complaint contained allegations against all the defendants which, if admitted hypothetically, would be sufficient to establish a cause or causes of action against all of them under Article 32 of the Civil Code. This brings us to the last issue. Was the trial court correct in dismissing the complaint with respect to plaintiffs Rogelio Aberca, Danilo de la Puente, Marco Palo, Alan Jazminez, Alex Marcelino, Elizabeth Protacio-Marcelino, Alfredo Mansos and Rolando Salutin, on the basis of the alleged failure of said plaintiffs to file a motion for reconsideration of the court's resolution of November 8, 1983, granting the respondent's motion to dismiss? It is undisputed that a timely motion to set aside said order of November 8, 1983 was filed by 'plaintiffs, through counsel. True, the motion was signed only by Atty. Joker P. Arroyo, counsel for Benjamin Sesgulido; Atty. Antonio Rosales, counsel for Edwin Lopez and Manuel Martin Guzman; Atty. Pedro B. Ella, Jr., counsel for Nestor Bodino and Carlos Palma; Atty. Arno V. Sanidad, counsel for Arturo Tabara; Atty. Felicitas S. Aquino, counsel for Joseph Olayer; and Atty. Alexander Padilla, counsel for Rodolfo Benosa. But the body of the motion itself clearly indicated that the motion was filed on behalf of all the plaintiffs. And this must have been also the understanding of defendants' counsel himself for when he filed his comment on the motion, he furnished copies thereof, not just to the lawyers who signed the motion, but to all the lawyers of plaintiffs, to wit: Attys. Jose Diokno, Procopio Beltran, Rene Sarmiento, Efren Mercado, Augusto Sanchez, Antonio Rosales, Pedro Efla Jr., Arno Sanidad, Alexander Padilla, Joker Arroyo, Rene Saguisag, Ramon Esguerra and Felicitas S. Aquino. In filing the motion to set aside the resolution of November 8, 1983, the signing attorneys did so on behalf of all the plaintiff. They needed no specific authority to do that. The authority of an attorney to appear for and in behalf of a party can be assumed, unless questioned or challenged by the adverse party or the party concerned, which was never done in this case. Thus, it was grave abuse on the part of respondent judge to take it upon himself to rule that the motion to set aside the order of November 8, 1953 dismissing the complaint was filed only by some of the plaintiffs, when by its very language it was clearly intended to be filed by and for the benefit of all of them. It is obvious that the respondent judge took umbrage under a contrived technicality to declare that the dismissal of the complaint had already become final with respect to some of the plaintiffs whose lawyers did not sign the motion for reconsideration. Such action tainted with legal infirmity cannot be sanctioned.

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Accordingly, we grant the petition and annul and set aside the resolution of the respondent court, dated November 8, 1983, its order dated May 11, 1984 and its resolution dated September 21, 1984. Let the case be remanded to the respondent court for further proceedings. With costs against private respondents. SO ORDERED. G.R. No. L-34529 January 27, 1983 MAXIMO MARCIA, AMALIA MOJICA, TIRSO YAP, DAMIANA MARCIA, EDGAR MARCIA, and RENATO YAP,petitioners, vs. COURT OF APPEALS, FELARDO PAJE, and VICTORY LINER, INC., respondents. Ricardo J. Francisco, for petitioners. Flors, Macapagal, Ocampo & Dizon for private respondents. RELOVA, J.: Appeal by certiorari from the decision of the Court of Appeals affirming the judgment of the Court of First Instance of Rizal, which dismissed the complaint filed by tile petitioners against private respondents in the concept of an independent civil action for damages for physical injuries resulting from reckless imprudence. On December 23, 1956, in the municipality of Lubao, Pampanga, a passenger bus operated by private respondent Victory Liner, Inc. and driven by its employee. private respondent Felardo Paje, collided with a jeep driven by Clemente Marcia, resulting in the latter's death and in physical injuries to herein petitioners, Edgar Marcia and Renato Yap. Thereupon, an information for homicide and serious physical injuries thru reckless imprudence was filed against Felardo Paje in the Court of First Instance of Pampanga (Criminal Case No. 2745). On January 23, 1957, an action for damages (Civil Case No. 4425) was filed in the Court of First Instance of Rizal by Edgar Marcia and Renato Yap, together with their respective parents. against the Victory Liner, Inc. and Felardo Paje, alleging that, the mishap was due to the reckless imprudence and negligence of the latter in driving the passenger bus. While said Civil Case No. 4425 was in progress in the Court of First Instance of Rizal, the criminal action proceeded in the Court of First Instance of Pampanga (Criminal Case No. 2745). The accused Felardo Paje was convicted of the offense charged. However, on appeal to the Court of Appeals, he was acquitted in a decision promulgated on November 3, 1982, based on the findings, to wit: 1 That the Victory Liner bus left its post, kilometer post no. 156, in San Marcelino, Zambales, at about 2:00 AM 2 That on the highway at Lubao, Pampanga, between Posts Nos. 83 and 84, the appellant driver thereof, saw a cargo truck parked in the middle of the right lane of the road to Manila, without 3 That appellant slackened the speed of his truck from 60 km. p.h. to 35 or 40 km. p. h. in order to pass said truck; 4 That the appellant did not see the oncoming jeep until it swerved to the left. 5 That the jeep was still far so appellant attempted to pass the truck but before he could do so, the jeep came very fast at the center of the road and out of its lane.

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6 That the passengers of the bus shouted at the appellant to bring the bus to the side so as to avoid a frontal collision with he jeep, and appellant brought his bus to the right shoulder of the road going to Bataan; 7 That the jeep driven by the deceased Clemente Marcia was running at a fast pace for which reason the driver lost control and veered sharply to the right shoulder of the road and crashed into the bus, parked thereat a few seconds before. 8 That appellant was not speeding, was diligent, and hence, not liable for the collision which at the least, was a fortuitous event for which no one was responsible. and the conclusion that "CRIMINAL NEGLIGENCE is WANTING in this case, and that appellant was NOT even guilty of CIVIL NEGLIGENCE, Insofar as appellant was concerned, it was a case of PURE ACCIDENT." As a consequence, herein private respondents, defendants in Civil Case No. 4425 of the Court of First Instance of Rizal, moved for the dismissal of the complaint invoking the decision of the Court of Appeals acquitting Felardo Paje and citing Section I (d), Rule 107 of the Rules of Court now Section 3 (c), Rule I I I of the New Rules of Court), which reads: SECTION 1. Rules governing civil actions arising from offenses. — Except as otherwise provided by law, the following rules shall be observed: xxx xxx xxx (d) Extinction of the penal action does not carry with it extinction of the civil, unless the extinction proceeds from a declaration in a final judgment that the fact from which the civil might arise did not exist. In the other cases, the persons entitled to the civil action may institute it in the jurisdiction and in the manner provided by law against the person who may be liable for restitution of the thing and reparation or indemnity for the damages suffered. The trial court denied the motion to dismiss and, thereafter, continued to hear defendants' (herein private respondents) evidence. The following were presented as defendants' evidence in chief: (a) the whole record of Criminal Case No. 2745 of the Court of First Instance of Pampanga in which defendant Felardo Paje was by reason of the occurrence prosecuted criminally and convicted of homicide with serious physical injuries thru reckless imprudence; (b) the decision of the Court of Appeals in CA-G.R. No. 01691 Cr, acquitting the accused; and (c) copy of the brief of the said defendant as accused-appellant in the said Court of Appeals case. On August 10, 1966, the Court of First Instance of Rizal rendered a decision dismissing plaintiffs' complaint against the defendants Victory Liner, Inc. and Felardo Paje, without pronouncement as to costs. Petitioners appealed the case to the (Court of Appeals CA-G.R. No. 38964-R) alleging that the acquittal of Paje in the criminal action for homicide and serious physical injuries thru reckless imprudence "is not a ground for dismissing the complaint in the instant civil action; that the instant civil action is entirely separate and distinct from the criminal action and shall proceed independently of the criminal prosecution, so that whatever may have been the result of the criminal action is irrelevant to this civil action; that Section 2 of Rule 111 of the Rules of Court and not Section 3, paragraph (c) of the said rule applies; that the statement in the decision of the Court of Appeals in the criminal action that defendant Paje as

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accused therein was not guilty of civil negligence is without the jurisdiction of the said Court to make and is to be completely disregarded as an extraneous, officious and void statement which cannot affect in any way the instant civil action; that the records of the criminal action against defendant Paje are inadmissible evidence; that it has been established in the case at bar, not only by preponderance of evidence but by uncontradicted, conclusive evidence that petitioners suffered damages as a proximate result of the negligence of respondent Paje and that it has been established, not only by preponderance of evidence but by uncontradicted, conclusive evidence, that the damages suffered by petitioners as a result of the negligence of private respondents is in the amount of P250,817.96, and that the latter should be sentenced, jointly and severally, to pay the same to petitioner. In the meantime, the heirs of Clemente Marcia who, as aforesaid, died as a result of the collision, instituted a separate civil action in the Court of First Instance of Rizal (Civil Case No. 6880) for damages based on the alleged reckless imprudence of bus driver Felardo Paje, praying that the driver and the Victory Liner, Inc. be ordered to pay jointly and severally the amount of damages claimed. The complaint of the heirs of Clemente Marcia was dismissed by the trial court. Appeal on questions of law was taken to this Court (Laura Corpus et al vs. Felardo Paje at al, 28 SCRA 1062) which, however, affirmed the order for the reason, among others, that "(1) The acquittal of the defendant Felardo Paje by the Court of Appeals in the criminal action on the ground that the reckless imprudence or criminal negligence charged against him did not exist and that the collision was a case of pure accident, was a bar to the civil action for damages for the death of Clemente Marcia, which action was based upon the same criminal negligence of which the defendant Felardo Paje was acquitted in the criminal action." Following the ruling of this Court in the Corpus vs. Paje decision, respondent Court of Appeals held that the private respondents Cannot be held civilly liable after it had ruled in the criminal action that negligence was wanting and that the collision was a case of pure accident. Dissatisfied with the decision, petitioners have come to US alleging that the Court of Appeals erred: I. IN NOT HOLDING THAT PETITIONERS INSTANT CIVIL ACTION FOR DAMAGES AGAINST PRIVATE RESPONDENTS FOR PHYSICAL INJURIES RESULTING FROM NEGLIGENCE IS AN INDEPENDENT ONE, ENTIRELY SEPARATE AND DISTINCT FROM THE CRIMINAL ACTION, UNDER THE PROVISIONS OF ARTICLES 33, 2176 AND 2177 OF THE NEW (CIVIL CODE AND SECTION 2 OF RULE 111 OF THE RULES OF COURT. AND IN INSTEAD HOLDING THAT THE INSTANT ACTION IS NOT AMONG THE INDEPENDENT CIVIL ACTIONS AUTHORIZED BY THE SAID PROVISIONS. II. IN NOT HOLDING THAT THE ACQUITTAL OF RESPONDENT FELARDO PAJE, DRIVER OF RESPONDENT VICTORY LINER, INC., IN THE CRIMINAL ACTION BASED ON THE SAID PHYSICAL INJURIES AND NEGLIGENCE IS ENTIRELY IRRELEVANT TO THE INSTANT CIVIL ACTION FOR DAMAGES BY VIRTUE OF THE AFORECITED PROVISIONS OF THE NEW CIVIL CODE AND THE RULES OF COURT, AND IN INSTEAD HOLDING THAT THE SAID ACQUITTAL IS A BAR TO THE

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INSTANT CIVIL ACTION UNDER SECTION 3 (c) OF RULE I I I AND SECTION 49 (c) OF RULE 39 OF THE RULES OF COURT. III. IN NOT HOLDING THAT THE EVIDENCE ADDUCED BY PRIVATE RESPONDENTS IN THE INSTANT CIVIL ACTION FOR DAMAGES, CONSISTING OF THE RECORDS OF THE CRIMINAL ACTION IN THE TRIAL COURT, THE DECISION OF THE COURT OF APPEALS ACQUITTING RESPONDENT PAJE AND THE COPY OF THE BRIEF OF THE SAID RESPONDENT AS ACCUSED-APPELLANT, ARE INADMISSIBLE IN THE INSTANT CIVIL ACTION FOR DAMAGES. IV. IN NOT HOLDING THAT IT HAS BEEN ESTABLISHED IN THE CASE AT BAR, NOT ONLY BY PREPONDERANCE OF EVIDENCE BUT BY UNCONTRADICTED, CONCLUSIVE EVIDENCE, THAT PETITIONERS SUFFERED DAMAGES AS A PROXIMATE RESULT OF THE NEGLIGENCE OF RESPONDENT PAJE. V. IN NOT HOLDING THAT IT HAS BEEN ESTABLISHED, NOT ONLY BY PREPONDERANCE OF EVIDENCE BUT BY UNCONTRADICTED, CONCLUSIVE EVIDENCE, THAT THE DAMAGES SUFFERED BY PETITIONERS AS A RESULT OF THE NEGLIGENCE OF DEFENDANTS IS IN THE AMOUNT OF P250,817.96, AND IN NOT SENTENCING PRIVATE RESPONDENTS JOINTLY AND SEVERALLY TO PAY THE SAME TO PETITIONERS. It is the stand of herein petitioners that Section 2, Rule 111 of the Rules of Court, not Section 3 (c) thereof, should apply in the case at bar. Sec. 2. Independent civil action. — In the cases provided for in Articles 31, 32, 33, 34 and 2177 of the Civil Code of the Philippines, an independent civil action entirely separate and distinct from the criminal action, may be brought by the injured party during the pendency of the criminal case, provided the right is reserved as required in the preceding section. Such civil action shall proceed independently of the criminal prosecution, and shall require only a preponderance of evidence. We do not agree, Section 2 of Rule 111 merely refers to the institution of an independent civil action without waiting for the filing or termination of the criminal action and requires only preponderance of evidence to prosper and not proof beyond reasonable doubt as required for conviction in criminal cases. However, an acquittal based on the finding that the facts upon which civil liability did not exist, bars the filing of an independent civil action if it is based on the crime. As early as 1952, We have held in the case of Tan vs. Standard Vacuum Oil Company 91 Phil. 672, that "the acquittal of the accused from the criminal charge will not necessarily extinguish the civil liability unless the court declares in the judgment that the fact from which the civil liability might arise did not exist. Where the court states 'that the evidence throws no light on the cause of fire and that it was an unfortunate accident for which the accused cannot be held responsible,' this declaration fits well into the exception of the rule which exempts the accused, from civil liability. " Likewise, in Albornoz vs. Albornoz, 98 Phil. 785, it was the ruling that "where the judgment in a criminal action contains an express declaration that the basis of claimant's action did not exist, the latter's action for

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civil liability is barred under section 1 (d) Rule 107 of the Rules of Court." And, in De Mesa vs. Priela 24 SCRA 582, this Court, speaking through then Chief Justice Roberto Concepcion, ruled that extinction of the penal action does not carry with it extinction of the civil, unless the extinction proceeds from a declaration in a final judgment that the fact from which the civil might arise did not exist. In other cases, the person entitled to the civil action may institute it in the jurisdiction and in the manner provided by law against the person who may be liable for restitution of the thing and reparation or indemnity for the damage suffered (Sec. 3 [c], Rule 111, Rules of Court.)" As held in Corpus vs. Paje, supra, reckless imprudence or criminal negligence is not one of the three crimes mentioned in Article 33 of the Civil Code, which provides: ART. 33. In cases of defamation, fraud, and physical injuries, a civil action for damages, entirely separate and distinct from the criminal action may be brought by the injured party. Such civil action shall proceed independently of the criminal prosecution, and shall require only a preponderance of evidence. The above article speaks only of defamation, fraud and physical injuries. The injuries suffered by herein petitioners were alleged to be the result of criminal negligence; they were not inflicted with malice. Hence, no independent civil action for damages may be instituted in connection therewith. Further, Section 3 (c), Rule 111 of the Rules of Court states that "(c) Extinction of the penal action does not carry with it extinction of the civil, unless the extinction proceeds from a declaration in a final judgment that the fact from which the civil might arise did not exist." Otherwise stated, unless the act from which the civil liability arises is declared to be nonexistent in the final judgment, the extinction of the criminal liability will not carry with it the extinction of the civil liability. Thus, if a person is charged with homicide and successfully pleaded self-defense, his acquittal by reason thereof will extinguish his civil liability. He has not incurred any criminal liability. On the other hand, if his acquittal is, for instance, due to the fact that he was not sufficiently Identified to be the assailant, a civil action for damages may be maintained. His acquittal is not due to non-existence of the crime from which civil liability might arise, but because he was not, in the eyes of the court, sufficiently Identified as the perpetrator of the crime. In People vs. Buan, 22 SCRA 1383, this Court, speaking through Mr. Justice J.B.L. Reyes, said that "the essence of the quasi offense of criminal negligence under Article 365 of the Revised Penal Code lies in the execution of an imprudent or negligent act that, if intentionally done, would be punishable as a felony. The law penalizes the negligent or careless act, not the result thereof. The gravity of the consequence is only taken into account to determine the penalty; it does not qualify the substance of the offense. The charge against Felardo Paje was not for homicide and physical injuries but for reckless imprudence or criminal negligence resulting in homicide (death of Clemente Marcia) and physical injuries suffered by Edgar Marcia and Renato Yap. They are not one of the three (3) crimes mentioned in Article 33 of the Civil Code and, therefore, no civil action shall proceed independently of the criminal prosecution. The case of Laura Corpus vs. Felardo Paje (supra) is the same as the case at bar, the only difference being the party-plaintiffs or petitioners. Clemente Marcia died, while Edgar Marcia and Renato Yap suffered physical injuries in the same

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accident. The heirs of Clemente Marcia filed Civil Case No. 6880 in the Court of First Instance of Rizal against herein respondents. The case was dismissed and appealed directly to this Court.1äwphï1.ñët The order appealed from was affirmed, as recorded in Laura Corpus vs. Felardo Paje, 28 SCRA 1062. The case at bar (Civil Case No. 4425) was filed by Edgar Marcia and Renato Yap against the same defendants in the Court of First Instance of Rizal. After trial, the case was dismissed and affirmed by the Court of Appeals. It is now before Us on appeal by certiorari from the said decision. Relative to the admissibility of the documents, to wit; (a) the records of the criminal case against Paje, (b) the decision of the Court of Appeals acquitting the latter; and (c) copy of the brief of the respondent Paje as accused-appellant, suffice it to say that since petitioners' cause of action is based on the alleged recklessness and imprudence of respondent Paje it necessarily follows that his acquittal by the Court of Appeals and its declaration that the mishap was "pure accident" are relevant and material evidence. In fact, the lower court may even take judicial notice of the decision of the Court of Appeals in said criminal case. Finally, with respect to the findings of fact of the Court of Appeals, well settled is the rule that the same are final and cannot be disturbed by Us, particularly where they are based, as they are in the case at bar, upon substantial evidence. WHEREFORE, the decision appealed from is hereby AFFIRMED in toto. With costs against the petitioners. SO ORDERED. G.R. No. L-51183 December 21, 1983 CARMEN L. MADEJA, petitioner, vs. HON. FELIX T. CARO and EVA ARELLANO-JAPZON, respondents. Ernesto P. Miel for petitioner. Gorgonio T. Alvarez for respondents. ABAD SANTOS, J.:ñé+.£ªwph!1 In Criminal Case No. 75-88 of the defunct Court of First Instance of Eastern Samar, DR. EVA A. JAPZON is accused of homicide through reckless imprudence for the death of Cleto Madeja after an appendectomy. The complaining witness is the widow of the deceased, Carmen L. Madeja. The information states that: "The offended party Carmen L. Madeja reserving her right to file a separate civil action for damages." (Rollo, p. 36.) The criminal case still pending, Carmen L. Madeja sued Dr. Eva A. Japzon for damages in Civil Case No. 141 of the same court. She alleged that her husband died because of the gross negligence of Dr. Japzon. The respondent judge granted the defendant's motion to dismiss which motion invoked Section 3(a) of Rule 111 of the Rules of Court which reads:têñ.£îhqw⣠Sec. 3. Other civil actions arising from offenses. — In all cases not included in the preceding section the following rules shall be observed: (a) Criminal and civil actions arising from the same offense may be instituted separately, but after the criminal action has been commenced the civil action can not be instituted until final judgment has been rendered in the criminal action. ...

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According to the respondent judge, "under the foregoing Sec. 3 (a), Rule 111, New Rules of Court, the instant civil action may be instituted only after final judgment has been rendered in the criminal action." (Rollo, p. 33.) The instant petition which seeks to set aside the order of the respondent judge granting the defendant's motion to dismiss Civil Case No. 141 is highly impressed with merit. Section 2, Rule 111 of the Rules of Court in relation to Article 33 of the Civil Code is the applicable provision. The two enactments are quoted hereinbelow:têñ.£îhqw⣠Sec. 2. Independent civil action. — In the cases provided for in Articles 31,32, 33, 34 and 2177 of the Civil Code of the Philippines, an independent civil action entirely separate and distinct from the criminal action, may be brought by the injured party during the pendency of the criminal case, provided the right is reserved as required in the preceding section. Such civil action shall proceed independently of the criminal prosecution, and shall require only a preponderance of evidence." (Rule 111, Rules of Court.) Art. 33. In cases of defamation, fraud, and physical injuries, a civil action for damages, entirely separate and distinct from the criminal action, may be brought by the injured party. Such civil action shall proceed independently of the criminal prosecution, and shall require only a preponderance of evidence. (Civil Code,) There are at least two things about Art. 33 of the Civil Code which are worth noting, namely: 1. The civil action for damages which it allows to be instituted is ex-delicto. This is manifest from the provision which uses the expressions "criminal action" and "criminal prosecution." This conclusion is supported by the comment of the Code Commission, thus:têñ.£îhqw⣠The underlying purpose of the principle under consideration is to allow the citizen to enforce his rights in a private action brought by him, regardless of the action of the State attorney. It is not conducive to civic spirit and to individual self-reliance and initiative to habituate the citizens to depend upon the government for the vindication of their own private rights. It is true that in many of the cases referred to in the provision cited, a criminal prosecution is proper, but it should be remembered that while the State is the complainant in the criminal case, the injured individual is the one most concerned because it is he who has suffered directly. He should be permitted to demand reparation for the wrong which peculiarly affects him. (Report, p. 46.) And Tolentino says:têñ.£îhqw⣠The general rule is that when a criminal action is instituted, the civil action for recovery of civil liability arising from the offense charged is impliedly instituted with the criminal action, unless the offended party reserves his right to institute it separately; and after a criminal action has been commenced, no civil action arising from the same offense can be prosecuted. The present articles creates an exception to this rule when the offense is defamation, fraud, or physical injuries, In these cases, a civil action may be filed independently of the criminal action, even if there has been no reservation made by the injured party; the law itself in this article makes such reservation; but the claimant is not given the right to determine whether the civil action should be scheduled or suspended until the criminal action has been terminated. The result of the civil action is thus independent of the result of the civil action." (I Civil Code, p. 144 [1974.])

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2. The term "physical injuries" is used in a generic sense. It is not the crime of physical injuries defined in the Revised Penal Code. It includes not only physical injuries but consummated, frustrated and attempted homicide.têñ.£îhqw⣠The Article in question uses the words 'defamation', 'fraud' and 'physical injuries.' Defamation and fraud are used in their ordinary sense because there are no specific provisions in the Revised Penal Code using these terms as means of offenses defined therein, so that these two terms defamation and fraud must have been used not to impart to them any technical meaning in the laws of the Philippines, but in their generic sense. With this apparent circumstance in mind, it is evident that the terms 'physical injuries' could not have been used in its specific sense as a crime defined in the Revised Penal Code, for it is difficult to believe that the Code Commission would have used terms in the same article-some in their general and another in its technical sense. In other words, the term 'physical injuries' should be understood to mean bodily injury, not the crime of physical injuries, bacause the terms used with the latter are general terms. In any case the Code Commission recommended that the civil action for physical injuries be similar to the civil action for assault and battery in American Law, and this recommendation must hove been accepted by the Legislature when it approved the article intact as recommended. If the intent has been to establish a civil action for the bodily harm received by the complainant similar to the civil action for assault and battery, as the Code Commission states, the civil action should lie whether the offense committed is that of physical injuries, or frustrated homicide, or attempted homicide, or even death," (Carandang vs. Santiago, 97 Phil. 94, 96-97 [1955].) Corpus vs. Paje, L-26737, July 31, 1969, 28 SCRA 1062, which states that reckless imprudence or criminal negligence is not included in Article 33 of the Civil Code is not authoritative. Of eleven justices only nine took part in the decision and four of them merely concurred in the result. In the light of the foregoing, it is apparent that the civil action against Dr. Japzon may proceed independently of the criminal action against her. WHEREFORE, the petition is hereby granted; the order dismissing Civil Case No. 141 is hereby set aside; no special pronouncement as to costs. SO ORDERED. 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., ABDULRAHMAN R.T. LINZAG, IBRAHIM F.P. ARCILLA, ABDUL RASHID DE GUZMAN, AL-FARED DA SILVA and IBRAHIM B.A. JUNIO, respondents. BELLOSILLO, J.: I may utterly detest what you write, but I shall fight to the death to make it possible for you to continue writing it. —

Voltaire

VOLTAIRE'S PONTIFICAL VERSE bestirs once again the basic liberties to free speech and free press — liberties that belong as well, if not more, to those who

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question, who do not conform, who differ. For the ultimate good which we all strive to achieve for ourselves and our posterity can better be reached by a free exchange of ideas, where the best test of truth is the power of the thought to get itself accepted in the competition of the free market — not just the ideas we desire, but including those thoughts we despise.1 ISLAMIC DA'WAH COUNCIL OF THE PHILIPPINES, INC., a local federation of more than seventy (70) Muslim religious organizations, and individual Muslims ABDULRAHMAN R.T. LINZAG, IBRAHIM F.P. ARCILLA, ABDUL RASHID DE GUZMAN, AL-FARED DA SILVA and IBRAHIM B.A. JUNIO, filed in the Regional Trial Court of Manila a complaint for damages in their own behalf and as a class suit in behalf of the Muslim members nationwide against MVRS PUBLICATIONS, INC., MARS C. LACONSAY, MYLA C. AGUJA and AGUSTINO G. BINEGAS, JR., arising from an article published in the 1 August 1992 issue of Bulgar, a daily tabloid. 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'." The complaint alleged that the libelous statement was insulting and damaging to the Muslims; that these words alluding to the pig as the God of the Muslims was not only published out of sheer ignorance but with intent to hurt the feelings, cast insult and disparage the Muslims and Islam, as a religion in this country, in violation of law, public policy, good morals and human relations; that on account of these libelous words Bulgar insulted not only the Muslims in the Philippines but the entire Muslim world, especially every Muslim individual in non-Muslim countries. MVRS PUBLICATIONS, INC., and AGUSTINO G. BINEGAS, JR., in their defense, contended that the article did not mention respondents as the object of the article and therefore were not entitled to damages; and, that the article was merely an expression of belief or opinion and was published without malice nor intention to cause damage, prejudice or injury to Muslims.2 On 30 June 1995 the trial court dismissed the complaint holding that the plaintiffs failed to establish their cause of action since the persons allegedly defamed by the article were not specifically identified — It must be noted that the persons allegedly defamed, the herein plaintiffs, were not identified with specificity. The subject article was directed at the Muslims without mentioning or identifying the herein plaintiffs x x x. It is thus apparent that the alleged libelous article refers to the larger collectivity of Muslims for which the readers of the libel could not readily identify the personalities of the persons defamed. Hence, it is difficult for an individual Muslim member to prove that the defamatory remarks apply to him. The evidence presented in this case failed to convince this court that, indeed, the defamatory remarks really applied to the herein plaintiffs.3 On 27 August 1998 the Court of Appeals reversed the decision of the trial court. It opined that it was "clear from the disputed article that the defamation was directed to all adherents of the Islamic faith. It stated that pigs were sacred and idolized as

