Guilatco vs. Dagupan G. R. No.61516

Facts: Guilatco was a Court Interpreter of Dagupan City. While she was about to board a motorized tricycle at a sidewalk located at Perez Blvd. (a National Road, under the control and supervision of the City of Dagupan) accidentally fell into a manhole located on said sidewalk, thereby causing her right leg to be fractured. As a result thereof, she had to be hospitalized, operated on, confined, at first at the Pangasinan Provincial Hospital. During the period of her confinement, plaintiff suffered severe or excruciating pain not only on her right leg which was fractured but also on all parts of her body; the pain has persisted even after her discharge from the Medical City General Hospital. She has been deprived of said income as she has already consumed her accrued leaves in the government service. She has lost several pounds as a result of the accident and she is no longer her former jovial self, she has been unable to perform her religious, social, and other activities which she used to do prior to the incident. The city contends that Perez Boulevard, where the fatal drainage hole is located, is a national road that is not under the control or supervision of the City of Dagupan. Hence, no liability should attach to the city. It submits that it is actually the Ministry of Public Highways that has control or supervision through the Highway Engineer which, by mere coincidence, is held concurrently by the same person who is also the City Engineer of Dagupan.

Issue: Whether the Dagupan City government liable to the plaintiff.

Ruling: Yes. The liability of public corporations for damages arising from injuries suffered by pedestrians from the defective condition of roads is expressed in the Civil Code as follows:

Article 2189. Provinces, cities and municipalities shall be liable for damages for the death of, or injuries suffered by, any person by reason of the defective condition of roads, streets, bridges, public buildings, and other public works under their control or supervision.

It is not even necessary for the defective road or street to belong to the province, city or municipality for liability to attach. The article only requires that either control or supervision is exercised over the defective road or street. In the case at bar, this control or supervision is provided for in the charter of Dagupan and is exercised through the City Engineer

The express provision in the charter holding the city not liable for damages or injuries sustained by persons or property due to the failure of any city officer to enforce the provisions of the charter, can not be used to exempt the city, as in the case at bar. The charter only lays down general rules regulating the liability of the city. On the other hand article 2189 applies in particular to the liability arising from "defective streets, public buildings and other public works." 9

Quezon city v. Dacara G. R. No. 150304

Facts: Fulgencio Dacara, Jr., son of Fulgencio P. Dacara, Sr. and owner of '87 Toyota Corolla 4-door Sedan with Plate No. 877 (sic), while driving the said vehicle, rammed into a pile of earth/street diggings found at Matahimik St., Quezon City, which was then being repaired by the Quezon City government. As a result, Dacarra (sic), Jr. allegedly sustained bodily injuries and the vehicle suffered extensive damage for it turned turtle when it hit the pile of earth. C onsequently, Fulgencio P. Dacara (hereinafter referred to as FULGENCIO), for and in behalf of his minor son filed a Complaint for damages against the Quezon City and Engr. Ramir Tiamzon, as defendants, which however, yielded negative results. Maintaining that they were not negligent, petitioners insist that they placed all the necessary precautionary signs to alert the public of a roadside construction. They argue that the driver (Fulgencio Dacara Jr.) of respondent's car was overspeeding, and that his own negligence was therefore the sole cause of the incident.

Issue: Whether the defendant City is liable in this case.

Ruling: Yes. Facts obtaining in this case are crystal clear that the accident of February 28, 1988 which caused almost the life and limb of Fulgencio Dacara, Jr. when his car turned turtle was the existence of a pile of earth from a digging done relative to the base failure at Matahimik Street nary a lighting device or a reflectorized barricade or

sign perhaps which could have served as an adequate warning to motorist especially during the thick of the night where darkness is pervasive.

"Contrary to the testimony of the witnesses for the defense that there were signs, gasera which was buried so that its light could not be blown off by the wind and barricade, none was ever presented to stress the point that sufficient and adequate precautionary signs were placed at Matahimik Street. If indeed signs were placed thereat, how then could it be explained that according to the report even of the policeman which for clarity is quoted again,none was found at the scene of the accident.

x x x x x x x x x

"Negligence of a person whether natural or juridical over a particular set of events is transfixed by the attending circumstances so that the greater the danger known or reasonably anticipated, the greater is the degree of care required to be observed.

x x x x x x x x x

"The provisions of Article 2189 of the New Civil Code capsulizes the responsibility of the city government relative to the maintenance of roads and bridges since it exercises the control and supervision over the same. Failure of the defendant to comply with the statutory provision found in the subject-article is tantamount to negligence per se which renders the City government liable. Harsh application of the law ensues as a result thereof but the state assumed the responsibility for the maintenance and repair of the roads and bridges and neither exception nor exculpation from

[G.R. No. L-15692. May 31, 1961.]

ENGRACIA ALARCON, Plaintiff-Appellant, v. JUAN ALARCON, Defendant-Appellee.

Flaviano T. Dalisay and Briones, Briones & Bongon, for Plaintiff-Appellant.

Blancaflor, San Andres & San Andres, for Defendant-Appellee. CONCEPCION J.

FACTS: On June 3, 1955 the defendant hired Urzino Azaña and his brother to dig a well on his land in Caramoan, Camarines Sur. After the day’s work the two had dug a hole about five feet meters deep without striking water.

"On the next day Urzino resumed his work with one Generoso Zulueta as co-worker. Generoso was also hired by the defendant in place of Urzino’s brother who did not return to work.

"Urzino and Generoso started their work early in the morning. Urzino was lowered into the hole with a rope to dig deeper. On reaching the bottom he quickly remarked that he was not feeling well. Generoso told him to get ready to be pulled up, but a moment later Urzino fainted and slumped helplessly into a sitting position.

"Generoso quickly called for help. A policeman and other persons immediately responded. After their arrival Generoso lowered a ladder and proceeded to descend into the hole. After having gone down about two meters, he felt a current of hot air with an obnoxious odor around him. He soon realized that he was not feeling well. Accordingly, he desisted from descending farther and instead he climbed up out of the hole. One of the men then volunteered to go down in his place, but he too could not reach the bottom for the same reason.

"Realizing that it was not safe to go into the hole, Generoso, and others thought of another method to get out Urzino. With a rope tied into a loop on one end, they caught one of his legs and pulled up his body. They next put him on bed while someone summoned a doctor. In less than five minutes the municipal health officer arrived. He quickly attempted to revive Urzino, but his efforts proved unavailing because he was already dead. He certified that Urzino died of asphyxia (Exhibit A).

"On the day of his death Urzino was single, 20 years old, and living with his mother who is the plaintiff. She filed this action to recover compensation for her son’s death under the provision of Art. 1711 of the Civil Code

the Court of First Instance of Camarines Sur rendered judgment dismissing the complaint upon the ground that, "not being owner of enterprises or employer of laborers in industry or business", defendant herein is not liable under Article 1711 of the Civil Code of the Philippines to pay compensation for the death of Urzino Azaña, the same being purely accidental in nature

ISSUE: WON CFI correct? YES

HELD: the employment of Urzino Azaña by defendant herein was "purely casual" and was not "for the purposes of the occupation or business" of said defendant, it is clear to us that Urzino Azaña is not covered by the provisions of the Workmen’s Compensation Act. Neither may plaintiff herein avail of the benefits of the Employer’s Liability Act (Act No. 1874), which she does not invoke, for it is not claimed that Urzino’s death was due to "a defect in the condition of the ways, works or machinery connected with or used in the business of the employer", or to "the negligence of a person in the service of the employer." Hence, there is no means by which defendant herein may be held liable for Azaña’s death, due to an accidental cause or fortuitous event

Defendant herein does not own any enterprise. He is merely a school teacher who needed a well. Neither does he fall under the category of "other employers" mentioned in said Article 1711. Under the principle of ejusdem generis, said "other employers" must be construed to refer to persons who belong to a class analogous to "owners of enterprises", such as those operating a business or engaged in a particular industry or trade, requiring its managers to contract the services of laborers, workers and/or employees. (SEE 1711 NCC)

"Laborer’ is used as a synonym of ‘Employee’ and means every person who has entered the employment of, or works under a service or apprenticeship contract for an employer. It does not include a person whose employment is purely casual and is not for the purposes of the occupation or business of the employer.

