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STRICT LIABILITY

A.

FALLING OBJECTS

B.

EMPLOYERS

C.

ANIMALS

G.R. No. 74431 November 6, 1989
PURITA
MIRANDA
VESTIL
vs.
INTERMEDIATE APPELLATE COURT, DAVID UY and TERESITA UY CRUZ, J.:

and

AGUSTIN

VESTIL

FACTS:

On July 29, 1915, Theness was bitten by a dog while she was playing with a child of the Vestils in the house of the late Vicente Miranda, the
father of Purita Vestil, at F. Ramos Street in Cebu City.

She was rushed to the Cebu General Hospital, where she was treated for "multiple lacerated wounds on the forehead" 1 and administered an
anti-rabies vaccine by Dr. Antonio Tautjo.

She was discharged after nine days but was readmitted one week later due to "vomiting of saliva."

The following day, on August 15, 1975, the child died. The cause of death was certified as broncho-pneumonia.

Seven months later, the Uys sued for damages, alleging that the Vestils were liable to them as the possessors of "Andoy," the dog that bit and
eventually killed their daughter.

The Vestils rejected the charge, insisting that the dog belonged to Vicente Miranda, that it was a tame animal, and that in any case no one had
witnessed it bite Theness.

TC: Judge Jose R. Ramolete of the CFI of Cebu dismissed the complaint.

CA: Reversed. It found that the Vestils were in possession of the house and the dog and so should be responsible under Article 2183 of the
Civil Code for the injuries caused by the dog.

It also held that the child had died as a result of the dog bites and not for causes independent thereof as submitted by the appellees. Hence
this petition.

ISSUE: WON the Vestils are liable for damages for the death of the child.
HELD: YES
RATIO:

Purita Vestil insists that she is not the owner of the house or of the dog left by her father as his estate has not yet been partitioned and there
are other heirs to the property.

Pursuing the logic of the Uys, she claims, even her sister living in Canada would be held responsible for the acts of the dog simply because
she is one of Miranda's heirs.

SC: What must be determined is the possession of the dog that admittedly was staying in the house in question, regardless of the
ownership of the dog or of the house.

Article 2183 reads as follows:
The possessor of an animal or whoever may make use of the same is responsible for the damage which it may cause, although it
may escape or be lost. 'This responsibility shall cease only in case the damages should come from force majeure from the fault of
the person who has suffered damage.

Purita Vestil's testimony that she was not in possession of Miranda's house is hardly credible. She said that the occupants of the house left by
her father were related to him ("one way or the other") and maintained themselves out of a common fund or by some kind of arrangement.

She at least implied that they did not pay any rent, presumably because of their relation with Vicente Miranda notwithstanding that she herself
did not seem to know them very well.

There is contrary evidence that the occupants of the house, were boarders (or more of boarders than relatives) who paid the petitioners for
providing them with meals and accommodations.

While it is true that she is not really the owner of the house, which was still part of Vicente Miranda's estate, there is no doubt that she and her
husband were its possessors at the time of the incident in question.

She was the only heir residing in Cebu City and the most logical person to take care of the property, which was only six kilometers from her
own house. Moreover, there is evidence showing that she and her family regularly went to the house, once or twice weekly, according to at
least one witness, 14 and used it virtually as a second house.

It is also noteworthy that the petitioners offered to assist the Uys with their hospitalization expenses although Purita said she knew them only
casually. 1

The petitioners also argue that even assuming that they were the possessors of the dog that bit Theness there was no clear showing that she
died as a result thereof.

On the contrary, the death certificate 17 declared that she died of broncho-pneumonia, which had nothing to do with the dog bites for which she
had been previously hospitalized. The Court need not involve itself in an extended scientific discussion of the causal connection between the
dog bites and the certified cause of death except to note that, first, Theness developed hydrophobia, a symptom of rabies, as a result of the
dog bites, and second, that asphyxia broncho-pneumonia, which ultimately caused her death, was a complication of rabies. (refer to the
testimony of the doctor as to the causal connection of rabies and pneumonia)

On the strength of the foregoing testimony, the Court finds that the link between the dog bites and the certified cause of death has beep
satisfactorily established.

We also reiterate our ruling in Sison v. Sun Life Assurance Company of Canada,
cause of death but only of the fact of death.

Indeed, the evidence of the child's hydrophobia is sufficient to convince us that she died because she was bitten by the dog even if the death
certificate stated a different cause of death.

The petitioner's contention that they could not be expected to exercise remote control of the dog is not acceptable. In fact, Article
2183 of the Civil Code holds the possessor liable even if the animal should "escape or be lost" and so be removed from his control.
And it does not matter either that, as the petitioners also contend, the dog was tame and was merely provoked by the child into
biting her. The law does not speak only of vicious animals but covers even tame ones as long as they cause injury.

As for the alleged provocation, the petitioners forget that Theness was only three years old at the time she was attacked and can
hardly be faulted for whatever she might have done to the animal.

It is worth observing that the above defenses of the petitioners are an implied rejection of their original posture that there was no proof that it
was the dog in their father's house that bit Theness.

According to Manresa the obligation imposed by Article 2183 of the Civil Code is not based on the negligence or on the presumed lack of
vigilance of the possessor or user of the animal causing the damage. It is based on natural equity and on the principle of social interest that he
who possesses animals for his utility, pleasure or service must answer for the damage which such animal may cause.

AFFIRMED

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that the death certificate is not conclusive proof of the

. business condition of property or anything else which: (1) Injuries or endangers the health or safety of others. MANILA ELECTRIC CO. its President. and impaired his health and lowered the value of his property. its Vice-Presidents. establishment.  In September.  Velasco contends that the sound constitutes an actionable nuisance under Article 694 of the Civil Code of the Philippines. Velasco bought from the People's Homesite and Housing Corporation three (3) adjoining lots situated at the corner of South D and South 6 Streets.  These lots are within an area zoned out as a "first residence" district by the City Council of Quezon City. In crimes and quasi-delicts.  TC dismissed the claim of the plaintiff. REYES. REYES. ART. VELASCO. 1953. City Engineer of Quezon City. J. without prior building permit or authority from the Public Service Commission. Diliman. the appellant sold two (2) lots to the Meralco.B. L-18390 August 6. JOHN COTTON and HERMENEGILDO B.NUISANCE G. omission. or (2) Annoys or offends the senses. finding that the sound of substation was unavoidable and did not constitute nuisance. Quezon City.. AGAN. 1971 PEDROJ.  Subsequently. It is not necessary that such damages have been foreseen or could have reasonably been foreseen by the defendant. over 300 commercial establishments and about 30. and that the items of damage claimed by plaintiff were not adequate proved. J.. No. the defendant shall be liable for all damages which are the natural and probable consequences of the act or omission complained of.: FACTS:  In 1948. numbering not less than 8. because subjection to the sound since 1954 had disturbed the concentration and sleep of said appellant. ureteritis. lumbago and anemia.500 residential homes.  The company built a stone and cement wall at the sides along the streets but along the side adjoining the appellant's property it put up a sawale wall but later changed it to an interlink wire fence. reading as follows: A nuisance is any act. ISSUE: WON the noise from the Electric Company constitutes nuisance and WON Velasco is entitled to recover damages. WILLIAM SNYDER.  The facility reduces high voltage electricity to a current suitable for distribution to the company's consumers. defendants-appellees. pyelonephritis. moral and other damages under Article 2202 of the Civil Code. which was farthest from the street-corner.R. Whether this sound constitutes an actionable nuisance or not is the principal issue in this case. that it could not have caused the diseases of anxiety neurosis. the appellee company started the construction of the sub-station in question and finished it the following November. and ANASTACIO A.  It was constructed at a distance of 10 to 20 meters from the Velasco’s house. but retained the third lot. 2202. he sought a judicial decree for the abatement of the nuisance and asked that he be declared entitled to recover compensatory.L.  Wherefore.  It is undisputed that a sound unceasingly emanates from the substation.vs. whereon he built his house.

and fail to give a definite idea of the intensity of the sound complained of.  His exaggerations are readily apparent in paragraph V of his amended complaint  The estimate of the other witnesses on the point of inquiry are vague and imprecise. but it must be a noise which affects injuriously the health or comfort of ordinary people in the vicinity to an unreasonable extent. but are not controlled. samplings of the sound intensity were taken by Dr. in a particular locality in fact devoted to uses which involve the emission of noise although ordinary care is taken to confine it within reasonable bounds. Injury to a particular person in a peculiar position or of specially sensitive characteristics will not render the noise an actionable nuisance. Anderson. Inc. but in the absence of statute noise becomes actionable only when it passes the limits of reasonable adjustment to the conditions of the locality and of the needs of the maker to the needs of the listener. In the conditions of present living noise seems inseparable from the conduct of many necessary occupations. constitutes an actionable nuisance for which the appellant is entitled to relief. 2d 857. by zoning ordinances. day and night. 156 S. and reasonableness is a question of fact dependent upon all the circumstances and conditions  That of plaintiff Velasco is too plainly biased and emotional to be of much value. They may be affected. after a review of authorities. W. and is a physician to boot (unlike appellee's electrical superintendent Buenafe). . What those limits are cannot be fixed by any definite measure of quantity or quality. or of holding property. It is that the noise is of such character as to produce actual physical discomfort and annoyance to a person of ordinary sensibilities.  With particular reference to noise emanating from electrical machinery and appliances. the noise continuously emitted. appear more reliable. If the noise does that it can well be said to be substantial and unreasonable in degree. contrary to the finding of the trial court. or in the vicinity of property of another owner who though creating a noise is acting with reasonable regard for the rights of those affected by it. 90 ALR 1206: A noise may constitute an actionable nuisance. The test is whether rights of property of health or of comfort are so injuriously affected by the noise in question that the sufferer is subjected to a loss which goes beyond the reasonable limit imposed upon him by the condition of living. the neighbor who causes such disturbance is held responsible for the resulting damage.. (refer to the case for valuations)  Thus the impartial and objective evidence points to the sound emitted by the appellee's substation transformers being of much higher level than the ambient sound of the locality. in Kentucky & West Virginia Power Co. Its presence is a nuisance in the popular sense in which that word is used. ruled as follows: The determinating factor when noise alone is the cause of complaint is not its intensity or volume. industry or general business is not a license to emit every noise profitably attending the conduct of any one of them. by requiring the appellee company to adopt the necessary measures to deaden or reduce the sound at the plaintiff's house. Almonte. by replacing the interlink wire fence with a partition made of sound absorbent material. The delimitation of designated areas to use for manufacturing. But if the prejudice exceeds the inconveniences that such proximity habitually brings.  The measurements taken by Dr. he may not complain against them.  The conclusion must be that. the court. 1 being guilty of causing nuisance. They depend upon the circumstances of the particular case. v.  We are thus constrained to rely on quantitative measurements shown by the record. who is not connected with either party. and so long as this level is not surpassed.  The basic principles are laid down in Tortorella vs.HELD: YES TO BOTH ISSUES RATIO:  The general rule is that everyone is bound to bear the habitual or customary inconveniences that result from the proximity of others.  Under instructions from the Director of Health. Jesus Almonte using a sound level meter and other instruments. Traiser & Co. rendering adjacent property less comfortable and valuable.. since the relocation of the substation is manifestly impracticable and would be prejudicial to the customers of the Electric Company who are being serviced from the substation.