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god by members of the Muslim religion. This libelous imputation undeniably applied to the plaintiff-appellants who are Muslims sharing the same religious beliefs." It added that the suit for damages was a "class suit" and that ISLAMIC DA'WAH COUNCIL OF THE PHILIPPINES, INC.'s religious status as a Muslim umbrella organization gave it the requisite personality to sue and protect the interests of all Muslims.4 Hence, the instant petition for review assailing the findings of the appellate court (a) on the existence of the elements of libel, (b) the right of respondents to institute the class suit, and, (c) the liability of petitioners for moral damages, exemplary damages, attorney's fees and costs of suit. Defamation, which includes libel and slander, means the offense of injuring a person's character, fame or reputation through false and malicious statements.5 It is that which tends to injure reputation or to diminish the esteem, respect, good will or confidence in the plaintiff or to excite derogatory feelings or opinions about the plaintiff.6 It is the publication of anything which is injurious to the good name or reputation of another or tends to bring him into disrepute.7 Defamation is an invasion of a relational interest since it involves the opinion which others in the community may have, or tend to have, of the plaintiff.8 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.10 Declarations made about a large class of people cannot be interpreted to advert to an identified or identifiable individual. Absent circumstances specifically pointing or alluding to a particular member of a class, no member of such class has a right of action11 without at all impairing the equally demanding right of free speech and expression, as well as of the press, under the Bill of Rights.12 Thus, in Newsweek, Inc. v. Intermediate Appellate Court,13 we dismissed a complaint for libel against Newsweek, Inc., on the ground that private respondents failed to state a cause of action since they made no allegation in the complaint that anything contained in the article complained of specifically referred to any of them. Private respondents, incorporated associations of sugarcane planters in Negros Occidental claiming to have 8,500 members and several individual members, filed a class action suit for damages in behalf of all sugarcane planters in Negros Occidental. The complaint filed in the Court of First Instance of Bacolod City alleged that Newsweek, Inc., committed libel against them by the publication of the article "Island of Fear" in its weekly newsmagazine allegedly depicting Negros Province as a place dominated by wealthy landowners and sugar planters who not only exploited the impoverished and underpaid sugarcane workers but also brutalized and killed them with impunity. Private respondents alleged that the article showed a deliberate and malicious use of falsehood, slanted presentation and/or misrepresentation of facts intended to put the sugarcane planters in a bad light, expose them to public ridicule, discredit and humiliation in the Philippines and abroad, and make them the objects of hatred, contempt and hostility of their agricultural workers and of the public in general. We ratiocinated — x x x where the defamation is alleged to have been directed at a group or class, it is essential that the statement must be so sweeping or all-embracing as to apply to every individual in that group or class, or sufficiently specific so that each

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individual in the class or group can prove that the defamatory statement specifically pointed to him, so that he can bring the action separately, if need be x x x x 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, 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. 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. In the present case, there was no fairly identifiable person who was allegedly injured by the Bulgar article. Since the persons allegedly defamed could not be identifiable, private respondents have no individual causes of action; hence, they cannot sue for a class allegedly disparaged. Private respondents must have a cause of action in common with the class to which they belong to in order for the case to prosper. 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." There is no injury to the reputation of the individual Muslims who constitute this community that can give rise to an action for group libel. Each reputation is personal in character to every person. Together, the Muslims do not have a single common reputation that will give them a common or general interest in the subject matter of the controversy. In Arcand v. The Evening Call Publishing Company,14 the United States Court of Appeals held that one guiding principle of group libel is that defamation of a large group does not give rise to a cause of action on the part of an individual unless it can be shown that he is the target of the defamatory matter. The rule on libel has been restrictive. In an American case,15 a person had allegedly committed libel against all persons of the Jewish religion. The Court held that there could be no libel against an extensive community in common law. In an English case, where libel consisted of allegations of immorality in a Catholic nunnery, the Court considered that if the libel were on the whole Roman Catholic Church generally, then the defendant must be absolved.16 With regard to the largest sectors in society, including religious groups, it may be generally concluded that no criminal action at the behest of the state, or civil action on behalf of the individual, will lie. In another case, the plaintiffs claimed that all Muslims, numbering more than 600 million, were defamed by the airing of a national television broadcast of a film depicting the public execution of a Saudi Arabian princess accused of adultery, and alleging that such film was "insulting and defamatory" to the Islamic religion.17 The United States District Court of the Northern District of California concluded that the plaintiffs' prayer for $20 Billion in damages arising from "an international conspiracy to insult, ridicule, discredit and abuse followers of Islam throughout the world, Arabs and the Kingdom of Saudi Arabia" bordered on the "frivolous," ruling that the plaintiffs had failed to demonstrate an actionable claim for defamation. The California Court stressed that the aim of the law on

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defamation was to protect individuals; a group may be sufficiently large that a statement concerning it could not defame individual group members.18 Philip Wittenberg, in his book "Dangerous Words: A Guide to the Law of Libel,"19 discusses the inappropriateness of any action for tortious libel involving large groups, and provides a succinct illustration: There are groupings which may be finite enough so that a description of the body is a description of the members. Here the problem is merely one of evaluation. Is the description of the member implicit in the description of the body, or is there a possibility that a description of the body may consist of a variety of persons, those included within the charge, and those excluded from it? A general charge that the lawyers in the city are shysters would obviously not be a charge that all of the lawyers were shysters. A charge that the lawyers in a local point in a great city, such as Times Square in New York City, were shysters would obviously not include all of the lawyers who practiced in that district; but a statement that all of the lawyers who practiced in a particular building in that district were shysters would be a specific charge, so that any lawyer having an office within that building could sue. 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. Not only does the group as such have no action; the plaintiff does not establish any personal reference to himself.20 At present, modern societal groups are both numerous and complex. The same principle follows with these groups: as the size of these groups increases, the chances for members of such groups to recover damages on tortious libel become elusive. 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.21 In the instant case, the Muslim community is too vast as to readily ascertain who among the Muslims were particularly defamed. The size of the group renders the reference as indeterminate and generic as a similar attack on Catholics, Protestants, Buddhists or Mormons would do. The word "Muslim" is descriptive of those who are believers of Islam, a religion divided into varying sects, such as the Sunnites, the Shiites, the Kharijites, the Sufis and others based upon political and theological distinctions. "Muslim" is a name which describes only a general segment of the Philippine population, comprising a heterogeneous body whose construction is not so well defined as to render it impossible for any representative identification. The Christian religion in the Philippines is likewise divided into different sects: Catholic, Baptist, Episcopalian, Presbyterian, Lutheran, and other groups the essence of which may lie in an inspired charlatan, whose temple may be a corner house in the fringes of the countryside. As with the Christian religion, so it is with other religions that represent the nation's culturally diverse people and minister to each one's spiritual needs. The Muslim population may be divided into smaller groups with varying agenda, from the prayerful conservative to the passionately radical. These divisions in the Muslim population may still be too large and ambiguous to provide a reasonable inference to any personality who can bring a case in an action for libel.

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The foregoing are in essence the same view scholarly expressed by Mr. Justice Reynato S. Puno in the course of the deliberations in this case. We extensively reproduce hereunder his comprehensive and penetrating discussion on group libel — Defamation is made up of the twin torts of libel and slander — the one being, in general, written, while the other in general is oral. In either form, defamation is an invasion of the interest in reputation and good name. This is a "relational interest" since it involves the opinion others in the community may have, or tend to have of the plaintiff. 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. Defamation requires that something be communicated to a third person that may affect the opinion others may have of the plaintiff. The unprivileged communication must be shown of a statement that would tend to hurt plaintiff's reputation, to impair plaintiff's standing in the community. Although the gist of an action for defamation is an injury to reputation, the focus of a defamation action is upon the allegedly defamatory statement itself and its predictable effect upon third persons. A statement is ordinarily considered defamatory if it "tend[s] to expose one to public hatred, shame, obloquy, contumely, odium, contempt, ridicule, aversion, ostracism, degradation or disgracex x x." The Restatement of Torts defines a defamatory statement as one that "tends to so harm the reputation of another as to lower him in the estimation of the community or to deter third persons from associating or dealing with him." Consequently as a prerequisite to recovery, it is necessary for the plaintiff to prove as part of his prima faciecase that the defendant (1) published a statement that was (2) defamatory (3) of and concerning the plaintiff. The rule in libel is that the action must be brought by the person against whom the defamatory charge has been made. In the American jurisdiction, no action lies by a third person for damages suffered by reason of defamation of another person, even though the plaintiff suffers some injury therefrom. For recovery in defamation cases, it is necessary that the publication be "of and concerning the plaintiff." Even when a publication may be clearly defamatory as to somebody, if the words have no personal application to the plaintiff, they are not actionable by him. If no one is identified, there can be no libel because no one's reputation has been injured x x x x In fine, in order for one to maintain an action for an alleged defamatory statement, it must appear that the plaintiff is the person with reference to whom the statement was made. This principle is of vital importance in cases where a group or class is defamed since, usually, the larger the collective, the more difficult it is for an individual member to show that he was the person at whom the defamation was directed. If the defamatory statements were directed at a small, restricted group of persons, they applied to any member of the group, and an individual member could maintain an action for defamation. When the defamatory language was used toward a small group or class, including every member, it has been held that the defamatory language referred to each member so that each could maintain an action. This small group or class may be a jury, persons engaged in certain

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businesses, professions or employments, a restricted subdivision of a particular class, a society, a football team, a family, small groups of union officials, a board of public officers, or engineers of a particular company. In contrast, if defamatory words are used broadly in respect to a large class or group of persons, and there is nothing that points, or by proper colloquium or innuendo can be made to apply, to a particular member of the class or group, no member has a right of action for libel or slander. Where the defamatory matter had no special, personal application and was so general that no individual damages could be presumed, and where the class referred to was so numerous that great vexation and oppression might grow out of the multiplicity of suits, no private action could be maintained. This rule has been applied to defamatory publications concerning groups or classes of persons engaged in a particular business, profession or employment, directed at associations or groups of association officials, and to those directed at miscellaneous groups or classes of persons. Distinguishing a small group — which if defamed entitles all its members to sue from a large group — which if defamed entitles no one to sue — is not always so simple. Some authorities have noted that in cases permitting recovery, the group generally has twenty five (25) or fewer members. However, there is usually no articulated limit on size. Suits have been permitted by members of fairly large groups when some distinguishing characteristic of the individual or group increases the likelihood that the statement could be interpreted to apply individually. For example, a single player on the 60 to 70 man Oklahoma University football team was permitted to sue when a writer accused the entire team of taking amphetamines to "hop up" its performance; the individual was a fullback, i.e., a significant position on the team and had played in all but two of the team's games. A prime consideration, therefore, is the public perception of the size of the group and whether a statement will be interpreted to refer to every member. The more organized and cohesive a group, the easier it is to tar all its members with the same brush and the more likely a court will permit a suit from an individual even if the group includes more than twenty five (25) members. At some point, however, increasing size may be seen to dilute the harm to individuals and any resulting injury will fall beneath the threshold for a viable lawsuit. x x x x There are many other groupings of men than those that are contained within the foregoing group classifications. There are all the religions of the world, there are all the political and ideological beliefs; there are the many colors of the human race. Group defamation has been a fertile and dangerous weapon of attack on various racial, religious and political minorities. Some states, therefore, have passed statutes to prevent concerted efforts to harass minority groups in the United States by making it a crime to circulate insidious rumors against racial and religious groups. Thus far, any civil remedy for such broadside defamation has been lacking. There have been numerous attempts by individual members to seek redress in the courts for libel on these groups, but very few have succeeded because it felt that the groups are too large and poorly defined to support a finding that the plaintiff was singled out for personal attack x x x x (citations omitted). Our conclusion therefore is that the statements published by petitioners in the instant case did not specifically identify nor refer to any particular individuals who were purportedly the subject of the alleged libelous publication. Respondents can

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scarcely claim to having been singled out for social censure pointedly resulting in damages. A 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. That opinion invokes Chaplinsky v. New Hampshire22 where the U.S. Supreme Court held that words heaping extreme profanity, intended merely to incite hostility, hatred or violence, have no social value and do not enjoy constitutional protection; and Beauharnais v. Illinois23 where it was also ruled that hate speech which denigrates a group of persons identified by their religion, race or ethnic origin defames that group and the law may validly prohibit such speech on the same ground as defamation of an individual. We do not agree to the contrary view articulated in the immediately preceding paragraph. Primarily, an "emotional distress" tort action is personal in nature, i.e., it is a civil action filed by an individual24 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. Also, the purported damage caused by the article, assuming there was any, falls under the principle of relational harm — which includes harm to social relationships in the community in the form of defamation; as distinguished from the principle of reactive harm — which includes injuries to individual emotional tranquility in the form of an infliction of emotional distress. In their complaint, respondents clearly asserted an alleged harm to the standing of Muslims in the community, especially to their activities in propagating their faith in Metro Manila and in other non-Muslim communities in the country.25It is thus beyond cavil that the present case falls within the application of the relational harm principle of tort actions for defamation, rather than the reactive harm principle on which the concept of emotional distress properly belongs. Moreover, under the Second Restatement of the Law, 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. The defendant's actions must have been so terrifying as naturally to humiliate, embarrass or frighten the plaintiff.27 Generally, conduct will be found to be actionable where the recitation of the facts to an average member of the community would arouse his resentment against the actor, and lead him or her to exclaim, "Outrageous!" as his or her reaction.28 "Emotional distress" means any highly unpleasant mental reaction such as extreme grief, shame, humiliation, embarrassment, anger, disappointment, worry, nausea, mental suffering and anguish, shock, fright, horror, and chagrin.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.30 The plaintiff is required to show, among other things, that he or she has suffered emotional distress

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so severe that no reasonable person could be expected to endure it; severity of the distress is an element of the cause of action, not simply a matter of damages.31 Any party seeking recovery for mental anguish must prove more than mere worry, anxiety, vexation, embarrassment, or anger. Liability does not arise from mere insults, indignities, threats, annoyances, petty expressions, or other trivialities. In determining whether the tort of outrage had been committed, a plaintiff is necessarily expected and required to be hardened to a certain amount of criticism, rough language, and to occasional acts and words that are definitely inconsiderate and unkind; the mere fact that the actor knows that the other will regard the conduct as insulting, or will have his feelings hurt, is not enough.32 Hustler Magazine v. Falwell33 illustrates the test case of a civil action for damages on intentional infliction of emotional distress. A parody appeared in Hustler magazine featuring the American fundamentalist preacher and evangelist Reverend Jerry Falwell depicting him in an inebriated state having an incestuous, sexual liaison with his mother in an outhouse. Falwell sued Hustler and its publisher Larry Flynt for damages. The United States District Court for the Western District of Virginia ruled that the parody was not libelous, because no reasonable reader would have understood it as a factual assertion that Falwell engaged in the act described. The jury, however, awarded $200,000 in damages on a separate count of "intentional infliction of emotional distress," a cause of action that did not require a false statement of fact to be made. The United States Supreme Court in a unanimous decision overturned the jury verdict of the Virginia Court and held that Reverend Falwell may not recover for intentional infliction of emotional distress. It was argued that the material might be deemed outrageous and may have been intended to cause severe emotional distress, but these circumstances were not sufficient to overcome the free speech rights guaranteed under the First Amendment of the United States Constitution. Simply stated, an intentional tort causing emotional distress must necessarily give way to the fundamental right to free speech. It must be observed that although Falwell was regarded by the U.S. High Court as a "public figure," he was anindividual particularly singled out or identified in the parody appearing on Hustler magazine. Also, the emotional distress allegedly suffered by Reverend Falwell involved a reactive interest — an emotional response to the parody which supposedly injured his psychological well-being. Verily, our position is clear that the conduct of petitioners was not extreme or outrageous. Neither was the emotional distress allegedly suffered by respondents so severe that no reasonable person could be expected to endure it. There is no evidence on record that points to that result. Professor William Prosser, views tort actions on intentional infliction of emotional distress in this manner34 — There is virtually unanimous agreement that such ordinary defendants are not liable for mere insult, indignity, annoyance, or even threats, where the case is lacking in other circumstances of aggravation. The reasons are not far to seek. Our manners, and with them our law, have not yet progressed to the point where we are able to afford a remedy in the form of tort damages for all intended mental disturbance. Liability of course cannot be extended to every trivial indignity x x x x The plaintiff must necessarily be expected and required to be hardened to a certain amount of rough language, and to acts that are definitely inconsiderate and unkind x x x The plaintiff cannot recover merely because of hurt feelings.

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Professor Calvert Magruder reinforces Prosser with this succinct observation, viz:35 There is no occasion for the law to intervene in every case where someone's feelings are hurt. There must still be freedom to express an unflattering opinion, and some safety valve must be left through which irascible tempers may blow off relatively harmless steam. Thus, it is evident that even American courts are reluctant to adopt a rule of recovery for emotional harm that would "open up a wide vista of litigation in the field of bad manners," an area in which a "toughening of the mental hide" was thought to be a more appropriate remedy.36 Perhaps of greater concern were the questions of causation, proof, and the ability to accurately assess damages for emotional harm, each of which continues to concern courts today.37 In this connection, the doctrines in Chaplinsky and Beauharnais had largely been superseded by subsequent First Amendment doctrines. Back in simpler times in the history of free expression the Supreme Court appeared to espouse a theory, known as the Two-Class Theory, that treated certain types of expression as taboo forms of speech, beneath the dignity of the First Amendment. The most celebrated statement of this view was expressed in Chaplinsky: There are certain well-defined and narrowly limited classes of speech, the prevention and punishment of which have never been thought to raise any Constitutional problem. These include the lewd and obscene, the profane, the libelous, and the insulting or "fighting" words — those which by their very utterance inflict injury or tend to incite an immediate breach of the peace. It has been well observed that such utterances are no essential part of any exposition of ideas, and are of such slight social value as a step to truth that any benefit that may be derived from them is clearly outweighed by the social interest in order and morality. Today, however, the theory is no longer viable; modern First Amendment principles have passed it by. American courts no longer accept the view that speech may be proscribed merely because it is "lewd," "profane," "insulting" or otherwise vulgar or offensive.38 Cohen v. California39 is illustrative: Paul Robert Cohen wore a jacket bearing the words "Fuck the Draft" in a Los Angeles courthouse in April 1968, which caused his eventual arrest. Cohen was convicted for violating a California statute prohibiting any person from "disturb[ing] the peace x x x by offensive conduct." The U.S. Supreme Court conceded that Cohen's expletive contained in his jacket was "vulgar," but it concluded that his speech was nonetheless protected by the right to free speech. It was neither considered an "incitement" to illegal action nor "obscenity." It did not constitute insulting or "fighting" words for it had not been directed at a person who was likely to retaliate or at someone who could not avoid the message. In other words, no one was present in the Los Angeles courthouse who would have regarded Cohen's speech as a direct personal insult, nor was there any danger of reactive violence against him. No specific individual was targeted in the allegedly defamatory words printed on Cohen's jacket. The conviction could only be justified by California's desire to exercise the broad power in preserving the cleanliness of discourse in the public sphere, which the U.S. Supreme Court refused to grant to the State, holding that no objective distinctions can be made between vulgar and nonvulgar speech, and that the emotive elements of speech are just as essential in the exercise of this right as the purely cognitive. As Mr. Justice Harlan so eloquently wrote: "[O]ne man's vulgarity is another man's lyric x x x words are often chosen as much for their

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emotive as their cognitive force."40 With Cohen, the U.S. Supreme Court finally laid the Constitutional foundation for judicial protection of provocative and potentially offensive speech. Similarly, libelous speech is no longer outside the First Amendment protection. Only one small piece of the Two-Class Theory in Chaplinsky survives — U.S. courts continue to treat "obscene" speech as not within the protection of the First Amendment at all. With respect to the "fighting words" doctrine, while it remains alive it was modified by the current rigorous clear and present danger test.41 Thus, in Cohen the U.S. Supreme Court in applying the test held that there was no showing that Cohen's jacket bearing the words "Fuck the Draft" had threatened to provoke imminent violence; and that protecting the sensibilities of onlookers was not sufficiently compelling interest to restrain Cohen's speech. Beauharnais, which closely followed the Chaplinsky doctrine, suffered the same fate as Chaplinsky. Indeed, whenBeauharnais was decided in 1952, the Two-Class Theory was still flourishing. While concededly the U.S. High Tribunal did not formally abandon Beauharnais, the seminal shifts in U.S. constitutional jurisprudence substantially undercut Beauharnais and seriously undermined what is left of its vitality as a precedent. Among the cases that dealt a crushing impact on Beauharnais and rendered it almost certainly a dead letter case law are Brandenburg v. Ohio,42 and, again, Cohen v. California.43 These decisions recognize a much narrower set of permissible grounds for restricting speech than did Beauharnais.44 In Brandenburg, appellant who was a leader of the Ku Klux Klan was convicted under the Ohio Criminal Syndicalism Statute for advocating the necessity, duty and propriety of crime, sabotage, violence, or unlawful methods of terrorism as a means of accomplishing industrial or political reforms; and for voluntarily assembling with a group formed to teach or advocate the doctrines of criminal syndicalism. Appellant challenged the statute and was sustained by the U.S. Supreme Court, holding that the advocacy of illegal action becomes punishable only if such advocacy is directed to inciting or producing imminent lawless action and is likely to incite or produce such action.45 Except in unusual instances, Brandenburg protects the advocacy of lawlessness as long as such speech is not translated into action. The importance of the Brandenburg ruling cannot be overemphasized. Prof. Smolla affirmed that "Brandenburgmust be understood as overruling Beauharnais and eliminating the possibility of treating group libel under the same First Amendment standards as individual libel."46 It may well be considered as one of the lynchpins of the modern doctrine of free speech, which seeks to give special protection to politically relevant speech. In any case, respondents' lack of cause of action cannot be cured by the filing of a class suit. As correctly pointed out by Mr. Justice Jose C. Vitug during the deliberations, "an element of a class suit is the adequacy of representation. In determining the question of fair and adequate representation of members of a class, the court must consider (a) whether the interest of the named party is coextensive with the interest of the other members of the class; (b) the proportion of those made parties as it so bears to the total membership of the class; and, (c) any other factor bearing on the ability of the named party to speak for the rest of the class.47 The rules require that courts must make sure that the persons intervening should be sufficiently numerous to fully protect the interests of all concerned. In the present

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controversy, Islamic Da'wah Council of the Philippines, Inc., seeks in effect to assert the interests not only of the Muslims in the Philippines but of the whole Muslim world as well. Private respondents obviously lack the sufficiency of numbers to represent such a global group; neither have they been able to demonstrate the identity of their interests with those they seek to represent. Unless it can be shown that there can be a safe guaranty that those absent will be adequately represented by those present, a class suit, given its magnitude in this instance, would be unavailing."48 Likewise on the matter of damages, we agree that "moral damages may be recovered only if the plaintiff is able to satisfactorily prove the existence of the factual basis for the damages and its causal connection with the acts complained of,49 and so it must be, as moral damages although incapable of pecuniary estimation are designed not to impose a penalty but to compensate for injury sustained and actual damages suffered.50 Exemplary damages, on the other hand, may only be awarded if claimant is able to establish his right to moral, temperate, liquidated or compensatory damages.51 Unfortunately, neither of the requirements to sustain an award for either of these damages would appear to have been adequately established by respondents." 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. It need not be stressed that this Court has no power to determine which is proper religious conduct or belief; neither does it have the authority to rule on the merits of one religion over another, nor declare which belief to uphold or cast asunder, for the validity of religious beliefs or values are outside the sphere of the judiciary. Such matters are better left for the religious authorities to address what is rightfully within their doctrine and realm of influence. 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 where "[a]ll ideas are treated equal in the eyes of the First Amendment — even those ideas that are universally condemned and run counter to constitutional principles."52 Under the right to free speech, "there is no such thing as a false idea. However pernicious an opinion may seem, we depend for its correction not on the conscience of judges and juries but on the competition of other ideas."53 Denying certiorari and affirming the appellate court decision would surely create a chilling effect on the constitutional guarantees of freedom of speech, of expression, and of the press. WHEREFORE, the petition is GRANTED. The assailed Decision of the Court of Appeals dated 27 August 1998 is REVERSED and SET ASIDE, and the Decision of the RTC-Br. 4, Manila, dismissing the complaint for lack of merit, is REINSTATED and AFFIRMED. No pronouncement as to costs. SO ORDERED.

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G.R. No. L-37733 September 30, 1982 ALMARIO T. SALTA, petitioner, vs. HON. JUDGE JESUS DE VEYRA, in his capacity as Presiding Judge of the CFI of Manila, Branch XIV and PHILIPPINE NATIONAL BANK, respondents. G.R. No. L-38035 September 30, 1982 PHILIPPINE NATIONAL BANK, petitioner, vs. HON. AMANTE P. PURISIMA, as Judge of the Court of First Instance of Manila, Branch VII and ALMARIO SALTA, respondents. Dakila F. Castro & Associates for petitioner. Nestor L. Kalaw, Edgardo M. Magtalas and Juan C. Gatmaitan for respondents, DE CASTRO, J.: In these two cases, the only issue to be resolved is whether a decision of acquittal in a criminal case operates to dismiss a separate civil action filed on the basis of the same facts as alleged in the criminal case, which is for violation of Republic Act No. 3019, otherwise known as the Anti-Graft and Corrupt Practices Act. The petitioner, Almario T. Salta, in G.R. No. L-37733, takes the affirmative stand on the issue as above indicated, as he made manifest in his motion to dismiss Civil Case No. 79583, of the CFI of Manila, Branch XIV, which was, however, denied by Hon. Jesus de Veyra, presiding. In a similar motion, aforementioned petitioner sought to dismiss another civil case (Civil Case No. 88343), pending before Branch VII of the same CFI of Manila, presided over by Hon. Amante Purisima who granted the motion to dismiss. We have, therefore, the unedifying spectacle of two cases involving the same issue disposed of by two judges in a manner directly in opposition of each other. For a uniform ruling that would authoritatively settle this regrettable conflict of opinion, the two cases have been consolidated for a single decision. For purposes of convenience, however, although the petitioner in G.R. No. L-37733, Almario T. Salta, is the private respondent in the other case, G.R. No. L-38035, in which the petitioner is the Philippine National Bank, We shall refer in this decision to Salta as "petitioner," and the PNB, as respondent bank." Petitioner was an employee of the PNB assigned as Manager of the Malolos' branch. As such, his duty was, among others, to himself grant loans, or only to recommend the granting of loans, depending on the amount of the loan applied for. In the performance of this particular duty, he is supposed to exercise care and prudence, and with utmost diligence, observe the policies, rules and regulations of the bank. In disregard of the pertinent rules, regulations and policies of the respondent bank, petitioner indiscriminately granted certain loans mentioned in the complaints filed by PNB, in a manner characterized by negligence, fraud and manifest partiality, and upon securities not commensurate with the amount of the loans. This is how the respondent bank found petitioner to have discharged his duties as branch manager of the bank, and so it filed a civil action in the CFI of Manila (Civil Case No. 79583, Branch XIV) on April 22, 1970, and another case (Civil Case No. 88343, Branch VII) on September 23, 1972, to recover losses the bank suffered. At the same time the bank caused to be filed, based on the same acts, a criminal case

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with the Circuit Criminal Court of the Fifth Judicial District at San Fernando, Pampanga, Criminal Case No. CCCV-668, for violation of the Anti-Graft and Corrupt Practices Act. In the criminal case, the Court, on motion to dismiss filed by the defense, after the prosecution has rested, granted the motion in a 64-page Resolution, the dispositive portion of which reads: CONFORMABLY WITH ALL THE FOREGOING, therefore, the Motion to Dismiss (Demurrer) to Evidence) should be as it is hereby granted and accused ALMARIO T. SALTA ACQUITTED of the offense charged in the Information the prosecution having failed to prove the essential ingredience and/or elements of the crime charged,. with costs de oficio. 1 With his acquittal in the criminal case, petitioner filed Motions to Dismiss in each of the two civil cases, based on Section 3(c), Rule I I I of the Revised Rules of Court which provides: (c) extinction of the penal action does not carry with it extinction of the civil, unless the extinction proceeds from a declaration in a final judgment that the fact from which the civil might arise did not exist. ... 2 It is in the resolution of the motions to dismiss that Judges de Veyra and Purisima of the CFI of Manila took diametrically opposing views, the former denying the motion, the latter granting it. We sustain the order denying the motion to dismiss as issued by Judge de Veyra, which, for its brevity, but clear and convincing, We quote as follows: Having been acquitted by the Circuit Court of the charges of violation of the Anti-Graft Law, Defendant now seeks the dismissal of the civil case which arose from the same set of facts. The motion to dismiss must be denied for the reason that acquittal in the criminal case will not be an obstacle for the civil case to prosper unless in the criminal case the Court makes a finding that even civilly the accused would not be liable-there is no such a finding. Apart from this, Plaintiff in this present civil case bases its case either on fraud or negligence-evidence that only requires a preponderance, unlike beyond reasonable doubt which is the requisite in criminal cases. The motion to dismiss is, therefore, denied for lack of merit. 3 To begin with, the filing in this case of a civil action separate from the criminal action is fully warranted under the provision of Article 33 of the New Civil Code. 4 The criminal case is for the prosecution of an offense the main element of which is fraud, one of the kinds of crime mentioned in the aforecited provision. Based on the same acts for which the criminal action was filed, the civil actions very clearly alleged fraud and negligence as having given rise to the cause of action averred in the complaints. It needs hardly any showing to demonstrate this fact, which petitioner disputes, particularly as to the sufficiency of the allegation of fraud in the civil complaints. Definitely, We hold that the following allegation in the complaints unmistakably shows that the complaints do contain sufficient averment of fraud: 13. That there was fraud committed by the defendant in granting the aforesaid loans which rendered him liable for his acts, which fraud is positively and easily Identifiable in the manner and scheme aforementioned. 5 That there is allegation of negligence is also unmistakably shown when the complaint states that "the defendant as manager of Malolos Branch, in gross violation of the bank rules and regulations, and without exercising necessary