G.R. No. L-9356 February 18, 1915 TRENT, J.:

C. S. GILCHRIST, plaintiff-appellee, vs. E. A. CUDDY, ET AL., defendants.

Lessons Applicable: Interference with Contractual Relations (Torts and Damages)

Laws Applicable: Article 1902 (old law)

FACTS: Cuddy was the owner of the film Zigomar

April 24: He rented it to C. S. Gilchrist for a week for P125

A few days to the date of delivery, Cuddy sent the money back to Gilchrist

Cuddy rented the film to Espejo and his partner Zaldarriaga P350 for the week knowing that it was rented to someone else and that Cuddy accepted it because he was paying about three times as much as he had contracted with Gilchrist but they didn't know the identity of the other party

Gilchrist filed for injunction against these parties

Trial Court and CA: granted - there is a contract between Gilchrist and Cuddy

ISSUE: W/N Espejo and his partner Zaldarriaga should be liable for damages though they do not know the identity of Gilchrist

HELD: YES. judgment is affirmed

That Cuddy was liable in an action for damages for the breach of that contract, there can be no doubt.

the mere right to compete could not justify the appellants in intentionally inducing Cuddy to take away the appellee's contractual rights

Everyone has a right to enjoy the fruits and advantages of his own enterprise, industry, skill and credit. He has no right to be free from malicious and wanton interference, disturbance or annoyance. If disturbance or loss come as a result of competition, or the exercise of like rights by others, it is damnum absque injuria(loss without injury), unless some superior right by contract or otherwise is interfered with

Cuddy contract on the part of the appellants was a desire to make a profit by exhibiting the film in their theater. There was no malice beyond this desire; but this fact does not relieve them of the legal liability for interfering with that contract and causing its breach.

liability of the appellants arises from unlawful acts and not from contractual obligations, as they were under no such obligations to induce Cuddy to violate his contract with Gilchrist

So that if the action of Gilchrist had been one for damages, it would be governed by chapter 2, title 16, book 4 of the Civil Code.

Article 1902 of that code provides that a person who, by act or omission, causes damages to another when there is fault or negligence, shall be obliged to repair the damage do done

There is nothing in this article which requires as a condition precedent to the liability of a tort-feasor that he must know the identity of a person to whom he causes damages

An injunction is a "special remedy" which was there issued by the authority and under the seal of a court of equity, and limited, as in order cases where equitable relief is sought, to cases where there is no "plain, adequate, and complete remedy at law," which "will not be granted while the rights between the parties are undetermined, except in extraordinary cases where material and irreparable injury will be done," which cannot be compensated in damages, and where there will be no adequate remedy, and which will not, as a rule, be granted, to take property out of the possession of one party and put it into that of another whose title has not been established by law

irreparable injury

not meant such injury as is beyond the possibility of repair, or beyond possible compensation in damages, nor necessarily great injury or great damage, but that species of injury, whether great or small, that ought not to be submitted to on the one hand or inflicted on the other; and, because it is so large on the one hand, or so small on the other, is of such constant and frequent recurrence that no fair or reasonable redress can be had therefor in a court of law

Gilchrist was facing the immediate prospect of diminished profits by reason of the fact that the appellants had induced Cuddy to rent to them the film Gilchrist had counted upon as his feature film

It is quite apparent that to estimate with any decree of accuracy the damages which Gilchrist would likely suffer from such an event would be quite difficult if not impossible

So far as the preliminary injunction issued against the appellants is concerned, which prohibited them from exhibiting the Zigomar during the week which Gilchrist desired to exhibit it, we are of the opinion that the circumstances justified the issuance of that injunction in the discretion of the court

the remedy by injunction cannot be used to restrain a legitimate competition, though such competition would involve the violation of a contract

Separate Opinion:

MORELAND, J., concurring:

The court seems to be of the opinion that the action is one for a permanent injunction; whereas, under my view of the case, it is one for specific performance.

The very nature of the case demonstrates that a permanent injunction is out of the question. The only thing that plaintiff desired was to be permitted to use the film for the week beginning the 26th of May. With the termination of that week his rights expired. After that time Cuddy was perfectly free to turn the film over to the defendants Espejo and Zaldarriaga for exhibition at any time.

No damages are claimed by reason of the issuance of the mandatory injunction under which the film was delivered to plaintiff and used by him during the week beginning the 26th of May.

So Ping Bun vs CA

Facts:In 1963, Tek Hua Trading Co, through its managing partner, So Pek Giok, entered into lease agreements with lessor Dee C. Chuan & Sons Inc. (DCCSI).Subjects of four (4) lease contracts were premises located at Nos. 930, 930-Int., 924-B and 924-C, Soler Street, Binondo, Manila.Tek Hua used the areas to store its textiles.The contracts each had a one-year term.They provided that should the lessee continue to occupy the premises after the term, the lease shall be on a month-to-month basis.

When the contracts expired, the parties did not renew the contracts, but Tek Hua continued to occupy the premises.In 1976, Tek Hua Trading Co. was dissolved. Later, the original members of Tek Hua Trading Co. including Manuel C. Tiong, formed Tek Hua Enterprising Corp., herein respondent corporation.So Pek Giok, managing partner of Tek Hua Trading, died in 1986.So Pek Gioks grandson, petitioner So Ping Bun, occupied the warehouse for his own textile business, Trendsetter Marketing.

On August 1, 1989, lessor DCCSI sent letters addressed to Tek Hua Enterprises, informing the latter of the 25% increase in rent effective September 1, 1989.The rent increase was later on reduced to 20% effective January 1, 1990, upon other lessees demand.Again on December 1, 1990, the lessor implemented a 30% rent increase.Enclosed in these letters were new lease contracts for signing. DCCSI warned that failure of the lessee to accomplish the contracts shall be deemed as lack of interest on the lessees part, and agreement to the termination of the lease.Private respondents did not answer any of these letters.Still, the lease contracts were not rescinded.

Issue: Whether Ping Bon is liable for damages for interfering with the contract.