(2) even defended its construction by not insisting on such building permit.  The law in this jurisdiction is clear. Article 2203 prescribes that "The party suffering loss or injury must exercise the diligence of a good father of a family to minimize the damages resulting from the act or omission in question". Admitting that the sound cannot be eliminated.s. but the mayor could not be expected to take action because he was of the belief. This is proved by the circumstance that no other person in Velasco's own household nor in his immediate neighborhood was shown to have become sick despite the noise complained of. the mayor for the city engineer to cause or order the removal of buildings or structures in violation of law or ordinances. Anastacio A. the court authorized an injunction and damages. Agan. namely. in September.  The last issue is whether the City Engineer of Quezon City. vs. and on a 60 day option. 857. several factors that mitigate defendant's liability in damages. There is also evidence that at the time the plaintiff-appellant appears to have been largely indebted to various credit institutions. The absence of suit neither lessens the company's liability under the law nor weakens the right of others against it to demand their just due. the other ailments which he was suffering at the time of the trial. of Quezon City. The first is that the noise from the substation does not appear to be an exclusive causative factor of plaintiff-appellant's illnesses. there is no proof that it cannot be reduced. which.  The other factor militating against full recovery by the petitioner Velasco in his passivity in the face of the damage caused to him by the noise of the substation. 14 January 1960. 1953. it was not Agan's duty to require the Meralco to secure a permit before the construction but for Meralco to apply for it. but that the prospective buyer backed out on account of his wife objecting to the noise of the substation. The second allegation is not true. 54 and 55 decibels.00 in damages and P5. as per Section 1. 156 SW. In all other respects. and this fact suffices to raise doubts as to whether he truly intended to dispose of it. Jr. the average of three readings along the plaintiff's fence was only 44 decibels but.00. for P95.00 for attorney's fees. appellant Velasco.. the three readings along the property line are 52. as he testified. ureteritis and others. because the sound from the sub-station was interminable and monotonous. Inc. as a precipitating factor. It may be added that there is no showing of any further attempts on the part of appellant to dispose of the house. and this court can take judicial cognizance of the fact that financial worries can affect unfavorably the debtor's disposition and mentality. himself a physician. or is concomitant with. To evade them appellant did not even have to sell his house. or take appropriate measures to reduce its noise at the property line between the defendant company's compound and that of the plaintiff-appellant to an average of forty (40) to fifty (50) decibels within 90 days from finality of this decision. the appealed decision is affirmed. Ordinance No. why it should be operated to the detriment and discomfort of others. 2  The fact that the Meralco had received no complaint although it had been operating hereabouts for the past 50 years with substations similar to the one in controversy is not a valid argument. no law or ordinance has been cited specifying that it is the city engineer's duty to initiate the removal or demolition of. as a result of his unsuccessful gubernatorial campaign. moreover.  Agan was included as a party defendant because he allegedly (1) did not require the Meralco to secure a building permit for the construction of the substation. because Agan wrote the Meralco requiring it to submit the plan and to pay permit fees (T. the company emphasizes that the substation was constructed for public convenience. He had no actual need to do so in order to escape deterioration of his health. The record does not support these allegations. relied upon by the plaintiff.. a co-defendant. pyelonephritis. he could have leased it and rented other premises for sleeping and maintaining his office and thus preserve his health as ordinary prudence demanded. Realizing as a physician that the latter was disturbing or depriving him of sleep and affecting both his physical and mental well being.  Constancio Soria testified that "The way the transformers are built. and to pay the said plaintiff-appellant P20. that the sound "did not have any effect on his body. This was not done. The defendant-appellee Manila Electric Company is hereby ordered to either transfer its substation at South D and South 6 Streets. the appealed decision is hereby reversed in part and affirmed in part. On the third allegation. This codal rule. Plaintiff's case is manifestly stronger. On this testimony. claimed that the noise. has caused him anxiety neurosis. that these resulted in the loss of his professional income and reduced his life expectancy. Quezon City. No costs. or for the criminal prosecution of. as heretofore noted. Diliman. On the first plea. and (3) did not initiate its removal or demolition and the criminal prosecution of the officials of the Meralco.. predisposed him to. may be held solidarily liable with Meralco.000. . the humming sound cannot be avoided". There are. Section 24 (d). Anderson. apparently hoping that he would thereby saddle appellee with large damages. requires an order by.  Appellant Velasco introduced evidence to the effect that he tried to sell his house to Jose Valencia. his claim therefore was correctly disallowed by the trial court. those persons who are responsible for the nuisance.  Since there is no evidence upon which to compute any loss or damage allegedly incurred by the plaintiff by the frustration of the sale on account of the noise.  As to the damages caused by the noise.n. pages 2081-2082). Republic Act 537.000. That the sub-station is needed for the Meralco to be able to serve well its customers is no reason. In the present case."  FOR THE FOREGOING REASONS. in turn. 3 clearly obligates the injured party to undertake measures that will alleviate and not aggravate his condition after the infliction of the injury. however. 1530. he did not take any steps to bring action to abate the nuisance or remove himself from the affected area as soon as the deleterious effects became noticeable. or previous approval of. and places upon him the burden of explaining why he could not do so. which embodies the previous jurisprudence on the point. Instead he obstinately stayed until his health became gravely affected. In Kentucky and West Virginia Co.000.

the court ordered that:  Notwithstanding the dismissals that may result from this Memorandum and Order. J.) filed a Joint Complaint in the RTC of General Santos City on August 10.R. Standard Fruit and Steamship Co. Shell Oil Co. Houston Division. et al. (hereinafter collectively referred to as DEL MONTE). and Del Monte Tropical Fruit Co. v.. the RTC of General Santos City declared that the tort alleged by Navida. Nos. and Chiquita Brands International. Inc. et al. and "Juan Ramon Valdez. (hereinafter collectively referred to as DOLE).  Defendants therein were: Shell Oil Co. H-951356... et al. prayed for the payment of damages in view of the illnesses and injuries to the reproductive systems which they allegedly suffered because of their exposure to DBCP. 125078. hereinafter referred to as NAVIDA.  RTC of General Santos City issued an Order dismissing the complaint..  The defendants in the consolidated cases prayed for the dismissal of all the actions under the doctrine of forum non conveniens.." which was docketed as Civil Action No. Standard Fruit Co. Shell Oil Co.  They claimed.. including the Philippines.. a number of personal injury suits were filed in different Texas state courts by citizens of twelve foreign countries. Dole Fresh Fruit Co. that they were exposed to this chemical during the early 1970’s up to the early 1980’s when they used the same in the banana plantations where they worked at.  The specific tort asserted against defendant foreign companies in the present complaint is product liability tort.  The thousands of plaintiffs sought damages for injuries they allegedly sustained from their exposure to dibromochloropropane (DBCP).R.  The cases therein that involved plaintiffs from the Philippines were "Jorge Colindres Carcamo.. MAY 30. Dole Food Co.. a total of 336 plaintiffs from General Santos City (the petitioners in G. Pertinently. among others. the Federal District Court conditionally granted the defendants’ motion to dismiss. et al.. is premised on being the manufacturer of the pesticides.A. No. Civil Case No.. while working on farms in 23 foreign countries. (OCCIDENTAL). Inc. were highly injurious to the former’s health and well-being. because it is the product manufactured by defendant foreign companies. a chemical used to kill nematodes (worms). et al.  This is necessarily so. which the defendant companies knew.. upon proper motion..  Navida. First. Bromine Compounds.  Navida.  July 11. and consolidated in. Occidental Chemical Corp. Inc. 125078 and 125598  In accordance with the above Memorandum and Order. Chiquita Brands.  According to NAVIDA. H-94-1359. the court will resume jurisdiction over the action as if the case had never been dismissed for [forum non conveniens]. (SHELL).. Dow Chemical Co. .. it becomes stark clear that such averments describe and identify the category of specific tort known as product liability tort.  When the averments in the present complaint are examined in terms of the particular categories of tort recognized in the Philippine Civil Code. Second. Ltd. et al. in the event that the highest court of any foreign country finally affirms the dismissal for lack of jurisdiction of an action commenced by a plaintiff in these actions in his home country or the country in which he was injured. claimed that their illnesses and injuries were due to the fault or negligence of each of the defendant companies in that they produced. 1995.PRODUCT AND SERVICE LIABILITY NAVIDA VS HON DIZON GR 125598. which is asserted to be the proximate cause of the damages sustained by the plaintiff workers." which was docketed as Civil Action No. 2011 LEONARDO-DE CASTRO. et al. in their complaint is a tort category that is not recognized in Philippine laws.. and the liability of the defendant foreign companies. and/or when they resided within the agricultural area where such chemical was used. et al. (CHIQUITA). they were allowed to be exposed to the said products.: Proceedings before the Texas Courts  Beginning 1993. the trial court determined that it did not have jurisdiction to hear the case. Ameribrom. and Amvac Chemical Corp.  The cases were eventually transferred to. that plaintiff may return to this court and. Del Monte Fresh Produce N. sold and/or otherwise put into the stream of commerce DBCP-containing products. or ought to have known. 1995. Dead Sea Bromine Co. Inc. Ltd. 5617 before the RTC of General Santos City and G. (DOW). the Federal District Court for the Southern District of Texas. et al. v.