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prudence, ... extended a number of credit accommodations . . ." 6 On this allegation of negligence alone, the civil case may be maintained as an entirely independent action from the criminal case. Consequently, Section 3(c), Rule III of the Revised Rules of Court has no application thereto. The ruling in the case of PNB vs. Bagamaspad, 7 involving the same respondent herein, and also against its branch manager, unherringly charts the course to be followed in the final resolution of these cases. Thus - The trial court based in the civil liability the appellants herein on the provisions of Article 1718 and 1719 of the Civil Code, defining and enumerating the duties and obligations of an agent and his liability for failure to comply with such duty.. . . A careful study and consideration of the record, however, convinces us and we agree with the trial court that the defendants-appellants have not only violated instructions of the plaintiff Bank, including things which the bank wanted done or not done, all of which were fully understood by them but they (appellants) also violated standing regulations regarding the granting of loans; and what is more, thru their carelessness, laxity and negligence, they allowed bans to be granted to persons who were not entitled to secure loans. 8 If petitioner's civil liability is, as alleged in the complaint, based on negligence, apart from the averment of fraud, then on the strength of the aforesaid ruling, the civil action can be maintained regardless of the outcome of the criminal action. The opinion of former Justice J.B.L. Reyes in Dionisio vs. Alvendia 9 is not only enlightening, but authoritative. Thus — . . . in the case of an independent civil actions under the Civil Code, the result of the criminal case, whether acquittal or conviction, would be entirety irrelevant to the civil action. This seems to be the spirit of the law when it decided to make these actions 'entirely separate and distinct' from the criminal action (Articles 22, 33, 34 and 2177). Hence in these cases, I think Rule 107 Sec. l(d) does not apply. 10 It is significant to note that under Article 31 11 of the New Civil Code, it is made clear that the civil action permitted therein to be filed separately from the criminal action may proceed independently of the criminal proceedings "regardless of the result of the latter." It seems perfectly reasonable to conclude that the civil actions mentioned in Article 33, permitted in the same manner to be filed separately from the criminal case, may proceed similarly regardless of the result of the criminal case. Indeed, when the law has allowed a civil case related to a criminal case, to be filed separately and to proceed independently even during the pendency of the latter case, the intention is patent to make the court's disposition of the criminal case of no effect whatsoever on the separate civil case. This must be so because the offenses specified in Article 33 are of such a nature, unlike other offenses not mentioned, that they may be made the subject of a separate civil action because of the distinct separability of their respective juridical cause or basis of action. This is clearly illustrated in the case of swindling, a specie of an offense committed by means of fraud, where the civil case may be filed separately and proceed independently of the criminal case, regardless of the result of the latter. The wisdom of the provision of Article 33 of the New Civil Code is to be found in the fact that when the civil action is reserved to be filed separately, the criminal case is prosecuted by the prosecuting officer alone without intervention from a private counsel representing the interest of the offended party. It is but just that when, as in the present instance, the prosecution of the criminal case is left to the

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government prosecutor to undertake, any mistake or mishanding of the case committed by the latter should not work to the prejudice of the offended party whose interest would thus be protected by the measure contemplated by Article 33 and Article 2177 12 of the New Civil Code. Prescinding from the foregoing, it should be stated with emphasis, for its decisive effect on how the issue raised in this case should be disposed of, that in no manner may the resolution of the Circuit Criminal Court be read as positively stating that the fact from which the civil action might arise did not exist, as required in the provision relied upon by petitioner, Section 3(c), Rule III of the Revised Rules of Court. As Judge de Veyra put it, "acquittal in the criminal case will not be an obstacle for the civil case to prosper unless in the criminal case the Court makes a finding that even civilly, the accused would not be liable-there is no such finding." There, indeed, could not be such finding because the criminal court, aware that the civil case is not before it, would be acting in excess of jurisdiction if it were to make any pronouncement in effect disposing of a case pending before another court, over which it had not acquired jurisdiction. Even if this were authorized by the Rules of Court, the validity of such rule would be open to serious doubt as it would be affecting a matter of jurisdiction, which is substantive in character, considering the constitutional limitation of the rule-making power of the Supreme Court, that said rules should not increase or diminish substantive rights. WHEREFORE, the order denying the motion to dismiss issued in Civil Case No. 79583 of the Court of First Instance of Manila (G. R. No. L-37733) is affirmed, while the order granting a similar motion in Civil Case No. 88343 of the same court (G. R. No. L-38035) is reversed. Let the records of these two (2) cases be remanded to their respective courts of origin for proper further proceedings. No costs. SO ORDERED. G.R. No. L-26737 July 31, 1969 LAURA CORPUS, and the minors RICARDO, TERESITA and CORAZON, all surnamed MARCIA and represented by their mother LAURA CORPUS, plaintiffs-appellants, vs. FELARDO PAJE and THE VICTORY LINER TRANSPORTATION CO., INC., defendants-appellees. Crispin D. Baizas and Associates for plaintiffs-appellants. Flores, Macapagal, Ocampo and Balbastro for defendants-appellees. CAPISTRANO, J.: This is a direct appeal on questions of law from an order of the Court of First Instance of Rizal dismissing the complaint in Civil Case No. 6880 of that court. On December 23, 1956, a passenger bus of the Victory Liner Transportation Co., Inc., driven by Felardo Paje, collided within the municipality of Lubao, Pampanga, with a jeep driven by Clemente Marcia, resulting in the latter's death and in physical injuries to two other persons. An information for homicide and double serious physical injuries through reckless imprudence was filed against Felardo Paje in the Court First Instance of Pampanga. The heirs of Clemente Marcia reserved their right to institute a separate civil action for damages. On November 7, 1960, the accused, Felardo Paje, was found guilty

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and convicted of the crime charged in the information. Said defendant appealed the judgment of conviction to the Court of Appeals. On November 21, 1961, while defendant's appeal was pending decision in the Court of Appeals, Clemente Marcia's heirs, namely, his widow, Laura Corpus, and their minor children, instituted in the Court of First Instance of Rizal a separate civil action (Civil Case No. 6880) for damages based upon the criminal act of reckless imprudence against Felardo Paje and the Victory Liner Transportation Co., Inc., defendants, praying that said defendants be ordered to pay jointly and severally the amounts of damages claimed by the plaintiffs. On November 9, 1962, the Court of Appeals promulgated its decision in the appeal of Felardo Paje reversing the appealed judgment and acquitting the appellant after finding that the reckless imprudence charged against him did not exist, and that the collision was a case of pure accident. On December 29, 1962, the defendants filed in the civil action a motion to dismiss on the ground that the action was barred by the acquittal by the Court of Appeals of the defendant Felardo Paje in the criminal action. The motion was denied. At the pre-trial of the civil case, the defendants asked the court to rule on their special defense that plaintiffs' cause of action based upon a quasi-delict had prescribed considering that the complaint was brought four years and eleven months after the collision and that according to Article 1144 of the Civil Code an action based upon a quasi-delict must be instituted within four years. The lower court, in its order of May 31, 1966, dismissed the complaint on the ground that plaintiffs' action was based upon a quasi-delict and that it had prescribed. The plaintiffs appealed direct to this Court on questions of law from the order dismissing the complaint. Plaintiffs-appellants contend that the lower court erred in dismissing the complaint. The contention is unmeritorious in view of the following considerations. (1) The acquittal of the defendant Felardo Paje by the Court of Appeals in the criminal action on the ground that the reckless imprudence or criminal negligence charged against him did not exist and that the collision was a case of pure accident, was a bar to the civil action for damages for the death of Clemente Marcia, which action was based upon the same criminal negligence of which the defendant Felardo Paje was acquitted in the criminal action. In the celebrated case of Chantangco vs. Abaroa, which was an appeal from the Philippine Supreme Court to the United States Supreme Court, 218 U.S. 476; 54 L. Ed. 1116; 40 Phil. 1056, Mr. Justice Lurton, speaking for the Supreme Court of the United States, said: It is true that one of the plaintiffs in the present case reserved whatever right he may have had to bring a civil action. This was obviously of no avail, inasmuch as there resulted a judgment for the defendant, and the plain inference from the foregoing is that a verdict of acquittal must carry with it exemption from civil responsibility. Criminal negligence, that is, reckless imprudence, is not one of the three crimes mentioned in Article 33 of the Civil Code which authorizes the institution of an independent civil action, that is, of an entirely separate and distinct civil action for damages, which shall proceed independently of the criminal prosecution and shall be proved only by a preponderance of evidence. Said article mentions only the crimes of defamation, fraud (estafa) and physical injuries. Although in the case of Dyogi, et al. vs. Yatco, et al., G.R. No. L-9623, January 22, 1957, this Court

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held that the term "physical injuries" used in article 33 of the Civil Code includes homicide, 1 it is to be borne in mind that the charge against Felardo Paje was for reckless imprudence resulting in homicide, and not for homicide and physical injuries. In the case of People vs. Buan, G.R. No. L-25366, March 29, 1968, Mr. Justice J.B.L. Reyes, speaking for the Supreme Court, said that the "offense of criminal negligence under article 365 of the Revised Penal Code lies in the execution of an imprudent or negligent act that, if intentionally done, would be punishable as a felony. The law penalizes thus the negligent or careless act, not the result thereof. The gravity of the consequence is only taken into account to determine the penalty; it does not qualify the substance of the offense." It is, therefore, clear that the charge against Felardo Paje was not for homicide but for reckless imprudence, that is, criminal negligence resulting in homicide (death of Clemente Marcia) and double physical injuries suffered by two other persons. As reckless imprudence or criminal negligence is not one of the three crimes mentioned in Article 33 of the Civil Code, there is no independent civil action for damages that may be instituted in connection with said offense. Hence, homicide through reckless imprudence or criminal negligence comes under the general rule that the acquittal of the defendant in the criminal action is a bar to his civil liability based upon the same criminal act notwithstanding that the injured party reserved 2 his right to institute a separate civil action (Chantangco vs. Abaroa, supra). In the language of the Rules of Court (Rule 111, Sec. 3) the extinction of the criminal action by acquittal of the defendant on the ground that the criminal act charged against him did not exist, necessarily extinguished also the civil action for damages based upon the same act. (2) Assuming, arguendo, that the civil action for damages for the death of Clemente Marcia was based upon a quasi-delict, 3 the trial court's finding that on that basis the action had prescribed is correct. An action upon a quasi-delict must be instituted within four (4) years (Article 1146, Civil Code). The four-year prescriptive period began to run from the day the quasi-delict was committed, or from December 23, 1956, and the running of the said period was not interrupted by the institution of the criminal action for reckless imprudence. (Paulan vs. Sarabia, G.R. No. L-10542, July 31, 1958.) PREMISES CONSIDERED, the order appealed from is affirmed, with special pronouncement as to costs. G.R. No. 108017 April 3, 1995 MARIA BENITA A. DULAY, in her own behalf and in behalf of the minor children KRIZTEEN ELIZABETH, BEVERLY MARIE and NAPOLEON II, all surnamed DULAY, petitioners, vs. THE COURT OF APPEALS, Former Eighth Division, HON. TEODORO P. REGINO, in his capacity as Presiding Judge of the Regional Trial Court National Capital Region, Quezon City, Br. 84, SAFEGUARD INVESTIGATION AND SECURITY CO., INC., and SUPERGUARD SECURITY CORPORATION, respondents. BIDIN, J.:

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This petition for certiorari prays for the reversal of the decision of the Court of Appeals dated October 29, 1991 in CA-G.R. CV No. 24646 which affirmed the order of the Regional Trial Court dismissing Civil Case No. Q-89-1751, and its resolution dated November 17, 1991 denying herein, petitioner's motion for reconsideration. The antecedent facts of the case are as follows: On December 7, 1988, an altercation between Benigno Torzuela and Atty. Napoleon Dulay occurred at the "Big Bang Sa Alabang," Alabang Village, Muntinlupa as a result of which Benigno Torzuela, the security guard on duty at the said carnival, shot and killed Atty. Napoleon Dulay. Herein petitioner Maria Benita A. Dulay, widow of the deceased Napoleon Dulay, in her own behalf and in behalf of her minor children, filed on February 8, 1989 an action for damages against Benigno Torzuela and herein private respondents Safeguard Investigation and Security Co., Inc., ("SAFEGUARD") and/or Superguard Security Corp. ("SUPERGUARD"), alleged employers of defendant Torzuela. The complaint, docketed as Civil Case No. Q-89-1751 among others alleges the following: 1. . . . Defendants SAFEGUARD INVESTIGATION AND SECURITY CO., INC., (Defendant Safeguard) and SUPERGUARD SECURITY CORPORATION (Defendant Superguard) are corporations duly organized and existing in accordance with Philippine laws, with offices at 10th Floor, Manufacturers Building, Inc., Plaza Santa Cruz, Manila. They are impleaded as alternative defendants for, while the former appears to be the employer of defendant BENIGNO TORZUELA (defendant TORZUELA), the latter impliedly acknowledged responsibility for the acts of defendant TORZUELA by extending its sympathies to plaintiffs. Defendant BENIGNO TORZUELA is of legal age, an employee of defendant SAFEGUARD and/or defendant SUPERGUARD and, at the time of the incident complained of, was under their control and supervision. . . . 3. On December 7, 1988 at around 8:00 a.m., defendant TORZUELA, while he was on duty as security guard at the "Big Bang sa Alabang," Alabang Village, Muntinlupa, Metro Manila shot and killed NAPOLEON V. DULAY with a .38 caliber revolver belonging to defendant SAFEGUARD, and/or SUPERGUARD (per Police Report dated January 7, 1989, copy attached as Annex A); 4. The incident resulting in the death of NAPOLEON V. DULAY was due to the concurring negligence of the defendants. Defendant TORZUELA'S wanton and reckless discharge of the firearm issued to him by defendant SAFEGUARD and/or SUPERGUARD was the immediate and proximate cause of the injury, while the negligence of defendant SAFEGUARD and/or SUPERGUARD consists in its having failed to exercise the diligence of a good father of a family in the supervision and control of its employee to avoid the injury. xxx xxx xxx (Rollo, pp. 117-118) Petitioners prayed for actual, compensatory, moral and exemplary damages, and attorney's fees. The said Civil Case No. Q-89-1751 was raffled to Branch 84 of the Regional Trial Court of Quezon City, presided by respondent Judge Teodoro Regino.

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On March 2, 1989, private respondent SUPERGUARD filed a Motion to Dismiss on the ground that the complaint does not state a valid cause of action. SUPERGUARD claimed that Torzuela's act of shooting Dulay was beyond the scope of his duties, and that since the alleged act of shooting was committed with deliberate intent (dolo), the civil liability therefor is governed by Article 100 of the Revised Penal Code, which states: Art. 100. Civil liability of a person guilty of a felony. — Every person criminally liable for a felony is also civilly liable. Respondent SUPERGUARD further alleged that a complaint for damages based on negligence under Article 2176 of the New Civil Code, such as the one filed by petitioners, cannot lie, since the civil liability under Article 2176 applies only to quasi-offenses under Article 365 of the Revised Penal Code. In addition, the private respondent argued that petitioners' filing of the complaint is premature considering that the conviction of Torzuela in a criminal case is a condition sine qua non for the employer's subsidiary liability (Rollo, p. 55-59). Respondent SAFEGUARD also filed a motion praying that it be excluded as defendant on the ground that defendant Torzuela is not one of its employees (Rollo, p. 96). Petitioners opposed both motions, stating that their cause of action against the private respondents is based on their liability under Article 2180 of the New Civil Code, which provides: Art. 2180. The obligation imposed by Article 2176 is demandable not only for one's own acts or omissions, but also for those of persons for whom one is responsible. xxx xxx xxx 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 an industry. xxx xxx xxx (Emphasis supplied) Petitioners contended that a suit against alternative defendants is allowed under Rule 3, Section 13 of the Rules of Court. Therefore, the inclusion of private respondents as alternative defendants in the complaint is justified by the following: the Initial Investigation Report prepared by Pat. Mario Tubon showing that Torzuela is an employee of SAFEGUARD; and through overt acts, SUPERGUARD extended its sympathies to petitioners (Rollo, pp. 64 and 98). Meanwhile, an Information dated March 21, 1989 charging Benigno Torzuela with homicide was filed before the Regional Trial Court of Makati and was docketed as Criminal Case No. 89-1896. On April 13, 1989, respondent Judge Regino issued an order granting SUPERGUARD'S motion to dismiss and SAFEGUARD'S motion for exclusion as defendant. The respondent judge held that the complaint did not state facts necessary or sufficient to constitute a quasi-delict since it does not mention any negligence on the part of Torzuela in shooting Napoleon Dulay or that the same was done in the performance of his duties. Respondent judge ruled that mere allegations of the concurring negligence of the defendants (private respondents herein) without stating the facts showing such negligence are mere conclusions of law (Rollo, p. 106). Respondent judge also declared that the complaint was one for damages founded on crimes punishable under Articles 100 and 103 of the Revised

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Penal Code as distinguished from those arising from, quasi-delict. The dispositive portion of the order dated April 13, 1989 states: WHEREFORE, this Court holds that in view of the material and ultimate facts alleged in the verified complaint and in accordance with the applicable law on the matter as well as precedents laid down by the Supreme Court, the complaint against the alternative defendants Superguard Security Corporation and Safeguard Investigation and Security Co., Inc., must be and (sic) it is hereby dismissed. (Rollo, p. 110) The above order was affirmed by the respondent court and petitioners' motion for reconsideration thereof was denied. Petitioners take exception to the assailed decision and insist that quasi-delicts are not limited to acts of negligence but also cover acts that are intentional and voluntary, citing Andamo v. IAC (191 SCRA 195 [1990]). Thus, petitioners insist that Torzuela' s act of shooting Napoleon Dulay constitutes a quasi-delict actionable under Article 2176 of the New Civil Code. Petitioners further contend that under Article 2180 of the New Civil Code, private respondents are primarily liable for their negligence either in the selection or supervision of their employees. This liability is independent of the employee's own liability for fault or negligence and is distinct from the subsidiary civil liability under Article 103 of the Revised Penal Code. The civil action against the employer may therefore proceed independently of the criminal action pursuant to Rule 111 Section 3 of the Rules of Court. Petitioners submit that the question of whether Torzuela is an employee of respondent SUPERGUARD or SAFEGUARD would be better resolved after trial. Moreover, petitioners argue that Torzuela's act of shooting Dulay is also actionable under Article 33 of the New Civil Code, to wit: Art. 33. In cases of defamation, fraud, and physical injuries, a civil action for damages, entirely separate and distinct from the criminal action, may be brought by the injured party. Such civil action shall proceed independently of the criminal prosecution, and shall require only a preponderance of evidence. (Emphasis supplied) In the same vein, petitioners cite Section 3, Rule 111 of the Rules of Court which provides: Rule 111. . . . . Sec. 3. When civil action may proceed independently — In the cases provided for in Articles 32, 33, 34 and 2176 of the Civil Code of the Philippines, the independent civil action which has been reserved may be brought by the offended party, shall proceed independently of the criminal action, and shall require only a preponderance of evidence. (Emphasis supplied) The term "physical injuries" under Article 33 has been held to include consummated, frustrated and attempted homicide. Thus, petitioners maintain that Torzuela's prior conviction is unnecessary since the civil action can proceed independently of the criminal action. On the other hand, it is the private respondents' argument that since the act was not committed with negligence, the petitioners have no cause of action under Articles 2116 and 2177 of the New Civil Code. The civil action contemplated in Article 2177 is not applicable to acts committed with deliberate intent, but only applies to quasi-offenses under Article 365 of the Revised Penal Code. Torzuela's act of shooting Atty. Dulay to death, aside from being purely personal, was done with deliberate intent and could not

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have been part of his duties as security guard. And since Article 2180 of the New Civil Code covers only: acts done within the scope of the employee's assigned tasks, the private respondents cannot be held liable for damages. We find for petitioners. It is undisputed that Benigno Torzuela is being prosecuted for homicide for the fatal shooting of Napoleon Dulay. Rule 111 of the Rules on Criminal Procedure provides: Sec. 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. (Emphasis supplied) It is well-settled that the filing of an independent civil action before the prosecution in the criminal action presents evidence is even far better than a compliance with the requirement of express reservation (Yakult Philippines v. Court of Appeals, 190 SCRA 357 [1990]). This is precisely what the petitioners opted to do in this case. However, the private respondents opposed the civil action on the ground that the same is founded on a delict and not on a quasi-delict as the shooting was not attended by negligence. What is in dispute therefore is the nature of the petitioner's cause of action. The nature of a cause of action is determined by the facts alleged in the complaint as constituting the cause of action (Republic v. Estenzo, 158 SCRA 282 [1988]). The purpose of an action or suit and the law to govern it is to be determined not by the claim of the party filing the action, made in his argument or brief, but rather by the complaint itself, its allegations and prayer for relief. (De Tavera v. Philippine Tuberculosis Society, 112 SCRA 243 [1982]). An examination of the complaint in the present case would show that the plaintiffs, petitioners herein, are invoking their right to recover damages against the private respondents for their vicarious responsibility for the injury caused by Benigno Torzuela's act of shooting and killing Napoleon Dulay, as stated in paragraphs 1 and 2 of the complaint. Article 2176 of the New Civil Code provides: Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties is called a quasi-delict and is governed by the provisions of this Chapter. Contrary to the theory of private respondents, there is no justification for limiting the scope of Article 2176 of the Civil Code to acts or omissions resulting from negligence. Well-entrenched is the doctrine that article 2176 covers not only acts committed with negligence, but also acts which are voluntary and intentional. As far back as the definitive case of Elcano v. Hill (77 SCRA 98 [1977]), this Court already held that: . . . Article 2176, where it refers to "fault or negligence," covers not only acts "not punishable by law" but also acts criminal in character; whether intentional and voluntary or negligent. Consequently, a separate civil action against the offender in a criminal act, whether or not he is criminally prosecuted and found guilty or

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acquitted, provided that the offended party is not allowed, if he is actually charged also criminally, to recover damages on both scores, and would be entitled in such eventuality only to the bigger award of the two, assuming the awards made in the two cases vary. In other words, the extinction of civil liability referred to in Par. (e) of Section 3, 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 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. Briefly stated, We here hold, in reiteration of Garcia, that culpa aquiliana includes voluntary and negligent acts which may be punishable by law. (Emphasis supplied) The same doctrine was echoed in the case of Andamo v. Intermediate Appellate Court (191 SCRA 195 [1990]), wherein the Court held: Article 2176, whenever it refers to "fault or negligence," covers not only acts criminal in character, whether intentional and voluntary or negligent. Consequently, a civil action lies against the offender in a criminal act, whether or not he is prosecuted or found guilty or acquitted, provided that the offended party is not allowed, (if the tortfeasor is actually also charged criminally), to recover damages on both scores, and would be entitled in such eventuality only to the bigger award of the two, assuming the awards made in the two cases vary. [citing Virata v. Ochoa, 81 SCRA 472] (Emphasis supplied) Private respondents submit that the word "intentional" in the Andamo case is inaccurate obiter, and should be read as "voluntary" since intent cannot be coupled with negligence as defined by Article 365 of the Revised Penal Code. In the absence of more substantial reasons, this Court will not disturb the above doctrine on the coverage of Article 2176. Private respondents further aver that Article 33 of the New Civil Code applies only to injuries intentionally committed pursuant to the ruling in Marcia v. CA (120 SCRA 193 [1983]), and that the actions for damages allowed thereunder are ex-delicto. However, the term "physical injuries" in Article 33 has already been construed to include bodily injuries causing death (Capuno v. Pepsi-Cola Bottling Co. of the Philippines, 121 Phil. 638 [1965); Carandang v. Santiago, 97 Phil. 94 [1955]). It is not the crime of physical injuries defined in the Revised Penal Code. It includes not only physical injuries but also consummated, frustrated, and attempted homicide (Madeja v. Caro, 126 SCRA 293 [1983]). Although in the Marcia case (supra), it was held that no independent civil action may be filed under Article 33 where the crime is the result of criminal negligence, it must be noted however, that Torzuela, the accused in the case at bar, is charged with homicide, not with reckless imprudence, whereas the defendant in Marcia was charged with reckless imprudence. Therefore, in this case, a civil action based on Article 33 lies. Private respondents also contend that their liability is subsidiary under the Revised Penal Code; and that they are not liable for Torzuela's act which is beyond the scope of his duties as a security guard. It having been established that the instant action is not ex-delicto, petitioners may proceed directly against Torzuela and the private respondents. Under Article 2180 of the New Civil Code as aforequoted, when an 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 employer either in the selection of the servant or employee, or in supervision over him after

!53!

selection or both (Layugan v. Intermediate Appellate Court, 167 SCRA 363 [1988]). The liability of the employer under Article 2180 is direct and immediate; it is not conditioned upon prior recourse against the negligent employee and a prior showing of the insolvency of such employee (Kapalaran Bus Lines v. Coronado, 176 SCRA 792 [1989]). Therefore, it is incumbent upon the private respondents to prove that they exercised the diligence of a good father of a family in the selection and supervision of their employee. Since Article 2176 covers not only acts of negligence but also acts which are intentional and voluntary, it was therefore erroneous on the part of the trial court to dismiss petitioner's complaint simply because it failed to make allegations of attendant negligence attributable to private respondents. With respect to the issue of whether the complaint at hand states a sufficient cause of action, the general rule is that the allegations in a complaint are sufficient to constitute a cause of action against the defendants if, admitting the facts alleged, the court can render a valid judgment upon the same in accordance with the prayer therein. A cause of action exist if the following elements are present, namely: (1) a right in favor of the plaintiff by whatever means and under whatever law it arises or is created; (2) an obligation on the part of the named defendant to respect or not to violate such right; and (3) an act or omission on the part of such defendant violative of the right of the plaintiff or constituting a breach of the obligation of the defendant to the plaintiff for which the latter may maintain an action for recovery of damages (Del Bros Hotel Corporation v. CA, 210 SCRA 33 [1992]); Development Bank of the Philippines v. Pundogar, 218 SCRA 118 [1993]) This Court finds, under the foregoing premises, that the complaint sufficiently alleged an actionable breach on the part of the defendant Torzuela and respondents SUPERGUARD and/or SAFEGUARD. It is enough that the complaint alleged that Benigno Torzuela shot Napoleon Dulay resulting in the latter's death; that the shooting occurred while Torzuela was on duty; and that either SUPERGUARD and/or SAFEGUARD was Torzuela's employer and responsible for his acts. This does not operate however, to establish that the defendants below are liable. Whether or not the shooting was actually reckless and wanton or attended by negligence and whether it was actually done within the scope of Torzuela's duties; whether the private respondents SUPERGUARD and/or SAFEGUARD failed to exercise the diligence of a good father of a family; and whether the defendants are actually liable, are questions which can be better resolved after trial on the merits where each party can present evidence to prove their respective allegations and defenses. In determining whether the allegations of a complaint are sufficient to support a cause of action, it must be borne in mind that the complaint does not have to establish or allege the facts proving the existence of a cause of action at the outset; this will have to be done at the trial on the merits of the case (Del Bros Hotel Corporation v. CA, supra). If the allegations in a complaint can furnish a sufficient basis by which the complaint can be maintained, the same should not be dismissed regardless of the defenses that may be assessed by the defendants (Rava Dev't. Corp. v. CA, 211 SCRA 152 [1992] citing Consolidated Bank & Trust Corporation v. Court of Appeals, 197 SCRA 663 [1991]). To sustain a motion to dismiss for lack of cause of action, the complaint must show that the claim for relief does not exist rather than that a claim has been defectively stated, is ambiguous, indefinite or uncertain (Azur v. Provincial Board, 27 SCRA 50

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[1969]). Since the petitioners clearly sustained an injury to their rights under the law, it would be more just to allow them to present evidence of such injury. WHEREFORE, premises considered, the petition for review is hereby GRANTED. The decision of the Court of Appeals as well as the Order of the Regional Trial Court dated April 13, 1989 are hereby REVERSED and SET ASIDE. Civil Case No. Q-89-1751 is remanded to the Regional Trial Court for trial on the merits. This decision is immediately executory. SO ORDERED. G.R. No. 81262 August 25, 1989 GLOBE MACKAY CABLE AND RADIO CORP., and HERBERT C. HENDRY, petitioners, vs. THE HONORABLE COURT OF APPEALS and RESTITUTO M. TOBIAS, respondents. Atencia & Arias Law Offices for petitioners. Romulo C. Felizmena for private respondent. CORTES, J.: Private respondent Restituto M. Tobias was employed by petitioner Globe Mackay Cable and Radio Corporation (GLOBE MACKAY) in a dual capacity as a purchasing agent and administrative assistant to the engineering operations manager. In 1972, GLOBE MACKAY discovered fictitious purchases and other fraudulent transactions for which it lost several thousands of pesos. According to private respondent it was he who actually discovered the anomalies and reported them on November 10, 1972 to his immediate superior Eduardo T. Ferraren and to petitioner Herbert C. Hendry who was then the Executive Vice-President and General Manager of GLOBE MACKAY. On November 11, 1972, one day after private respondent Tobias made the report, petitioner Hendry confronted him by stating that he was the number one suspect, and ordered him to take a one week forced leave, not to communicate with the office, to leave his table drawers open, and to leave the office keys. On November 20, 1972, when private respondent Tobias returned to work after the forced leave, petitioner Hendry went up to him and called him a "crook" and a "swindler." Tobias was then ordered to take a lie detector test. He was also instructed to submit specimen of his handwriting, signature, and initials for examination by the police investigators to determine his complicity in the anomalies. On December 6,1972, the Manila police investigators submitted a laboratory crime report (Exh. "A") clearing private respondent of participation in the anomalies. Not satisfied with the police report, petitioners hired a private investigator, retired Col. Jose G. Fernandez, who on December 10, 1972, submitted a report (Exh. "2") finding Tobias guilty. This report however expressly stated that further investigation was still to be conducted. Nevertheless, on December 12, 1972, petitioner Hendry issued a memorandum suspending Tobias from work preparatory to the filing of criminal charges against him.