Ruling: Yes,essentially, the correct interpretation of the applicable law on tortuous conduct, particularly unlawful interference with contract.We have to begin, obviously, with certain fundamental principles on torts and damages.Damage is the loss, hurt, or harm which results from injury, and damages are the recompense or compensation awarded for the damage suffered.One becomes liable in an action for damages for a nontrespassory invasion of anothers interest in the private use and enjoyment of asset if (a) the other has property rights and privileges with respect to the use or enjoyment interfered with, (b) the invasion is substantial, (c) the defendants conduct is a legal cause of the invasion, and (d) the invasion is either intentional and unreasonable or unintentional and actionable under general negligence rules.The elements of tort interference are: (1) existence of a valid contract; (2) knowledge on the part of the third person of the existence of contract; and (3) interference of the third person is without legal justification or excuse.A duty which the law of torts is concerned with is respect for the property of others, and a cause of action ex delicto may be predicated upon an unlawful interference by one person of the enjoyment by the other of his private property.This may pertain to a situation where a third person induces a party to renege on or violate his undertaking under a contract.In the case before us, petitioners Trendsetter Marketing asked DCCSI to execute lease contracts in its favor, and as a result petitioner deprived

respondent corporation of the latters property right.Clearly, and as correctly viewed by the appellate court, the three elements of tort interference above-mentioned are present in the instant case.Authorities debate on whether interference may be justified where the defendant acts for the sole purpose of furthering his own financial or economic interest.One view is that, as a general rule, justification for interfering with the business relations of another exists where the actors motive is to benefit himself.Such justification does not exist where his sole motive is to cause harm to the other.Added to this, some authorities believe that it is not necessary that the interferers interest outweigh that of the party whose rights are invaded, and that an individual acts under an economic interest that is substantial, not merely de minimis, such that wrongful and malicious motives are negatived, for he acts in self-protection.Moreover, justification for protecting ones financial position should not be made to depend on a comparison of his economic interest in the subject matter with that of others.It is sufficient if the impetus of his conduct lies in a proper business interest rather than in wrongful motives.

Lagon vs CA

Facts:On June 23, 1982, petitioner Jose Lagon purchased from the estate of Bai Tonina Sepi, through an intestate court,two parcels of land located at Tacurong, Sultan Kudarat. A few months after the sale, private respondent Menandro Lapuz filed a complaint for torts and damages against petitioner before the Regional Trial Court (RTC) of Sultan Kudarat.In the complaint, private respondent, as then plaintiff, claimed that he entered into a contract of lease with the late Bai Tonina Sepi Mengelen Guiabar over three parcels of land (the property) in Sultan Kudarat, Maguindanao beginning 1964. One of the provisions agreed upon was for private respondent to put up commercial buildings which would, in turn, be leased to new tenants. The rentals to be paid by those tenants would answer for the rent private respondent was obligated to pay Bai Tonina Sepi for the lease of the land. In 1974, the lease contract ended but since the construction of the commercial buildings had yet to be completed, the lease contract was allegedly renewed.When Bai Tonina Sepi died, private respondent started remitting his rent to the court-appointed administrator of her estate. But when the administrator advised him to stop collecting rentals from the tenants of the buildings he constructed, he discovered that petitioner, representing himself as the new owner of the property, had been collecting rentals from the tenants. He thus filed a complaint against the latter, accusing petitioner of inducing the heirs of Bai Tonina Sepi to sell the property to him, thereby violating his leasehold rights over it.In his answer to the complaint, petitioner denied that he induced the heirs of Bai Tonina to sell the property to him, contending that the heirs were in dire need of money to pay off the obligations of the deceased. He also denied interfering with private respondents leasehold rights as there was no lease contract covering the property when he purchased it; that his personal investigation and inquiry revealed no claims or encumbrances on the subject lots.Petitioner claimed that before he bought the property, he went to Atty. Benjamin Fajardo, the lawyer who allegedly notarized the lease contract between private respondent and Bai Tonina Sepi, to verify if the parties indeed renewed the lease contract after it expired in 1974. Petitioner averred that Atty. Fajardo showed him four copies of the lease renewal but these were all unsigned. To refute the existence of a lease contract, petitioner presented in court a certification from the Office of the Clerk of Court confirming that no record of any lease contract notarized by Atty. Fajardo had been entered into their files. Petitioner added that he only learned of the alleged lease contract when he was informed that private respondent was collecting rent from the tenants of the building.

Issue: Whether Lagon is liable for damages for tortuous interfering with the contract.

Ruling: Yes, the elements of tortuous interference with contractual relations: (a) existence of a valid contract; (b) knowledge on the part of the third person of the existence of the contract and (c) interference of the third person without legal justification or excuse. In that case, petitioner So Ping Bun occupied the premises which the corporation of his grandfather was leasing from private respondent, without the knowledge and permission of the corporation. The corporation, prevented from using the premises for its business, sued So Ping Bun for tortuous interference.As regards the first element, the existence of a valid contract must be duly established. To prove this, private respondent presented in court a notarized copy of the purported lease renewal.While the contract appeared as duly notarized, the notarization thereof, however, only proved its due execution and delivery but not the veracity of its contents. Nonetheless, after undergoing the rigid scrutiny of petitioners counsel and after the trial court declared it to be valid and subsisting, the notarized copy of the lease contract presented in court appeared to be incontestable proof that private respondent and the late Bai Tonina Sepi actually renewed their

lease contract. Settled is the rule that until overcome by clear, strong and convincing evidence, a notarized document continues to be prima facie evidence of the facts that gave rise to its execution and delivery.

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

GO v. CORDERO

FACTS: Mortimer Cordero ventured into the business of marketing inter-island passenger vessels. He met Tony Robinson, the Managing Director of Aluminum Fast Ferries Australia (AFFA). Robinsonn signed documents appointing Cordero as the exclusive distributor of AFFA catamaran and other fast ferry vessels in the Philippines. As such, Cordero offered for sale to prospective buyers the 25-meter Aluminum Passenger catamaran known as the SEACAT 25. After negotiations with Felipe Landicho and Tecson, lawyers of Allan Go who was the owner/operator of ACG Express Liner, Cordero was able to close the deal for the purchase of 2 units. They executed a Shipbuilding Contract for one SEACAT 25. Cordero made 2 trips to the AFFA Shipyard in Brisbane, Australia, and on one occasion even accompanied Go and his family and Landicho to monitor the progress of the building of the vessel. He shouldered all the expenses for airfare, food, hotel accomodations, transportation and entertainment during trips. He also spent long distance phone calls to communicate with Go, Tecson and Landicho. However, Cordero discovered that Go was dealing directly with Robinson. Cordero immediately flew to Brisbane only to find out that Go and Landicho were already there in Brisbane negotiating for the sale of 2nd SEACAT 25. Despite repeated follow ups, no explanation was given by Robinson, Go and Landicho and Tecson, who even made Cordero believe there would be no further sale between AFFA and ACG Express Liner.

In a letter, Cordero informed Go that such act of dealing directly with Ronbinson violated his exclusive distributorship. Cordero’s lawyer also wrote ACG Express, assailing the fraudulent actuations and misrepresentations committed by Go in connivance with his lawyer in breach of Cordero’s exclusive distributorship appointment. Thereafter, Cordero instituted civil action seeking Robinson, Go, Tecson and Landicho liable jointly and solidary for conniving and conspiring together in violating his exclusive distributorship in bad faith and wanton disregard of his rights, thus depriving him of his due commissions and causing him actual, moral and exemplary damages.

ISSUE: whether the respondents may be held liable for damages to Cordero for his unpaid commissions and termination of his exclusive distributorship appointment by the principal, AFFA.

RULING: While it is true that a third person cannot possibly be sued for breach of contract because only parties can breach contractual provisions, a contracting party may sue a third person not for breach but for inducing another to commit such breach.

Article 1314 of the Civil Code provides:

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

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

The presence of the first and second elements is not disputed. Through the letters issued by Robinson attesting that Cordero is the exclusive distributor of AFFA in the Philippines, respondents were clearly aware of the contract between Cordero and AFFA represented by Robinson. In fact, evidence on record showed that respondents initially dealt with and recognized Cordero as such exclusive dealer of AFFA high-speed catamaran vessels in the

Philippines. In that capacity as exclusive distributor, petitioner Go entered into the Memorandum of Agreement and Shipbuilding Contract No. 7825 with Cordero in behalf of AFFA.