) amended their Joint-Complaint on May 21. 24.  Fourth. strict liability. DOW.  The RTC of Davao City. According to ABELLA. One of the conditions imposed was for the plaintiffs to file actions in their home countries or the countries in which they were injured x x x. 24. Notwithstanding. claimed that the defendant companies manufactured. et al. but rather were coerced to do so. ABELLA. produced. plaintiffs seeking for payment of damages based on negligence. they were made to use and/or were exposed to nematocides. Mass sterility will not qualify as a class suit injury within the contemplation of Philippine statute. S.) 11. et al. and/or made available in commerce. No product liability ever filed or tried here. 126654. Nos. hereinafter referred to as ABELLA. et al.. junked Civil Case No. inclusive of and comprehending the specific tort described in the complaint of the plaintiff workers. These plaintiffs (the petitioners in G. and 128398  Another joint complaint for damages against SHELL. Courts will reassume jurisdiction.. as workers in the banana plantation and/or as residents near the said plantation. and CHIQUITA was filed before Branch 16 of the RTC of Davao City by 155 plaintiffs from Davao City. as plaintiffs. Should the Philippine Courts refuse or deny jurisdiction. District Court. USA. the U. DOLE. 127856. OCCIDENTAL." to wit: 1. a petition was filed by same plaintiffs against same defendants in the Courts of Texas.R. said petition was provisionally dismissed on condition that these cases be filed in the Philippines or before 11 August 1995 (Philippine date. after having elected to sue in the place of defendants’ residence. DIVESTED THIS COURT OF ITS OWN JURISDICTION  THIS CASE IS BARRED BY THE RULE OF "LITIS PENDENCIA" Civil Case No. merely to comply with the U. et al. the Memorandum and [O]rder further provided that should the highest court of any foreign country affirm the dismissal for lack of jurisdictions over these actions filed by the plaintiffs in their home countries [or] the countries where they were injured. distributed. 3. upon proper motion.. were coerced into submitting their case to the Philippine courts. This means there is no available evidence which will prove and disprove the relation between sterility and DBCP. used. 1995. which contained the chemical DBCP. In the Amended Joint Complaint. upon defendants’ Motion to Dismiss on Forum non [conveniens]. DBCP without warning the users of its hazardous effects on health.  Similar to the complaint of NAVIDA. the RTC of General Santos City adjudged that Navida. and in order to keep open to the plaintiffs the opportunity to return to the U. District Court’s Order dated July 11. DEL MONTE. HENCE THIS PETITION . 27). plaintiffs are suing the defendants for tortuous acts committed by these foreign corporations on their respective countries. Former Justice Secretary Demetrio Demetria in a May 1995 opinion said: The Philippines should be an inconvenient forum to file this kind of damage suit against foreign companies since the causes of action alleged in the petition do not exist under Philippine laws. The Court however is constrained to dismiss the case at bar not solely on the basis of the above but because it shares the opinion of legal experts given in the interview made by the Inquirer in its Special report "Pesticide Cause Mass Sterility.S. the Court will resume jurisdiction as if the case had never been dismissed for forum non conveniens. and without providing instructions on its proper use and application..251-96 Upon a thorough review of the Complaint and Amended Complaint For: Damages filed by the plaintiffs against the defendants. No. sterility and severe injuries to their reproductive capacities. THE DEFENDANTS’ SUBMISSION TO JURISDICTION IS CONDITIONAL AS IT IS ILLUSORY  THE JURISDICTION FROWNS UPON AND PROHIBITS FORUM SHOPPING  THE FILING OF THE CASE IN U.S. however. but not limited to. plaintiffs aver that: on 11 July 1995. conspiracy and international tort theories (par. 126654. is convinced that plaintiffs "would have this Honorable Court dismiss the case to pave the way for their getting an affirmance by the Supreme Court" Consider these: 1) In the original Joint Complaint. they have no agents as well. the Federal District Court issued a Memorandum and Order conditionally dismissing several of the consolidated actions including those filed by the Filipino complainants. all foreign corporations with Philippine Representatives.251-96 before the RTC of Davao City and G. It is clear.. had they exercised ordinary care and prudence. alleged that. plaintiffs state that: defendants have no properties in the Philippines. such exposure resulted in "serious and permanent injuries to their health. sold. if and only if the Civil Code of the Philippines. the said plaintiffs may return to that court and. 1996.R."  ABELLA. There has been no decided case in Philippine Jurisprudence awarding to those adversely affected by DBCP. 2.  Third. Retired Supreme Court Justice Abraham Sarmiento opined that while a class suit is allowed in the Philippines the device has been employed strictly. including. et al. which the defendant companies knew or ought to have known. that the Regional Trial Court has jurisdiction over the present case. are now compelled by a decision of a Texas District Court to file cases under torts in this jurisdiction for causes of actions which occurred abroad. or a suppletory special law prescribes a product liability tort. the Court. Retired High Court Justice Rodolfo Nocom stated that there is simply an absence of doctrine here that permits these causes to be heard. therefore. et al.S.

respectively.  NAVIDA.. 126654. also filed their Comment dated September 14.. pray that the respective rulings of the RTC of General Santos City and the RTC of Davao City in Civil Case Nos. 5617 and 24. distributed or otherwise put into the stream of commerce by defendant companies happened in the Philippines. DOLE posits that the Philippines is the situs of the tortious acts allegedly committed by defendant companies as NAVIDA. 127856.251-96. 53explaining that the said petition "is already moot and academic and no longer presents a justiciable controversy" since they have already entered into an amicable settlement with NAVIDA. which falls under Article 2176 of the Civil Code. et al. et al. No. 2004. 1999. and ABELLA.ISSUE: WON the RP has jurisdiction over the case. et al. for lack of jurisdiction.." which were attached to the said motion. 125598. and ABELLA. the general principles of law. and ABELLA. the crux of the controversy in the petitions at bar is whether the RTC of General Santos City and the RTC of Davao City erred in dismissing Civil Case Nos. this Court consolidated G. the plaintiff claimants sought to withdraw their petitions as against DOW..  Furthermore.R.  The court may still resolve the case.251-96 be reversed and that the said cases be remanded to the courts a quo for further proceedings. their cause of action is based on quasi-delict under Article 2176 of the Civil Code. et al. the courts a quo should have dismissed the civil cases on the ground that the Amended Joint-Complaints of NAVIDA.  In addition.  In the Resolutions dated February 10. OCCIDENTAL. and SHELL as Party-Respondents filed by NAVIDA. 125078.R. 5617 and 24. are broad enough to cover their claim for damages. 125598  On July 13. and March 10. the use of and exposure to DBCP that was manufactured. and Hold Harmless Agreement. The Motion to Withdraw Petition for Review in G. by the RTC of Davao City is bereft of basis. and SHELL. Thus. 5617 had already been amicably settled by the parties in 1997. Indemnity. No. 125598.  Said fact allegedly constitutes reasonable basis for our courts to assume jurisdiction over the case.  The plaintiff claimants alleged that they had amicably settled their cases with DOW. and ABELLA. REMANDED TO RTC RATIO:  According to ABELLA. No. and ABELLA. OCCIDENTAL. et al. et al. 1997. et al.  They also maintain that the absence of jurisprudence regarding the award of damages in favor of those adversely affected by the DBCP does not preclude them from presenting evidence to prove their allegations that their exposure to DBCP caused their sterility and/or infertility. assert that the provisions of Chapter 2 of the Preliminary Title of the Civil Code.R. HELD: YES. Nos. NAVIDA. April 28. 125598 has become moot and academic because Civil Case No. as well as Article 2176 thereof. et al..  DOLE similarly maintains that the acts attributed to defendant companies constitute a quasi-delict. and ABELLA.. et al. On the issue of jurisdiction  Essentially. 1997.. argue that the allegedly tortious acts and/or omissions of defendant companies occurred within Philippine territory.. the RTC of Davao City has jurisdiction over the subject matter of the case since Articles 2176 and 2187 of the Civil Code are broad enough to cover the acts complained of and to support their claims for damages.. stated no cause of action against the defendant companies. in the absence thereof. 55 stating that they agree with the view of DOW and OCCIDENTAL that the petition in G. et al. point to . et al.. This settlement agreement was evidenced by facsimiles of the "Compromise Settlement.. DOLE states that if there were no actionable wrongs committed under Philippine law. DOW and OCCIDENTAL added that they have fully complied with their obligations set forth in the 1997 Compromise Agreements.. further aver that the dismissal of the case. et al. based on the opinions of legal luminaries reported in a newspaper. et al. et al. 2004.  Specifically. and 128398. Pursuant to said agreement. and SHELL sometime in July 1997.R. NAVIDA. DOW and OCCIDENTAL filed a Motion to Withdraw Petition for Review in G. The Consolidated Motion to Drop DOW.  According to them. applying the customs of the place and. et al. OCCIDENTAL.  ABELLA. et al.  NAVIDA..

and/or USED DBCP and/or otherwise. the plaintiffs suffered serious and permanent injuries TO THEIR HEALTH. THEY allowed Plaintiffs to be exposed to. et al.their alleged exposure to DBCP which occurred in the Philippines. in such other cases in Metro Manila. 59 Once vested by law.60  From the foregoing. produced. which plagued banana plantations. The Amended Joint-Complaints sought approximately P2. which states that the law of the place where the alleged wrong was committed will govern the action. 24..  The RTCs unmistakably have jurisdiction over the cases filed in General Santos City and Davao City. irrespective of whether the plaintiffs are entitled to all or some of the claims asserted therein. thus. et al. PUT THE SAME into the stream of commerce.. attorney’s fees.000. etc. INCLUDING THOSE in the Philippines. and/or (b) they resided within the agricultural area WHERE IT WAS USED.251-96. WITHOUT INFORMING THE USERS OF ITS HAZARDOUS EFFECTS ON HEALTH AND/OR WITHOUT INSTRUCTIONS ON ITS PROPER USE AND APPLICATION.  CHIQUITA avers that the pertinent matter is the place of the alleged exposure to DBCP. THE DEFENDANTS WERE AT FAULT OR WERE NEGLIGENT IN THAT THEY MANUFACTURED. damages of whatever kind. PRODUCED. as amended by Republic Act No. on a particular court or body. STERILITY and severe injuries to their reproductive capacities.7 million for each of the plaintiff claimants. were highly harmful and injurious to the Plaintiffs’ health and wellbeing. prays for the remand of Civil Case Nos. 6. 5617 and 24.00). fall within the purview of the definition of the jurisdiction of the RTC under Batas Pambansa Blg. and ABELLA. 7. where the demand. respectively. of the said chemical.  Finally. CHIQUITA argues that the courts a quo had jurisdiction over the subject matter of the cases filed before them. or to cause their subsidiaries or affiliates to so warn plaintiffs. SOLD. AND/OR MADE AVAILABLE IN COMMERCE nematocides containing the chemical dibromochloropropane. The Defendants WHO MANUFACTURED.00) or. sold. but not limited to.  CHIQUITA and the other defendant companies also submitted themselves to the jurisdiction of the RTC by making voluntary appearances and seeking for affirmative reliefs during the course of the proceedings. litigation expenses. packaging.7 million in damages for each plaintiff claimant. Failed to adequately warn Plaintiffs of the dangerous characteristics of DBCP. exclusive of interest. MADE AVAILABLE OR PUT DBCP INTO THE STREAM OF COMMERCE were negligent OR AT FAULT in that they a. DISTRIBUTED.. DBCP not only destroyed nematodes. was: SEC. The Defendants manufactured. 19. respectively  The rule is settled that jurisdiction over the subject matter of a case is conferred by law and is determined by the allegations in the complaint and the character of the relief sought. 7691. sale.  In a similar vein. The RTC of General Santos City and the RTC of Davao City have jurisdiction over Civil Case Nos. sold. not the place of manufacture. DBCP-containing materials which THEY knew. 129. commonly known as DBCP. . THE CHEMICAL WAS USED AGAINST the parasite known as the nematode. CHIQUITA. distributed. 5.251-96 to the RTC of General Santos City and the RTC of Davao City. – Regional Trial Courts shall exercise exclusive original jurisdiction: (8) In all other cases in which the demand.  This is in consonance with the lex loci delicti commisi theory in determining the situs of a tort. or in the exercise of ordinary care and prudence ought to have known.251-96 given that newspaper articles are hearsay and without any evidentiary value. including. 5617 and 24. At the time of the filing of the complaints. Jurisdiction in civil cases. which amount falls within the jurisdiction of the RTC. AS IT TURNED OUT. it is clear that the claim for damages is the main cause of action and that the total amount sought in the complaints is approximately P2. The plaintiffs were exposed to DBCP in the 1970s up to the early 1980s WHILE (a) they used this product in the banana plantations WHERE they were employed. as the cause of the sterility and other reproductive system problems that they allegedly suffered. None of the defendant companies ever objected to the exercise of jurisdiction by the courts a quo over their persons. and costs or the value of the property in controversy exceeds One hundred thousand pesos (P100. DOLE adds that the RTC of Davao City gravely erred in relying upon newspaper reports in dismissing Civil Case No. IT ALSO CAUSED ILLEFFECTS ON THE HEALTH OF PERSONS EXPOSED TO IT AFFECTING the human reproductive system as well. As a result of such exposure. the jurisdiction over the subject matter or nature of the action cannot be dislodged by anybody other than by the legislature through the enactment of a law. the jurisdiction of the RTC in civil cases under Batas Pambansa Blg. 129. as both claims by NAVIDA.000. used. distribution. exclusive of the abovementioned items exceeds Two hundred thousand pesos (P200. THE CAUSES OF ACTION 4.