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On December 19,1972, Lt. Dioscoro V. Tagle, Metro Manila Police Chief Document Examiner, after investigating other documents pertaining to the alleged anomalous transactions, submitted a second laboratory crime report (Exh. "B") reiterating his previous finding that the handwritings, signatures, and initials appearing in the checks and other documents involved in the fraudulent transactions were not those of Tobias. The lie detector tests conducted on Tobias also yielded negative results. Notwithstanding the two police reports exculpating Tobias from the anomalies and the fact that the report of the private investigator, was, by its own terms, not yet complete, petitioners filed with the City Fiscal of Manila a complaint for estafa through falsification of commercial documents, later amended to just estafa. Subsequently five other criminal complaints were filed against Tobias, four of which were for estafa through Falsification of commercial document while the fifth was for of Article 290 of' the Revised Penal Code (Discovering Secrets Through Seizure of Correspondence).lâwphî1.ñèt Two of these complaints were refiled with the Judge Advocate General's Office, which however, remanded them to the fiscal's office. All of the six criminal complaints were dismissed by the fiscal. Petitioners appealed four of the fiscal's resolutions dismissing the criminal complaints with the Secretary of Justice, who, however, affirmed their dismissal. In the meantime, on January 17, 1973, Tobias received a notice (Exh. "F") from petitioners that his employment has been terminated effective December 13, 1972. Whereupon, Tobias filed a complaint for illegal dismissal. The labor arbiter dismissed the complaint. On appeal, the National Labor Relations Commission (NLRC) reversed the labor arbiter's decision. However, the Secretary of Labor, acting on petitioners' appeal from the NLRC ruling, reinstated the labor arbiter's decision. Tobias appealed the Secretary of Labor's order with the Office of the President. During the pendency of the appeal with said office, petitioners and private respondent Tobias entered into a compromise agreement regarding the latter's complaint for illegal dismissal. Unemployed, Tobias sought employment with the Republic Telephone Company (RETELCO). However, petitioner Hendry, without being asked by RETELCO, wrote a letter to the latter stating that Tobias was dismissed by GLOBE MACKAY due to dishonesty. Private respondent Tobias filed a civil case for damages anchored on alleged unlawful, malicious, oppressive, and abusive acts of petitioners. Petitioner Hendry, claiming illness, did not testify during the hearings. The Regional Trial Court (RTC) of Manila, Branch IX, through Judge Manuel T. Reyes rendered judgment in favor of private respondent by ordering petitioners to pay him eighty thousand pesos (P80,000.00) as actual damages, two hundred thousand pesos (P200,000.00) as moral damages, twenty thousand pesos (P20,000.00) as exemplary damages, thirty thousand pesos (P30,000.00) as attorney's fees, and costs. Petitioners appealed the RTC decision to the Court of Appeals. On the other hand, Tobias appealed as to the amount of damages. However, the Court of Appeals, an a decision dated August 31, 1987 affirmed the RTC decision in toto. Petitioners' motion for reconsideration having been denied, the instant petition for review on certiorari was filed. The main issue in this case is whether or not petitioners are liable for damages to private respondent.

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Petitioners contend that they could not be made liable for damages in the lawful exercise of their right to dismiss private respondent. On the other hand, private respondent contends that because of petitioners' abusive manner in dismissing him as well as for the inhuman treatment he got from them, the Petitioners must indemnify him for the damage that he had suffered. One of the more notable innovations of the New Civil Code is the codification of "some basic principles that are to be observed for the rightful relationship between human beings and for the stability of the social order." [REPORT ON THE CODE COMMISSION ON THE PROPOSED CIVIL CODE OF THE PHILIPPINES, p. 39]. The framers of the Code, seeking to remedy the defect of the old Code which merely stated the effects of the law, but failed to draw out its spirit, incorporated certain fundamental precepts which were "designed to indicate certain norms that spring from the fountain of good conscience" and which were also meant to serve as "guides for human conduct [that] should run as golden threads through society, to the end that law may approach its supreme ideal, which is the sway and dominance of justice" (Id.) Foremost among these principles is that pronounced in Article 19 which provides: Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith. This article, known to contain what is commonly referred to as the principle of abuse of rights, sets certain standards which must be observed not only in the exercise of one's rights but also in the performance of one's duties. These standards are the following: to act with justice; to give everyone his due; and to observe honesty and good faith. The law, therefore, recognizes a primordial limitation on all rights; that in their exercise, the norms of human conduct set forth in Article 19 must be observed. A right, though by itself legal because recognized or granted by law as such, may nevertheless become the source of some illegality. When a right is exercised in a manner which does not conform with the norms enshrined in Article 19 and results in damage to another, a legal wrong is thereby committed for which the wrongdoer must be held responsible. But while Article 19 lays down a rule of conduct for the government of human relations and for the maintenance of social order, it does not provide a remedy for its violation. Generally, an action for damages under either Article 20 or Article 21 would be proper. Article 20, which pertains to damage arising from a violation of law, provides that: Art. 20. Every person who contrary to law, wilfully or negligently causes damage to another, shall indemnify the latter for the same. However, in the case at bar, petitioners claim that they did not violate any provision of law since they were merely exercising their legal right to dismiss private respondent. This does not, however, leave private respondent with no relief because Article 21 of the Civil Code provides that: Art. 21. Any person who wilfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage. This article, adopted to remedy the "countless gaps in the statutes, which leave so many victims of moral wrongs helpless, even though they have actually suffered material and moral injury" [Id.] should "vouchsafe adequate legal remedy for that untold number of moral wrongs which it is impossible for human foresight to

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provide for specifically in the statutes" [Id. it p. 40; See also PNB v. CA, G.R. No. L-27155, May 18,1978, 83 SCRA 237, 247]. In determining whether or not the principle of abuse of rights may be invoked, there is no rigid test which can be applied. While the Court has not hesitated to apply Article 19 whether the legal and factual circumstances called for its application [See for e.g., Velayo v. Shell Co. of the Phil., Ltd., 100 Phil. 186 (1956); PNB v. CA, supra;Grand Union Supermarket, Inc. v. Espino, Jr., G.R. No. L-48250, December 28, 1979, 94 SCRA 953; PAL v. CA, G.R. No. L-46558, July 31,1981,106 SCRA 391; United General Industries, Inc, v. Paler G.R. No. L-30205, March 15,1982,112 SCRA 404; Rubio v. CA, G.R. No. 50911, August 21, 1987, 153 SCRA 183] the question of whether or not the principle of abuse of rights has been violated resulting in damages under Article 20 or Article 21 or other applicable provision of law, depends on the circumstances of each case. And in the instant case, the Court, after examining the record and considering certain significant circumstances, finds that all petitioners have indeed abused the right that they invoke, causing damage to private respondent and for which the latter must now be indemnified. The trial court made a finding that notwithstanding the fact that it was private respondent Tobias who reported the possible existence of anomalous transactions, petitioner Hendry "showed belligerence and told plaintiff (private respondent herein) that he was the number one suspect and to take a one week vacation leave, not to communicate with the office, to leave his table drawers open, and to leave his keys to said defendant (petitioner Hendry)" [RTC Decision, p. 2; Rollo, p. 232]. This, petitioners do not dispute. But regardless of whether or not it was private respondent Tobias who reported the anomalies to petitioners, the latter's reaction towards the former upon uncovering the anomalies was less than civil. An employer who harbors suspicions that an employee has committed dishonesty might be justified in taking the appropriate action such as ordering an investigation and directing the employee to go on a leave. Firmness and the resolve to uncover the truth would also be expected from such employer. But the high-handed treatment accorded Tobias by petitioners was certainly uncalled for. And this reprehensible attitude of petitioners was to continue when private respondent returned to work on November 20, 1972 after his one week forced leave. Upon reporting for work, Tobias was confronted by Hendry who said. "Tobby, you are the crook and swindler in this company." Considering that the first report made by the police investigators was submitted only on December 10, 1972 [See Exh. A] the statement made by petitioner Hendry was baseless. The imputation of guilt without basis and the pattern of harassment during the investigations of Tobias transgress the standards of human conduct set forth in Article 19 of the Civil Code. The Court has already ruled that the right of the employer to dismiss an employee should not be confused with the manner in which the right is exercised and the effects flowing therefrom. If the dismissal is done abusively, then the employer is liable for damages to the employee [Quisaba v. Sta. Ines-Melale Veneer and Plywood Inc., G.R. No. L-38088, August 30, 1974, 58 SCRA 771; See also Philippine Refining Co., Inc. v. Garcia, G.R. No. L-21871, September 27,1966, 18 SCRA 107] Under the circumstances of the instant case, the petitioners clearly failed to exercise in a legitimate manner their right to dismiss Tobias, giving the latter the right to recover damages under Article 19 in relation to Article 21 of the Civil Code.

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But petitioners were not content with just dismissing Tobias. Several other tortious acts were committed by petitioners against Tobias after the latter's termination from work. Towards the latter part of January, 1973, after the filing of the first of six criminal complaints against Tobias, the latter talked to Hendry to protest the actions taken against him. In response, Hendry cut short Tobias' protestations by telling him to just confess or else the company would file a hundred more cases against him until he landed in jail. Hendry added that, "You Filipinos cannot be trusted." The threat unmasked petitioner's bad faith in the various actions taken against Tobias. On the other hand, the scornful remark about Filipinos as well as Hendry's earlier statements about Tobias being a "crook" and "swindler" are clear violations of 'Tobias' personal dignity [See Article 26, Civil Code]. The next tortious act committed by petitioners was the writing of a letter to RETELCO sometime in October 1974, stating that Tobias had been dismissed by GLOBE MACKAY due to dishonesty. Because of the letter, Tobias failed to gain employment with RETELCO and as a result of which, Tobias remained unemployed for a longer period of time. For this further damage suffered by Tobias, petitioners must likewise be held liable for damages consistent with Article 2176 of the Civil Code. Petitioners, however, contend that they have a "moral, if not legal, duty to forewarn other employers of the kind of employee the plaintiff (private respondent herein) was." [Petition, p. 14; Rollo, p. 15]. Petitioners further claim that "it is the accepted moral and societal obligation of every man to advise or warn his fellowmen of any threat or danger to the latter's life, honor or property. And this includes warning one's brethren of the possible dangers involved in dealing with, or accepting into confidence, a man whose honesty and integrity is suspect" [Id.]. These arguments, rather than justify petitioners' act, reveal a seeming obsession to prevent Tobias from getting a job, even after almost two years from the time Tobias was dismissed. Finally, there is the matter of the filing by petitioners of six criminal complaints against Tobias. Petitioners contend that there is no case against them for malicious prosecution and that they cannot be "penalized for exercising their right and prerogative of seeking justice by filing criminal complaints against an employee who was their principal suspect in the commission of forgeries and in the perpetration of anomalous transactions which defrauded them of substantial sums of money" [Petition, p. 10, Rollo, p. 11]. While sound principles of justice and public policy dictate that persons shall have free resort to the courts for redress of wrongs and vindication of their rights [Buenaventura v. Sto. Domingo, 103 Phil. 239 (1958)], the right to institute criminal prosecutions can not be exercised maliciously and in bad faith [Ventura v. Bernabe, G.R. No. L-26760, April 30, 1971, 38 SCRA 5871.] Hence, in Yutuk V. Manila Electric Co., G.R. No. L-13016, May 31, 1961, 2 SCRA 337, the Court held that the right to file criminal complaints should not be used as a weapon to force an alleged debtor to pay an indebtedness. To do so would be a clear perversion of the function of the criminal processes and of the courts of justice. And in Hawpia CA, G.R. No. L-20047, June 30, 1967. 20 SCRA 536 the Court upheld the judgment against the petitioner for actual and moral damages and attorney's fees after making a finding that petitioner, with persistence, filed at least six criminal complaints against respondent, all of which were dismissed. To constitute malicious prosecution, there must be proof that the prosecution was prompted by a design to vex and humiliate a person and that it was initiated

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deliberately by the defendant knowing that the charges were false and groundless [Manila Gas Corporation v. CA, G.R. No. L-44190, October 30,1980, 100 SCRA 602]. Concededly, the filing of a suit by itself, does not render a person liable for malicious prosecution [Inhelder Corporation v. CA, G.R. No. 52358, May 301983122 SCRA 576]. The mere dismissal by the fiscal of the criminal complaint is not a ground for an award of damages for malicious prosecution if there is no competent evidence to show that the complainant had acted in bad faith [Sison v. David, G.R. No. L-11268, January 28,1961, 1 SCRA 60]. In the instant case, however, the trial court made a finding that petitioners acted in bad faith in filing the criminal complaints against Tobias, observing that: x x x Defendants (petitioners herein) filed with the Fiscal's Office of Manila a total of six (6) criminal cases, five (5) of which were for estafa thru falsification of commercial document and one for violation of Art. 290 of the Revised Penal Code "discovering secrets thru seizure of correspondence," and all were dismissed for insufficiency or lack of evidence." The dismissal of four (4) of the cases was appealed to the Ministry of Justice, but said Ministry invariably sustained the dismissal of the cases. As above adverted to, two of these cases were refiled with the Judge Advocate General's Office of the Armed Forces of the Philippines to railroad plaintiffs arrest and detention in the military stockade, but this was frustrated by a presidential decree transferring criminal cases involving civilians to the civil courts. x x x To be sure, when despite the two (2) police reports embodying the findings of Lt. Dioscoro Tagle, Chief Document Examiner of the Manila Police Department, clearing plaintiff of participation or involvement in the fraudulent transactions complained of, despite the negative results of the lie detector tests which defendants compelled plaintiff to undergo, and although the police investigation was "still under follow-up and a supplementary report will be submitted after all the evidence has been gathered," defendants hastily filed six (6) criminal cases with the city Fiscal's Office of Manila, five (5) for estafa thru falsification of commercial document and one (1) for violation of Art. 290 of the Revised Penal Code, so much so that as was to be expected, all six (6) cases were dismissed, with one of the investigating fiscals, Asst. Fiscal de Guia, commenting in one case that, "Indeed, the haphazard way this case was investigated is evident. Evident likewise is the flurry and haste in the filing of this case against respondent Tobias," there can be no mistaking that defendants would not but be motivated by malicious and unlawful intent to harass, oppress, and cause damage to plaintiff. x x x [RTC Decision, pp. 5-6; Rollo, pp. 235-236]. In addition to the observations made by the trial court, the Court finds it significant that the criminal complaints were filed during the pendency of the illegal dismissal case filed by Tobias against petitioners. This explains the haste in which the complaints were filed, which the trial court earlier noted. But petitioners, to prove their good faith, point to the fact that only six complaints were filed against Tobias when they could have allegedly filed one hundred cases, considering the number of anomalous transactions committed against GLOBE MACKAY. However, petitioners' good faith is belied by the threat made by Hendry after the filing of the first complaint that one hundred more cases would be filed against Tobias. In

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effect, the possible filing of one hundred more cases was made to hang like the sword of Damocles over the head of Tobias. In fine, considering the haste in which the criminal complaints were filed, the fact that they were filed during the pendency of the illegal dismissal case against petitioners, the threat made by Hendry, the fact that the cases were filed notwithstanding the two police reports exculpating Tobias from involvement in the anomalies committed against GLOBE MACKAY, coupled by the eventual dismissal of all the cases, the Court is led into no other conclusion than that petitioners were motivated by malicious intent in filing the six criminal complaints against Tobias. Petitioners next contend that the award of damages was excessive. In the complaint filed against petitioners, Tobias prayed for the following: one hundred thousand pesos (P100,000.00) as actual damages; fifty thousand pesos (P50,000.00) as exemplary damages; eight hundred thousand pesos (P800,000.00) as moral damages; fifty thousand pesos (P50,000.00) as attorney's fees; and costs. The trial court, after making a computation of the damages incurred by Tobias [See RTC Decision, pp. 7-8; Rollo, pp. 154-1551, awarded him the following: eighty thousand pesos (P80,000.00) as actual damages; two hundred thousand pesos (P200,000.00) as moral damages; twenty thousand pesos (P20,000.00) as exemplary damages; thirty thousand pesos (P30,000.00) as attorney's fees; and, costs. It must be underscored that petitioners have been guilty of committing several actionable tortious acts, i.e., the abusive manner in which they dismissed Tobias from work including the baseless imputation of guilt and the harassment during the investigations; the defamatory language heaped on Tobias as well as the scornful remark on Filipinos; the poison letter sent to RETELCO which resulted in Tobias' loss of possible employment; and, the malicious filing of the criminal complaints. Considering the extent of the damage wrought on Tobias, the Court finds that, contrary to petitioners' contention, the amount of damages awarded to Tobias was reasonable under the circumstances. Yet, petitioners still insist that the award of damages was improper, invoking the principle of damnum absqueinjuria. It is argued that "[t]he only probable actual damage that plaintiff (private respondent herein) could have suffered was a direct result of his having been dismissed from his employment, which was a valid and legal act of the defendants-appellants (petitioners herein).lâwphî1.ñèt " [Petition, p. 17; Rollo, p. 18]. According to the principle of damnum absque injuria, damage or loss which does not constitute a violation of a legal right or amount to a legal wrong is not actionable [Escano v. CA, G.R. No. L-47207, September 25, 1980, 100 SCRA 197; See also Gilchrist v. Cuddy 29 Phil, 542 (1915); The Board of Liquidators v. Kalaw, G.R. No. L-18805, August 14, 1967, 20 SCRA 987]. This principle finds no application in this case. It bears repeating that even granting that petitioners might have had the right to dismiss Tobias from work, the abusive manner in which that right was exercised amounted to a legal wrong for which petitioners must now be held liable. Moreover, the damage incurred by Tobias was not only in connection with the abusive manner in which he was dismissed but was also the result of several other quasi-delictual acts committed by petitioners. Petitioners next question the award of moral damages. However, the Court has already ruled in Wassmer v. Velez, G.R. No. L-20089, December 26, 1964, 12 SCRA 648, 653, that [p]er express provision of Article 2219 (10) of the New Civil Code, moral damages are recoverable in the cases mentioned in Article 21 of said

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Code." Hence, the Court of Appeals committed no error in awarding moral damages to Tobias. Lastly, the award of exemplary damages is impugned by petitioners. Although Article 2231 of the Civil Code provides that "[i]n quasi-delicts, exemplary damages may be granted if the defendant acted with gross negligence," the Court, in Zulueta v. Pan American World Airways, Inc., G.R. No. L- 28589, January 8, 1973, 49 SCRA 1, ruled that if gross negligence warrants the award of exemplary damages, with more reason is its imposition justified when the act performed is deliberate, malicious and tainted with bad faith. As in the Zuluetacase, the nature of the wrongful acts shown to have been committed by petitioners against Tobias is sufficient basis for the award of exemplary damages to the latter. WHEREFORE, the petition is hereby DENIED and the decision of the Court of Appeals in CA-G.R. CV No. 09055 is AFFIRMED. SO ORDERED. G.R. No. 140420 February 15, 2001 SERGIO AMONOY, petitioner, vs. Spouses JOSE GUTIERREZ and ANGELA FORNIDA, respondents. PANGANIBAN, J.: Damnum absque injuria. Under this principle, the legitimate exercise of a person's rights, even if it causes loss to another, does not automatically result in an actionable injury. The law does not prescribe a remedy for the loss. This principle does not, however, apply when there is an abuse of a person's right, or when the exercise of this right is suspended or extinguished pursuant to a court order. Indeed, in the availment of one's rights, one must act with justice, give their due, and observe honesty and good faith The Case Before us is a Petition for Review under Rule 45 of the Rules of Court, assailing the April 21, 1999 Decision1 of the Court of Appeals (CA) in CA-GR CV No. 41451, which set aside the judgment2 of the Regional Trial Court (RTC) of Tanay, Rizal. The RTC had earlier dismissed the Complaint for damages filed by herein respondents against petitioner. The dispositive portion of the challenged CA Decision reads as follows: "WHEREFORE, the appealed Decision is SET ASIDE, and in its stead judgment is rendered ordering the defendant-appellee Sergio Amonoy to pay the plaintiffs-appellants bruno and Bernadina Gutierrez as actual damages the sum of [t]wo [h]undred [f]ifty [t]housand [p]esos (P250,000.00)."3 Likewise assailed is the October 19, 1999 CA Resolution,4 which denied the Motion for Reconsideration. The Facts The appellate court narrated the factual antecedents of this case as follows: "This case had its roots in Special Proceedings No. 3103 of Branch I of the CFI of Pasig, Rizal, for the settlement of the estate of the deceased Julio Cantolos, involving six(6) parcels of land situated in Tanay Rizal. Amonoy was the counsel of therein Francisca Catolos, Agnes Catolos, Asuncion Pasamba and Alfonso Formida. On 12 January 1965, the Project of Partition submitted was approved and xxx two (2) of the said lots were adjudicated to Asuncion Pasamba and Alfonso

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Formilda. The Attorney's fees charged by Amonoy was P27,600.00 and on 20 January 1965 Asuncion Pasamba and Alfonso Formida executed a deed of real estate mortgage on the said two (2) lots adjudicated to them, in favor of Amonoy to secure the payment of his attorney's fees. But it was only on 6 August 1969 after the taxes had been paid, the claims settled and the properties adjudicated, that the estate was declared closed and terminated. "Asuncion Pasamba died on 24 February 1969 while Alfonso Fornilda passsed away on 2 July 1969. Among the heirs of the latter was his daughter, plaintiff-appellant Angela Gutierrez. "Because his Attorney's fess thus secured by the two lots were not paid, on 21 January 1970 Amonoy filed for their foreclosure in Civil Code4 No. 12726 entitled Sergio Amonoy vs. Heirs of Asuncion Pasamba and Heirs of Alfonso Fornilda before the CFI of Pasig, Rizal, and this was assigned to Branch VIII. The heirs opposed, contending that the attorney's fees charged [were] unconscionable and that the attorney's fees charged [were] unconscionable and that the agreed sum was only P11,695.92. But on 28 September 1972 judgment was rendered in favor of Amonoy requiring the heirs to pay within 90 days the P27,600.00 secured by the mortgage, P11,880.00 as value of the harvests, and P9,645.00 as another round of attorney's fees. Failing in that, the two (2) lots would be sold at public auction. "They failed to pay. On 6 February 1973, the said lots were foreclosed and on 23 March 1973 the auction sale was held where Amonoy was the highest bidder at P23,760.00. On 2 May 1973 his bid was judicially confirmed. A deficiency was claimed and to satisfy it another execution sale was conducted, and again the highest bidder was Amonoy at P12,137.50. "Included in those sold was the lot on which the Gutierrez spouses had their house. "More than a year after the Decision in Civil Code No. 12726 was rendered, the said decedent's heirs filed on 19 December 1973 before the CFI of Pasig, Rixal[,] Civil case No. 18731 entitled Maria Penano, et al vs. Sergio Amonoy, et al, a suit for the annulment thereof. The case was dismissed by the CFI on 7 November 1977, and this was affirmed by the Court of Appeals on 22 July 1981. "Thereafter, the CFI on 25 July 1985 issued a Writ of Possession and pursuant to which a notice to vacate was made on 26 August 1985. On Amonoy's motion of 24 April 1986, the Orders of 25 April 1986 and 6 May 1986 were issued for the demolition of structures in the said lots, including the house of the Gutierrez spouses. "On 27 September 1985 the petition entitled David Fornilda, et al vs Branch 164 RTC Ivth Pasig, Deputy Sheriff Joaquin Antonil and Atty. Sergio Amonoy, G.R. No. L-72306, was filed before the Supreme Court. Among the petitioners was the plaintiff-appellant Angela Gutierrez. On a twin musiyun (Mahigpit na Musiyon Para Papanagutin Kaugnay ng Paglalapastangan) with full titles as fanciful and elongated as theirPetisyung (Petisyung Makapagsuri Taglay and Pagpigil ng Utos), a temporary restraining order was granted on 2 June 1986 enjoining the demolition of the petitioners' houses. "Then on 5 October 1988 a Decision was rendered in the said G.R. No. L-72306 disposing that: "WHEREFORE, Certiorari is granted; the Order of respondent Trial Court, dated 25 July 1985, granting a Writ of Possession, as well as its Orderd, dated 25 April 1986 and 16 May 1986, directing and authorizing respondent Sheriff to demolish the houses of petitioners Angela and Leocadia Fornilda are hereby ordered

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returned to petitioners unless some of them have been conveyed to innocent third persons."5 But by the time the Supreme Court promulgated the abovementioned Decision, respondents' house had already been destroyed, supposedly in accordance with a Writ of Demolition ordered by the lower court. Thus, a Complaint for damages in connection with the destruction of their house was filed by respondents against petitioner before the RTC on December 15, 1989. In its January 27, 1993 Decision, the RTC dismissed respondents' suit. On appeal, the CA set aside the lower court's ruling and ordered petitioner to pay respondents P250,000 as actual damages. Petitioner then filed a Motion for Reconsideration, which was also denied. The Issue In his Memorandum,7 petitioner submits this lone issue for our consideration: "Whether or not the Court of Appeals was correct was correct in deciding that the petition [was] liable to the respondents for damages."8 The Court's Ruling The Petition has no merit. Main Issue: Petitioner's Liability Well-settled is the maxim that damage resulting from the legitimate exercise of a person's rights is a loss without injury- damnum absque injuria - for which the law gives no remedy.9 In other words, one who merely exercises one's rights does no actionable injury and cannot be held liable for damages. Petitioner invokes this legal precept in arguing that he is not liable for the demolition of respondents' house. He maintains that he was merely acting in accordance with the Writ of Demolition ordered by the RTC. We reject this submission. Damnum absque injuria finds no application to this case. True, petitioner commenced the demolition of respondents' house on May 30, 1986 under the authority of a Writ of Demolition issued by the RTC. But the records show that a Temporary Restraining Order (TRO), enjoining the demolition of respondents' house, was issued by the Supreme Court on June 2, 1986. The CA also found, based on the Certificate of Service of the Supreme Court process server, that a copy of the TRO was served on petitioner himself on June 4, 1986. Petitioner, howeverm, did not heed the TRO of this Court. We agree with the CA that he unlawfully pursued the demolition of respondents' house well until the middle of 1987. This is clear from Respondent Angela Gutierrez's testimony. The appellate court quoted the following pertinent portion thereof:10 "Q. On May 30, 1986, were they able to destroy your house? "A. Not all, a certain portion only xxx xxx xxx "Q. Was your house completely demolished? "A. No, sir. xxx xxx xxx "Q. Until when[,] Mrs. Witness? "A. Until 1987. "Q. About what month of 1987? "A. Middle of the year. "Q. Can you tell the Honorable Court who completed the demolition?