As to the third element, it was held that As early as Gilchrist vs. Cuddy, we held that where there was no malice in the interference of a contract, and the impulse behind ones conduct lies in a proper business interest rather than in wrongful motives, a party cannot be a malicious interferer. Where the alleged interferer is financially interested, and such interest motivates his conduct, it cannot be said that he is an officious or malicious intermeddler.

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

x x x

While we do not encourage tort interferers seeking their economic interest to intrude into existing contracts at the expense of others, however, we find that the conduct herein complained of did not transcend the limits forbidding an obligatory award for damages in the absence of any malice. The business desire is there to make some gain to the detriment of the contracting parties. Lack of malice, however, precludes damages. But it does not relieve petitioner of the legal liability for entering into contracts and causing breach of existing ones.

The act of Go, Landicho and Tecson in inducing Robinson and AFFA to enter into another contract directly with ACG Express Liner to obtain a lower price for the second vessel resulted in AFFAs breach of its contractual obligation to pay in full the commission due to Cordero and unceremonious termination of Corderos appointment as exclusive distributor. Following our pronouncement in Gilchrist v. Cuddy (supra), such act may not be deemed malicious if impelled by a proper business interest rather than in wrongful motives. The attendant circumstances, however, demonstrated that respondents transgressed the bounds of permissible financial interest to benefit themselves at the expense of Cordero. Respondents furtively went directly to Robinson afterCordero had worked hard to close the deal for them to purchase from AFFA two (2) SEACAT 25, closely monitored the progress of building the first vessel sold, attended to their concerns and spent no measly sum for the trip to Australia with Go, Landicho and Gos family members. But what is appalling is the fact that even as Go, Landicho and Tecson secretly negotiated with Robinson for the purchase of a second vessel, Landicho and Tecson continued to demand and receive from Cordero their commission or cut from Corderos earned commission from the sale of the first SEACAT 25.

Cordero was practically excluded from the transaction when Go, Robinson, Tecson and Landicho suddenly ceased communicating with him, without giving him any explanation. While there was nothing objectionable in negotiating for a lower price in the second purchase of SEACAT 25, which is not prohibited by the Memorandum of Agreement, Go, Robinson, Tecson and Landicho clearly connived not only in ensuring that Cordero would have no participation in the contract for sale of the second SEACAT 25, but also that Cordero would not be paid the balance of his commission from the sale of the first SEACAT 25. This, despite their knowledge that it was commission already earned by and due to Cordero. Thus, the trial and appellate courts correctly ruled that the actuations of Go, Robinson, Tecson and Landicho were without legal justification and intended solely to prejudice Cordero.

The failure of Robinson, Go, Tecson and Landico to act with fairness, honesty and good faith in securing better terms for the purchase of high-speed catamarans from AFFA, to the prejudice of Cordero as the duly appointed exclusive distributor, is further proscribed by Article 19 of the Civil Code

GLOBE MACKAY v. COURT OF APPEALS

FACTS: 10 November 1972, herein private respondent Restituto Tobias, a purchasing agent and administrative assistant to the engineering operations manager, discovered fictitious purchases and other fraudulent transactions, which caused Globe Mackay Cable and Radio Corp loss of several thousands of pesos. He reported it to his immediate superior Eduardo T. Ferraren and to the Executive Vice President and General Manager Herbert

Hendry. A day after the report, Hendry told Tobias that he was number one suspect and ordered him one week forced leave. When Tobias returned to work after said leave, Hendry called him a “crook” and a “swindler”, ordered him to take a lie detector test, and to submit specimen of

his handwriting, signature and initials for police investigation. Moreover, petitioners hired a private investigator. Private investigation was still incomplete; the lie detector tests yielded negative results; reports from Manila police investigators and from the Metro Manila Police Chief Document Examiner are in favor of Tobias. Petitioners filed with the Fiscal’s Office of Manila a total of six (6) criminal cases against private respondent Tobias, but were dismissed.

Tobias received a notice of termination of his employment from petitioners in January 1973, effective December 1972. He sought employment with the Republic Telephone Company (RETELCO); but Hendry wrote a letter to RETELCO stating that Tobias was dismissed by Globe Mackay due to dishonesty. Tobias, then, filed a civil case for damages anchored on alleged unlawful, malicious, oppressive, and abusive acts of petitioners. The Regional Trial Court of Manila, Branch IX, through Judge Manuel T. Reyes rendered judgment in favor of private respondent, 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; hence, this petition for review on certiorari.

Issue: Whether or not petitioners are liable for damages to private respondent.

RULING : Yes. 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: when Hendry told Tobias to just confess or else the company would file a hundred more cases against him until he landed in jail; his (Hendry) scornful remarks about Filipinos ("You Filipinos cannot be trusted.”) as well as against Tobias (“crook”, and “swindler”); the writing of a letter to RETELCO stating that Tobias was dismissed by Globe Mackay due to dishonesty; and the filing of six criminal cases by petitioners against private respondent. All these reveal that petitioners are motivated by malicious and unlawful intent to harass, oppress, and cause damage to private respondent. 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.

Petitioners invoked the right of damnun absque injuria or the damage or loss which does not constitute a violation of legal right or amount to a legal wrong is not actionable. However, this is not applicable 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 be held liable.

The court awarded Tobias the following: Php 80, 000 as actual damages, Php 200, 000 as moral damages, Php 20, 0000 as exemplary damages; Php 30, 000 as attorney’s fees; and, costs. Petition was denied and the decision of CA is AFFIRMED.

G.R. No. 88694 January 11, 1993

ALBENSON ENTERPRISES CORP., JESSE YAP, AND BENJAMIN MENDIONA, petitioners, vs. THE COURT OF APPEALS AND EUGENIO S. BALTAO, respondents.

FACTS: Petitioner Albenson delivered to Guaranteed Industries, Inc. (Guaranteed for short), the mild steel plates which the latter ordered. As part payment thereof, Albenson was given Pacific Banking Corporation Check and drawn against the account of E.L. Woodworks.

When presented for payment, the check was dishonored for the reason "Account Closed." Thereafter, petitioner Albenson, through counsel, traced the origin of the dishonored check. From the records of the Securities and

Exchange Commission (SEC), Albenson discovered that the president of Guaranteed, the recipient of the unpaid mild steel plates, was one "Eugenio S. Baltao." Upon further inquiry, Albenson was informed by the Ministry of Trade and Industry that E.L. Woodworks, a single proprietorship business, was registered in the name of one "Eugenio Baltao". In addition, upon verification with the drawee bank, Pacific Banking Corporation, Albenson was advised that the signature appearing on the subject check belonged to one "Eugenio Baltao."

After obtaining the foregoing information, Albenson, through counsel, made an extrajudicial demand upon private respondent Eugenio S. Baltao.Respondent Baltao, denied that he issued the check, or that the signature appearing thereon is his. He further alleged that Guaranteed was a defunct entity and hence, could not have transacted business with Albenson.

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

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

Because of the alleged unjust filing of a criminal case against him,respondent Baltao filed before the Regional Trial Court of Quezon City a complaint for damages against herein petitioners Albenson Enterprises, Jesse Yap, its owner, and Benjamin Mendiona, its employee.

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

ISSUE:WON Albenson is liable for damages on the basis of abuse of rights?