... Failed to test DBCP prior to releasing these products for sale.  First. 8. would be easier to gather in the Philippines.. The RTC of General Santos City and the RTC of Davao City obviously have reasonable basis to assume jurisdiction over the cases. the injuries and illnesses. and h. Dole Food Company. most of the evidence required to prove the claims of NAVIDA. or to cause their subsidiaries or affiliates to do so. the acts and/or omissions attributed to the defendant companies constitute a quasi-delict which is the basis for the claim for damages filed by NAVIDA. et al.. d. co-workers. are available only in the Philippines. Dole Fresh Fruit Company. Failed to adequately supervise and instruct Plaintiffs in the safe and proper application of DBCP-containing products. to protect plaintiffs from the harmful effects of exposure to DBCP. or to cause their subsidiaries or affiliates to do so..)  Thus. in a language understandable to the worker. which under the Civil Code is defined as an act.  The factual allegations in the Amended Joint-Complaints all point to their cause of action.. and Chiquita Brands International. d. on containers of DBCP-containing materials to warn of the dangers to health of coming into contact with DBCP. et al. Failed to use substitute nematocides for said products or to cause such substitutes to [be] used. there being fault or negligence. and f. To be precise. governmental agencies and the public. adopt and enforce a safety plan and a safe method of handling and applying DBCP. which undeniably occurred in the Philippines. Article 2176 of the Civil Code provides:……. or to cause their subsidiaries or affiliates to do so. and ABELLA. Failed to implement proper methods and techniques of application of said products. f. et al.  Third. family members and other members of the community. such as doctors. 62 (Emphasis supplied and words in brackets ours. Failed to take reasonable precaution or to exercise reasonable care to publish.. or omission which causes damage to another. c. or to cause said products to be tested. unconditionally and knowingly appeared and submitted themselves to the jurisdiction of the courts a quo. b. Concealed from Plaintiffs information concerning the observed effects of said products on Plaintiffs. et al. Inc. et al.  In a very real sense. allegedly suffered resulted from their exposure to DBCP while they were employed in the banana plantations located in the Philippines or while they were residing within the agricultural areas also located in the Philippines. The illnesses and injuries of each plaintiff are also due to the FAULT or negligence of defendants Standard Fruit Company.. these allegations in the complaints constitute the cause of action of plaintiff claimants – a quasi-delict.  Second. or to cause their subsidiaries or affiliates to do so. Inc. g. Inc. if any. the specific areas where they were allegedly exposed to the chemical DBCP are within the territorial jurisdiction of the courts a quo wherein NAVIDA. e.b. Failed to monitor the health of plaintiffs exposed to said products. initially filed their claims for damages. et al. The RTC of General Santos City and the RTC of Davao City validly acquired jurisdiction over the persons of all the defendant companies  All parties voluntarily. plaintiff claimants are all residents of the Philippines. et al. Failed to test said products for adverse health effects. Failed to place adequate warnings.  Moreover. et al. and ABELLA. and ABELLA. Failed to provide plaintiffs with information as to what should be reasonably safe and sufficient clothing and proper protective equipment and appliances. with individual claims of approximately P2. Failed to warn Plaintiffs of the hazards of exposure to said products or to cause them to be so warned..  Clearly then. in that they failed to exercise reasonable care to prevent each plaintiff’s harmful exposure to DBCP-containing products which defendants knew or should have known were hazardous to each plaintiff in that they. Chiquita Brands. which NAVIDA. Failed to place adequate labels on containers of said products to warn them of the damages of said products. the testimonial and documentary evidence from important witnesses. and ABELLA. Failed to reveal the results of tests conducted on DBCP to each plaintiff. e. either in General Santos City or in Davao City. or to cause their subsidiaries or affiliate to do so. AMONG OTHERS: a. or to cause such to be implemented. which obviously falls within the purview of the civil action jurisdiction of the RTCs. .7 million for each plaintiff claimant. c.

It is true that. one is entitled to an adequate compensation only for such pecuniary loss suffered by him as he has duly proved. perfected by mere consent. where a court has jurisdiction over the persons of the defendants and the subject matter.70 Plaintiffs’ purported bad faith in filing the subject civil cases in Philippine courts  Court finds such argument much too speculative to deserve any merit. by making reciprocal concessions. and REMAND the records of this case to the respective Regional Trial Courts of origin for further and appropriate proceedings in line with the ruling herein that said courts have jurisdiction over the subject matter of the amended complaints in Civil Case Nos. Any error that the court may commit in the exercise of its jurisdiction is merely an error of judgment." Like any other contract. 1990. was personally directing the repair of the said Kiln Drive Motor. Eriksson. the plaintiff delivered the 160 KW Kiln DC Drive Motor to the defendants to be repaired. Such compensation is referred to as actual or compensatory damages. INC. a compromise agreement determines the rights and obligations of only the parties to it. 1996 denying reconsideration in Civil Case No. Branch 37. and each of the creditors is entitled to demand the satisfaction of the whole obligation from any or all of the debtors. to repair its 160 KW Kiln DC Drive Motor (Kiln Drive Motor). as a binding contract."1 FACTS:  Sometime in July 1990. 77 A compromise has upon the parties the effect and authority of res judicata78 and this holds true even if the agreement has not been judicially approved. AND TORD B. petitioner filed with Branch 101 of the RTC of Quezon City a Complaint for sum of money and damages.R." Jurisdiction refers to the authority to decide a case.80 In light of the foregoing legal precepts. Branch 16. VicePresident of the Service Division of the respondent ABB. the responsibility of two or more persons who are liable for the same quasi-delict is solidary. there is no right of reimbursement to speak of as yet. Tord B.251-96. the RTC of General Santos City and the RTC of Davao City should first receive in evidence and examine all of the alleged compromise settlements involved in the cases at bar to determine the propriety of dropping any party as a defendant therefrom. avoid a litigation or put an end to one already commenced. the 160 KW Kiln Drive Motor was installed for testing on October 3. 1990 that the plaintiff resumed operation.a corporation engaged in the business of producing cement. 1990. petitioner Continental Cement Corporation (CCC). due to the repeated failure of respondents to repair the Kiln Drive Motor. which would necessarily give rise to an obligation to pay on the part of the defendants. an extrajudicial compromise agreement is not excepted from rules and principles of a contract. against respondent corporations and respondent Tord B.9  Petitioner alleged that: On July 11. 76 Judicial approval is not required for its perfection.  The defendant.81 In the cases at bar. A trial on the merits must necessarily be conducted first in order to establish whether or not defendant companies are liable for the claims for damages filed by the plaintiff claimants. 1990. and its subsequent Order dated December 16.: "Except as provided by law or by stipulation. 1996 of the Regional Trial Court of Davao City.7  On October 23. Accordingly. the Court hereby GRANTS the petitions for review on certiorari in G. in Civil Case No. which does not affect its authority to decide the case. It was only on October 9. under Article 2194 of the Civil Code. Under Article 2028 of the Civil Code. CORPORATION VS ASEA BROWN BOVERI.251-96. J. much less divest the court of the jurisdiction over the case.  On October 4. 24. . Corp. the latter being manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract.5 obtained the services of respondents6 Asea Brown Boveri.. A solidary obligation is one in which each of the debtors is liable for the entire obligation. and 128398. SO ORDERED. WHEREFORE. 79 In addition. 1996 of the Regional Trial Court of General Santos City. The plaintiff lost 1. 1990 the test failed. and the Order dated October 1. It may also be pertinently stressed that "jurisdiction" is different from the "exercise of jurisdiction.** Respondents. 5617 and 24. It is a consensual contract. CONTINENTAL CEMENT ERIKSON. the decision on all questions arising therefrom is but an exercise of such jurisdiction. Inc. BBC BROWN BOVERI.040 MTD per day from October 5 to October 9. We REVERSE and SET ASIDE the Order dated May 20. "[a] compromise is a contract whereby the parties. The plaintiff removed the DC Drive Motor and replaced it with its old motor. Nos. Eriksson (Eriksson). 126654. CORP.  After the first repair by the defendants. (ABB) and BBC Brown Boveri. 5617. 1991. 125078. DEL CASTILLO.. not the orders or the decision rendered therein. as in the case of the courts a quo.

1990 issued by respondent ABB to petitioner. the test failed.11 attached to the letter of offer12dated July 4. 1990. The plaintiff sustained production losses at the rate of 1. The plaintiff resumed operation on March 15.00 . the repairman cannot be made to pay for loss of production as a result of the unsuccessful repair.  As a consequence of the failure of the defendants to comply with their contractual obligation to repair the 160 KW Kiln DC Drive Motor. On November 14.24 HELD:YES TO BOTH RATIO: Petitioner’s Arguments  Petitioner reiterates that the General Conditions cannot exculpate respondents because petitioner never agreed to be bound by it nor did petitioner receive a copy of it. thus. the plaintiff sustained the Total Damages OF 10.  The plaintiff resumed operation with its old motor on November 19.017.30  Respondents likewise defend the ruling of the CA that there could be no implied warranty on the repair made by respondent ABB as the warranty of the fitness of the equipment should be enforced directly against the manufacturer of the Kiln Drive Motor. 1991.25  Petitioner contends that these concepts are not applicable because the instant case does not involve a contract of sale. petitioner in effect accepted the General Conditions appended to respondent ABB’s letter of offer. Whether the [CA] seriously erred in applying the concepts of ‘implied warranty’ and ‘warranty against hidden defects’ of the New Civil Code in order to exculpate the respondents from its contractual obligation.42  The plaintiff has made several demands on the defendants for the payment of the above-enumerated damages.29  By issuing Purchase Order Nos. but the latter refused to do so without valid justification. respondents insist that petitioner is bound by the General Conditions.  On March 13.  CA: REVERSED The CA applied the exculpatory clause in the General Conditions and ruled that there is no implied warranty on repair work. The test failed again.983.450. 17136 and 17137 to exculpate the respondents from liability in this case. 1990. the liability of respondent ABB "does not extend to consequential damages either direct or indirect.040 MTD daily. The plaintiff suffered production losses for five days at the rate of 1. SC: Petitioner and respondent ABB entered into a contract for the repair of petitioner’s Kiln Drive Motor with the following terms and conditions: a) Total Price: P197. 17136-37. 27 What applies are Articles 1170 and 2201 of the Civil Code. Whether the [CA] gravely erred in applying the terms of the "General Conditions" of Purchase Orders Nos. Issues 1.  The defendants were given a third chance to repair the 160 KW Kiln DC Drive Motor. after the defendants had undertaken the second repair of the motor in question." 13  RTC: in favor of petitioner. The RTC rejected the defense of limited liability interposed by respondents since they failed to prove that petitioner received a copy of the General Conditions. 1991.28 Respondents’ Arguments  Conversely. it was installed in the kiln. 2. the motor was installed and tested.  Respondents claimed that under Clause 7 of the General Conditions. Again.040 MTD for two days.