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A. The men of Fiscal Amonoy."11 The foregoing disproves the claim of petitioner that the demolition, which allegedly commenced only on May 30, 1986, was completed the following day. It likewise belies his allegation that the demolitions had already ceased when he received notice of the TRO. Although the acts of petitioner may have been legally justified at the outsset, their continuation after the issuance of the TRO amounted to an insidious abuse of his right. Indubitably, his actions were tainted with bad faith. Had he not insisted on completing the demolition, respondents would not have suffered the loss that engendered the suit before the RTC. Verily, his acts constituted not only an abuse of a right, but an invalid exercise of a right that had been suspended when he received thae TRO from this Court on June 4, 1986. By then he was no longer entitled to proceed with the demolition. A commentator on this topic explains: "The exercise of a right ends when the right disappears, and it disappears when it is abused, especially to the prejudice of others. The mask of a right without the spirit of justcie which gives it life, is repugnant to the modern concept of social law. It cannot be said that a person exercises a right when he unnecessarily prejudices another xxx. Over and above the specific precepts of postive law are the supreme norms of justice xxx; and he who violates them violates the law. For this reason it is not permissible to abuse our rights to prejudice others."12 Likewise, in Albenson Enterprises Corp. v. CA,13 the Court discussed the concept of abuse of rights as follows: "Artilce 19, known to contain what is commonly referred to as the principle of abuse of rights, sets certain standards which may be observed not only in the exercise of one's rights but also in the performance of one's duties.These standards are the following: to act with justice; to give everyone his due; recognizes the primordial limitation on all rights: that in their exercise, the norms of human conduct set forth in Article 19 and results in damage to another, a legal wrong is thereby committed for which the wrongdoer must be held responsible xxx." Clearly then, the demolition of respondents' house by petitioner, despite his receipt of the TRO, was not only an abuse but also an unlawful exercise of such right. In insisting on his alleged right, he wantonly violated this Court's Order and wittingly caused the destruction of respondents; house.1âwphi1.nêt Obviously, petitioner cannot invoke damnum absque injuria, a principle premised on the valid exercise of a right.14 Anything less or beyond such exercise will not give rise to the legal protection that the principle accords. And when damage or prejudice to another is occasioned thereby, liability cannot be obscured, much less abated. In the ultimate analysis, petitioner's liability is premised on the obligation to repair or to make whole the damage caused to another by reason of one's act or omission, whether done intentionally or negligently and whether or not punishable by law.15 WHEREFORE, the Petition is DENIED and the appealed Decision AFFIRMED. Costs against petitioner. SO ORDERED. G.R. No. 132344 February 17, 2000

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UNIVERSITY OF THE EAST, petitioner, vs. ROMEO A. JADER, respondent. YNARES-SANTIAGO, J.: May an educational institution be held liable for damages for misleading a student into believing that the latter had satisfied all the requirements for graduation when such is not the case? This is the issue in the instant petition for review premised on the following undisputed facts as summarized by the trial court and adopted by the Court of Appeals (CA),1 to wit: Plaintiff was enrolled in the defendants' College of Law from 1984 up to 1988. In the first semester of his last year (School year 1987-1988), he failed to take the regular final examination in Practice Court I for which he was given an incomplete grade (Exhibits "2", also Exhibit "H"). He enrolled for the second semester as fourth year law student (Exhibit "A") and on February 1, 1988 he filed an application for the removal of the incomplete grade given him by Professor Carlos Ortega (Exhibits "H-2", also Exhibit "2") which was approved by Dean Celedonio Tiongson after payment of the required fee. He took the examination on March 28, 1988. On May 30, 1988, Professor Carlos Ortega submitted his grade. It was a grade of five (5). (Exhibits "H-4", also Exhibits "2-L", "2-N").1âwphi1.nêt In the meantime, the Dean and the Faculty Members of the College of Law met to deliberate on who among the fourth year students should be allowed to graduate. The plaintiff's name appeared in the Tentative List of Candidates for graduation for the Degree of Bachelor of Laws (LL.B) as of Second Semester (1987-1988) with the following annotation: JADER ROMEO A. Def. Conflict of Laws — x-1-87-88, Practice Court I Inc., 1-87-88 C-1 to submit transcript with S.O. (Exhibits "3", "3-C-1", "3-C-2"). The 35th Investitures & Commencement Ceremonies for the candidates of Bachelor of Laws was scheduled on the 16th of April 1988 at 3:00 o'clock in the afternoon, and in the invitation for that occasion the name of the plaintiff appeared as one of the candidates. (Exhibits "B", "B-6", "B-6-A"). At the foot of the list of the names of the candidates there appeared however the following annotation: This is a tentative list Degrees will be conferred upon these candidates who satisfactorily complete requirements as stated in the University Bulletin and as approved of the Department of Education, Culture and Sports (Exhibit "B-7-A"). The plaintiff attended the investiture ceremonies at F. dela Cruz Quadrangle, U.E., Recto Campus, during the program of which he went up the stage when his name was called, escorted by her (sic) mother and his eldest brother who assisted in placing the Hood, and his Tassel was turned from left to right, and he was thereafter handed by Dean Celedonio a rolled white sheet of paper symbolical of the Law Diploma. His relatives took pictures of the occasion (Exhibits "C" to "C-6", "D-3" to "D-11"). He tendered a blow-out that evening which was attended by neighbors, friends and relatives who wished him good luck in the forthcoming bar examination. There were pictures taken too during the blow-out (Exhibits "D" to "D-1"). He thereafter prepared himself for the bar examination. He took a leave of absence without pay from his job from April 20, 1988 to September 30, 1988 (Exhibit "G") and enrolled at the pre-bar review class in Far Eastern University. (Exhibits "F" to

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"F-2"). Having learned of the deficiency he dropped his review class and was not able to take the bar examination.2 Consequently, respondent sued petitioner for damages alleging that he suffered moral shock, mental anguish, serious anxiety, besmirched reputation, wounded feelings and sleepless nights when he was not able to take the 1988 bar examinations arising from the latter's negligence. He prayed for an award of moral and exemplary damages, unrealized income, attorney's fees, and costs of suit. In its answer with counterclaim, petitioner denied liability arguing mainly that it never led respondent to believe that he completed the requirements for a Bachelor of Laws degree when his name was included in the tentative list of graduating students. After trial, the lower court rendered judgment as follows: WHEREFORE, in view of the foregoing judgment is hereby rendered in favor of the plaintiff and against the defendant ordering the latter to pay plaintiff the sum of THIRTY FIVE THOUSAND FOUR HUNDRED SEVENTY PESOS (P35,470.00) with legal rate of interest from the filing of the complaint until fully paid, the amount of FIVE THOUSAND PESOS (P5,000.00) as attorney's fees and the cost of suit. Defendant's counterclaim is, for lack of merit, hereby dismissed. SO ORDERED.3 which on appeal by both parties was affirmed by the Court of Appeals (CA) with modification. The dispositive portion of the CA decision reads: WHEREFORE, in the light of the foregoing, the lower Court's Decision is hereby AFFIRMED with the MODIFICATION that defendant-appellee, in addition to the sum adjudged by the lower court in favor of plaintiff-appellant, is also ORDERED to pay plaintiff-appellant the amount of FIFTY THOUSAND (P50,000.00) PESOS for moral damages. Costs against defendant-appellee. SO ORDERED.4 Upon the denial of its motion for reconsideration, petitioner UE elevated the case to this Court on a petition for review under Rule 45 of the Rules of Court, arguing that it has no liability to respondent Romeo A. Jader, considering that the proximate and immediate cause of the alleged damages incurred by the latter arose out of his own negligence in not verifying from the professor concerned the result of his removal exam. The petition lacks merit. When a student is enrolled in any educational or learning institution, a contract of education is entered into between said institution and the student. The professors, teachers or instructors hired by the school are considered merely as agents and administrators tasked to perform the school's commitment under the contract. Since the contracting parties are the school and the student, the latter is not duty-bound to deal with the former's agents, such as the professors with respect to the status or result of his grades, although nothing prevents either professors or students from sharing with each other such information. The Court takes judicial notice of the traditional practice in educational institutions wherein the professor directly furnishes his/her students their grades. It is the contractual obligation of the school to timely inform and furnish sufficient notice and information to each and every student as to whether he or she had already complied with all the requirements for the conferment of a degree or whether they would be included among those who will graduate. Although commencement exercises are but a formal ceremony, it nonetheless is not an ordinary occasion, since such ceremony is the educational

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institution's way of announcing to the whole world that the students included in the list of those who will be conferred a degree during the baccalaureate ceremony have satisfied all the requirements for such degree. Prior or subsequent to the ceremony, the school has the obligation to promptly inform the student of any problem involving the latter's grades and performance and also most importantly, of the procedures for remedying the same. Petitioner, in belatedly informing respondent of the result of the removal examination, particularly at a time when he had already commenced preparing for the bar exams, cannot be said to have acted in good faith. Absence of good faith must be sufficiently established for a successful prosecution by the aggrieved party in a suit for abuse of right under Article 19 of the Civil Code. Good faith connotes an honest intention to abstain from taking undue advantage of another, even though the forms and technicalities of the law, together with the absence of all information or belief of facts, would render the transaction unconscientious.5 It is the school that has access to those information and it is only the school that can compel its professors to act and comply with its rules, regulations and policies with respect to the computation and the prompt submission of grades. Students do not exercise control, much less influence, over the way an educational institution should run its affairs, particularly in disciplining its professors and teachers and ensuring their compliance with the school's rules and orders. Being the party that hired them, it is the school that exercises general supervision and exclusive control over the professors with respect to the submission of reports involving the students' standing. Exclusive control means that no other person or entity had any control over the instrumentality which caused the damage or injury.6 The college dean is the senior officer responsible for the operation of an academic program, enforcement of rules and regulations, and the supervision of faculty and student services.7 He must see to it that his own professors and teachers, regardless of their status or position outside of the university, must comply with the rules set by the latter. The negligent act of a professor who fails to observe the rules of the school, for instance by not promptly submitting a student's grade, is not only imputable to the professor but is an act of the school, being his employer. Considering further, that the institution of learning involved herein is a university which is engaged in legal education, it should have practiced what it inculcates in its students, more specifically the principle of good dealings enshrined in Articles 19 and 20 of the Civil Code which states: Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith. Art. 20. Every person who, contrary to law, wilfully or negligently causes damage to another, shall indemnify the latter for the same. Art. 19 was intended to expand the concept of torts by granting adequate legal remedy for the untold number of moral wrongs which is impossible for human foresight to provide specifically in statutory law.8 In civilized society, men must be able to assume that others will do them no intended injury — that others will commit no internal aggressions upon them; that their fellowmen, when they act affirmatively will do so with due care which the ordinary understanding and moral sense of the community exacts and that those with whom they deal in the general course of society will act in good faith. The ultimate thing in the theory of liability is justifiable reliance under conditions of civilized society.9 Schools and professors

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cannot just take students for granted and be indifferent to them, for without the latter, the former are useless. Educational institutions are duty-bound to inform the students of their academic status and not wait for the latter to inquire from the former. The conscious indifference of a person to the rights or welfare of the person/persons who may be affected by his act or omission can support a claim for damages.10 Want of care to the conscious disregard of civil obligations coupled with a conscious knowledge of the cause naturally calculated to produce them would make the erring party liable.11 Petitioner ought to have known that time was of the essence in the performance of its obligation to inform respondent of his grade. It cannot feign ignorance that respondent will not prepare himself for the bar exams since that is precisely the immediate concern after graduation of an LL.B. graduate. It failed to act seasonably. Petitioner cannot just give out its student's grades at any time because a student has to comply with certain deadlines set by the Supreme Court on the submission of requirements for taking the bar. Petitioner's liability arose from its failure to promptly inform respondent of the result of an examination and in misleading the latter into believing that he had satisfied all requirements for the course. Worth quoting is the following disquisition of the respondent court: It is apparent from the testimony of Dean Tiongson that defendant-appellee University had been informed during the deliberation that the professor in Practice Court I gave plaintiff-appellant a failing grade. Yet, defendant-appellee still did not inform plaintiff-appellant of his failure to complete the requirements for the degree nor did they remove his name from the tentative list of candidates for graduation. Worse, defendant-appellee university, despite the knowledge that plaintiff-appellant failed in Practice Court I, againincluded plaintiff-appellant's name in the "tentative list of candidates for graduation which was prepared after the deliberation and which became the basis for the commencement rites program. Dean Tiongson reasons out that plaintiff-appellant's name was allowed to remain in the tentative list of candidates for graduation in the hope that the latter would still be able to remedy the situation in the remaining few days before graduation day. Dean Tiongson, however, did not explain how plaintiff appellant Jader could have done something to complete his deficiency if defendant-appellee university did not exert any effort to inform plaintiff-appellant of his failing grade in Practice Court I.12 Petitioner cannot pass on its blame to the professors to justify its own negligence that led to the delayed relay of information to respondent. When one of two innocent parties must suffer, he through whose agency the loss occurred must bear it.13 The modern tendency is to grant indemnity for damages in cases where there is abuse of right, even when the act is not illicit.14 If mere fault or negligence in one's acts can make him liable for damages for injury caused thereby, with more reason should abuse or bad faith make him liable. A person should be protected only when he acts in the legitimate exercise of his right, that is, when he acts with prudence and in good faith, but not when he acts with negligence or abuse.15 However, while petitioner was guilty of negligence and thus liable to respondent for the latter's actual damages, we hold that respondent should not have been awarded moral damages. We do not agree with the Court of Appeals' findings that respondent suffered shock, trauma and pain when he was informed that he could not graduate and will not be allowed to take the bar examinations. At the very least, it behooved on respondent to verify for himself whether he has completed all

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necessary requirements to be eligible for the bar examinations. As a senior law student, respondent should have been responsible enough to ensure that all his affairs, specifically those pertaining to his academic achievement, are in order. Given these considerations, we fail to see how respondent could have suffered untold embarrassment in attending the graduation rites, enrolling in the bar review classes and not being able to take the bar exams. If respondent was indeed humiliated by his failure to take the bar, he brought this upon himself by not verifying if he has satisfied all the requirements including his school records, before preparing himself for the bar examination. Certainly, taking the bar examinations does not only entail a mental preparation on the subjects thereof; there are also prerequisites of documentation and submission of requirements which the prospective examinee must meet. WHEREFORE, the assailed decision of the Court of Appeals is AFFIRMED with MODIFICATION. Petitioner is ORDERED to PAY respondent the sum of Thirty-five Thousand Four Hundred Seventy Pesos (P35,470.00), with legal interest of 6% per annum computed from the date of filing of the complaint until fully paid; the amount of Five Thousand Pesos (P5,000.00) as attorney's fees; and the costs of the suit. The award of moral damages is DELEIED.1âwphi1.nêt SO ORDERED. G.R. No. L-15526 December 28, 1963 ENRIQUE J. L. RUIZ and JOSE V. HERRERA, in their behalf and as minority stockholders of the Allied Technologists, Inc., plaintiffs-appellants, vs. THE SECRETARY OF NATIONAL DEFENSE, COL. NICOLAS JIMENEZ, Head of the Engineer Group, Office of the Secretary of National Defense, THE FINANCE OFFICER of the Department of National Defense, THE AUDITOR of the Dept. of National Defense, PABLO D. PANLILIO and ALLIED TECHNOLOGISTS, INC.,defendants-appellees. Montenegro, Madayag, Viola and Hernandez for plaintiffs-appellants. Office of the Solicitor General for defendant-appellee Secretary of National Defense. Rosauro Alvarez for defendant-appellee Allied Technologists, Inc. L. D. Panlilio for defendant-appellee Pablo Panlilio. PAREDES, J.: This is an appeal by plaintiffs Enrique J. L. Ruiz and Jose V. Herrera from an Order of the Court of First Instance of Manila, in Civil Case No. 26601, dated February 25, 1959, dismissing plaintiffs' complaint. On September 11, 1950, a contract was executed between the defendant Allied Technologists, Inc. (corporation, for short), and the Republic of the Philippines, for the construction of the Veterans Memorial Hospital. Ruiz and Herrera were stockholders and officers of the corporation. The construction of the hospital was terminated in 1955. On August 20, 1954, and June 20, 1955, Civil Cases Nos. 23778 and 26601, respectively, were filed by same plaintiffs herein, making as parties-defendants in both cases, the same defendants herein, the Secretary of National Defense, Col. Nicolas Jimenez (Engineer), the Finance Officer, and the Auditor of the Dept. of National Defense, Pablo D. Panlilio and Allied Technologists, Inc. Civil Case No. 23778 was dismissed by the CFI on October 12,

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1954; and the dismissal was affirmed by this Court on July 7, 1955, in G.R. No. L-8638. Civil Case No. 26601 was also dismissed on September 13, 1955. On appeal, this Court reversed the order of dismissal, under the impression that the real controversy was confined merely between defendant Panlilio and plaintiffs Ruiz and Herrera over the 15% of the contract price, which was retained by the Department of National Defense. The retention of the 15% of the contract price in the sum of P34,740.00 was made to answer for any claim or lien that might arise, in the course of the construction. The last case, however, was remanded to the court of origin, for further proceedings. Panlilio and the corporation filed their amended answers, stating that the amount retained by the Department of National Defense was already paid to defendant corporation, as sought for by the plaintiffs in their complaint. In view of this development, the trial court invited the parties to a conference, in which the plaintiffs indicated their conformity, to the dismissal of the complaint with respect to the retention of the 15% of the contract price; but insisted upon the hearing of the second question, which sought the declaration and recognition of plaintiffs Ruiz and Herrera, as two of the three architects of the hospital. The trial court, nevertheless, dismissed the complaint, for being already academic and moot. Hence, this appeal by plaintiffs-appellants, who alleged in their lone assignment of error that "the lower court grievously erred in ordering the dismissal of the case, with costs against the plaintiffs". Plaintiffs-appellants contend that the only ground relied upon by the lower court to dismiss the case without any trial is the allegation contained in pars. 4 and (e) of the answers of the appellees Panlilio and Allied Technologists, Inc., respectively; that the amount retained by the Department of National Defense had already been paid; that except for this bare allegation of the appellees, no evidence was adduced to prove the truth of the same; that even assuming, for the sake of argument, that the same is true, nevertheless the first part of the first cause of action still remains, for which they had insisted upon a hearing in order to establish their right to be recognized as two of the three architects of the hospital; that because the pleadings do not show any ground which might legally justify the action taken by the lower court, the latter should not have ordered the dismissal of the entire case but should have ordered only the striking out of the moot portion of appellants' first cause of action, citing Pacal v. Ramos, 81 Phil. 30, 33; 27 C.J.S. 209-210; Bush v. Murray, 205 N.Y.S. 21, 26, 209 App. Div. 563; Bearden v. Longino. 190 S.E. 12, 183 Ga. 819. Appellants further argue in their brief that they base their cause of action on article 21, New Civil Code. The appeal has no merit. The order appealed from, states — Considering the manifestation of counsel for plaintiffs that the latter would insist on the hearing of the above-entitled case for the purpose of establishing their right to be recognized as the architects of the Veterans Hospital together with defendant Pablo D. Panlilio, and it appearing that plaintiffs' Amended Complaint with Injunction prays, among others, "That this Honorable Court order defendants Secretary of National Defense, Col. Nicolas Jimenez, and the Finance Officer and Auditor of the Department of National Defense to pay the Allied Technologists, Inc., the balance unpaid by virtue of the contract executed on September 11, 1950 (Annex "C" hereof) for services rendered under Title I and to be rendered under Title II of said contract; that paragraph 4 of defendant Pablo Panlilio's Amended Answer to said complaint alleges "That whatever amounts were retained by the Dept. of National Defense on the contract price, which retention was authorized by

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the contract, was paid by the Dept. of National Defense to the Allied Technologists Inc. as sought by the plaintiffs; that paragraph (e) of the ANSWER TO THE AMENDED COMPLAINT of defendant Allied Technologists, Inc., also alleges "That whatever amounts were retained by the Department of National Defense, per the stipulations contained in the contract, have already been paid by the Allied Technologists, Inc. and, therefore, the present action seeking to compel the aforementioned Department of National Defense to pay to defendant Allied Technologists, Inc. the amounts retained by the Department of National Defense is academic, groundless, unfounded and malicious"; that the said allegations of the separate answers of defendants Pablo Panlilio and Allied Technologists, Inc., are not and can not be denied by plaintiffs, and that it is this Court's understanding that defendant has no objection to the dismissal of this case — it is ordered that this case be, as it is hereby DISMISSED, with costs against plaintiffs. A cursory reading of pars. 18 and 19 of the amended complaint with injunction and prayers (1) and (2) thereof, reveals that appellants' first cause of action is composed of two parts, as follows: (a) A judicial declaration or recognition that appellants Ruiz and Herrera, together with appellee Panlilio, were the architects of the Veterans Hospital; and (b) An injunction restraining the appellee government officials paying their co-appellee Panlilio the sum retained by the former, as per stipulation contained in the contract for the construction of the hospital because "they will not only be deprived of the monetary value of the services legally due them, but that their professional prestige and standing will be seriously impaired".lawphil.net As appellants admitted, they no longer consider the Secretary and other officials of the Department of National Defense, as parties-defendants in the case, said officials can no longer be compelled to recognize the appellants, Ruiz and Herrera, as co-architects with appellee Panlilio of the Veterans Hospital. And, as the amount retained by the Department on the contract price, which retention was authorized by the contract, was, as sought by the appellants, already paid to the Allied Technologists, Inc., there is nothing more for the trial court to decide, even without first ruling on the special defenses of appellees Panlilio and the corporation. Moreover, by discarding the Secretary and other officials of the Department of National Defense, as parties-defendants, appellants could not expect the trial court to order them to recognize and declare appellants as co-architects in the construction of the hospital. And this must be so, because the construction agreement expressly provides that the architect being contracted by the Government was appellee Pablo Panlilio. The said agreement states that the same was entered into by the government, party of the first part and "Allied Technologists, Inc. . . . and Mr. Pablo D. Panlilio, architect, hereinafter called the party of the second part" and "The Allied Technologists, Inc. for rendering engineering services and Mr. Pablo D. Panlilio, architect, for rendering architectural services". And the contract was signed for the Government by "Ramon Magsaysay, Secretary of National Defense (party of the first part," and "Allied Technologists, Inc., by Enrique J. L. Ruiz, President, Contractor, Pablo D. Panlilio, Architect". Appellants maintain that their claim for recognition is divisible and separable from their allegations regarding the non-payment by the government of a portion of the architectural fees; thereby concluding that what the lower court should have done,

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should have been merely to order the striking out of the moot portion of appellants' cause of action, and should have proceeded with hearing their claim for recognition. But the allegations in pars. 18 and 19 of the amended complaint, show otherwise. There is an indivisible and single cause of action which is primarily to prevent payment exclusively to defendant Panlilio of the amount of P34,740.00, which said appellants contend should be paid to appellee Allied Technologists, Inc.; the matter recognizing them together with Pablo Panlilio as architects of the hospital, being merely incidental thereto. The case of Pacal v. Ramos, 81 Phil. 30, cited by appellants is not applicable. In this case, the grounds for quo warranto are separable from the grounds for election irregularities which are distinct and separate causes of action, entitling the petitioner to separate and unrelated reliefs. These two grounds were alleged under separate paragraphs and they were two independent actions improperly joined in one proceeding. In the case at bar, in one paragraph (par. 19 of the amended complaint), as first cause of action, the claim for recognition is inseparably linked with their allegations regarding alleged threatened payment of P34,740.00 to Panlilio alone, because "they will not only be deprived of the monetary value of the services legally due them, but that their professional prestige and standing will be seriously impaired". When the very defendant Allied Technologists, Inc. itself asserted in its answer the amended complaint, that the amount was paid to it, an assertion which was not at all denied, plaintiffs-appellants' cause of action under said par. 19 dissipated entirely. There is a veiled insinuation that appellants, thesis would fall under the provisions of the Rules on declaratory relief, because appellants wanted merely a declaration of their rights in a contract in which they were interested. The trial court, however, was correct in refusing to make such declaration, because it was not necessary and proper under the circumstances (sec. 6, Rule 66). Appellants were not parties to the construction agreement. The sole object the appeal is only to secure for them a recognition, that they were allegedly the co-architects of Panlilio, in the construction of the hospital, so as to enhance their professional prestige and not to impair their standing. If this is the goal of appellants, a judicial declaration to the effect would seem unnecessary. Let us ponder over the thought that a brilliant professional enjoys the respect and esteem of his fellowmen, even without any court declaration of such fact, and that an incompetent one may summon all the tribunals in the world, to proclaim his genius in vain. But appellants invoke Article 21 of the Civil Code, which states — 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 damages. contending that the word "injury" in the said article, refers not only to any indeterminate right or property, but also to honor or credit (I Tolentino Civil Code, p. 67). It may be added, however, that this article also envisions a situation where a person has a legal right, and such right is violated by another in a manner contrary to morals, good customs or public policy; it presupposes losses or injuries, material or otherwise, which one may suffer as a result of said violation. The pleadings do not show that damages were ever asked or alleged, in connection with this case, predicated upon the article aforecited. And under the facts and circumstances obtaining in this case, one cannot plausibly sustain the contention that the failure or refusal to extend the recognition was an act contrary to morals, good customs or public policy.

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IN VIEW HEREOF, the order appealed from is affirmed, with costs against plaintiffs-appellants. G.R. No. L-20089 December 26, 1964 BEATRIZ P. WASSMER, plaintiff-appellee, vs. FRANCISCO X. VELEZ, defendant-appellant. Jalandoni & Jamir for defendant-appellant. Samson S. Alcantara for plaintiff-appellee. BENGZON, J.P., J.: The facts that culminated in this case started with dreams and hopes, followed by appropriate planning and serious endeavors, but terminated in frustration and, what is worse, complete public humiliation. Francisco X. Velez and Beatriz P. Wassmer, following their mutual promise of love, decided to get married and set September 4, 1954 as the big day. On September 2, 1954 Velez left this note for his bride-to-be: Dear Bet — Will have to postpone wedding — My mother opposes it. Am leaving on the Convair today. Please do not ask too many people about the reason why — That would only create a scandal. Paquing But the next day, September 3, he sent her the following telegram: NOTHING CHANGED REST ASSURED RETURNING VERY SOON APOLOGIZE MAMA PAPA LOVE . PAKING Thereafter Velez did not appear nor was he heard from again. Sued by Beatriz for damages, Velez filed no answer and was declared in default. Plaintiff adduced evidence before the clerk of court as commissioner, and on April 29, 1955, judgment was rendered ordering defendant to pay plaintiff P2,000.00 as actual damages; P25,000.00 as moral and exemplary damages; P2,500.00 as attorney's fees; and the costs. On June 21, 1955 defendant filed a "petition for relief from orders, judgment and proceedings and motion for new trial and reconsideration." Plaintiff moved to strike it cut. But the court, on August 2, 1955, ordered the parties and their attorneys to appear before it on August 23, 1955 "to explore at this stage of the proceedings the possibility of arriving at an amicable settlement." It added that should any of them fail to appear "the petition for relief and the opposition thereto will be deemed submitted for resolution." On August 23, 1955 defendant failed to appear before court. Instead, on the following day his counsel filed a motion to defer for two weeks the resolution on defendants petition for relief. The counsel stated that he would confer with defendant in Cagayan de Oro City — the latter's residence — on the possibility of an amicable element. The court granted two weeks counted from August 25, 1955. Plaintiff manifested on June 15, 1956 that the two weeks given by the court had expired on September 8, 1955 but that defendant and his counsel had failed to appear.