HELD:NO. The elements of an abuse of right under Article 19 are the following: (1) There is a legal right or duty; (2) which is exercised in bad faith; (3) for the sole intent of prejudicing or injuring another. Article 20 speaks of the general sanction for all other provisions of law which do not especially provide for their own sanction (Tolentino, supra, p. 71). Thus, anyone who, whether willfully or negligently, in the exercise of his legal right or duty, causes damage to another, shall indemnify his victim for injuries suffered thereby. Article 21 deals with acts contra bonus mores, and has the following elements: 1) There is an act which is legal; 2) but which is contrary to morals, good custom, public order, or public policy; 3) and it is done with intent to injure.

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

The presence of probable cause signifies, as a legal consequence, the absence of malice. In the instant case, it is evident that petitioners were not motivated by malicious intent or by sinister design to unduly harass private

respondent, but only by a well-founded anxiety to protect their rights when they filed the criminal complaint against private respondent.

There is no proof or showing that petitioners acted maliciously or in bad faith in the filing of the case against private respondent. Consequently, in the absence of proof of fraud and bad faith committed by petitioners, they cannot be held liable for damages (Escritor, Jr. vs. Intermediate Appellate Court, 155 SCRA 577 [1987]). No damages can be awarded in the instant case, whether based on the principle of abuse of rights, or for malicious prosecution.

G.R. No. 140420 February 15, 2001

SERGIO AMONOY, petitioner, vs. Spouses JOSE GUTIERREZ and ANGELA FORNIDA, respondents

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.

FACTS: This case had its roots in Special Proceedings, for the settlement of the estate of the deceased Julio Cantolos, involving six(6) parcels of land situated in Tanay Rizal. Amonoy was the counsel of therein Francisca Catolos, Agnes Catolos, Asuncion Pasamba and Alfonso Formida. On 12 January 1965, the Project of Partition submitted was approved and xxx two (2) of the said lots were adjudicated to Asuncion Pasamba and Alfonso Formilda. The Attorney's fees charged by Amonoy was P27,600.00 and on 20 January 1965 Asuncion Pasamba and Alfonso Formida executed a deed of real estate mortgage on the said two (2) lots adjudicated to them, in favor of Amonoy to secure the payment of his attorney's fees. But it was only on 6 August 1969 after the taxes had been paid, the claims settled and the properties adjudicated, that the estate was declared closed and terminated.

"Asuncion Pasamba died on 24 February 1969 while Alfonso Fornilda passsed away on 2 July 1969. Among the heirs of the latter was his daughter, plaintiff-appellant Angela Gutierrez.

"Because his Attorney's fees thus secured by the two lots were not paid, Amonoy filed for their foreclosure. 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 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.

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 a twin musiyun (Mahigpit na Musiyon Para Papanagutin Kaugnay ng Paglalapastangan) with full titles as fanciful and elongated as their Petisyung(Petisyung Makapagsuri Taglay and Pagpigil ng Utos), a temporary restraining order was granted on 2 June 1986 enjoining the demolition of the petitioners' houses.

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.

ISSUE: Won petitioner Amonoy is liable to pay respondents for damages?

HELD: YES. 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.

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.

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

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.

Obviously, petitioner cannot invoke damnum absque injuria, a principle premised on the valid exercise of a right.14Anything less or beyond such exercise will not give rise to the legal protection that the principle

G.R. No. 132344 February 17, 2000

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

YNARES-SANTIAGO, J.:

FACTS: Romeo Jader was law student of University of the East which was enrolled from 1984 to 1988. In his last year (1987-1988), he failed to take the final examination in PRACTICE COURT I for which he was given an incomplete grade. On second semester of 4th year he filed an application for the removal of the incomplete grade given him by Professor Carlos Ortega which was approved by Dean Celedonio Tiongson after payment of required fee. Thereafter, he took the examination and subsequently receibed his grade of five(5).

Meanwhile, Dean and Faculty staff of College of Law met to deliberate the list of graduates. Jader;s name was in the tentative list of candidates for graduation. The commencement ceremonies came and scheduled and in the invitation Jader’s name appeared as one of candidates with following annotation:This is a tentative list Degrees will be conferred upon these candidates who satisfactorily complete requirements…

Jader attended the investure ceremonies which he went up the stage when his name was called, escorted by her mother who assisted in placing Hood and his Tassl and was handed by Dean Celedonio of a symbolical Diploma. In the evening he had a blow-out which was attended by neighbors, friends and relatives who wished him good luck for bar exam. Thereafter, he prepared for bar examination. Took leave of absence without pay from his job, enrolled for pre-bar review class at FEU. HOWEVER, having learned of his deficiency he dropped his review class and was not able to take the bar exam. 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.

Trial Court favored Jader and on appeal by UE, the same was affirmed modifying the award by increasing the amount. Hence, this petition.

CONTENTION OF UE: that he 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.

ISSUE: whether petitioner shall be held liable.

RULING: YES. 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 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.

POLO S. PANTALEON, V. AMERICAN EXPRESS INTERNATIONAL, INC., SUPRA

FACTS: After the Amsterdam incident that happened involving the delay of American Express Card to approve his credit card purchases worth US$13,826.00 at the Coster

store, Pantaleon commenced a complaint for moral and exemplary damages before the RTC against American Express. He said that he and his family experienced inconvenience and humiliation due to the delays in credit authorization. RTC rendered a decision in favor of Pantaleon. CA reversed the award of damages in favor of Pantaleon, holding that AmEx had not breached its obligations to Pantaleon, as the purchase at Coster deviated from Pantaleon's established charge purchase pattern.

According to Pantaleon, even if AMEX did have a right to review his charge purchases, it abused this right when it unreasonably delayed the processing of the Coster charge purchase, as well as his purchase requests at the Richard Metz Golf Studio and Kids Unlimited Store; AMEX should have known that its failure to act immediately on charge referrals would entail inconvenience and result in humiliation, embarrassment, anxiety and distress to its cardholders who would be required to wait before closing their transactions

ISSUE: Whether AMEX acted in good faith?

RULING:YES. we have already established that: (a) AMEX had neither a contractual nor a legal obligation to act upon Pantaleons purchases within a specific period of time; and (b) AMEX has a right to review a cardholders credit card history. Our recognition of these entitlements, however, does not give AMEX an unlimited right to put off action on cardholders purchase requests for indefinite periods of time. In acting on cardholders purchase requests, AMEX must take care not to abuse its rights and cause injury to its clients and/or third persons. We cite in this regard Article 19, in conjunction with Article 21, of the Civil Code

Article 19 pervades the entire legal system and ensures that a person suffering damage in the course of anothers exercise of right or performance of duty, should find himself without relief.[36] It sets the standard for the conduct of all persons, whether artificial or natural, and requires that everyone, in the exercise of rights and the performance of obligations, must: (a) act with justice, (b) give everyone his due, and (c) observe honesty and good faith. It is not because a person invokes his rights that he can do anything, even to the prejudice and disadvantage of another.[37]

While Article 19 enumerates the standards of conduct, Article 21 provides the remedy for the person injured by the willful act, an action for damages. We explained how these two provisions correlate with each other in GF Equity, Inc. v. Valenzona:[38]

[Article 19], 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.

In the context of a credit card relationship, although there is neither a contractual stipulation nor a specific law requiring the credit card issuer to act on the credit card holders offer within a definite period of time, these principles provide the standard by which to judge AMEXs actions.

It is an elementary rule in our jurisdiction that good faith is presumed and that the burden of proving bad faith rests upon the party alleging it.[40] Although it took AMEX some time before it approved Pantaleons three charge requests, we find no evidence to suggest that it acted with deliberate intent to cause Pantaleon any loss or injury, or acted in a manner that was contrary to morals, good customs or public policy. We give credence to AMEXs claim that its review procedure was done to ensure Pantaleons own protection as a cardholder and to prevent the possibility that the credit card was being fraudulently used by a third person.