the said motor was actually delivered to petitioner as early as January 7. 1990 or six (6) weeks from receipt of order and down payment34 c) Penalty: One half of one percent of the total cost or Nine Hundred Eighty Seven Pesos and Twenty five centavos (P987. ART. petitioner seeks to recover as damages production loss. and rental of the crane) claimed by petitioner. such as loss of profits on account of delay or failure of delivery. such as in the instant case. 1990. petitioner is not entitled to recover production loss.  Having breached the contract it entered with petitioner. which state:  Based on the foregoing. Clause 7 of the General Conditions is not binding on petitioner  Respondents contend that under Clause 7 of the General Conditions their liability "does not extend to consequential damages either direct or indirect. BUSINESS TORTS A. production loss. prompting petitioner to sue for damages.25 per day from the time of delay. In this case. labor cost and rental of the crane in case it fails to repair the motor or incurs delay in delivering the same. which the parties have foreseen or could have reasonably foreseen at the time the obligation was constituted. especially since the motor under repair was a spare motor. 1314. consequential damages. thus. in addition to the penalties. and 2201 of the Civil Code. labor cost. since there is no stipulation to the contrary.48  Considering the nature of the obligation in the instant case. Petitioner is not entitled to recover production loss. labor cost and the rental of the crane. August 30.41  Thus. 17136-37. respondent ABB. a repairman who fails to perform his obligation is liable to pay for the cost of the execution of the obligation plus damages. labor cost and the rental of crane  Article 1226 of the Civil Code further provides that if the obligor refuses to pay the penalty.25) per day of delay. however. hence. 17136-37  As per Purchase Order Nos. Petitioner is entitled to penalties under Purchase Order Nos.49  For the foregoing reasons. petitioner is entitled to penalties in the amount of P987. Respondent ABB. 1991."35 This IS unavailing because respondents failed to show that petitioner was duly furnished with a copy of said General Conditions. 1170. the penalty in the amount of P987.  Records show that although the testing of Kiln Drive Motor was done on March 13.b) Delivery Date: August 29. unless there is a stipulation to the contrary. respondent ABB is liable for damages pursuant to Articles 1167.38  Under Article 122639 of the Civil Code. CC 40 damages and .25 per day of delay covers all other damages (i. could not have reasonably foreseen that it would be made liable for production loss. interests may still be recovered on top of the penalty. at the time it agreed to repair petitioner’s Kiln Drive Motor. may be recovered only if such damages were reasonably foreseen or have been brought within the contemplation of the parties as the probable result of a breach at the time of or prior to contracting. 1991 upon the request of petitioner because the Kiln was under repair at the time the motor was delivered. not only incurred delay in performing its obligation but likewise failed to repair the Kiln Drive Motor. labor cost and the rental of the crane. 1991.e. the penalty clause takes the place of indemnity for damages and the payment of interests in case of non-compliance with the obligation. up to the time the Kiln Drive Motor was finally returned to petitioner. the load testing had to be postponed.37  The installation and testing was done only on March 13.  Besides. CONTRACTUAL INTERFERENCE.  Damages claimed must be the natural and probable consequences of the breach.

Branch 85 in Civil Case No. Tecson and Landicho liable jointly and solidarily for conniving and conspiring together in violating his exclusive distributorship in bad faith and wanton disregard of his rights. Cordero immediately flew to Brisbane to clarify matters with Robinson. it turned out. Ernesto A. 2004 as modified by the Resolution 2 dated July 22.512. Tecson and Landicho offered to convince Go to honor his exclusive distributorship with AFFA and to purchase all vessels for ACG Express Liner through him for the next three (3) years. MORTIMER F. Cordero instituted Civil Case No. while Robinson refused to answer his calls. Robinson signed documents appointing Cordero as the exclusive distributor of AFFA catamaran and other fast ferry vessels in the Philippines. Go who is the owner/operator of ACG Express Liner of Cebu City.6 Per agreement between Robinson and Cordero. the latter shall receive commissions totalling US$328. Tecson and Landicho. they filed their Answer denying that they have anything to do with the termination by AFFA of Cordero’s authority as exclusive distributor in the Philippines. 9 Having been apprised of Cordero’s demand letter. as well as attorney’s fees and litigation expenses. The factual antecedents: Sometime in 1996. Cordero was able to close a deal for the purchase of two (2) SEACAT 25 as evidenced by the Memorandum of Agreement dated August 7. doing business under the vs.4 After negotiations with Felipe Landicho and Vincent Tecson. food. 2004 of the Court of Appeals (CA) in CA-G. and on one (1) occasion even accompanied Go and his family and Landicho. without prejudice to legal action against him and Robinson should they fail to heed the same. to monitor the progress of the building of the vessel. talked to him over the telephone and offered to amicably settle their dispute. Respondent. acting in behalf of Go.7 Cordero made two (2) trips to the AFFA Shipyard in Brisbane. Tecson and Landicho proposed that they will convince Go to pay him US$1. 1999. CORDERO. from the sale of each vessel. Go. In an effort to amicably settle the matter. the terms of which were contained in a draft agreement which Cordero allegedly failed to return to AFFA within a reasonable time. As such exclusive distributor. an Australian national based in Brisbane.00 representing expenses for airplane travel to Australia.R. Cordero then filed a complaint with the Bureau of Customs (BOC) to prohibit the entry of SEACAT 25 from Australia based on misdeclaration and undervaluation. Landicho. the parties executed Shipbuilding Contract No. Cordero later discovered that Go was dealing directly with Robinson when he was informed by Dennis Padua of Wartsila Philippines that Go was canvassing for a second catamaran engine from their company which provided the ship engine for the first SEACAT 25. the purchase of a high-speed catamaran vessel by ACG Express Liner in August 1997. Jr. He shouldered all the expenses for airfare. also wrote ACG Express Liner assailing the fraudulent actuations and misrepresentations committed by Go in connivance with his lawyers (Landicho and Tecson) in breach of Cordero’s exclusive distributorship appointment. 12 Robinson filed a motion to dismiss grounded on lack of jurisdiction over his person and failure to state a cause of action. and which offer is already being revoked by AFFA. however. of ACCRA law firm.VILLARAMA. Landicho and Tecson to his demand letter. ventured into the business of marketing interisland passenger vessels.465. which affirmed with modifications the Decision 3 dated May 31. telecommunications bills and entertainment. Mortimer F." Petitioner. And so it was agreed between him.500. no explanation was given by Robinson. moral and exemplary damages.000.742. Cordero informed Go that such act of dealing directly with Robinson violated his exclusive distributorship and demanded that they respect the same. In a handwritten letter dated June 24.43% of the purchase price. Thyne & Macartney. 1998. J. Cordero offered for sale to prospective buyers the 25-meter Aluminium Passenger catamaran known as the SEACAT 25.01 and unpaid commission for the sale of the second vessel in the amount of US$328.000. Landicho and Tecson that the latter would give him a weekly status report and that the matter will be settled in three (3) to four (4) weeks and neither party will file an action against each other until a final report on the proposed settlement. However.ALLAN C. GO.11 On August 21. 1999.522. or 22. Cordero. 13 As for Go and Tecson. Despite repeated follow-up calls. AFFA. Padua told Cordero that Go instructed him to fax the requested quotation of the second engine to the Park Royal Hotel in Brisbane where Go was then staying. at the Mactan Island Resort Hotel lobby. Go.742.000. 98-35332. 1998. hotel accommodations. 1998. Australia.5 Accordingly. only to find out that Go and Landicho were already there in Brisbane negotiating for the sale of the second SEACAT 25. Landicho. 2000 of the Regional Trial Court (RTC) of Quezon City. Cordero also prayed for the award of moral and exemplary damages. Australia. Robinson was likewise declared in default for failure to file his answer within the period granted by the trial court. 69113. He also spent for long distance telephone calls to communicate regularly with Robinson. Atty. transportation and entertainment during these trips.. Said motion was denied by the trial court on December 20.: name and style "ACG Express Liner. Between June and August 1997. that is. 98-35332 seeking to hold Robinson.00) and causing him actual. the lawyer of AFFA and Robinson. on account of AFFA’s untimely cancellation of the exclusive distributorship agreement. 7825 for one (1) high-speed catamaran (SEACAT 25) for the price of US$1. an Alert Order was issued by Acting BOC Commissioner Nelson Tan for the vessel which in fact arrived on July 17.00. had no intention to do so and were just buying time as the catamaran vessel was due to arrive from Australia. Cordero tried to contact Go and Landicho to confirm the matter but they were nowhere to be found. After contacting various overseas fast ferry manufacturers from all over the world. For review is the Decision1 dated March 16. On said date. Cordero testified before the trial court that on the same day. lawyers of Allan C. Consequently. Landicho and Tecson who even made Cordero believe there would be no further sale between AFFA and ACG Express Liner. CV No.00. Tabujara. 14 Subsequently. a single proprietorship. JR. No such report was made by either Tecson or Landicho who. Vice-President of Pamana Marketing Corporation (Pamana). only Landicho and Tecson came and no reason was given for Go’s absence. thus depriving him of his due commissions (balance of unpaid commission from the sale of the first vessel in the amount of US$31. 1997.m. 8 Cordero’s lawyer.00 on the condition that they will get a cut of 20%. such that Go engaged the services of Landicho to fly to Australia and . asserting that there was no act committed in violation of the distributorship agreement. 1998 between 9:30 p. Go. set up a meeting with Cordero on June 29. 10 As to the response of Go. their motion to dismiss based on failure to state a cause of action was likewise denied by the trial court on February 26.m. including P800. they averred it was Cordero who stopped communicating with Go in connection with the purchase of the first vessel from AFFA and was not doing his part in making progress status reports and airing the client’s grievances to his principal. who is the Managing Director of Aluminium Fast Ferries Australia (AFFA). Cordero claimed that Go and Robinson had conspired to undervalue the vessel by around US$500. acting on behalf of Go. On the contrary. he came to meet Tony Robinson.00. The letter further stated that Cordero was offered the exclusive distributorship. faxed a letter to ACCRA law firm asserting that the appointment of Cordero as AFFA’s distributor was for the purpose of one (1) transaction only. to 10:30 p.