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Another chance for amicable settlement was given by the court in its order of July 6, 1956 calling the parties and their attorneys to appear on July 13, 1956. This time. however, defendant's counsel informed the court that chances of settling the case amicably were nil. On July 20, 1956 the court issued an order denying defendant's aforesaid petition. Defendant has appealed to this Court. In his petition of June 21, 1955 in the court a quo defendant alleged excusable negligence as ground to set aside the judgment by default. Specifically, it was stated that defendant filed no answer in the belief that an amicable settlement was being negotiated. A petition for relief from judgment on grounds of fraud, accident, mistake or excusable negligence, must be duly supported by an affidavit of merits stating facts constituting a valid defense. (Sec. 3, Rule 38, Rules of Court.) Defendant's affidavit of merits attached to his petition of June 21, 1955 stated: "That he has a good and valid defense against plaintiff's cause of action, his failure to marry the plaintiff as scheduled having been due to fortuitous event and/or circumstances beyond his control." An affidavit of merits like this stating mere conclusions or opinions instead of facts is not valid. (Cortes vs. Co Bun Kim, L-3926, Oct. 10, 1951; Vaswani vs. P. Tarrachand Bros., L-15800, December 29, 1960.) Defendant, however, would contend that the affidavit of merits was in fact unnecessary, or a mere surplusage, because the judgment sought to be set aside was null and void, it having been based on evidence adduced before the clerk of court. In Province of Pangasinan vs. Palisoc, L-16519, October 30, 1962, this Court pointed out that the procedure of designating the clerk of court as commissioner to receive evidence is sanctioned by Rule 34 (now Rule 33) of the Rules of Court. Now as to defendant's consent to said procedure, the same did not have to be obtained for he was declared in default and thus had no standing in court (Velez vs. Ramas, 40 Phil. 787; Alano vs. Court of First Instance, L-14557, October 30, 1959). In support of his "motion for new trial and reconsideration," defendant asserts that the judgment is contrary to law. The reason given is that "there is no provision of the Civil Code authorizing" an action for breach of promise to marry. Indeed, our ruling in Hermosisima vs. Court of Appeals (L-14628, Sept. 30, 1960), as reiterated in Estopa vs. Biansay (L-14733, Sept. 30, 1960), is that "mere breach of a promise to marry" is not an actionable wrong. We pointed out that Congress deliberately eliminated from the draft of the new Civil Code the provisions that would have it so. It must not be overlooked, however, that the extent to which acts not contrary to law may be perpetrated with impunity, is not limitless for Article 21 of said Code provides that "any person who wilfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage." The record reveals that on August 23, 1954 plaintiff and defendant applied for a license to contract marriage, which was subsequently issued (Exhs. A, A-1). Their wedding was set for September 4, 1954. Invitations were printed and distributed to relatives, friends and acquaintances (Tsn., 5; Exh. C). The bride-to-be's trousseau, party drsrses and other apparel for the important occasion were purchased (Tsn., 7-8). Dresses for the maid of honor and the flower girl were prepared. A matrimonial bed, with accessories, was bought. Bridal showers were given and gifts received (Tsn., 6; Exh. E). And then, with but two days before the wedding, defendant, who

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was then 28 years old,: simply left a note for plaintiff stating: "Will have to postpone wedding — My mother opposes it ... " He enplaned to his home city in Mindanao, and the next day, the day before the wedding, he wired plaintiff: "Nothing changed rest assured returning soon." But he never returned and was never heard from again. Surely this is not a case of mere breach of promise to marry. As stated, mere breach of promise to marry is not an actionable wrong. But to formally set a wedding and go through all the above-described preparation and publicity, only to walk out of it when the matrimony is about to be solemnized, is quite different. This is palpably and unjustifiably contrary to good customs for which defendant must be held answerable in damages in accordance with Article 21 aforesaid. Defendant urges in his afore-stated petition that the damages awarded were excessive. No question is raised as to the award of actual damages. What defendant would really assert hereunder is that the award of moral and exemplary damages, in the amount of P25,000.00, should be totally eliminated. Per express provision of Article 2219 (10) of the New Civil Code, moral damages are recoverable in the cases mentioned in Article 21 of said Code. As to exemplary damages, defendant contends that the same could not be adjudged against him because under Article 2232 of the New Civil Code the condition precedent is that "the defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner." The argument is devoid of merit as under the above-narrated circumstances of this case defendant clearly acted in a "wanton ... , reckless [and] oppressive manner." This Court's opinion, however, is that considering the particular circumstances of this case, P15,000.00 as moral and exemplary damages is deemed to be a reasonable award. PREMISES CONSIDERED, with the above-indicated modification, the lower court's judgment is hereby affirmed, with costs. G.R. No. L-18630 December 17, 1966 APOLONIO TANJANCO, petitioner, vs. HON. COURT OF APPEALS and ARACELI SANTOS, respondents. P. Carreon and G. O. Veneracion, Jr. for petitioner. Antonio V. Bonoan for respondents. REYES, J.B.L., J.: Appeal from a decision of the Court of Appeals (in its Case No. 27210-R) revoking an order of the Court of First Instance of Rizal (in Civil Case No. Q-4797) dismissing appellant's action for support and damages. The essential allegations of the complaint are to the effect that, from December, 1957, the defendant (appellee herein), Apolonio Tanjanco, courted the plaintiff, Araceli Santos, both being of adult age; that "defendant expressed and professed his undying love and affection for plaintiff who also in due time reciprocated the tender feelings"; that in consideration of defendant's promise of marriage plaintiff consented and acceded to defendant's pleas for carnal knowledge; that regularly until December 1959, through his protestations of love and promises of marriage, defendant succeeded in having carnal access to plaintiff, as a result of which the latter conceived a child; that due to her pregnant condition, to avoid embarrassment and social humiliation, plaintiff had to resign her job as secretary in IBM

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Philippines, Inc., where she was receiving P230.00 a month; that thereby plaintiff became unable to support herself and her baby; that due to defendant's refusal to marry plaintiff, as promised, the latter suffered mental anguish, besmirched reputation, wounded feelings, moral shock, and social humiliation. The prayer was for a decree compelling the defendant to recognize the unborn child that plaintiff was bearing; to pay her not less than P430.00 a month for her support and that of her baby, plus P100,000.00 in moral and exemplary damages, plus P10,000.00 attorney's fees. Upon defendant's motion to dismiss, the court of first instance dismissed the complaint for failure to state a cause of action. Plaintiff Santos duly appealed to the Court of Appeals, and the latter ultimately decided the case, holding with the lower court that no cause of action was shown to compel recognition of a child as yet unborn, nor for its support, but decreed that the complaint did state a cause of action for damages, premised on Article 21 of the Civil Code of the Philippines, prescribing as follows: ART. 21. Any person who wilfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage. The Court of Appeals, therefore, entered judgment setting aside the dismissal and directing the court of origin to proceed with the case. Defendant, in turn, appealed to this Court, pleading that actions for breach of a promise to marry are not permissible in this jurisdiction, and invoking the rulings of this Court in Estopa vs. Piansay, L-14733, September 30, 1960; Hermosisima vs. Court of Appeals, L-14628, January 29, 1962; and De Jesus vs. SyQuia, 58 Phil. 886. We find this appeal meritorious. In holding that the complaint stated a cause of action for damages, under Article 21 above mentioned, the Court of Appeals relied upon and quoted from the memorandum submitted by the Code Commission to the Legislature in 1949 to support the original draft of the Civil Code. Referring to Article 23 of the draft (now Article 21 of the Code), the Commission stated: But the Code Commission has gone farther than the sphere of wrongs defined or determined by positive law. Fully sensible that there are countless gaps in the statutes, which leave so many victims of moral wrongs helpless, even though they have actually suffered material and moral injury, the Commission has deemed it necessary, in the interest of justice, to incorporate in the proposed Civil Code the following rule: "ART. 23. Any person who wilfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage." An example will illustrate the purview of the foregoing norm: "A" seduces the nineteen-year old daughter of "X". A promise of marriage either has not been made, or can not be proved. The girl becomes pregnant. Under the present laws, there is no crime, as the girl is above eighteen years of age. Neither can any civil action for breach of promise of marriage be filed. Therefore, though the grievous moral wrong has been committed, and though the girl and her family have suffered incalculable moral damage, she and her parents cannot bring any action for damages. But under the proposed article, she and her parents would have such a right of action.

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The Court of Appeals seems to have overlooked that the example set forth in the Code Commission's memorandum refers to a tort upon a minor who has been seduced. The essential feature is seduction, that in law is more than mere sexual intercourse, or a breach of a promise of marriage; it connotes essentially the idea of deceit, enticement, superior power or abuse of confidence on the part of the seducer to which the woman has yielded (U.S. vs. Buenaventura, 27 Phil. 121; U.S. vs. Arlante, 9 Phil. 595). It has been ruled in the Buenaventura case (supra) that — To constitute seduction there must in all cases be some sufficient promise or inducement and the woman must yield because of the promise or other inducement. If she consents merely from carnal lust and the intercourse is from mutual desire, there is no seduction (43 Cent. Dig. tit. Seduction, par. 56). She must be induced to depart from the path of virtue by the use of some species of arts, persuasions and wiles, which are calculated to have and do have that effect, and which result in her ultimately submitting her person to the sexual embraces of her seducer (27 Phil. 123). And in American Jurisprudence we find: On the other hand, in an action by the woman, the enticement, persuasion or deception is the essence of the injury; and a mere proof of intercourse is insufficient to warrant a recover. Accordingly it is not seduction where the willingness arises out of sexual desire or curiosity of the female, and the defendant merely affords her the needed opportunity for the commission of the act. It has been emphasized that to allow a recovery in all such cases would tend to the demoralization of the female sex, and would be a reward for unchastity by which a class of adventuresses would be swift to profit." (47 Am. Jur. 662) Bearing these principles in mind, let us examine the complaint. The material allegations there are as follows: I. That the plaintiff is of legal age, single, and residing at 56 South E. Diliman, Quezon City, while defendant is also of legal age, single and residing at 525 Padre Faura, Manila, where he may be served with summons; II. That the plaintiff and the defendant became acquainted with each other sometime in December, 1957 and soon thereafter, the defendant started visiting and courting the plaintiff; III. That the defendant's visits were regular and frequent and in due time the defendant expressed and professed his undying love and affection for the plaintiff who also in due time reciprocated the tender feelings; IV. That in the course of their engagement, the plaintiff and the defendant as are wont of young people in love had frequent outings and dates, became very close and intimate to each other and sometime in July, 1958, in consideration of the defendant's promises of marriage, the plaintiff consented and acceded to the former's earnest and repeated pleas to have carnal knowledge with him; V. That subsequent thereto and regularly until about July, 1959 except for a short period in December, 1958 when the defendant was out of the country, the defendant through his protestations of love and promises of marriage succeeded in having carnal knowledge with the plaintiff; VI. That as a result of their intimate relationship, the plaintiff started conceiving which was confirmed by a doctor sometime in July, 1959;

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VII. That upon being certain of her pregnant condition, the plaintiff informed the defendant and pleaded with him to make good his promises of marriage, but instead of honoring his promises and righting his wrong, the defendant stopped and refrained from seeing the plaintiff since about July, 1959 has not visited the plaintiff and to all intents and purposes has broken their engagement and his promises. Over and above the partisan allegations, the facts stand out that for one whole year, from 1958 to 1959, the plaintiff-appellee, a woman of adult age, maintained intimate sexual relations with appellant, with repeated acts of intercourse. Such conduct is incompatible with the idea of seduction. Plainly there is here voluntariness and mutual passion; for had the appellant been deceived, had she surrendered exclusively because of the deceit, artful persuasions and wiles of the defendant, she would not have again yielded to his embraces, much less for one year, without exacting early fulfillment of the alleged promises of marriage, and would have cut chart all sexual relations upon finding that defendant did not intend to fulfill his promises. Hence, we conclude that no case is made under Article 21 of the Civil Code, and no other cause of action being alleged, no error was committed by the Court of First Instance in dismissing the complaint. Of course, the dismissal must be understood as without prejudice to whatever actions may correspond to the child of the plaintiff against the defendant-appellant, if any. On that point, this Court makes no pronouncement, since the child's own rights are not here involved. FOR THE FOREGOING REASONS, the decision of the Court of Appeals is reversed, and that of the Court of First Instance is affirmed. No costs. G.R. No. 101749 July 10, 1992 CONRADO BUNAG, JR., petitioner, vs. HON. COURT OF APPEALS, First Division, and ZENAIDA B. CIRILO, respondents. REGALADO, J.: Petitioner appeals for the reversal of the decision 1 of respondent Court of Appeals promulgated on May 17, 1991 in CA-G.R. CV No. 07054, entitled "Zenaida B. Cirilo vs. Conrado Bunag, Sr. and Conrado Bunag, Jr.," which affirmed in toto the decision of the Regional Trial Court, Branch XI at Bacoor, Cavite, and, implicitly, respondent court's resolution of September 3, 1991 2 denying petitioner's motion for reconsideration. Respondent court having assiduously discussed the salient antecedents of this case, vis-a-vis the factual findings of the court below, the evidence of record and the contentions of the parties, it is appropriate that its findings, which we approve and adopt, be extensively reproduced hereunder: Based on the evidence on record, the following facts are considered indisputable: On the afternoon of September 8, 1973, defendant-appellant Bunag, Jr. brought plaintiff-appellant to a motel or hotel where they had sexual intercourse. Later that evening, said defendant-appellant brought plaintiff-appellant to the house of his grandmother Juana de Leon in Pamplona, Las Piñas, Metro Manila, where they lived together as husband and wife for 21 days, or until September 29, 1973. On

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September 10, 1973, defendant-appellant Bunag, Jr. and plaintiff-appellant filed their respective applications for a marriage license with the Office of the Local Civil Registrar of Bacoor, Cavite. On October 1, 1973, after leaving plaintiff-appellant, defendant-appellant Bunag, Jr. filed an affidavit withdrawing his application for a marriage license. Plaintiff-appellant contends that on the afternoon of September 8, 1973, defendant-appellant Bunag, Jr., together with an unidentified male companion, abducted her in the vicinity of the San Juan de Dios Hospital in Pasay City and brought her to a motel where she was raped. The court a quo, which adopted her evidence, summarized the same which we paraphrased as follows: Plaintiff was 26 years old on November 5, 1974 when she testified, single and had finished a college course in Commerce (t.s.n., p. 4, Nov. 5, 1974). It appears that on September 8, 1973, at about 4:00 o'clock in the afternoon, while she was walking along Figueras Street, Pasay City on her way to the San Juan de Dios Canteen to take her snack, defendant, Conrado Bunag, Jr., came riding in a car driven by a male companion. Plaintiff and defendant Bunag, Jr. were sweethearts, but two weeks before September 8, 1973, they had a quarrel, and Bunag, Jr. wanted to talk matters over with plaintiff, so that he invited her to take their merienda at the Aristocrat Restaurant in Manila instead of at the San Juan de Dios Canteen, to which plaintiff obliged, as she believed in his sincerity (t.s.n., pp. 8-10, Nov. 5, 1974). Plaintiff rode in the car and took the front seat beside the driver while Bunag, Jr. seated himself by her right side. The car travelled north on its way to the Aristocrat Restaurant but upon reaching San Juan Street in Pasay City, it turned abruptly to the right, to which plaintiff protested, but which the duo ignored and instead threatened her not to make any noise as they were ready to die and would bump the car against the post if she persisted. Frightened and silenced, the car travelled its course thru F.B. Harrison Boulevard until they reached a motel. Plaintiff was then pulled and dragged from the car against her will, and amidst her cries and pleas. In spite of her struggle she was no match to the joint strength of the two male combatants because of her natural weakness being a woman and her small stature. Eventually, she was brought inside the hotel where the defendant Bunag, Jr. deflowered her against her will and consent. She could not fight back and repel the attack because after Bunag, Jr. had forced her to lie down and embraced her, his companion held her two feet, removed her panty, after which he left. Bunag, Jr. threatened her that he would ask his companion to come back and hold her feet if she did not surrender her womanhood to him, thus he succeeded in feasting on her virginity. Plaintiff described the pains she felt and how blood came out of her private parts after her vagina was penetrated by the penis of the defendant Bunag, Jr. (t.s.n. pp. 17-24, Nov. 5, 1974). After that outrage on her virginity, plaintiff asked Bunag, Jr. once more to allow her to go home but the latter would not consent and stated that he would only let her go after they were married as he intended to marry her, so much so that she promised not to make any scandal and to marry him. Thereafter, they took a taxi together after the car that they used had already gone, and proceeded to the house of Juana de Leon, Bunag, Jr.'s grandmother in Pamplona, Las Piñas, Metro Manila where they arrived at 9:30 o'clock in the evening (t.s.n., p. 26, Nov. 5, 1974). At about ten (10) o'clock that same evening, defendant Conrado Bunag, Sr., father of Bunag, Jr. arrived and assured plaintiff that the following day which was a

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Monday, she and Bunag, Jr. would go to Bacoor, to apply for a marriage license, which they did. They filed their applications for marriage license (Exhibits "A" and "C") and after that plaintiff and defendant Bunag, Jr. returned to the house of Juana de Leon and lived there as husband and wife from September 8, 1973 to September 29, 1973. On September 29, 1973 defendant Bunag, Jr. left and never returned, humiliating plaintiff and compelled her to go back to her parents on October 3, 1973. Plaintiff was ashamed when she went home and could not sleep and eat because of the deception done against her by defendants-appellants (t.s.n., p. 35, Nov. 5, 1974). The testimony of plaintiff was corroborated in toto by her uncle, Vivencio Bansagan who declared that on September 8, 1973 when plaintiff failed to arrive home at 9:00 o'clock in the evening, his sister who is the mother of plaintiff asked him to look for her but his efforts proved futile, and he told his sister that plaintiff might have married (baka nag-asawa, t.s.n., pp. 5-6, March 18, 1976). However, in the afternoon of the next day (Sunday), his sister told him that Francisco Cabrera, accompanied by barrio captain Jacinto Manalili of Ligas, Bacoor, Cavite, informed her that plaintiff and Bunag, Jr. were in Cabrera's house, so that her sister requested him to go and see the plaintiff, which he did, and at the house of Mrs. Juana de Leon in Pamplona, Las Piñas, Metro Manila he met defendant Conrado Bunag, Sr., who told him, "Pare, the children are here already. Let us settle the matter and have them married." He conferred with plaintiff who told him that as she had already lost her honor, she would bear her sufferings as Boy Bunag, Jr. and his father promised they would be married. Defendants-appellants, on the other hand, deny that defendant-appellant Conrado Bunag, Jr. abducted and raped plaintiff-appellant on September 8, 1973. On the contrary, plaintiff-appellant and defendant-appellant Bunag, Jr. eloped on that date because of the opposition of the latter's father to their relationship. Defendant-appellants claim that defendant-appellant Bunag, Jr. and plaintiff-appellant had earlier made plans to elope and get married, and this fact was known to their friends, among them, Architect Chito Rodriguez. The couple made good their plans to elope on the afternoon of September 8, 1973, when defendant-appellant Bunag, Jr., accompanied by his friend Guillermo Ramos, Jr., met plaintiff-appellant and her officemate named Lydia in the vicinity of the San Juan de Dios Hospital. The foursome then proceeded to (the) aforesaid hospital's canteen where they had some snacks. Later, Guillermo Ramos, Jr. took Lydia to Quirino Avenue where she could get a ride home, thereby leaving the defendant-appellant Bunag, Jr. and plaintiff-appellant alone. According to defendant-appellant Bunag, Jr., after Guillermo Ramos, Jr. and Lydia left, he and plaintiff-appellant took a taxi to the Golden Gate and Flamingo Hotels where they tried to get a room, but these were full. They finally got a room at the Holiday Hotel, where defendant-appellant registered using his real name and residence certificate number. Three hours later, the couple check out of the hotel and proceeded to the house of Juana de Leon at Pamplona, Las Piñas, where they stayed until September 19, 1873. Defendant-appellant claims that bitter disagreements with the plaintiff-appellant over money and the threats made to his life prompted him to break off their plan to get married. During this period, defendant-appellant Bunag, Sr. denied having gone to the house of Juan de Leon and telling plaintiff-appellant that she would be wed to

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defendant-appellant Bunag, Jr. In fact, he phoned Atty. Conrado Adreneda, member of the board of directors of Mandala Corporation, defendant-appellant Bunag, Jr.'s employer, three times between the evening of September 8, 1973 and September 9, 1973 inquiring as to the whereabouts of his son. He came to know about his son's whereabouts when he was told of the couple's elopement late in the afternoon of September 9, 1973 by his mother Candida Gawaran. He likewise denied having met relatives and emissaries of plaintiff-appellant and agreeing to her marriage to his son. 3 A complaint for damages for alleged breach of promise to marry was filed by herein private respondent Zenaida B. Cirilo against petitioner Conrado Bunag, Jr. and his father, Conrado Bunag, Sr., as Civil Case No. N-2028 of the Regional Trial Court, Branch XIX at Bacoor, Cavite. On August 20, 1983, on a finding, inter alia, that petitioner had forcibly abducted and raped private respondent, the trial court rendered a decision 4 ordering petitioner Bunag, Jr. to pay private respondent P80,000.00 as moral damages, P20,000.00 as exemplary damages, P20,000.00 by way of temperate damages, and P10,000.00 for and as attorney's fees, as well as the costs of suit. Defendant Conrado Bunag, Sr. was absolved from any and all liability. Private respondent appealed that portion of the lower court's decision disculpating Conrado Bunag, Sr. from civil liability in this case. On the other hand, the Bunags, as defendants-appellants, assigned in their appeal several errors allegedly committed by trial court, which were summarized by respondent court as follows: (1) in finding that defendant-appellant Conrado Bunag, Jr. forcibly abducted and raped plaintiff-appellant; (2) in finding that defendants-appellants promised plaintiff-appellant that she would be wed to defendant-appellant Conrado Bunag, Jr.; and (3) in awarding plaintiff-appellant damages for the breach of defendants-appellants' promise of marriage. 5 As stated at the outset, on May 17, 1991 respondent Court of Appeals rendered judgment dismissing both appeals and affirming in toto the decision of the trial court. His motion for reconsideration having been denied, petitioner Bunag, Jr. is before us on a petition for review, contending that (1) respondent court failed to consider vital exhibits, testimonies and incidents for petitioner's defense, resulting in the misapprehensions of facts and violative of the law on preparation of judgment; and (2) it erred in the application of the proper law and jurisprudence by holding that there was forcible abduction with rape, not just a simple elopement and an agreement to marry, and in the award of excessive damages. 6 Petitioner Bunag, Jr. first contends that both the trial and appellate courts failed to take into consideration the alleged fact that he and private respondent had agreed to marry, and that there was no case of forcible abduction with rape, but one of simple elopement and agreement to marry. It is averred that the agreement to marry has been sufficiently proven by the testimonies of the witnesses for both parties and the exhibits presented in court. This submission, therefore, clearly hinges on the credibility of the witnesses and evidence presented by the parties and the weight accorded thereto in the factual findings of the trial court and the Court of Appeals. In effect, what petitioner would want this Court to do is to evaluate and analyze anew the evidence, both testimonial and documentary, presented before and calibrated by the trial court, and as further meticulously reviewed and discussed by respondent court.

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The issue raised primarily and ineluctably involves questions of fact. We are, therefore, once again constrained to stress the well-entrenched statutory and jurisprudential mandate that findings of fact of the Court of Appeals are, as a rule, conclusive upon this Court. Only questions of law, distinctly set forth, may be raised in a petition for review on certiorari under Rule 45 of the Rules of Court, subject to clearly settled exceptions in case law. Our jurisdiction in cases brought to us from the Court of Appeals is limited to reviewing and revising the errors of law imputed to the latter, its findings of fact being conclusive. This Court has emphatically declared that it is not its function to analyze or weigh such evidence all over again, its jurisdiction being limited to reviewing errors of law that might have been committed by the lower court. Barring, therefore, a showing that the findings complained of are totally devoid of support in the record, or that they are so glaringly erroneous as to constitute serious abuse of discretion, such findings must stand, for this Court is not expected or required to examine or contrast the oral and documentary evidence submitted by the parties. 7 Neither does the instant case reveal any feature falling within, any of the exceptions which under our decisional rules may warrant a review of the factual findings of the Court of Appeals. On the foregoing considerations and our review of the records, we sustain the holding of respondent court in favor of private respondent. Petitioner likewise asserts that since action involves a breach of promise to marry, the trial court erred in awarding damages. It is true that in this jurisdiction, we adhere to the time-honored rule that an action for breach of promise to marry has no standing in the civil law, apart from the right to recover money or property advanced by the plaintiff upon the faith of such promise. 8 Generally, therefore, a breach of promise to marry per se is not actionable, except where the plaintiff has actually incurred expenses for the wedding and the necessary incidents thereof. However, the award of moral damages is allowed in cases specified in or analogous to those provided in Article 2219 of the Civil Code. Correlatively, under Article 21 of said Code, in relation to paragraph 10 of said Article 2219, any person who wilfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for moral damages. 9 Article 21 was adopted to remedy the countless gaps in the statutes which leave so many victims of moral wrongs helpless even though they have actually suffered material and moral injury, and is intended to vouchsafe adequate legal remedy for that untold number of moral wrongs which is impossible for human foresight to specifically provide for in the statutes. 10 Under the circumstances obtaining in the case at bar, the acts of petitioner in forcibly abducting private respondent and having carnal knowledge with her against her will, and thereafter promising to marry her in order to escape criminal liability, only to thereafter renege on such promise after cohabiting with her for twenty-one days, irremissibly constitute acts contrary to morals and good customs. These are grossly insensate and reprehensible transgressions which indisputably warrant and abundantly justify the award of moral and exemplary damages, pursuant to Article 21 in relation to paragraphs 3 and 10, Article 2219, and Article 2229 and 2234 of Civil Code. Petitioner would, however, belabor the fact that said damages were awarded by the trial court on the basis of a finding that he is guilty of forcible abduction with rape,

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despite the prior dismissal of the complaint therefor filed by private respondent with the Pasay City Fiscal's Office. Generally, the basis of civil liability from crime is the fundamental postulate of our law that every person criminally liable for a felony is also civilly liable. In other words, criminal liability will give rise to civil liability ex delicto only if the same felonious act or omission results in damage or injury to another and is the direct and proximate cause thereof. 11 Hence, extinction of the penal action does not carry with it the extinction of civil liability unless the extinction proceeds from a declaration in a final judgment that the fact from which the civil might arise did not exist. 12 In the instant case, the dismissal of the complaint for forcible abduction with rape was by mere resolution of the fiscal at the preliminary investigation stage. There is no declaration in a final judgment that the fact from which the civil case might arise did not exist. Consequently, the dismissal did not in any way affect the right of herein private respondent to institute a civil action arising from the offense because such preliminary dismissal of the penal action did not carry with it the extinction of the civil action. The reason most often given for this holding is that the two proceedings involved are not between the same parties. Furthermore, it has long been emphasized, with continuing validity up to now, that there are different rules as to the competency of witnesses and the quantum of evidence in criminal and civil proceedings. In a criminal action, the State must prove its case by evidence which shows the guilt of the accused beyond reasonable doubt, while in a civil action it is sufficient for the plaintiff to sustain his cause by preponderance of evidence only. 13 Thus, in Rillon, et al. vs. Rillon, 14 we stressed that it is not now necessary that a criminal prosecution for rape be first instituted and prosecuted to final judgment before a civil action based on said offense in favor of the offended woman can likewise be instituted and prosecuted to final judgment. WHEREFORE, the petition is hereby DENIED for lack of merit, and the assailed judgment and resolution are hereby AFFIRMED. SO ORDERED. G.R. No. L-17396 May 30, 1962 CECILIO PE, ET AL., plaintiffs-appellants, vs. ALFONSO PE, defendant-appellee. Cecilio L. Pe for and in his own behalf as plaintiff-appellant. Leodegario L. Mogol for defendant-appellee. BAUTISTA ANGELO, J.: Plaintiffs brought this action before the Court of First Instance of Manila to recover moral, compensatory, exemplary and corrective damages in the amount of P94,000.00 exclusive of attorney's fees and expenses of litigation. Defendant, after denying some allegations contained in the complaint, set up as a defense that the facts alleged therein, even if true, do not constitute a valid cause of action. After trial, the lower court, after finding that defendant had carried on a love affair with one Lolita Pe, an unmarried woman, being a married man himself, declared that defendant cannot be held liable for moral damages it appearing that plaintiffs

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failed to prove that defendant, being aware of his marital status, deliberately and in bad faith tried to win Lolita's affection. So it rendered decision dismissing the complaint.1äwphï1.ñët Plaintiffs brought this case on appeal before this Court on the ground that the issues involved are purely of law. The facts as found by the trial court are: Plaintiffs are the parents, brothers and sisters of one Lolita Pe. At the time of her disappearance on April 14, 1957, Lolita was 24 years old and unmarried. Defendant is a married man and works as agent of the La Perla Cigar and Cigarette Factory. He used to stay in the town of Gasan, Marinduque, in connection with his aforesaid occupation. Lolita was staying with her parents in the same town. Defendant was an adopted son of a Chinaman named Pe Beco, a collateral relative of Lolita's father. Because of such fact and the similarity in their family name, defendant became close to the plaintiffs who regarded him as a member of their family. Sometime in 1952, defendant frequented the house of Lolita on the pretext that he wanted her to teach him how to pray the rosary. The two eventually fell in love with each other and conducted clandestine trysts not only in the town of Gasan but also in Boac where Lolita used to teach in a barrio school. They exchanged love notes with each other the contents of which reveal not only their infatuation for each other but also the extent to which they had carried their relationship. The rumors about their love affairs reached the ears of Lolita's parents sometime, in 1955, and since then defendant was forbidden from going to their house and from further seeing Lolita. The plaintiffs even filed deportation proceedings against defendant who is a Chinese national. The affair between defendant and Lolita continued nonetheless. Sometime in April, 1957, Lolita was staying with her brothers and sisters at their residence at 54-B España Extension, Quezon City. On April 14, 1957, Lolita disappeared from said house. After she left, her brothers and sisters checked up her thing and found that Lolita's clothes were gone. However, plaintiffs found a note on a crumpled piece of paper inside Lolita's aparador. Said note, written on a small slip of paper approximately 4" by 3" in size, was in a handwriting recognized to be that of defendant's. In English it reads: Honey, suppose I leave here on Sunday night, and that's 13th of this month and we will have a date on the 14th, that's Monday morning at 10 a.m. Reply Love The disappearance of Lolita was reported to the police authorities and the NBI but up to the present there is no news or trace of her whereabouts. The present action is based on Article 21 of the New Civil Code which provides: Any person who wilfully causes loss or injury to another in a manner which is contrary to morals, good customs or public policy shall compensate the latter for the damage. There is no doubt that the claim of plaintiffs for damages is based on the fact that defendant, being a married man, carried on a love affair with Lolita Pe thereby causing plaintiffs injury in a manner contrary to morals, good customs and public policy. But in spite of the fact that plaintiffs have clearly established that in illicit affair was carried on between defendant and Lolita which caused great damage to the name and reputation of plaintiffs who are her parents, brothers and sisters, the trial court considered their complaint not actionable for the reason that they failed to prove that defendant deliberately and in bad faith tried to win Lolita's affection

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Thus, the trial court said: "In the absence of proof on this point, the court may not presume that it was the defendant who deliberately induced such relationship. We cannot be unmindful of the uncertainties and sometimes inexplicable mysteries of the human emotions. It is a possibility that the defendant and Lolita simply fell in love with each other, not only without any desire on their part, but also against their better judgment and in full consciousness of what it will bring to both of them. This is specially so with respect to Lolita, being an unmarried woman, falling in love with defendant who is a married man." We disagree with this view. The circumstances under which defendant tried to win Lolita's affection cannot lead, to any other conclusion than that it was he who, thru an ingenious scheme or trickery, seduced the latter to the extent of making her fall in love with him. This is shown by the fact that defendant frequented the house of Lolita on the pretext that he wanted her to teach him how to pray the rosary. Because of the frequency of his visits to the latter's family who was allowed free access because he was a collateral relative and was considered as a member of her family, the two eventually fell in love with each other and conducted clandestine love affairs not only in Gasan but also in Boac where Lolita used to teach in a barrio school. When the rumors about their illicit affairs reached the knowledge of her parents, defendant was forbidden from going to their house and even from seeing Lolita. Plaintiffs even filed deportation proceedings against defendant who is a Chinese national. Nevertheless, defendant continued his love affairs with Lolita until she disappeared from the parental home. Indeed, no other conclusion can be drawn from this chain of events than that defendant not only deliberately, but through a clever strategy, succeeded in winning the affection and love of Lolita to the extent of having illicit relations with her. The wrong he has caused her and her family is indeed immeasurable considering the fact that he is a married man. Verily, he has committed an injury to Lolita's family in a manner contrary to morals, good customs and public policy as contemplated in Article 21 of the new Civil Code. WHEREFORE, the decision appealed from is reversed. Defendant is hereby sentenced to pay the plaintiffs the sum of P5,000.00 as damages and P2,000.00 as attorney's fees and expenses of litigations. Costs against appellee. G.R. No. 47013 February 17, 2000 ANDRES LAO, petitioner, vs. COURT OF APPEALS, THE ASSOCIATED ANGLO-AMERICAN TOBACCO CORPORATION and ESTEBAN CO, respondents. ----------------------------- G.R. No. 60647 February 17, 2000 ESTEBAN CO, petitioner, vs. COURT OF APPEALS and ANDRES LAO, respondents. ----------------------------- G.R. No. 60958-59 February 17, 2000 THE ASSOCIATED ANGLO-AMERICAN TOBACCO CORPORATION, petitioner, vs.