Pantaleon countered that this review procedure is primarily intended to protect AMEXs interests, to make sure that the cardholder making the purchase has enough means to pay for the credit extended. Even if this were the case, however, we do not find any taint of bad faith in such motive. It is but natural for AMEX to want to ensure that it will extend credit only to people who will have sufficient means to pay for their purchases. AMEX, after all, is running a business, not a charity, and it would simply be ludicrous to suggest that it would not want to earn profit for its services. Thus, so long as AMEX exercises its rights, performs its obligations, and generally acts with good faith, with no intent to cause harm, even if it may occasionally inconvenience others, it cannot be held liable for damages.

GARCIA VS. SALVADOR

FACTS: Ranida Salvador worked as a trainee in the accounting department of Limay Bulk Handling Terminal. As a prerequisite for regular employment, she underwent a medical exam at the Community Diagnostic Center (CDC). Garcia, a medical technologies conducted the HBs Ag (Hepatitis B Surface Antigen) test and issued the test result indicating that Ranida was “HBs Ag: Reactive.” The result bore the name and signature of Garcia as examiner and the rubber stamp signature of Bu Castro as pathologist. When Ranida submitted the result to company physician Dr. Sto. Domingo, the latter told her that the result indicated that she is suffering from Hepatitis B, a liver disease. Based on the the doctor’s medical report, the company terminated Ranida’s employment for failing the physical exam. When she informed her father Ramon, he suffered a heart attack and was confined at Bataan Doctors Hospital. During her father’s confinement, she had another HBs Ag test at the same hospital. The result indicated that she is non-reactive. She informed Sto. Domingo but was told that the test by the CDC was more reliable because it used the Mirco-Elisa Method. She went back to CDC for confirmatory testing and the Anti-HBs test conducted on her had a Negative result. She also had another test at the hospital using the Micro-Elisa Method and the result indicated that she was non-reactive. She submitted both results to the Executive Officer of the company who requested her to undergo another similar test before her re-employment would be considered. The CDC conducted another test which indicated a Negative result. The Med-Tech OIC of CDC issued a certification correcting the initial result and explaining that the examining med tech Garcia interpreted the delayed reaction as

positive or negative. The company rehired Ranida. She then filed a complaint for damages against Garcia and an unknown pathologist of CDC. She claimed that because of the erroneous interpretation of the results of the examination, she lost her job and suffered serious mental anxiety, trauma, sleepless nights, while Ramon was hospitalized and lost business opportunities. In an amended complaint, she named Castro as the pathologist. Garcia denied the allegations of gross negligence and incompetence and reiterated the scientific explanation for the “false positive” result of the first HBs Ag tests in a letter to the respondents. Castro claimed that as pathologist, he rarely went to CDC and only when a case was referred to him; that he did not examine Ranida; and that the test results bore only his rubber-stamp signature. RTC dismissed the complaint because the respondent failed to present sufficient evidence to prove the liability of Garcia and Castro. CA reversed the RTC’s ruling and found Garcial liable for damages for negligently issuing an erroneous HBs Ag result. The appellate court exonerated Castro for lack of participation.

ISSUE: Whether Castro has been negligent in issuing the test result and thus liable for damages.

HELD: YES. Negligence is the failure to observe for the protection of the interest of another person that degree of care, precaution and vigilance which the circumstance justly demand, whereby such other person suffers injury. For health care providers, the test of the existence of negligence is: did the health care provider either fail to do something which a reasonably prudent health care provider would have done, or that he or she did something that a reasonably prudent health care provider would not have done; and that failure or action caused injury to the patient; if yes, then he is guilty of negligence. Thus, the elements of actionable conduct are: 1) duty, 2)breach, 3) injury,

and 4) proximate causation. All the elements are present in the case at bar. Owners and operators of clinical laboratories have the duty to comply with statutes, as well as rules and regulations, purposely promulgated to protect and promote the health of the people by preventing the operation of substandard, improperly managed and inadequately supported clinical laboratories and by improving the quality of performance of clinical laboratory examinations. Their business is impressed with public interest, as such, high standards of performance are expected from them. In fine, violation of a statutory duty is negligence. Where the law imposes upon a person the duty to do something, his omission or non-performance will render him liable to whoever may be injured thereby. From provisions RA 4688, otherwise known as the The Clinical Laboratory Law, it is clear that a clinical laboratory must be administered, directed and supervised by a licensed physician authorized by the Sec. of Health, like a pathologist who is specially trained in methods of laboratory medicine; that the medical technologist must be under the supervision of the pathologist or licensed physician; and that the results of any examination may be released only to the requesting physician or his authorized representative upon the direction of the laboratory pathologist. These rules are intended for the protection of the public by preventing performance of substandard clinical examinations by laboratories whose personnel are not properly supervised. The public demands no less than an effective and efficient performance of clinical laboratory examinations through compliance with the quality standards set by laws and regulations. Garcia may not have intended to cause the consequences which followed after the release of the HBs AG test result. However, his failure to comply with the laws and rules promulgated and issued for the protection of public safety and interest is failure to observe that care which a reasonably prudent health care provider would observe. Thus, his act or omission constitutes a breach of duty.

Indubitably, Ranida suffered injury as a direct consequence of Garcia’s failure to comply with the mandate of the laws and rules aforequoted. She was terminated from the service for failing the physical examination; suffered anxiety because of the diagnosis; and was compelled to undergo several more tests. All these could have been avoided had the proper safeguards been scrupulously followed in conducting the clinical examination and releasing the clinical report.

Article 20 of the New Civil Code provides:

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

The foregoing provision provides the legal basis for the award of damages to a party who suffers damage whenever one commits an act in violation of some legal provision.30 This was incorporated by the Code Commission to provide relief to a person who suffers damage because another has violated some legal provision.31

We find the Court of Appeals’ award of moral damages reasonable under the circumstances bearing in mind the mental trauma suffered by respondent Ranida who thought she was afflicted by Hepatitis B, making her "unfit or unsafe for any type of employment."32 Having established her right to moral damages, we see no reason to disturb the award of exemplary damages and attorney’s fees. Exemplary damages are imposed, by way of example or correction for the public good, in addition to moral, temperate, liquidated or compensatory damages,33 and attorney’s fees may be recovered when, as in the instant case, exemplary damages are awarded.34

WASSMER VS. VALDEZ

FACTS: In 1954, Francisco Velez and Beatriz Wassmer planned their marriage. They decided to schedule it on September 4, 1954. And so Wassmer made preparations such as: making and sending wedding invitations, bought her wedding dress and other apparels, and other wedding necessities. But 2 days before the scheduled day of wedding, Velez sent a letter to Wassmer advising her that he will not be able to attend the wedding because his mom was opposed to said wedding. And one day before the wedding, he sent another message to Wassmer advising her that nothing has changed and that he will be returning soon. However, he never returned.

This prompted Wassmer to file a civil case against Velez. Velez never filed an answer and eventually judgment was made in favor of Wassmer. The court awarded exemplary and moral damages in favor of Wassmer.

On appeal, Velez argued that his failure to attend the scheduled wedding was because of fortuitous events. He further argued that he cannot be held civilly liable for breaching his promise to marry Wassmer because there is no law upon which such an action may be grounded. He also contested the award of exemplary and moral damages against him.

ISSUE: Whether or not the award of damages is proper.