in view of the latter’s failure to appear at the pre-trial conference on January 7. Defendants moved to reconsider the said order insofar as it granted the motion for execution pending appeal.742. As to the inquiry for the Philippine price for a Wartsila ship engine for AFFA’s other on-going vessel construction. 2000 Order granting the ex-parte motion for release of garnished funds. Consequently.000. CV No. cancelled the scheduled public auction sale of levied real properties. 1998 meeting with Landicho. claiming that they have been unduly prejudiced by the negligence of their counsel who was allegedly unaware that the pre-trial conference on January 28. Robinson and Landicho. the trial court reconsidered its Order dated August 21. which is not limited to the sale of one (1) such catamaran to Go on August 7. However. this was merely requested by Robinson but which Cordero misinterpreted as indication that Go was buying a second vessel.attend to the documents needed for shipment of the vessel to the Philippines. 2000 did not push through for the reason that Cordero was then allowed to present his evidence ex-parte. 2000. Tabujara at Shangri-la’s Mactan Island Resort. Costs against the defendants. PREMISES CONSIDERED. 3. 1997 considering the termination of his authority by AFFA’s lawyers on June 26. 1998. Further.09 or P1. as requested by the defendants. the trial court rendered its decision. 2000.00) as moral damages. vouchers and bank transmittals were presented to prove that: (1) Cordero was properly authorized and actually transacted in behalf of AFFA as exclusive distributor in the Philippines. Tony Robinson. 21 On August 8. the following: 1. Tecson and Atty. 2001. The trial court further confirmed that said defendants misled the trial court in moving for continuance during the pre-trial conference held on December 10.00 rate) with .09 still due to him. 60354 questioning the execution orders issued by the trial court.25 On September 29.28 On March 16. 2. Cordero appealed the said judgment in a petition for review filed with this Court which was eventually denied under our Decision dated September 17.522. SO ORDERED. Cordero’s motion for execution pending appeal was granted. Felipe Landicho. purportedly to go abroad for the holiday season when in truth a Hold-Departure Order had been issued against them. In any case. 1999. and the latter’s offer of settlement. Robinson.00) as attorney’s fees. 1997. 69113 affirmed the trial court (1) in allowing Cordero to present his evidence ex-parte after the unjustified failure of appellants (Go. 60354 and setting aside the trial court’s orders of execution pending appeal.00. 2000. 2000. the sum of ONE MILLION PESOS (P1. documentary evidence including photographs taken of the June 29. 17 On May 31. on motion filed by Cordero through counsel. SP No. this was due to the malicious demand of Cordero to be given US$3. 2000. the notice of appeal was denied for failure to pay the appellate court docket fee within the prescribed period.90 (on the basis of US$1. it held that Cordero is entitled only to commission for the sale of the first catamaran obtained through his efforts with the remaining unpaid sum of US$31.00) as exemplary damages.355. the trial court recalled and set aside its November 6. (2) in finding that it was Cordero and not Pamana who was appointed by AFFA as the exclusive distributor in the Philippines of its SEACAT 25 and other fast ferry vessels. photographs taken in Brisbane showing Cordero. Landicho and Tecson. and denied the ex-parte Motion for Break-Open Order and Ex-Parte Motion for Encashment of Check filed by Cordero. and (3) in finding that Cordero is entitled to a commission per vessel sold for AFFA through his efforts in the amount equivalent to 22.27 On January 29.291. Cordero’s testimony regarding his transaction with defendants Go.18 Go. the sum of ONE MILLION PESOS (P1. the sum total of SIXTEEN MILLION TWO HUNDRED NINETY ONE THOUSAND THREE HUNDRED FIFTY TWO AND FORTY THREE CENTAVOS (P16. On the First Cause of Action.91 having been made to Cordero. the sum of ONE MILLION PESOS (P1. SP No.000. 2004. 2000 despite due notice. However. judgment is hereby rendered in favor of Plaintiff and against defendants Allan C. the writ of execution pending appeal was issued. plaintiff Cordero was allowed to present his evidence ex parte. the dispositive portion of which reads as follows: WHEREFORE. the CA rendered judgment granting the petition for certiorari in CA-G.000.15 Pre-trial was reset twice to afford the parties opportunity to reach a settlement. as he had assumed that the said ex-parte hearing was being conducted only against Robinson who was earlier declared in default. On the Fourth Cause of Action. As prayed for. and Vincent Tecson. defendants are hereby ordered to pay Plaintiff jointly and solidarily. the CA issued a temporary restraining order at the instance of defendants in the certiorari case they filed with said court docketed as CA-G. Cordero no longer had cause of action for his commission for the sale of the second vessel under the memorandum of agreement dated August 7. Go. On the Third Cause of Action.449. the trial court denied the motion for reconsideration and on August 21.26 On November 29. and with payments of US$297. As to the supposed meeting to settle their dispute.000. On the Second Cause of Action.R. Tecson and Landicho.000.R. the CA in CA-G. was corroborated by his counsel who also took the witness stand. Landicho and Tecson filed a motion for new trial.000 as otherwise he will expose in the media the alleged undervaluation of the vessel with the BOC. 2000 denying due course to the notice of appeal and forthwith directed the transmittal of the records to the CA. 2000.000.000.22 On August 18.19 In its Order dated July 28.352. 24 Defendants filed a motion for reconsideration and to transmit the case records to the CA. Tecson and Landicho) to appear at the pre-trial conference despite due notice. (2) Cordero spent considerable sums of money in pursuance of the contract with Go and ACG Express Liner. 7825. 2000. the trial court reconsidered the resetting of the pre-trial to another date for the third time as requested by Go. Go with his family. 20 In the same order.R. communications.43) as actual damages with legal interest from 25 June 1998 until fully paid. and 4. the trial court denied the motion for new trial.219.00=P43. 2002. Moreover. there remained a balance of US$31. Landicho and Tecson had no transaction whatsoever with Cordero who had no document to show any such shipbuilding contract.43% of the price of each vessel or US$328. and (3) AFFA through Robinson paid Cordero his commissions from each scheduled payment made by Go for the first SEACAT 25 purchased from AFFA pursuant to Shipbuilding Contract No. they filed a notice of appeal.522. The CA sustained the trial court in ruling that Cordero is entitled to damages for the breach of his exclusive distributorship agreement with AFFA.16 Accordingly. and also various documents.23 Meanwhile.

THE HONORABLE APPELLATE COURT MISAPPLIED THE LAW AND ACTED WITH GRAVE ABUSE OF DISCRETION IN FINDING PETITIONER LIABLE IN SOLIDUM WITH THE CO-DEFENDANTS WITH RESPECT TO THE CLAIMS OF RESPONDENT. SINCE IT WAS PETITIONER’S EFFORTS WHICH ACTUALLY FACILITATED AND SET-UP THE TRANSACTION FOR RESPONDENTS. III. No. DAMAGES. No.00. C. the CA reduced the same to P500. 20. food and lodging. The case before us is a consolidation of the petitions for review under Rule 45 separately filed by Go (G.000. THE COURT OF APPEALS ERRED IN RULING THAT PETITIONER IS NOT ENTITLED TO HIS COMMISSIONS FOR THE PURCHASE OF A SECOND VESSEL. No.R. A. THE COURT OF APPEALS ERRED IN NOT SUSTAINING THE JUDGMENT OF THE TRIAL COURT AWARDING PETITIONER ACTUAL DAMAGES FOR HIS COMMISSION FOR THE SALE OF THE SECOND VESSEL.R. 1998 until the finality of the decision. and the rate of 12% interest per annum shall apply once the decision becomes final and executory until the judgment has been satisfied. as well as attorney’s fees. IV. THE MEMORANDUM OF AGREEMENT DATED 7 AUGUST 1997 PROVIDES THAT RESPONDENT GO WAS CONTRACTUALLY BOUND TO BUY TWO (2) VESSELS FROM AFFA. 2004. respectively. SINCE THERE IS SUFFICIENT EVIDENCE ON RECORD WHICH PROVES THAT THERE WAS A SECOND SALE OF A VESSEL. . the same being the logical and necessary consequences of the exclusive distributorship agreement which are normal in the field of sales and distribution. P300.000. THE HONORABLE APPELLATE COURT ACTED CONTRARY TO LAW AND JURISPRUDENCE AND GRAVELY ABUSED ITS DISCRETION WHEN IT EFFECTIVELY DEPRIVED HEREIN PETITIONER OF HIS RIGHT TO DUE PROCESS BY AFFIRMING THE LOWER COURT’S DENIAL OF PETITIONER’S MOTION FOR NEW TRIAL. 164703 (Petitioner Go) I. III. THE HONORABLE COURT OF APPEALS IGNORED THE LAW AND JURISPRUDENCE AND ACTED WITH GRAVE ABUSE OF DISCRETION IN HOLDING HEREIN PETITIONER RESPONSIBLE FOR THE BREACH IN THE ALLEGED EXCLUSIVE DISTRIBUTORSHIP AGREEMENT WITH ALUMINIUM FAST FERRIES AUSTRALIA. and affirmed the Decision dated March 16. II. ADMITS UNDER OATH THAT HE HAD INDEED PURCHASED A SECOND VESSEL FROM AFFA. phone bills. ATTORNEY’S FEES.000. THE COURT OF APPEALS ERRED IN NOT IMPOSING THE PROPER LEGAL INTEREST RATE ON RESPONDENTS’ UNPAID OBLIGATION WHICH SHOULD BE TWELVE PERCENT (12%) FROM THE TIME OF THE BREACH OF THE OBLIGATION. Appellants were held solidarily liable pursuant to the provisions of Article 1207 in relation to Articles 19. II. AND LITIGATION EXPENSES.000. and V.00. By Resolution dated July 22. entertainment. the CA denied the motions for reconsideration respectively filed by the appellants and appellee.00 representing expenses incurred by Cordero for transportation. 164747 (Petitioner Cordero) I.29 G. No. 164703) and Cordero (G. 21 and 22 of the New Civil Code. the CA declared there was no basis for such award. B. THE HONORABLE COURT OF APPEALS MISAPPLIED LAW AND JURISPRUDENCE AND GRAVELY ABUSED ITS DISCRETION WHEN IT FOUND PETITIONER LIABLE FOR UNPAID COMMISSIONS.R.R. As to the P800. The CA further ruled that no error was committed by the trial court in denying their motion for new trial. and the expenditures having redounded to the benefit of the distributor (Cordero). On the amounts awarded by the trial court as moral and exemplary damages.interest at 6% per annum from the time of the filing of the complaint until the same is fully paid. 164747) in which petitioners raised the following arguments: G. RESPONDENTS ADMITTED IN THEIR PRE-TRIAL BRIEF THAT THEY HAD PURCHASED A SECOND VESSEL. RESPONDENT GO’S POSITION PAPER AND COUNTER-AFFIDAVIT/POSITION PAPER THAT WERE FILED BEFORE THE BUREAU OF CUSTOMS.00 and P50. which said court found to be pro forma and did not raise any substantial matter as to warrant the conduct of another trial. 2004 with the sole modification that the legal interest of 6% per annum shall start to run from June 24. THE HONORABLE COURT OF APPEALS DISREGARDED THE RULES OF COURT AND PERTINENT JURISPRUDENCE AND ACTED WITH GRAVE ABUSE OF DISCRETION IN NOT RULING THAT THE RESPONDENT IS NOT THE REAL PARTY-IN-INTEREST AND IN NOT DISMISSING THE INSTANT CASE ON THE GROUND OF LACK OF CAUSE OF ACTION.