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COURT OF APPEALS, ANDRES LAO, JOSE LAO, and TOMAS LAO, respondents. PURISIMA, J.: These consolidated petitions for review on certiorari under Rule 45 of the Rules of Court revolve around discrepant statements of accountability between a principal and its agent in the sale of cigarettes. The common factual background at bar follows: On April 6, 1965, The Associated Anglo-American Tobacco Corporation (Corporation for brevity) entered into a "Contract of Sales Agent" with Andres Lao. Under the contract, Lao agreed to sell cigarettes manufactured and shipped by the Corporation to his business address in Tacloban City. Lao would in turn remit the sales proceeds to the Corporation. For his services, Lao would receive commission depending on the kind of cigarettes sold, fixed monthly salary, and operational allowance. As a guarantee to Lao's compliance with his contractual obligations, his brother Jose and his father Tomas executed a deed of mortgage1 in favor of the Corporation in the amount of P200,000.00. In compliance with the contract, Lao regularly remitted the proceeds of his sales to the Corporation, generating, in the process, a great deal of business. Thus, the Corporation awarded him trophies and plaques in recognition of his outstanding performance from 1966 to 1968. However, in February 1968 and until about seven (7) months later, Lao failed to accomplish his monthly sales report. In a conference in Cebu, Ching Kiat Kam, the President of the Corporation, reminded Lao of his enormous accounts and the difficulty of obtaining a tally thereon despite Lao's avowal of regular remittances of his collections. Sometime in August and September 1969, Esteban Co, the vice-president and general manager of the Corporation, summoned Lao to Pasay City for an accounting. It was then and there established that Lao's liability amounted to P525,053.47. And so, Lao and his brother Lao Y Ka, enlisted the services of the Sycip Gorres and Velayo Accounting Firm (SGV) to check and reconcile the accounts. Ching Kiat Kam allowed Lao to continue with the sales agency provided Lao would reduce his accountability to P200,000.00, the amount secured by the mortgage. The Corporation thereafter credited in favor of Lao the amount of P325,053.47 representing partial payments he had made but without prejudice to the result of the audit of accounts. However, the SGV personnel Lao had employed failed to conclude their services because the Corporation did not honor its commitment to assign two of its accountants to assist them. Neither did the Corporation allow the SGV men access to its records. Subsequently, the Corporation discovered that Lao was engaging in the construction business so much so that it suspected that Lao was diverting the proceeds of his sales to finance his business. In the demand letter of April 15, 1979,2 counsel for the Corporation sought payment of the obligations of Lao, warning him of the intention of the Corporation to foreclose the mortgage. Attached to said letter was a statement of account indicating that Lao's total obligations duly supported by receipts amounted to P248,990.82. Since Lao appeared to encounter difficulties in complying with his obligations under the contract of agency, the Corporation sent Ngo Kheng to supervise Lao's sales operations in Leyte and Samar. Ngo Kheng discovered that, contrary to Lao's allegation that he still had huge collectibles from his customers, nothing was due

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the Corporation from Lao's clients. From then on, Lao no longer received shipments from the Corporation which transferred its vehicles to another compound controlled by Ngo Kheng. Shipments of cigarettes and the corresponding invoices were also placed in the name of Ngo Kheng. On May 21, 1970, Andres, Jose and Tomas Lao brought a complaint for accounting and damages with writ of preliminary injunction3 against the Corporation, docketed as Civil Case No. 4452 before the then Court of First Instance of Leyte, Branch I in Tacloban City, which court4 came out with its decision5 on March 26, 1975, disposing as follows: IN VIEW OF ALL THE FOREGOING PREMISES, and upon a clear preponderance of evidence in favor of the plaintiffs, the court hereby renders judgment as follows: 1. Ordering both the plaintiffs and defendant corporation to undergo a Court supervised accounting of their respective account with the view of establishing once and for all, by a reconciliation of their respective books of accounts, the true and correct accountability of Andres Lao to the defendant corporation. Pursuant thereto, both plaintiff Andres Lao and the defendant The Associated Anglo-American Tobacco Corporation are directed to make available all their records pertainting [sic] to their business transactions with each other under the contract of sales agent, from 1965 up to the time Andres Lao ceased being the agent of the defendant. A Committee on Audit is hereby formed to be composed of three (3) members, one member to be nominated by the plaintiffs, another to be nominated by the defendant corporation and the third member who shall act as the Committee Chairman to be appointed by this Court. As Committee Chairman, the Court hereby appoints the Branch Clerk of Court of this Court, Atty. Victorio Galapon, who shall immediately convene the Committee upon appointment of the other two members, and undertake to finish their assigned task under his decision within two (2) months. 2. Ordering the defendant corporation to pay Plaintiffs the amount of P180,000 representing actual loss of earnings. 3. Ordering the defendant to pay plaintiffs moral damages in the amount of P130,000.00. 4. Ordering the defendant to pay to the plaintiffs, exemplary damages in the amount of P50,000.00. 5. Ordering the defendant to pay to the plaintiffs, attorney's fees in the amount of P40,000.00. 6. Ordering the plaintiffs and the defendant to pay the compensation of the commissioners pro-rata. 7. Finally ordering the defendant to pay the cost of this suit. SO ORDERED. The Committee of Audit that was eventually constituted was composed of Atty. Victorio L. Galapon, Jr., as chairman, Wilfredo Madarang, Jr. and Cesar F.P. Corcuera, as representatives of the Corporation, and Lao himself. On September 16, 1976, said committee submitted a report6 with the following findings:

Total remittances made by Mr. Andres Lao in favor of Associated from April 10, 1965 to November 1969 which are substantially supported by official receipt P13,686,148.80

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Shipments by Associated to Mr. Andres Lao duly supported by bills of lading, factory consignment invoices and delivery receipts 9,110,777.00

Shipments by Associated to Mr. Andres Lao, covered by bills of lading and factory consignment invoices but with no supporting delivery receipts purported to have been delivered to Mr. Lao on the basis of sales made by him as reported in his monthly sales reports (except for sales in December, 1968 and November and December 1968 where the sales reports were not available to the Audit Committee) 4,018,927.60

Shipments covered by bills of lading and factory consignment invoices but with no supporting delivery receipts 597,239.40

Shipments with covering factory consignment invoices but not covered by bills of lading and delivery receipts 126,950.00

On February 28, 1977, the trial court7 promulgated a supplemental decision wherein it dismissed Lao's claim that he had made an overpayment of P556,444.20. The alleged overpayment was arrived at after deducting the total payment made by Lao in the amount of P13,686,148.80 from the total volume of shipments made by the Corporation in the amount of P13,129,704.60, without including the amount of P597,239.40, representing alleged shipments covered by bills of lading and factory consignment invoices but with no supporting delivery receipts, and the amount of P126,950.00, representing shipments with factory consignment invoices but not covered by bills of lading and delivery receipts. The trial court, in rejecting the claim of overpayment, held that "when he (referring to Lao) made partial payments amounting to P325,053.47 subsequent to the demand in September, 1969, he is deemed to have admitted his liability and his claim of overpayment is not only preposterous but devoid of logic." Therefore, with the sums of P597,239.40 and P126,950.00 included in the total volume of shipments made by the Corporation in the amount of P13,129,704.60, Lao's total remittances of P13,686,248.80 were short of P167,745.20. Thus, the trial court held: WHEREFORE, judgment is hereby rendered declaring plaintiff Andres Lao's accountability to defendant Corporation in the amount of P167,745.20 and ordering him to pay said amount of P167,745.20 to defendant The Associated Anglo-American Tobacco Corporation. The Corporation appealed the decision, dated March 26, 1975, just as Lao appealed the supplemental decision, dated February 28, 1977, to the Court of Appeals. Docketed as CA-G.R. No. 62532-R, the appeal was resolved in the Decision of the Court of Appeals dated October 26, 1981,8 disposing thus: WHEREFORE, in connection with the decision of March 26, 1975, defendant corporation is hereby ordered to pay plaintiffs P150,000.00 actual damages for loss of earnings, P30,000.00 by way of moral damages and P10,000.00 for exemplary damages. As modified, the decision is AFFIRMED in all other respects. As for the supplemental decision of February 28, 1977, the same is hereby reversed and set aside, and defendant-appellant corporation sentenced to reimburse Andres Lao's overpayment in the amount of P556,444.20. Costs against defendant-appellant corporation.

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The Corporation presented a motion for reconsideration9 of the said Decision but the same was denied in a Resolution dated May 18, 1982.10 A motion for leave to file a second motion for reconsideration was likewise denied.11 Meanwhile, on June 24, 1974 and during the pendency of Civil Case No. 4452, Esteban Co, representing the Corporation as its new vice-president, filed an affidavit of complaint12 with the Pasay City Fiscal's Office under I.S. No. 90994; alleging that Lao failed to remit the amount of P224,585.82 which he allegedly misappropriated and converted to his personal use. Although the amount supposedly defalcated was put up as a counterclaim in Civil Case No. 4452 for accounting, the Corporation averted that it reserved the right to institute a criminal case against Lao. On July 31, 1974, after finding a prima facie case against Lao, the Pasay City Fiscal filed an information13 for estafa against Lao, docketed as Criminal Case No. 2650-P before the then Court of First Instance of Rizal, Branch XXVII. Lao sought a reinvestigation14 of the case, contending that he was never served a subpoena or notice of preliminary investigation that was considered mandatory in cases cognizable by Court of First Instance, now Regional Trial Court. Apparently, the preliminary investigation proceeded ex-parte because Esteban Co made it appear that Lao could not be located. On December 17, 1974, without awaiting the termination of the criminal case, Lao lodged a complaint15 for malicious prosecution against the Corporation and Esteban Co, praying for an award of damages for violation of Articles 20 and 21 of the Civil Code. The case was docketed as Civil Case No. 5528 before Branch I of the then Court of First Instance in Cotabato City. In his resolution dated January 3, 1975,16 then Pasay City Fiscal Jose Flaminiano found merit in the petition for reinvestigation of the estafa case. He opined that Lao had not committed estafa as his liability was essentially civil in nature. The Fiscal entertained doubts about the motive of the Corporation in instituting the criminal case against Lao because of the undue delay in its filing, aside from the fact that the estafa case involved the same subject matter the Corporation sued upon by way of counterclaim in Civil Case No. 4452. Eventually, on May 13, 1976, the Court of First Instance of Rizal, Branch XXVII, in Pasay City, promulgated a decision17 acquitting Lao of the crime charged and adopting in toto the said Resolution of Fiscal Flaminiano. On March 18, 1977, the Court of First Instance of Samar18 handed down a decision in Civil Case No. 5528, the action for damages arising from malicious prosecution, disposing thus: WHEREFORE, the Court declares that the defendants filed Criminal Case No. 2650-P against the plaintiff for estafa before the Court of First Instance of Rizal, Branch XXVII, Pasay City, without probable cause and with malice and therefore orders the defendants Associated Anglo-American Tobacco Corporation and Esteban Co to jointly and severally pay the plaintiff: a. P30,000 as actual damages; b. P150,000.00 as moral damages; c. P100,000.00 as exemplary damages; d. P50,000.00 as attorney's fees and costs. SO ORDERED. The Corporation and Esteban Co both appealed the aforesaid decision to the Court of Appeals under CA-G.R. No. 61925-R.

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On April 18, 1977, Lao presented a motion for execution pending appeal19 before the trial court. The opposition of the Corporation notwithstanding, on June 8, 1977 the trial court issued a special order granting the motion for execution pending appeal,20 and on the following day, the corresponding writ of execution issued.21 On June 10, 1977, the Court of Appeals issued a Restraining Order enjoining the execution of subject judgment.22 The said order was issued on account of a petition for certiorari, prohibition and mandamus with preliminary injunction23 filed by the Corporation and Esteban Co with the said appellate court. Docketed as CA-G.R. No. 06761, the petition was received by the Court of Appeals on June 9, 1977. A supplemental to the petition and a "compliance" were also received on the same time and date.24 On June 21, 1977, Lao moved to lift the restraining order. On September 14, 1977, the Court of Appeals resolved in CA-G.R. No. 06761 thus: WHEREFORE, the petition for certiorari is hereby granted, the special order granting execution pending appeal is annulled and the restraining order heretofore issued is made permanent. No pronouncement as to costs. On October 21, 1981, the Court of Appeals likewise rendered a Decision25 in CA-G.R. No. 62532-R, affirming the trial court's finding that Criminal Case No. 2650-P was filed without probable cause and with malice; and held the Corporation and Esteban Co solidarily liable for damages, attorney's fees and costs. The Corporation and Esteban Co moved to reconsider26 the said decision in CA-G.R. No. 61925-R but to no avail. The motion for reconsideration was denied in a Resolution promulgated on May 18, 1992. A motion for leave of court to file a second motion for reconsideration27 met the same fate. It was likewise denied in a Resolution28 dated June 23, 1982. From the said cases sprung the present petitions which were ordered consolidated in the Resolutions of December 15, 1982 and November 11, 1985.29 Subject petitions are to be passed upon in the order they were filed. G.R. No. 47013 A petition for review on certiorari of the Decision of the Court of Appeals in CA-G.R. No. 06761 that Lao filed, contending that: 1. The Court of Appeals cannot validly give due course to an original action for certiorari, prohibition andmandamus where the petition is fatally defective for not being accompanied by a copy of the trial court's questioned process/order. 2. The Court of Appeals, cannot, in a petition for certiorari, prohibition and mandamus, disregard, disturb and substitute its own judgment for the findings of facts of the trial court, particularly as in the present case, where the trial court did not exceed nor abuse its discretion. 3. The Court of Appeals did not act in accordance with established jurisprudence when it overruled the trial court's holding that the posting of a good and solvent bond is a good or special reason for execution pending appeal. For clarity, the petition for review on certiorari questioning the Decision of the Court of Appeals that nullified the special order granting execution pending appeal is anchored on the antecedent facts as follows: After the Court of First Instance of Samar had decided in favor of Lao in the action for damages by reason of malicious prosecution, Lao filed a motion for execution pending appeal30 even as the Corporation and Co had interposed an appeal from the said decision. In that motion, Lao theorized that the appeal had no merit and the

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judgment in his favor would be rendered ineffectual on account of losses incurred by the Corporation in the 1972 floods in Luzon and in a fire that cost the Corporation P5 million, as well as the fact that the properties of the Corporation were heavily encumbered as it had even incurred an overdraft with a bank; for which reasons, Lao evinced his willingness to post a bond although Section 2, Rule 39 of the Rules of Court does not require such bond. Lao thereafter sent in a supplemental motion31 asserting that the Corporation's properties were mortgaged in the total amount of Seven Million (P7,000,000.00) Pesos. The Corporation and Co opposed both motions. On June 8, 1977, after hearing and presentation of evidence by both parties, the Court of First Instance of Samar issued a special order granting the motion for execution pending appeal.32 The following day, June 9, 1977, the corresponding writ of execution pending appeal issued.33 At 8:00 a.m. on the same day, the Corporation and Co filed a petition for certiorari, prohibition and mandamus with preliminary injunction with the Court of Appeals, the filling of which petition was followed by the filing of a supplement to the petition and a "compliance" with each pleading bearing the docket stamp showing that the Court of Appeals also received the same at 8:00 a.m.34 In the petition under consideration, petitioner Lao contends that the supplemental petition and "compliance" could not have been filed with the Court of Appeals at the same time as the original petition; pointing out that the supplemental petition contains an allegation to the effect that the special order granting execution pending appeal was then still "being flown to Manila" and would be attached to the petition "as soon as it arrives in Manila which is expected tomorrow, June 10, 1977 or Saturday."35 Petitioner Lao thus expressed incredulity on the fact that both the supplemental petition and the "compliance" submitted to the appellate court a copy of the special order bearing the same time of receipt. He theorized that the writ of execution could have been issued by the Court of First Instance of Samar at the earliest, at 8:30 a.m. on July 9, 1977. Petitioner Lao then noted that, the restraining order enjoining execution pending appeal did not mention the date of issuance of the writ subsequently issued and the names of the special sheriffs tasked to execute it simply because when the restraining order was issued the copy of the writ of execution was not yet filed with the Court of Appeals. Petitioner Lao also averred that because his counsel was furnished a copy of the restraining order through the mail, he was deprived of the opportunity to take immediate "remedial steps in connection with the improvident issuance of the restraining order."36 In their comment on the petition, respondent Corporation and Co assail petitioner Lao's insinuation of irregularity in the filing of their pleadings. They aver that in view of petitioner Lao's allegation, they, made inquiries in the Docket Section of the Court of Appeals, and they were informed that the receiving machine of said section was out of order when the pleadings were received "as the time of receipt appearing therein is always 8:00 a.m."37 This Court cannot gloss over, as it has never glossed over allegations of irregularity in the handling of pleadings filed in the Court. However, in the absence of concrete proof that there was malicious intent to derail the propriety of procedure, this Court has no basis on which to arrive at a conclusion thereon. The documentary evidence of simultaneous receipt of pleadings that should ordinarily be received one after another is simply insufficient to warrant any conclusion on irregularity of procedure.

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All court personnel are enjoined to do their jobs properly and according to law. Should they notice anything in the performance of their duties that may generate even a mere suspicion of irregularity, they are duty-bound to correct the same. In this case, more diligence on the part of the personnel handling the receiving machine could have prevented the stamping on the pleadings with erroneous date and time of receipt and would have averted suspicion of an anomaly in the filing of pleadings. Persons responsible for the negligence should be taken to task. However, since this is not the proper forum for whatever administrative measures may be taken under the premises, the Court opts to discuss the merits of the petition for review on certiorari at bar rather than tarry more on an administrative matter that is fundamentally extraneous to the petition. Petitioner Lao maintains that the Court of Appeals should not have been given due course to the petition forcertiorari, prohibition and mandamus considering that it was fatally defective for failure of the petitioners to attach thereto a copy of the questioned writ of execution. On their part, private respondents concede the mandatory character of the requirement of Section 1, Rule 65 of the Rules of Court — that the petition "shall be accompanied by a certified true copy of the judgment or order subject thereof, together with copies of all pleadings and documents relevant and pertinent thereto." However, private respondents asked that their submission of a certified true copy of the special order granting execution pending appeal attached to their "compliance" dated June 9, 197738 be taken as substantial compliance with the rule. The Court gives due consideration to private respondents' stance. Strict adherence to procedural rules must at all times be observed. However, it is not the end-all and be-all of litigation. As this Court said: . . . adjective law is not to be taken lightly for, without it, the enforcement of substantive law may not remain assured. The Court must add, nevertheless, that technical rules of procedure are not ends in themselves but primarily devised and designed to help in the proper and expedient dispensation of justice. In appropriate cases, therefore, the rules may have to be so construed liberally as to meet and advance the cause of substantial justice.39 Thus, in holding that the Court of Appeals may entertain a second motion for reconsideration of its decision although the filing of such motion violates a prohibition thereof, the Court said: . . . (I)t is within the power of this Court to temper rigid rules in favor of substantial justice. While it is desirable that the Rules of Court be faithfully and even meticulously observed, courts should not be so strict about procedural lapses that do not really impair the proper administration of justice. If the rules are intended to ensure the orderly conduct of litigation, it is because of the higher objective they seek which is the protection of substantive rights of the parties.40 In the case under consideration, private respondents substantially complied with the Rules of Court when they submitted a copy of the writ of execution sought to be enjoined on the same day they filed the petition forcertiorari, prohibition and mandamus. Petitioner Co's allegation of irregularity as to the time of receipt of the "compliance" to which copy of the writ was attached being unsubstantiated, the presumption of regularity of its receipt on the day the original petition was filed should prevail. Petitioner Co argues that the Court of Appeals cannot disturb the factual findings of the trial court and substitute its own in a petition for certiorari, prohibition

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and mandamus where the basic issue is one of jurisdiction or grave abuse of discretion. It is well-settled, however, that in a petition for certiorari and mandamus, the Court of Appeals, when inevitable, may examine the factual merits of the case.41 In the present case, it was necessary and inevitable for the Court of Appeals to look into the diverse factual allegations of the parties. It is worthy to note that petitioner's motion for execution pending appeal was premised on his contention that the award of damages in his favor would be meaningless on account of respondent Corporation's precarious financial status. On the other hand, respondent Corporation countered that it was operating at a profit, an assurance that at the time, it was a stable business entity that could answer for its obligations. In the face of these contradictory allegations, the appellate court correctly opted to make its own finding of facts on the issue of the propriety of the issuance of the writ of execution pending appeal. It should be stressed that what was at issue was not the award of damages itself but the issuance of said writ. Petitioner Lao's position that the posting of a good and solvent bond is a special reason for the issuance of the writ of execution pending appeal is utterly barren of merit. Mere posting of a bond to answer for damages does not suffice as a good reason for the granting of execution pending appeal, within the context of "good reasons" under Section 2, Rule 39 of the Rules of Court.42 In Roxas v. Court of Appeals,43 the Court held: It is not intended obviously that execution pending appeal shall issue as a matter of course. "Good reasons, special, important, pressing reasons must exist to justify it; otherwise, instead of an instrument of solicitude and justice, it may well become a tool of oppression and inequity. But to consider the mere posting of a bond a "good reason" would precisely make immediate execution of a judgment pending appeal routinary, the rule rather than the exception. Judgments would be executed immediately, as a matter of course, once rendered, if all that the prevailing party needed to do was to post a bond to answer for damages that might result therefrom. This is a situation, to repeat, neither contemplated nor intended by law.44 G.R. No. 60647 From the decision of the Court of First Instance of Samar in Civil Case No. 5528, finding that they are liable for malicious prosecution and therefore, they must pay Lao damages, the Corporation and Co appealed to the Court of Appeals. In affirming the lower court's decision, the Court of Appeals deduced from the facts established that the Corporation knew all along that Lao's liability was civil in nature. However, after around four (4) years had elapsed and sensing that Civil Case No. 4452 would result in a decision against them, they instituted the criminal case for estafa. In awarding damages in the total amount of P330,000, the Court of Appeals took into account Lao's social and business standing.45 From the Decision of the Court of Appeals in CA-G.R. No. 61925-R, Co filed the instant petition for review oncertiorari; contending that the Court of Appeals erred in affirming the decision of the Samar Court of First Instance because when the case for malicious prosecution was commenced there was as yet no cause of action as the criminal case was still pending decision. Co also asserted that he should not be held jointly and severally liable with the Corporation because in filing the affidavit-complaint against respondent Lao, he was acting as the executive vice-president of the Corporation and his action was within the scope of his authority as such corporate officer.

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The issue of whether the Court of Appeals correctly ruled that the Corporation and petitioner Co should be held liable for damages on account of malicious prosecution shall be ratiocinated upon and resolved with the issues submitted for resolution in G.R. Nos. 60958-59. What should concern the Court here is whether petitioner Co should be held solidarily liable with the Corporation for whatever damages would be imposed upon them for filing the complaint for malicious prosecution. Petitioner Co argues that following the dictum in agency, the suit should be against his principal unless he acted on his own or exceeded the limits of his agency. A perusal of his affidavit-complaint reveals that at the time he filed the same on June 24, 1974, petitioner Co was the vice-president of the Corporation. As a corporate officer, his power to bind the Corporation as its agent must be sought from statute, charter, by-laws, a delegation of authority to a corporate officer, or from the acts of the board of directors formally expressed or implied from a habit or custom of doing business.46 In this case, no such sources of petitioner's authority from which to deduce whether or not he was acting beyond the scope of his responsibilities as corporate vice-president are mentioned, much less proven. It is thus logical to conclude that the board of directors or by laws- of the corporation vested petitioner Co with certain executive duties47 one of which is a case for the Corporation. That petitioner Co was authorized to institute the estafa case is buttressed by the fact that the Corporation failed to make an issue out of his authority to file said case. Upon well-established principles of pleading, lack of authority of an officer of a corporation to bind it by contract executed by him in its name, is a defense which should have been specially pleaded by the Corporation.48 The Corporation's failure to interpose such a defense could only mean that the filing of the affidavit-complaint by petitioner Co was with the consent and authority of the Corporation. In the same vein, petitioner Co may not be held personally liable for acts performed in pursuance of an authority and therefore, holding him solidarily liable with the Corporation for the damages awarded to respondent Lao does accord with law and jurisprudence. G.R. No. 606958-59 In this petition for review on certiorari of the Decisions of the Court of Appeals in CA-G.R. No. 61925-R, regarding Lao's claim for damages on account of malicious prosecution, and in CA-G.R. No. 62532-R that arose from Lao's complaint for accounting and damages, petitioner Corporation assigns as errors, that: 1. The respondent Court of Appeals erred and/or committed a grave abuse of discretion in affirming the erroneous decision of the lower court. The civil case for malicious prosecution was filed during the pendency of the criminal case upon which the civil suit was based. There is as yet no cause of action. . . . . 2. The respondent Court of Appeals erred and/or committed a grave abuse of discretion when it reversed or set aside the supplemental decision of the lower court in Civil Case No. 4452, which reversal was merely based on surmises and conjectures. . . . . 3. The respondent Court of Appeals erred and/or committed grave abuse of discretion when it awarded moral damages in Civil Case No. 4452 which was not prayed for because Andres Lao prayed for moral damages and was already awarded in Civil Case No. 5528. Moral damages must be specifically prayed for. . . . .49

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Petitioner Corporation contends that the complaint for malicious prosecution brought by Lao during the pendency of subject criminal case for estafa, states no cause of action as it was prematurely filed when the criminal case that resulted in the acquittal of Lao was not yet terminated. On the other hand, respondent Lao countered that the elements supportive of an action for malicious prosecution are evidentiary in nature and their existence or non-existence cannot be the subject of evaluation and conclusion upon the filing of the complaint. For Lao, those elements must be determined at the time the plaintiff has offered all his evidence and rested his case. Malicious prosecution has been defined as an action for damages brought by one against whom a criminal prosecution, civil suit or other legal proceeding has been instituted maliciously and without probable cause, after the termination of such prosecution, suit or other proceeding in favor of the defendant therein.50 As thus defined, the fact of termination of the criminal prosecution, civil suit or legal proceeding maliciously filed and without probable cause, should precede the complaint for malicious prosecution. Such a complaint states a cause of action if it alleges: (a) that the defendant was himself the prosecutor or at least instigated the prosecution; (b) that the prosecution finally terminated in the acquittal of the plaintiff; (c) that in bringing the action the prosecutor acted without probable cause, and (d) that the prosecutor was actuated by malice, i.e., by improper and sinister motives.51 Ocamp v. Buenaventura52 demonstrates the importance of the requirement that the case maliciously commenced should be terminated before a claim for damages arising from the filing of such case should be presented. In that case, a complaint for damages arising from the alleged malicious filing of an administrative case for serious misconduct, grave abuse of authority and commission of a felony, was held to be premature during the pendency of said administrative case before the then Police Commission (POLCOM). Observing that the complaint for damages was based on the claim that the administrative case brought before the POLCOM was malicious, unfounded and aimed to harass the respondents, the Court there held: . . . . The veracity of this allegation is not for us to determine, for if We rule and allow the civil case for damages to proceed on that ground, there is the possibility that the court a quo in deciding said case might declare the respondents victims of harassment and thereby indirectly interfere with the proceedings before the POLCOM. The respondents' case for damages before the lower court is, therefore, premature as it was filed during the pendency of the administrative case against the respondents before the POLCOM. The possibility cannot be overlooked that the POLCOM may hand down a decision adverse to the respondents, in which case the damage suit will become unfounded and baseless for wanting in cause of action. Of persuasive force is the ruling in William H. Brown vs. Bank of the Philippine Islands and Santiago Freixas, 101 Phil. 309, 312, where this Court said: . . . . In effect, plaintiff herein seeks to recover damages upon the ground that the detainer case has been filed, and is being maintained, maliciously and without justification; but this pretense affects the merits of said detainer case. Should final judgment be eventually rendered in that case in favor of the plaintiffs therein, such as the one rendered in the municipal court, the validity of the cause of action of said lessors against Brown, would thereby be conclusively established, and necessarily, his contention in the present case would have to be rejected. Similarly, we cannot sustain the theory of Brown in the case at bar, without prejudging the