HELD: Yes. The defense of fortuitous events raised by Velez is not tenable and also unsubstantiated. It is true that a breach of promise to marry per se is not an actionable wrong. However, in this case, it was not a simple breach of promise to marry. because of such promise, Wassmer made preparations for the wedding. Velez’s unreasonable withdrawal from the wedding is contrary to morals, good customs or public policy. Wassmer’s cause of action is supported under Article 21 of the Civil Code which provides in part “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.”

And under the law, any violation of Article 21 entitles the injured party to receive an award for moral damages as properly awarded by the lower court in this case. Further, the award of exemplary damages is also proper. Here, the circumstances of this case show that Velez, in breaching his promise to Wassmer, acted in wanton, reckless, and oppressive manner – this warrants the imposition of exemplary damages against him.

APOLONIO TANJANCO, petitioner, vs. HON. COURT OF APPEALS and ARACELI SANTOS, respondents.

FACTS: Petitioner Apolonio Tanjanco courted respondent Araulli Santos—he expressed and professed his undying love and affection towards her which she eventually reciprocated. For one year from Dec. 1953-Dec. 1954, petitioner succeeded in having carnal access to her, because of his protestation of love and promise of marriage. She got pregnant, for which she resigned from her work as IBM secretary to avoid embarrassment. He refused to marry her nor give support.

Thus, she filed for an action before the trial court to compel him to recognize the unborn child and provide support. The complaint was dismissed for failure to state the cause of action. Upon appeal, the CA ruled that cause of action existed for damages as premised on Art. 21.

ISSUE: Whether or not breach of a promise to marry is an actionable wrong.

HELD: The case under Art. 21, cited as an example by the Code Commission, refers to a tort upon a minor who has been seduced. The essential feature is seduction, that in law is more than sexual intercourse, or a breach or 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. Where for one whole year, a woman of adult age maintained intimate sexual intercourse, such conduct is incompatible with the idea of seduction. Plainly, there is voluntariness and mutual passion. Hence, no case is made under Art. 21, and no other cause of action being alleged, no error was committed by CFI in dismissing the complaint.

In US v. Bustamante, 27 Phil 121: 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.

Decision of CA reversed; that of CFI affirmed.

GASHEM SHOOKAT BAKSH, petitioner, vs. HON. COURT OF APPEALS and MARILOU T. GONZALES, respondents.

FACTS:Petitioner Gashem Shookat Baksh was an Iranian citizen, exchange student taking a medical course in Dagupan City, who courted private respondent

Marilou Gonzales, and promised to marry her. On the condition that they would get married, she reciprocated his love. They then set the marriage after the end of the school semester. He visited Marilou’s parents to secure their approval of marriage. In August 1987, he forced her to live with him, which she did. However, his attitude toward her changed after a while; he would maltreat and even threatened to kill her, from which she sustained injuries. Upon confrontation with the barangay captain, he repudiated their marriage agreement, saying that he was already married to someone living in Bacolod.

Marilou then filed for damages before the RTC. Baksh denied the accusations but asserted that he told her not to go to his place since he discovered her stealing his money and passport. The RTC ruled in favor of Gonzales. The CA affirmed the RTC decision.

ISSUES:1. Whether or not breach of promise to marry is an actionable wrong.

2. Whether or not Art. 21 of the Civil Code applies to this case.

HELD:No. The existing rule is that a breach of promise to marry per se is not an actionable wrong.

Yes. This, notwithstanding, Art. 21 is designed to expand the concept of torts or quasi-delict in this jurisdictions by granting adequate legal remedy for the untold number of moral wrongs which is impossible for human foresight to specifically enumerate and punish in the statute books.

Art. 21 defines quasi-delict:

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 quasi-delict and is governed by the (Civil Code).

It is clear that petitioner harbors a condescending if not sarcastic regard for the private respondent on account of the latter’s ignoble birth, inferior educational background, poverty and, as perceived by him, dishonorable employment. From the beginning, obviously, he was not at all moved by good faith and an honest motive. Thus, his profession of love and promise to marry were empty words directly intended to fool, dupe, entice, beguile and deceive the poor woman into believing that indeed, he loved her and would want her to be his life partner. His was nothing but pure lust which he wanted satisfied by a Filipina who honestly believed that by accepting his proffer of love and proposal of marriage, she would be able to enjoy a life of ease and security. Petitioner clearly violated the Filipino concept of morality and so brazenly defied the traditional respect Filipinos have for their women. It can even be said that the petitioner committed such deplorable acts in blatant disregard of Article 19 of the Civil Code which directs

every person to act with justice, give everyone his due, and observe honesty and good faith in the exercise of his right and in the performance of his obligations.

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

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

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

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

PE VS PE, GR NO L-17396

May 30, 1962

FACTS:Alfonso Pe, a married man, courted Lolita Pe, 24 years old and single. Alfonso, being the adopted son of Pe Beco, a collateral relative of Lolita’s father, become close to the family of Lolita. Alfonso frequented Lolita’s house on the pretext that he wanted her to teach him the rosary. The two eventually fell in love with each other and conducted clandestine trysts. When the rumors of their relationship reached Lolita’s parents, Alfonso was forbidden to see Lolita but the affair continued nonetheless. Later, Lolita disappeared from the house of her brothers and sisters who noticed that her clothes were gone. They found a note crumpled inside her aparador in a handwriting recognized to be that of Alfonso. The note made reference to a meeting between the two on the same date of her disappearance. Lolita’s family sued Alfonso for damages. The trial court dismissed the complaint.

ISSUE:Whether or not ALFONSO is liable for damages to Lolita’s family

HELD:Yes. The circumstances under which defendant tried to win Lolita’s affection cannot lead to any other conclusion that 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 the defendant frequented the house of Lolita on the pretext that he wanted her to teach him how to pray rosary. 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 her new Civil Code.

GRAND UNION VS ESPINO

GR NO L-48250

December 28, 1979

FACTS:Jose J. Espino. Jr., a civil engineer and an executive of Procter and Gamble Philippines, Inc, together with his wife and two daughters went to shop at South Supermarket in Makati. Finding a cylindrical "rat tail" file which he needed for his hobby, he picked it up and held it fearing it might get lost because of its tiny size. While shopping, they saw the maid of Jose's aunt so as he talked, he placed the rat tail in his breast pocket partly exposed. At the check-out counter, he paid for their purchases worth P77 but forgot to pay the file. As he was exiting the supermarket, he was approached by Guard Ebreo regarding the file in his pocket. He quickly apologized saying "I'm Sorry" and he turned towards the cashier to pay. But, he was stopped and instead was brought to the rear of the supermarket when he was asked to fill out an Incident Report labeling him as "Shoplifter". His wife joined him since he was taking so long and they were brought to the first checkout counter where Ms. Nelia Santos-Fandino's desk was. She made a remark:"Ano, nakaw na naman ito". Jose told Ms. Fandino that he was going to pay for the file because he needed it but she replied "That is all they say, the people whom we cause not paying for the goods say... They all intended to pay for the things that are found to them." Jose objected stating he is a regular customer of the supermarket. He gave P5 to pay for the P3.85 cost of the file but Ms. Fandino said the P5 was his fine which will be rewarded to the guard. People were staring at them. He took the file and paid the file at the nearest checkout counter with P50 and got out as fast as they could. His first impulse was to go back to the supermarket that night to throw rocks at its glass windows. But reason prevailed over passion and he thought that justice should take its due course.