43 In this case. Real Party-in-Interest First. Respondents Landicho and Tecson failed to refute the evidence submitted by Cordero consisting of receipts signed by them. the real party plaintiff appears to be Pamana. 1997 issued by Tony Robinson. Cordero was no longer informed of payments remitted to AFFA in Brisbane. (2) certification dated 5 August 199735. and (3) letter dated 5 August 1997 addressed to petitioner Cordero concerning "commissions to be paid to Pamana Marketing Corporation. while jurisdiction over the defendants in a civil case is acquired either through the service of summons upon them in the manner required by law or through their voluntary appearance in court and their submission to its authority. In that case. and ceased communicating through petitioner Cordero as the exclusive distributor of AFFA in the Philippines. which defines such party as the one (1) to be benefited or injured by the judgment in the suit. he effectively submitted voluntarily to the trial court’s jurisdiction. For all intents and purposes. it was established that petitioner Cordero was not paid the balance of his commission by respondent Robinson. at the expense of the sole authorized distributor. Cordero was not paid anything and worse. or the party entitled to the avails of the suit. Robinson and AFFA dealt only with Cordero who alone made decisions in the performance of the exclusive distributorship. notwithstanding that he raised it in a special appearance specifically raising the issue of lack of jurisdiction over his person. the former dealer of the same goods purchased the merchandise from the manufacturer in England through a trading firm in West Germany and sold these in the Philippines. we agree with the CA in ruling that it was Cordero and not Pamana who is the exclusive distributor of AFFA in the Philippines as shown by the Certification dated June 1. He is now estopped from asserting otherwise.47 In the case at bar. which can be gleaned from their act of immediately furnishing him with copies of bank transmittals everytime Go remits payment to Robinson.31 A case is dismissible for lack of personality to sue upon proof that the plaintiff is not the real party-in-interest. Cordero" was actually the exclusive distributor: (1) letter dated 1 June 199734. Landicho and Tecson never raised petitioner Cordero’s lack of personality to sue on behalf of Pamana. Cordero had clearly been cut off from the transaction until the arrival of the first SEACAT 25 which was sold through his efforts. and 4) to discourage litigation and keep it within certain bounds. I. that is."36 Such apparent inconsistency in naming AFFA’s exclusive distributor in the Philippines is of no moment. THE COURT OF APPEALS ERRED IN NOT SUSTAINING THE ORIGINAL AMOUNT OF CONSEQUENTIAL DAMAGES AWARDED TO PETITIONER BY THE TRIAL COURT CONSIDERING THE BAD FAITH AND FRAUDULENT CONDUCT OF RESPONDENTS IN MISAPPROPRIATING THE MONEY OF PETITIONER. petitioner Go. Contractual Interference and Respondents’ Liability for Damages In Yu v. 3) to avoid a multiplicity of suits." or "cuts" from his own commission.30 The controversy boils down to two (2) main issues: (1) whether petitioner Cordero has the legal personality to sue the respondents for breach of contract. title or interest in the case. AFFA through its lawyer in Australia even terminated his exclusive dealership insisting that his services were engaged for only one (1) transaction. Rule 3 of the Rules of Court. as with other clients to whom he had similarly offered AFFA’s fast ferry vessels.45 II." it must be noted that he had earlier filed a Motion for Time to file an appropriate responsive pleading even beyond the time provided in the summons by publication.41 As already mentioned. hence grounded on failure to state a cause of action. 2) to require that the actual party entitled to legal relief be the one to prosecute the action. even before this Court.38 Moreover. When Cordero complained to Go. who was appointed and acted as exclusive distributor for AFFA. Courts acquire jurisdiction over the plaintiffs upon the filing of the complaint. We find no error committed by the trial court in overruling Robinson’s objection over the improper resort to summons by publication upon a foreign national like him and in an action in personam. Mortimer F. the stipulated commissions from each progress payments made by Go were directly paid by Robinson to Cordero. 33Petitioner Go mentions the following documents also signed by respondent Robinson which state that "Pamana Marketing Corporation represented by Mr. pursuant to sound public policy. and (2) 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. injunction is the appropriate remedy to prevent a wrongful interference with contracts by strangers to such contracts where the legal remedy is insufficient and the resulting injury is irreparable. Moreover. 39 and did so only before the CA when they contended that it is Pamana and not Cordero. Court of Appeals. however. Consequently. but an appearance submitting to the jurisdiction of the court by acknowledging the summons by publication issued by the court and praying for additional time to file a responsive pleading.46 this Court ruled that the right to perform an exclusive distributorship agreement and to reap the profits resulting from such performance are proprietary rights which a party may protect. From the time petitioner Go and respondent Landicho directly dealt with respondent Robinson in Brisbane. However.44 Such motion did not state that it was a conditional appearance entered to question the regularity of the service of summons.IV. AFFA. Thus. the purchase of the first SEACAT 25 in August 1997. Out of these partial payments of his commission. Robinson having acknowledged the summons by publication and also having invoked the jurisdiction of the trial court to secure affirmative relief in his motion for additional time. Go simply let his lawyers led by Landicho and Tecson handle the matter and tried to settle it by promising to pay a certain amount and to purchase high-speed catamarans through Cordero.32 On this issue. In other words. Landicho and Tecson about their acts prejudicial to his rights and demanded that they respect his exclusive distributorship. 40 It was Robinson who argued in support of his motion to dismiss that as far as said defendant is concerned. We held that the rights granted to the petitioner under the exclusive distributorship agreement may not be diminished nor rendered illusory by the expedient act of utilizing or interposing a person or firm to obtain goods for which the exclusive distributorship was conceptualized. Breach of Exclusive Distributorship. on the issue of whether the case had been filed by the real party-in-interest as required by Section 2. transportation. . The purposes of this provision are: 1) to prevent the prosecution of actions by persons without any right. the trial court denied the motion to dismiss filed by Robinson. food and hotel accommodations for the trip to Australia. Cordero would still give Landicho and Tecson their respective "commission. against the real party defendant which is AFFA. Said amounts were apart from the earlier expenses shouldered by Cordero for Landicho’s airline tickets. Robinson. 37 Respondents Landicho and Tecson were only too aware of Cordero’s authority as the person who was appointed and acted as exclusive distributor of AFFA. although the Motion to Dismiss filed by Robinson specifically stated as one (1) of the grounds the lack of "personal jurisdiction. who in turn transfers a portion of funds received to the bank account of Cordero in the Philippines as his commission.42 A party who makes a special appearance in court challenging the jurisdiction of said court based on the ground of invalid service of summons is not deemed to have submitted himself to the jurisdiction of the court.

relying on Articles 1207. Where the alleged interferer is financially interested. undertook to pay commission payments to Pamana on a staggered progress payment plan in the form of percentage of the commission per payment. Any third person who induces another to violate his contract shall be liable for damages to the other contracting party. we held that where there was no malice in the interference of a contract. and as a result petitioner deprived respondent corporation of the latter’s property right. 52 The presence of the first and second elements is not disputed. justification for interfering with the business relations of another exists where the actor’s motive is to benefit himself. it is clear that petitioner So Ping Bun prevailed upon DCCSI to lease the warehouse to his enterprise at the expense of respondent corporation. 49 We find that contrary to the claims of petitioner Cordero. Added to this. Respondents clearly acted in bad faith in bypassing Cordero as they completed the remaining payments to AFFA without advising him and furnishing him with copies of the bank transmittals as they previously did. and the impulse behind one’s conduct lies in a proper business interest rather than in wrongful motives. showing that they conspired to defeat the very purpose of the exclusive distributorship agreement. One view is that. and as correctly viewed by the appellate court. and that an individual acts under an economic interest that is substantial. and directly dealt with AFFA through Robinson regarding arrangements for the arrival of the first SEACAT 25 in Manila and negotiations for the purchase of the second vessel pursuant to the Memorandum of Agreement which Cordero signed in behalf of AFFA. But it does not relieve petitioner of the legal liability for entering into contracts and causing breach of existing ones.] . in the letter dated August 5. not merely de minimis. Authorities debate on whether interference may be justified where the defendant acts for the sole purpose of furthering his own financial or economic interest. Further. The respondent appellate court correctly confirmed the permanent injunction and nullification of the lease contracts between DCCSI and Trendsetter Marketing. As a result of respondents’ actuations. Petitioner Go contends that the trial and appellate courts erred in holding them solidarily liable for Cordero’s unpaid commission. In the instant case. AFFA explicitly committed that it will. Court of Appeals53 is instructive. 1997 addressed to Cordero. 19 and 21 of the Civil Code despite absence of evidence. Moreover. for he acts in self-protection. 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. Court of Appeals 48 there is no conclusive proof adduced by petitioner Cordero that they actually purchased a second SEACAT 25 directly from AFFA and hence there was no violation of the exclusive distributorship agreement. (2) knowledge on the part of the third person of the existence of a contract.51 While it is true that a third person cannot possibly be sued for breach of contract because only parties can breach contractual provisions. precludes damages. nothing on record imputes deliberate wrongful motives or malice in him. and (3) interference of the third person is without legal justification. 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. he contends that the CA gravely abused its discretion in holding them solidarily liable to Cordero. which is the sole obligation of the principal AFFA. however. Cuddy. such that wrongful and malicious motives are negatived. 7825 with Cordero in behalf of AFFA. Clearly. 1314. Such justification does not exist where his sole motive is to cause harm to the other. our ruling in the case of So Ping Bun v. the three elements of tort interference above-mentioned are present in the instant case. petitioner’s Trendsetter Marketing asked DCCSI to execute lease contracts in its favor. As to the third element. "upon receipt of progress payments. Through the letters issued by Robinson attesting that Cordero is the exclusive distributor of AFFA in the Philippines. Though petitioner took interest in the property of respondent corporation and benefited from it. xxx While we do not encourage tort interferers seeking their economic interest to intrude into existing contracts at the expense of others. It is sufficient if the impetus of his conduct lies in a proper business interest rather than in wrongful motives. As early as Gilchrist vs. some authorities believe that it is not necessary that the interferer’s interest outweigh that of the party whose rights are invaded. pay to Pamana their full commission by telegraphic transfer to an account nominated by Pamana within one to two days of [AFFA] receiving such payments. 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. Lack of malice. It was Robinson on behalf of AFFA who. it cannot be said that he is an officious or malicious intermeddler. a contracting party may sue a third person not for breach but for inducing another to commit such breach. he had also paid in full the first and only vessel he purchased from AFFA. In that capacity as exclusive distributor. But this circumstance will not absolve respondents from liability for invading Cordero’s rights under the exclusive distributorship." 50Petitioner Go further maintains that he had not in any way violated or caused the termination of the exclusive distributorship agreement between Cordero and AFFA. The elements of tort interference are: (1) existence of a valid contract. there was indeed no sufficient evidence that respondents actually purchased a second SEACAT 25 directly from AFFA. The business desire is there to make some gain to the detriment of the contracting parties. petitioner Go entered into the Memorandum of Agreement and Shipbuilding Contract No. justification for protecting one’s financial position should not be made to depend on a comparison of his economic interest in the subject matter with that of others. without awarding damages. as a general rule. to wit: A duty which the law of torts is concerned with is respect for the property of others. The injunction saved the respondents from further damage or injury caused by petitioner’s interference. In fact. documentary or testimonial. Article 1314 of the Civil Code provides: Art.Petitioner Go argues that unlike in Yu v. 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. a party cannot be a malicious interferer. and such interest motivates his conduct. Cordero incurred losses as he was not paid the balance of his commission from the sale of the first vessel and his exclusive distributorship revoked by AFFA. however. respondents were clearly aware of the contract between Cordero and AFFA represented by Robinson.54 [emphasis supplied.