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issue in the detainer case, which is still pending. Until final determination of said case, plaintiff herein cannot, and does not, have, therefore, a cause of action — if any, on which we do not express our opinion — against the herein defendants. In short, the lower court has correctly held that the present action is premature, and, that, consequently, the complain herein does not set forth a cause of action against the defendants.53 A similar ruling was laid down in Cabacungan v. Corrales54 where the Court sustained the dismissal of an action for damages on the ground of prematurity. The records disclosed that the alleged false and malicious complaint charging plaintiffs with malicious mischief was still pending trial when the action for damages based on the subject complaint was brought. Premises studiedly viewed in proper perspective, the contention of Lao that the elements of an action for malicious prosecution are evidentiary in nature and should be determined at the time the plaintiff offers evidence and rests his case, is untenable. To rule otherwise would, in effect, sanction the filing of actions without a cause of action. The existence of a cause of action is determined solely by the facts alleged in the complaint. Consideration of other facts is proscribed and any attempt to prove extraneous circumstances is not allowed.55 As this Court said in Surigao Mine Exploration Co., Inc. v. Harris,56 "unless the plaintiff has a valid and subsisting cause of action at the time his action is commenced, the defect cannot be cured or remedied by the acquisition or accrual of one while the action is pending, and a supplemental complaint or an amendment setting up such after-accrued cause of action is not permissible."57 Thus, the circumstance that the estafa case concluded in respondent Lao's acquittal during the pendency of the complaint for malicious prosecution did not cure the defect of lack of cause of action at the time of filing of the complaint. Neither does the Court find merit in respondent Lao's submission that the complaint for malicious prosecution is viable inasmuch as it is also anchored on Articles 20 and 21 of the Civil Code. This may appear to be a persuasive argument since there is no hard and fast rule which can be applied in the determination of whether or not the principle of abuse of rights has been violated, resulting in damages under the said articles of the Civil Code on Human Relations. Indeed, a party injured by the filing of a court case against him, even if he is later on absolved, may file a case for damages grounded either on the principle of abuse of rights or on malicious prosecution.58 However, whether based on the principle of abuse of rights or malicious prosecution, a reading of the complaint here reveals that it is founded on the mere filing of the estafa charge against respondent Lao. As such, it was prematurely filed and it failed to allege a cause of action. Should the action for malicious prosecution be entertained and the estafa charge would result in respondent Lao's conviction during the pendency of the damage suit, even if it is based on Articles 20 and 21, such suit would nonetheless become groundless and unfounded. To repeat; that the estafa case, in fact, resulted in respondent Lao's acquittal would not infuse a cause of action on the malicious prosecution case already commenced and pending resolution. The complaint for damages based on malicious prosecution and/or on Articles 20 and 21 should have been dismissed for lack of cause of action and therefore, the Court of Appeals erred in affirming the decision of the trial court of origin. It should be stressed, however, that the dismissal of subject complaint should not be

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taken as an adjudication on the merits, the same being merely grounded on the failure of the complaint to state a cause of action.59 As regards the Decision in CA-G.R. No. 62532-R which was spawned by respondent Lao's complaint for accounting, petitioner contends that the appellate court erred when it reversed and set aside the supplemental decision in Civil Case No. 4452 and directed the corporation to reimburse the amount of P556,444.20, representing Lao's overpayment to the Corporation. The Court would normally have restricted itself to questions of law and shunned away from questions of fact were it not for the conflicting findings of fact by the trial court and appellate court on the matter. The Court is therefore constrained to relax the rule on conclusiveness of factual findings of the Court of Appeals and, on the basis of the facts on record, make its own findings.60 It is significant to note that as per decision of the trial court dated March 26, 1975, a court-supervised accounting was directed so as to ascertain the true and correct accountability of Andres Lao to the defendant corporation. Thus, a three-man audit committee was formed with the branch of clerk of court, Atty. Victorio Galapon, as chairman, and two other certified public accountants respectively nominated by the parties, as members. On September 16, 1976, the said Audit Committee submitted its report61 and in the hearing of November 25, 1976, the parties interposed no objection thereto and unanimously accepted the Audit Committee Report. The Committee found that Andres Lao has made a total overpayment to defendant corporation in the amount of P556 ,444.20. Trial by commissioners is allowed by the Rules of Court when a) the trial of an issue of fact requires the examination of a long account on either side, in which case the commissioner may be directed to hear and report upon the whole issue or any specific question involved therein; b) when the taking of an account is necessary for the information of the court before judgment, or for carrying a judgment or order into effect; and c) when a question of fact, other than upon the pleadings, arises upon motion or otherwise, at any stage of a case, or for carrying a judgment or order into effect.62 Ultimately, the trial court, in the exercise of its sound discretion, may either adopt, modify, or reject in whole or in part, the commissioners' report or it may recommit the same with instructions, or require the parties to present additional evidence before the commissioners or before the court.63 In the case under consideration, it is thus within the power of the trial court to refer the accounting to court-appointed commissioners because a true and correct accounting is necessary for the information of the court before it can render judgment. Moreover, the technical nature of the audit procedure necessitates the assistance of a certified public accountant. And since both parties offered no objection to the commissioners' report, they are deemed to have accepted and admitted the findings therein contained. There is no discernible cause for veering from the findings of the Audit Committee. In arriving at its conclusion, the Audit Committee subtracted the total remittances of Lao in the amount of P13,686,148.80 from the entire volume of shipments made by the corporation. In determining the total volume of shipments made by the corporation, the Audit Committee did not include the shipments covered by bills of lading and factory consignment invoices but without the corresponding delivery receipts. These included shipments in the amount of

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P597,239.40 covered by bills of lading and factory consignment invoices but with no supporting delivery receipts, and shipments worth P126,950.00 with factory consignment invoices but not covered by bills of lading and delivery receipts. However, the Audit Committee considered shipments made by the corporation to Lao in the amount of P9,110,777.00 covered by bills of lading and factory invoices but without the corresponding delivery receipts because subject shipments were duly reported in Lao's monthly sales report. The Audit Committee correctly excluded the shipments not supported by delivery receipts, albeit covered by bills of lading and factory consignment invoices. Under Article 1497 of the Civil Code, a thing sold shall be understood as delivered when it is placed in the control or possession of the vendee. Unless possession or control has been transferred to the vendee, the thing or goods sold cannot be considered as delivered. Thus, in the present case, the Audit Committee was correct when it adopted as guideline that accountability over the goods shipped was transferred from the corporation to Andres Lao only upon actual delivery of the goods to him. For it is only when the goods were actually delivered to and received by Lao, did Lao have control and possession over subject goods, and only when he had control and possession over said goods could he sell the same. Delivery is generally evidenced by a written acknowledgement of a person that he or she has actually received the thing or the goods, as in delivery receipts. A bill of lading cannot substitute for a delivery receipt. This is because it is a written acknowledgement of the receipt of the goods by the carrier and an agreement to transport and deliver them at a specific place to a person named or upon his order.64 It does not evidence receipt of the goods by the consignee or the person named in the bill of lading; rather, it is evidence of receipt by the carrier of the goods from the shipper for transportation and delivery. Likewise, a factory consignment invoice is not evidence of actual delivery of the goods. An invoice is nothing more than a detailed statement of the nature, quantity and cost of the thing sold.65 It is not proof that the thing or goods were actually delivered to the vendee or the consignee. As admitted by the witness for the corporation: A: Factory consignment invoices represents what the company billed the plaintiff Mr. Lao and the bill of lading represents the goods which were supposed to have been shipped. x x x x x x x x x A: Shipments covered by factory consignment invoices simply meant these are billings made again by the Associated Anglo-American Tobacco Corporation to plaintiff Andres Lao. (t.s.n., November 25, 1976, pp. 45-47 as cited in Respondent Lao's Comment, Rollo, p. 259) Thus, in the absence of proof that the goods were actually received by Lao as evidenced by delivery receipts, the shipments allegedly made by the corporation in the amount of P597,239.40 and P126,950.00 covered only by bills of lading and factory consignment invoices cannot be included in Lao's accountability. However, as to the shipments worth P4,018,927.60 likewise covered only by bills of lading and factory consignment invoices, the Audit Committee correctly considered them in Lao's account because such shipments were reported in the latter's sales reports. The fact that Lao included them in his sales reports is an implied admission that subject goods were actually delivered to him, and that he received the said goods for resale.

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As regards the award of moral damages, petitioner Corporation faults the Court of Appeals for awarding such damages not specifically prayed for in the complaint for accounting and damages in Civil Case No. 4452. Petitioner Corporation argues that moral damages were prayed for and duly awarded in Civil Case No. 5528 and therefore, it would be unfair and unjust to allow once again, recovery of moral damages on similar grounds. Contrary to the allegation of the petitioner Corporation, the award of moral damages was specifically prayed for in the complaint albeit it left the amount of the same to the discretion of the court.66 Moreover, Civil Case Nos. 4452 and 5528 were on varied causes of action. While the award for moral damages in Civil Case No. 4452 was based on the evident bad faith of the petitioner Corporation in unilaterally rescinding respondent Lao's sales agency through his immediate replacement by Ngo Kheng, the claim for moral damages in Civil Case No. 5528 was anchored on the supposed malice that attended the filing of the criminal case for estafa. Petitioner Corporation also opposes for being conjectural, the award of P150,000.00 in Civil Case No. 4452, representing actual damages for loss of earnings. True, damages cannot be presumed or premised on conjecture or even logic. A party is entitled to adequate compensation only for duly substantiated pecuniary loss actually suffered by him or her.67 In this case, however, the trial court correctly found that an award for actual damages was justified because several months before their contract of agency was due to expire in 1969, the petitioner Corporation replaced Lao with Ngo Kheng as sales agent for the areas of Leyte and Samar. This, despite the fact that they had already agreed that Lao would continue to act as the corporation's sales agent provided that he would reduce his accountability to P200,000.00, the amount covered by his bond, and engaged the services of an independent accounting firm to do an audit to establish Lao's true liability. Due to his ouster as sales agent, Lao failed to realize a net income from his sales agency in the amount of P30,000,00 a year. However, the amount of actual damages should be reduced to P30,000.00 only instead of the P150,000.00 awarded by the appellate court. Since the contract of sales agency was on a yearly basis, the actual damages Lao suffered should be limited to the annual net income he failed to realize due to his unjust termination as sales agent prior to the expiration of his contract in 1969. Unrealized income for the succeeding years cannot be awarded to Lao because the corporation is deemed to have opted not to renew the contract with Lao for the succeeding years. As to the award of exemplary damages, suffice it to state that in contracts and quasi-contracts, the court may award exemplary damages if the defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner.68 In the case under scrutiny, the Court finds the award of exemplary damages unjustified or unwarranted in the absence of any proof that the petitioner Corporation acted in a wanton, fraudulent, reckless, oppressive, and malevolent manner. For the same reasons, the award for attorney's fees should be deleted.1âwphi1.nêt WHEREFORE, In G.R. No. L-47013, the petition for review on certiorari is DENIED for lack of merit; In G.R. No. 60647, the petition is GRANTED and the assailed decision is SET ASIDE; and the Decision of the Court of Appeals in CA-G.R. No. 61925-R, finding Esteban Co solidarity liable with the respondent Associated Anglo-

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American Tobacco Corporation for damages, is REVERSED AND SET ASIDE. As above ratiocinated, the respondent corporation cannot be held liable for damages. In G.R. Nos. 60958-59, the Decision in CA-G.R. No. 61925-R is REVERSED AND SET ASIDE; the respondent corporation is adjudged not liable for malicious prosecution due to the prematurity of the action; while the Decision in CA-G.R. No. 62532-R is AFFIRMED, insofar as it ordered respondent corporation to reimburse Andres Lao's overpayment in the amount of P556,444.20, but MODIFIED, in that only an award of P30,000.00 for actual damages is GRANTED, and all the other monetary awards are deleted. No pronouncement as to costs. SO ORDERED. G.R. No. 107019 March 20, 1997 FRANKLIN M. DRILON, AURELIO C. TRAMPE, GREGORIO A. ARIZALA, CESAR M. SOLIS and FERDINAND R. ABESAMIS, petitioners, vs. COURT OF APPEALS, HON. GEORGE C. MACLI-ING, in his capacity as Presiding Judge of Branch 100 of the Regional Trial Court of Quezon City, and HOMOBONO ADAZA, respondents. HERMOSISIMA, JR., J.: Petitioners seek the reversal of the Resolutions of respondent Court of Appeals in CA-G.R. SP No. 25080 dated January 31, 1992 and September 2, 1992 affirming the Orders, dated February 8, 1991 and May 14, 1991, of respondent Judge George C. Macli-ing which denied herein petitioner's Motion to Dismiss the complaint filed in Civil Case No. Q-90-6073 by respondent Homobono Adaza. The facts are not in dispute. In a letter-complaint to then Secretary of Justice Franklin Drilon 1 dated March 20, 1990, General Renato de Villa, 2who was then the Chief of Staff of the Armed Forces of the Philippines, requested the Department of Justice to order the investigation of several individuals named therein, including herein private respondent Homobono Adaza, for their alleged participation in the failed December 1989 coup d'etat. The letter-complaint was based on the affidavit of Brigadier General Alejandro Galido, Captain Oscarlito Mapalo, Colonel Juan Mamorno, Colonel Hernani Figueroa and Major Eduardo Sebastian. Gen. de Villa's letter-complaint with its annexes was referred for preliminary inquiry to the Special Composite Team of Prosecutors created pursuant to Department of Justice Order No. 5 dated January 10, 1990. Petitioner then Assistant Chief State Prosecutor Aurelio Trampe, 3 the Team Leader, finding sufficient basis to continue the inquiry, issued a subpoena to the individuals named in the letter-complaint, Adaza included, and assigned the case for preliminary investigation to a panel of investigators composed of prosecutors George Arizala, as Chairman, and Ferdinand Abesamis and Cesar Solis as members. The case was docketed as I.S. No. DOJ-SC-90-013. On April 17, 1990, the panel released its findings, thru a Resolution, which reads: PREMISES CONSIDERED, we find and so hold that there is probable cause to hold herein respondents for trial for the crime of REBELLION WITH MURDER

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AND FRUSTRATED MURDER. Hence we respectfully recommend the filing of the corresponding information against them in court. 4 The above Resolution became the basis for the filing of an Information, 5 dated April 18, 1990, charging private respondent with the crime of rebellion with murder and frustrated murder before the Regional Trial Court of Quezon City, with no recommendation as to bail. 6 Feeling aggrieved by the institution of these proceedings against him, private respondent Adaza filed a complaint for damages, 7 dated July 11, 1990, before Branch 100 of the Regional Trial Court of Quezon City. The complaint was docketed as Civil Case No. Q-90-6073 entitled, "Homobono Adaza, plaintiff versus Franklin Drilon, et al., respondents." In his complaint, Adaza charged petitioners with engaging in a deliberate, willful and malicious experimentation by filing against him a charge of rebellion complexed with murder and frustrated murder when petitioners, according to Adaza, were fully aware of the non-existence of such crime in the statute books. On October 15, 1990, petitioners filed a Motion to Dismiss Adaza's complaint on the ground that said complaint states no actionable wrong constituting a valid cause of action against petitioners. On February 8, 1991, public respondent judge issued an Order 8 denying petitioners' Motion to Dismiss. In the same Order, petitioners were required to file their answer to the complaint within fifteen (15) days from receipt of the Order. Petitioners moved for a reconsideration of the Order of denial, but the same was likewise denied by respondent Judge in another Order dated May 14, 1991. 9 The subsequent Order reiterated that petitioners file their responsive pleading within the prescribed reglementary period. Instead of filing their answer as ordered, petitioners filed on June 5, 1991 a petition for certiorari under Rule 65 before the Court of Appeals, docketed as CA-G.R. No. 25080, alleging grave abuse of discretion on the part of the respondent Judge in ruling that sufficient cause of action exists to warrant a full-blown hearing of the case filed by Adaza and thus denying petitioners' Motion to Dismiss. In its Resolution promulgated on January 31, 1992, the appellate court dismissed the petition for lack of merit and ordered respondent Judge to proceed with the trial of Civil Case No. Q-90-6073. 10 A Motion for Reconsideration having been subsequently filed on February 28, 1992, the court a quo denied the same in a Resolution dated September 2, 1992. 11 Hence, this petition, dated October 9, 1992, pleading this Court to exercise its power of review under Rule 45 of the Revised Rules of Court. On January 13, 1993, however, this Court, thru the Second Division, dismissed the petition for failure to comply with Revised Circular No. 1-88, particularly the requirement on the payment of the prescribed docketing fees. 12 On March 8, 1993, 13 we reinstated the petition and required the respondents to comment on the aforesaid petition. In the same Resolution, a temporary restraining order was issued by this Court enjoining respondent Judge from further proceeding with Civil Case No. Q-90-6073 until further orders from this Court. The petition has merit. In his Comment, 14 dated March 23, 1993, respondent Adaza maintains that his claim before the trial court was merely a suit for damages based on tort by reason of petitioners' various malfeasance, misfeasance and nonfeasance in office, as well as for violation by the petitioners of Section 3 (e) of Republic Act No. 3019,

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otherwise known as the Anti-Graft and Corrupt Practices Act. It was not a suit for malicious prosecution. Private respondent is taking us for a ride. A cursory perusal of the complaint filed by Adaza before respondent Judge George Macli-ing reveals that it is one for malicious prosecution against the petitioners for the latter's filing of the charge against him of rebellion with murder and frustrated murder. An examination of the records would show that this latest posture as to the nature of his cause of action is only being raised for the first time on appeal. Nowhere in his complaint filed with the trial court did respondent Adaza allege that his action is one based on tort or on Section 3 (e) or Republic Act No. 3019. Such a change of theory cannot be allowed. When a party adopts a certain theory in the court below, he will not be permitted to change his theory on appeal, for to permit him to do so would not only be unfair to the other party but it would also be offensive to the basic rules of fair play, justice and due process. 15 Any member of the Bar, even if not too schooled in the art of litigation, would easily discern that Adaza's complaint is no doubt a suit for damages for malicious prosecution against the herein petitioners. Unfortunately, however, his complaint filed with the trial court suffers from a fatal infirmity — that of failure to state a cause of action — and should have been dismissed right from the start. We shall show why. The term malicious prosecution has been defined in various ways. In American jurisdiction, it is defined as: One begun in malice without probable cause to believe the charges can be sustained (Eustace v. Dechter, 28 Cal. App. 2d. 706, 83 P. 2d. 525). Instituted with intention of injuring defendant and without probable cause, and which terminates in favor of the person prosecuted. For this injury an action on the case lies, called the action of malicious prosecution (Hicks v. Brantley, 29 S.E. 459, 102 Ga. 264; Eggett v. Allen, 96 N.W. 803, 119 Wis. 625). 16 In Philippine jurisdiction, it has been defined as: An action for damages brought by one against whom a criminal prosecution, civil suit, or other legal proceeding has been instituted maliciously and without probable cause, after the termination of such prosecution, suit, or other proceeding in favor of the defendant therein. The gist of the action is the putting of legal process in force, regularly, for the mere purpose of vexation or injury (Cabasaan v. Anota, 14169-R, November 19, 1956). 17 The statutory basis for a civil action for damages for malicious prosecution are found in the provisions of the New Civil Code on Human Relations and on damages particularly Articles 19, 20, 21, 26, 29, 32, 33, 35, 2217 and 2219 (8). 18 To constitute malicious prosecution, however, there must be proof that the prosecution was prompted by a sinister design to vex and humiliate a person, and that it was initiated deliberately by the defendant knowing that his charges were false and groundless. Concededly, the mere act of submitting a case to the authorities for prosecution does not make one liable for malicious prosecution. 19 Thus, in order for a malicious prosecution suit to prosper, the plaintiff must prove three (3) elements: (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. 20 All these requisites must concur.

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Judging from the face of the complaint itself filed by Adaza against the herein petitioners, none of the foregoing requisites have been alleged therein, thus rendering the complaint dismissible on the ground of failure to state a cause of action under Section 1 (g), Rule 16 of the Revised Rules of Court. There is nothing in the records which shows, and the complaint does not allege, that Criminal Case No. Q-90-11855, filed by the petitioners against respondent Adaza for Rebellion with Murder and Frustrated Murder, has been finally terminated and therein accused Adaza acquitted of the charge. Not even Adaza himself, thru counsel, makes any positive asseveration on this aspect that would establish his acquittal. Insofar as Criminal Case No. Q-90-11855 is concerned, what appears clear from the records only is that respondent has been discharged on a writ of habeas corpus and granted bail. 21 This is not, however, considered the termination of the action contemplated under Philippine jurisdiction to warrant the institution of a malicious prosecution suit against those responsible for the filing of the information against him. The complaint likewise does not make any allegation that the prosecution acted without probable cause in filing the criminal information dated April 18, 1990 for rebellion with murder and frustrated murder. Elementarily defined, probable cause is the existence of such facts and circumstances as would excite the belief, in a reasonable mind, acting on the facts within the knowledge of the prosecutor, that the person charged was guilty of the crime for which he was prosecuted. It is well-settled that one cannot be held liable for maliciously instituting a prosecution where one has acted with probable cause. Elsewise stated, a suit for malicious prosecution will lie only in cases where a legal prosecution has been carried on without probable cause. The reason for this rule is that it would be a very great discouragement to public justice, if prosecutors, who had tolerable ground of suspicion, were liable to be sued at law when their indictment miscarried. 22 In the case under consideration, the decision of the Special Team of Prosecutors to file the information for rebellion with murder and frustrated murder against respondent Adaza, among others, cannot be dismissed as the mere product of whim or caprice on the part of the prosecutors who conducted the preliminary investigation. Said decision was fully justified in an eighteen (18)-page Resolution dated April 17, 1990. 23 While it is true that the petitioners were fully aware of the prevailing jurisprudence enunciated in People v. Hernandez, 24 which proscribes the complexing of murder and other common crimes with rebellion, petitioners were of the honest conviction that the Hernandez Case can be differentiated from the present case. The petitioners thus argued: Of course we are aware of the ruling in People vs. Hernandez, 99 Phil. 515, which held that common crimes like murder, arson, etc. are absorbed by rebellion. However, the Hernandez case is different from the present case before us. In the Hernandez case, the common crimes of murder, arson, etc. were found by the fiscal to have been committed as a necessary means to commit rebellion, or in furtherance thereof. Thus, the fiscal filed an information for rebellion alleging those common crimes as a necessary means of committing the offense charged under the second part of Article 48, RPC. We, however, find no occasion to apply the Hernandez ruling since as intimated above, the crimes of murder and frustrated murder in this case were absolutely unnecessary to commit rebellion although they were the natural consequences of

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the unlawful bombing. Hence, the applicable provision is the first part of Article 48 of the RPC. 25 While the Supreme Court in the case of Enrile v. Salazar, 26 addressing the issue of whether or not the Hernandez doctrine is still good law, in a 10-3 vote, did not sustain the position espoused by the herein petitioners on the matter, three justices 27 felt the need to re-study the Hernandez ruling in light of present-day developments, among whom was then Chief Justice Marcelo Fernan who wrote a dissenting opinion in this wise: I am constrained to write this separate opinion on what seems to be a rigid adherence to the 1956 ruling of the Court. The numerous challenges to the doctrine enunciated in the case of People vs.Hernandez, 99 Phil. 515 (1956), should at once demonstrate the need to redefine the applicability of said doctrine so as to make it conformable with accepted and well-settled principles of criminal law and jurisprudence. To my mind, the Hernandez doctrine should not be interpreted as an all-embracing authority for the rule that all common crimes committed on the occasion, or in furtherance of, or in connection with, rebellion are absorbed by the latter. To that extent, I cannot go along with the view of the majority in the instant case that "Hernandez remains binding doctrine operating to prohibit the complexing of rebellion with any other offense committed on the occasion thereof, either as a means necessary to its commission or as an unintended effect of an activity that constitutes rebellion" (p. 9, Decision). The Hernandez doctrine has served the purpose for which it was applied by the Court in 1956 during the communist-inspired rebellion of the Huks. The changes in our society in the span of 34 years since then have far-reaching effects on the all-embracing applicability of the doctrine considering the emergence of alternative modes of seizing the powers of the duly-constituted Government not contemplated in Articles 134 and 135 of the Revised Penal Code and their consequent effects on the lives of our people. The doctrine was good law then, but I believe that there is a certain aspect of the Hernandez doctrine that needs clarification. 28 Apparently, not even the Supreme Court then was of one mind in debunking the theory being advanced by the petitioners in this case, some of whom were also the petitioners in the Enrile case. Nevertheless, we held in Enrilethat the Information filed therein properly charged an offense — that of simple rebellion — 29 and thereupon ordered the remand of the case to the trial court for the prosecution of the named accused 30 in the Information therein. Following this lead, the Information against Adaza in Criminal Case No. Q-90-11855 was not quashed, but was instead treated likewise as charging the crime of simple rebellion. A doubtful or difficult question of law may become the basis of good faith and, in this regard, the law always accords to public officials the presumption of good faith and regularity in the performance of official duties. 31 Any person who seeks to establish otherwise has the burden of proving bad faith or ill-motive. Here, since the petitioners were of the honest conviction that there was probable cause to hold respondent Adaza for trial for the crime of rebellion with murder and frustrated murder, and since Adaza himself, through counsel, did not allege in his complaint lack of probable cause, we find that the petitioners cannot be held liable for malicious prosecution. Needless to say, probable cause was not wanting in the institution of Criminal Case No. Q-90-11855 against Adaza.

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As to the requirement that the prosecutor must be impelled by malice in bringing the unfounded action, suffice it to state that the presence of probable cause signifies, as a legal consequence, the absence of malice. 32 At the risk of being repetitious, it is evident in this case that petitioners were not motivated by malicious intent or by a sinister design to unduly harass private respondent, but only by a well-founded belief that respondent Adaza can be held for trial for the crime alleged in the information. All told, the complaint, dated July 11, 1990, filed by Adaza before Branch 100 of the Regional Trial Court against the petitioners does not allege facts sufficient to constitute a cause of action for malicious prosecution. Lack of cause of action, as a ground for a motion to dismiss under Section 1 (g), Rule 16 of the Revised Rules of Court, must appear on the face of the complaint itself, meaning that it must be determined from the allegations of the complaint and from none other. 33 The infirmity of the complaint in this regard is only too obvious to have escaped respondent judge's attention. Paragraph 14 of the complaint which states: xxx xxx xxx 14. The malicious prosecution, nay persecution, of plaintiff for a non-existent crime had severely injured and besmirched plaintiff's name and reputation and forever stigmatized his stature as a public figure, thereby causing him extreme physical suffering, serious anxiety, mental anguish, moral shock and social humiliation. 34 is a mere conclusion of law and is not an averment or allegation of ultimate facts. It does not, therefore, aid in any wise the complaint in setting forth a valid cause of action against the petitioners. It is worthy to note that this case was elevated to the public respondent Court of Appeals and now to this Court because of respondent Judge Macli-ing's denial of petitioners' motion to dismiss the Adaza complaint. The ordinary procedure, as a general rule, is that petitioners should have filed an answer, go to trial, and if the decision is adverse, reiterate the issue on appeal. 35 This general rule, however, is subject to certain exceptions, among which are, if the court denying the motion to dismiss acts without or in excess of jurisdiction or with grave abuse of discretion, in which case certiorari under Rule 65 may be availed of. The reason is that it would be unfair to require the defendants (petitioners in this case) to undergo the ordeal and expense of trial under such circumstances, because the remedy of appeal then would then not be plain and adequate. 36 Judge Macli-ing committed grave abuse of discretion in denying petitioners' motion to dismiss the Adaza complaint, and thus public respondent Court of Appeals should have issued the writ of certiorari prayed for by the petitioners and annulled the February 8, 1991 and May 14, 1991 Orders of respondent Judge. It was grievous error on the part of the court a quo not to have done so. This has to be corrected. Respondent Adaza's baseless action cannot be sustained for this would unjustly compel the petitioners to needlessly go through a protracted trial and thereby unduly burden the court with one more futile and inconsequential case. WHEREFORE, the petition is GRANTED. The Resolutions of respondent Court of Appeals dated January 31, 1992 and September 2, 1992 affirming the February 8, 1991 and May 14, 1991 Orders of respondent Judge George C. Macli-ing are all hereby NULLIFIED AND SET ASIDE. Respondent Judge is DIRECTED to take no further action on Civil Case No. Q-90-6073 except to DISMISS the same. SO ORDERED.