He filed against Grand Union Supermarket et al. founded on Article 21 in relation to Article 2219 of the New Civil Code and prays for moral damages, exemplary damages, attorney s fees and 'expenses of litigation, costs of the suit and the return of the P5 fine

ISSUE: Whether or not Grand Union Supermarket should be liable for public humiliation founded on Article 21 in relation to Article 2219 of the New Civil Code

HELD: YES. Grand Union Supermarket ordered to pay, jointly and severally moral damages P5,000 and P2,000 as and for attorney's fees; and to return the P5 fine

Accordingly, Jose did not intend to steal the file and that is act of picking up the file from the open shelf was not criminal nor done with malice or criminal intent for on the contrary, he took the item with the intention of buying and paying for it.

Considering further of the personal circumstances, his education, graduate Mechanical Engineer from U.P. Class 1950, employed as an executive of Proctor & Gamble Phils., Inc., a corporate manager incharge of motoring and warehousing therein; honorably discharged from the Philippine Army in 1946; a Philippine government pensionado of the United States for six months; member of the Philippine veterans Legion; author of articles published in the Manila Sunday Times and Philippines Free Press; member of the Knights of Columbus, Council No. 3713; son of the late Jose Maria Espino, retired Minister, Department of Foreign Affairs at the Philippine Embassy Washington.

Jose was falsely accused of shoplifting is evident, he was fine branding him as a thief which was not right nor justified, the mode and manner in which he was subjected, shouting at him, imposing upon him a fine, threatening to call the police and in the presence and hearing of many people at the Supermarket which brought and caused him humiliation and embarrassment, sufficiently rendered the petitioners liable for damages under Articles 19 and 21 in relation to Article 2219 of the Civil Code. It is against morals, good customs and public policy to humiliate,

embarrass and degrade the dignity of a person. Everyone must respect the dignity, personality, privacy and peace of mind of his neighbors and other persons (Article 26, Civil Code).

CARPIO vs. VALMONTE

G.R. No. 151866; September 9, 2004

FACTS: Respondent Leonora Valmonte is a wedding coordinator. Michelle del Rosario and Jon Sierra engaged her services for their church wedding. Valmonte went to the Manila Hotel where the bride and her family were billeted. When she arrived at Suite 326-A, several persons were already there including the bride, the bride’s parents and relatives, the make-up artist and his assistant, the official photographers, and the fashion designer. Among those present was petitioner Soledad Carpio, an aunt of the bride who was preparing to dress up for the occasion.

After reporting to the bride, Valmonte went out of the suite carrying the items needed for the wedding rites and the gifts from the principal sponsors. She proceeded to the Maynila Restaurant where the reception was to be held. She paid the suppliers, gave the meal allowance to the band, and went back to the suite. Upon entering the suite, Valmonte noticed the people staring at her. It was at this juncture that petitioner allegedly uttered the following words to Valmonte: "Ikaw lang ang lumabas ng kwarto, nasaan ang dala mong bag? Saan ka pumunta? Ikaw lang and lumabas ng kwarto, ikaw ang kumuha." Petitioner then ordered one of the ladies to search Valmonte’s bag. It turned out that after Valmonte left the room to attend to her duties, petitioner discovered that the pieces of jewelry which she placed inside the comfort room in a paper bag were lost. The jewelry pieces consist of two (2) diamond rings, one (1) set of diamond earrings, bracelet and necklace with a total value of about one million pesos. The hotel security was called in to help in the search. The bags and personal belongings of all the people inside the room were searched. Valmonte was allegedly bodily searched, interrogated and trailed by a security guard throughout the evening. Later, police officers arrived and interviewed all persons who had access to the suite and fingerprinted them including Valmonte. During all the time Valmonte was being interrogated by the police officers, petitioner kept on saying the words "Siya lang ang lumabas ng kwarto." Valmonte’s car which was parked at the hotel premises was also searched but the search yielded nothing. Petitioner filed a complaint for damages.

ISSUE: Whether or not respondent Valmonte is entitled to damages

RULING:Yes, Valmonte is entitled to damages. In the case at bar, petitioner’s verbal reproach against respondent was certainly uncalled for considering that by her own account nobody knew that she brought such kind and amount of jewelry inside the paper bag.17 This being the case, she had no right to attack respondent with her innuendos which were not merely inquisitive but outrightly accusatory. By openly accusing respondent as the only person who went out of the room before the loss of the jewelry in the presence of all the guests therein, and ordering that she be immediately bodily searched, petitioner virtually branded respondent as the thief. True, petitioner had the right to ascertain the identity of the malefactor, but to malign respondent without an iota of proof that she was the one who actually stole the jewelry is an act which, by any standard or principle of law is impermissible. Petitioner had willfully caused injury to respondent in a manner which is contrary to morals and good customs. Her firmness and resolve to find her missing jewelry cannot justify her acts toward respondent. She did not act with justice and good faith for apparently, she had no other purpose in mind but to prejudice respondent. Certainly, petitioner transgressed the provisions of Article 19 in relation to Article 21 for which she should be held accountable.

QUE vs. IAC

G.R. No. L-66865 January 13, 1989

FACTS:In 1975, the private respondent ordered from Que certain amounts of canvass strollers which were delivered to and accepted by Nicolas, who issued five checks therefore to Que. The total face value of the checks was P7,600.00. Payment thereof was subsequently stopped by Nicolas and Que was unable to encash them. Nicolas

explained later that he had ordered the "stop payment" because of defects in the articles sold which despite his requests Que had not corrected. Que for his part argued that the allegedly defective articles were never returned to him until after he had filed the charge for estafa and that Nicolas had earlier merely ignored his complaints about the dishonored checks.

In 1976, Nicolas filed his own complaint for damages against Que for malicious prosecution. Que averred that Nicolas had maliciously filed the complaint in Bulacan although he was a resident of Caloocan City, and Nicolas was indebted to him in any case, and that it was Que who suffered damages due to the unwarranted suit.

ISSUE: Whether or not Que is guilty for malicious prosecution

RULING: No. To constitute malicious prosecution, there must be proof that the prosecution was prompted by a sinister design to vex and humiliate a person that it was initiated deliberately by the defendant knowing that his charges were false and groundless. The mere act of submitting a case to the authorities for prosecution does not make one liable for malicious prosecution.

One cannot be held liable in damages for maliciously instituting a prosecution where he acted with probable cause. The presence of probable cause signifies as a legal consequence the absence of malice. If the charge, although false, was made with an honest belief in its truth and justice, and there were reasonable grounds on which such a belief could be founded, the accusation could not be held to have been false in the legal sense. [Buchanan v. Esteban]

Proof and motive that the prosecution or institution of the action was prompted by a sinister design to vex and humiliate a person and to cast dishonor and disgrace must be clearly and preponderantly established to entitle the victims to damages and other rights granted by law. Otherwise, there would always be a civil action for damages after the prosecution's failure to prove its cause. The adverse result of an action does not per se make the act wrongful and subject the actor to the payment of moral damages. The law could not have meant to impose a penalty on the right to litigate; such right is so precious that moral damages may not be charged on those who may exercise it erroneously.

Considering that the checks could not be encashed and the supposedly defective goods had not been returned, Que had reason to believe that Nicolas intended to deceive him. Que was not motivated by ill feeling but only by an anxiety to protect his rights. Even if the fiscal found that no deceit was involved and that Que’s claim was unfounded, the mistaken charge was not malicious.

The mere dismissal of the criminal complaint by the fiscal's office did not create a cause of action. What was inquired into was whether or not there was a prima facie showing of estafa. SC finds Que’s claim of harassment more plausible. However, inasmuch as good faith is presumed, absent sufficient rebuttable evidence, neither of them is guilty of malice. SC denied both parties their respective claims for damages. Each of them must bear the financial consequences of one’s own acts, including the litigation expenses.