the CounterAffidavit/Position Paper for the Importer dated November 16. and upon mutual agreement. Tecson and Landicho were without legal justification and intended solely to prejudice Cordero. Therefore.Malice connotes ill will or spite. Attached to the answer were photocopies of the second contract stating a lower purchase price (US$1. Court of Appeals. we ruled as follows: Assuming ex gratia argumenti that petitioner knew of the contract. (2) that Go will obtain another vessel. 1998. Incidentally.55 In the case of Lagon v. were able to locate him only to obtain unsatisfactory reports such that it was Go who would still call up Robinson regarding any progress status report. Cuddy (supra). Robinson. which was submitted by Go on behalf of ACG Express Liner in connection with the complaint-affidavit filed by Cordero before the BOC-SGS Appeals Committee relative to the shipment valuation of the first SEACAT 25 purchased from AFFA.00) was only presented before the BOC to show that the vessel imported into the Philippines was not undervalued by almost US$500.00. obviously to obtain a lower price for the second vessel at the expense of Cordero. that -8. This led to the signing of another contract superseding the first one (1).00) and facsimile transmission of AFFA to Go confirming the transaction. They gave a different version of the events that transpired following the signing of Shipbuilding Contract No. x xx Furthermore. But what is appalling is the fact that even as Go. even assuming that private respondent was able to prove the renewal of his lease contract with Bai Tonina Sepi. the total remittances made by herein Importer to AFFA does not alone represent the purchase price for Seacat 25. etc. Go engaged the services of Landicho who went to Australia to see to it that all documents needed for the shipment of the vessel to the Philippines would be in order. Landicho and Tecson continued to demand and receive from Cordero their "commission" or "cut" from Cordero’s earned commission from the sale of the first SEACAT 25. and it was always Landicho and Tecson who. adding that the contract was to be effective on August 7. was misinterpreted by Cordero as indicating that Go was buying a second vessel.000. in May 1998 on the scheduled launching of the ship in Australia. the defendant must have acted with malice or must have been driven by purely impure reasons to injure the plaintiff. his act of interference cannot be justified. closely monitored the progress of building the first vessel sold. the claim of tortuous interference was never established.150. without giving him any explanation. 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 AFFA’s breach of its contractual obligation to pay in full the commission due to Cordero and unceremonious termination of Cordero’s appointment as exclusive distributor. Following our pronouncement in Gilchrist v. after several attempts.150.000. the fact was that he was unable to prove malice or bad faith on the part of petitioner in purchasing the property. Tecson and Landicho suddenly ceased communicating with him. 1997. (3) that to secure compliance of such conditions. Landicho and Go’s family members. 60 It appears that the purported second contract superseding the original Shipbuilding Contract No. the trial and appellate courts correctly ruled that the actuations of Go. It implies an intention to do ulterior and unjustifiable harm. The word "induce" refers to situations where a person causes another to choose one course of conduct by persuasion or intimidation. Cordero vehemently denied there was such modification of the contract and accused respondents of resorting to falsified documents.. which is not prohibited by the Memorandum of Agreement. Malice is bad faith or bad motive. the time when their funds was to become available. It includes advance payment for the acquisition of another vessel as part of the deal due to the discounted price. despite their knowledge that it was commission already earned by and due to Cordero. This. Hence. the records do not support the allegation of private respondent that petitioner induced the heirs of Bai Tonina Sepi to sell the property to him.62 which even gives credence to the claim of Cordero that respondents negotiated for the sale of the second vessel and that the nonpayment of the remaining two (2) instalments of his commission for the sale of the first SEACAT 25 was a result of Go and Landicho’s directly dealing with Robinson. As to the allegation of private respondent in said case that petitioner induced the heirs of the late Bai Tonina Sepi to sell the property to petitioner despite an alleged renewal of the original lease contract with the deceased landowner. Go must make an advance payment for the building of the second vessel.00 (not US$1. attended to their concerns and spent no measly sum for the trip to Australia with Go. several builder-competitors still entered the picture after the said contract for the purchase of one (1) SEACAT 25 was sent to Brisbane in July 1997 for authentication. 56 we held that to sustain a case for tortuous interference. demonstrated that respondents transgressed the bounds of permissible financial interest to benefit themselves at the expense of Cordero. As elsewhere stated. such knowledge alone was not sufficient to make him liable for tortuous interference. and go to Australia for ocular inspection. Landicho and Tecson secretly negotiated with Robinson for the purchase of a second vessel. including the facsimile transmission of AFFA supposedly confirming the said sale for only US$1.512. Go averred it was Cordero who was nowhere to be contacted at the time the shipbuilding progress did not turn good as promised. but also that Cordero would not be paid the balance of his commission from the sale of the first SEACAT 25. Go admitted he called the attention of AFFA if it can compete with the prices of other builders.150. 57 In their Answer. 7825. Cordero was practically excluded from the transaction when Go. and (4) that the payment scheme formerly agreed upon as stipulated in the first contract shall still be the basis and used as the guiding factor in remitting money for the building of the first vessel.000. respondents denied having anything to do with the unpaid balance of the commission due to Cordero and the eventual termination of his exclusive distributorship by AFFA.000. While there was nothing objectionable in negotiating for a lower price in the second purchase of SEACAT 25. however. Thus. Private respondent himself did not proffer any evidence to support his claim. another document filed in said BOC case.465. We further explained that the word "induce" refers to situations where a person causes another to choose one course of conduct by persuasion or intimidation. 7825 and stating a lower price of US$1. The act of Go. The attendant circumstances. Robinson.00. 1998. such act may not be deemed malicious if impelled by a proper business interest rather than in wrongful motives. Respondents furtively went directly to Robinson after Cordero had worked hard to close the deal for them to purchase from AFFA two (2) SEACAT 25. The records show that the decision of the heirs of the late Bai Tonina Sepi to sell the property was completely of their own volition and that petitioner did absolutely nothing to influence their judgment. Tecson and Landicho clearly connived not only in ensuring that Cordero would have no participation in the contract for sale of the second SEACAT 25.58 As to the cessation of communication with Cordero. In short. lacking documents for MARINA. AFFA agreed to give them a discounted price under the following terms and conditions: (1) that the contract price be lowered. and speaks not in response to duty. Go. . in other words. It was also during this time that Robinson’s request for inquiry on the Philippine price of a Wartsila engine for AFFA’s then on-going vessel construction. According to them. still to be dated 07 August 1997.59 We find these allegations unconvincing and a mere afterthought as these were the very same averments contained in the Position Paper for the Importer dated October 9.61 states in paragraph 8 under the Antecedent facts thereof. Robinson.

] The rule is that the defendant found guilty of interference with contractual relations cannot be held liable for more than the amount for which the party who was inducted to break the contract can be held liable.522. Inc. Go. The failure of Robinson. When Article 19 is violated. is to set certain standards which must be observed not only in the exercise of one’s rights but also in the performance of one’s duties.63 We see no compelling reason to reverse the findings of the RTC and the CA that respondents acted in bad faith and in utter disregard of the rights of Cordero under the exclusive distributorship agreement. give everyone his due. but is also jointly liable with his tort feasors. to the same extent and in the same manner as if they had performed the wrongful act themselves.The existence of malice.64 Petitioner Go’s argument that he. therefore. instigate. the court during trial may find that some of the alleged tort feasors are liable and that others are not liable. and (3) it is done with intent to injure. on the other hand. Its antithesis. the requirements of an award of exemplary damages are: (1) they may be imposed by way of example in addition to compensatory damages. of course satisfies any claim which might exist against the others. As we have expounded in another case: Elsewhere. and observe honesty and good faith. moral damages may be recovered under Article 2219 of the Civil Code. by one of the joint tort feasors. The courts may release some for lack of evidence while condemning others of the alleged tort feasors. Conformably with Article 2194 of the Civil Code. ill will or bad faith is a factual matter. As a rule. is equally bereft of merit.66 we held: [O]bligations arising from tort are. Tecson and Landico to act with fairness. which AFFA/Robinson did not pay in violation of the exclusive distributorship agreement. v. (2) that they cannot be recovered as a matter of right. is further proscribed by Article 19 of the Civil Code: Art. Landicho and Tecson cannot be held liable solidarily with Robinson for actual. It is no defense for one sued alone. or who approve of it after it is done. Its elements are the following: (1) There is a legal right or duty. 67 [emphasis supplied. with interest at the rate of 6% per annum from June 24. their determination depending upon the amount of compensatory damages that may be awarded to the claimant. xxx It may be stated as a general rule that joint tort feasors are all the persons who command. Each is liable for the whole damages caused by all. Every person must. is any act evincing bad faith or intent to injure. countenance. nor is it any excuse for him that his participation in the tort was insignificant as compared to that of the others. We have assiduously maintained this legal principle as early as 1912 in Worcester v. are conclusive on this Court. x x x Joint tort feasors are not liable pro rata. and (3) the act must be accompanied by bad faith or done in a wanton. we explained that 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. Article 20 pertains to damages arising from a violation of law x x x. the responsibility of two or more persons who are liable for the quasi-delict is solidary. (2) which is exercised in bad faith. and that is. always solidary. promote. by their nature.09 or its peso equivalent. These standards are the following: act with justice. advise. moral and exemplary damages. good custom." The object of this article. And this is true even though they are charged jointly and severally. for the purpose of each paying an aliquot part. Respondents having acted in bad faith.69On the other hand. findings of fact of the trial court. A common theme runs through Articles 19 and 21. act with justice. states: Art. if done for their benefit. to the prejudice of Cordero as the duly appointed exclusive distributor. x x x Joint tort feasors are jointly and severally liable for the tort which they commit. in which we held: x x x The difficulty in the contention of the appellants is that they fail to recognize that the basis of the present action is tort. They fail to recognize the universal doctrine that each joint tort feasor is not only individually liable for the tort in which he participates. Article 21 refers to acts contra bonus mores and has the following elements: (1) There is an act which is legal. as well as attorney’s fees awarded to Cordero since no law or contract provided for solidary obligation in these cases. good customs or public policy shall compensate the latter for the damage. public order. 65 In Lafarge Cement Philippines. that the others who participated in the wrongful act are not joined with him as defendants. and only after the claimant’s right to them has been established. give everyone his due and observe honesty and good faith. 19. They are each liable as principals. The release of one of the joint tort feasors by agreement generally operates to discharge all. 21. encourage. x x x A payment in full for the damage done. Any person who willfully causes loss or injury to another in a manner that is contrary to morals. an action for damages is proper under Articles 20 or 21 of the Civil Code. aid or abet the commission of a tort. fraudulent. Article 21. honesty and good faith in securing better terms for the purchase of high-speed catamarans from AFFA. 1998 until the same is fully paid. They cannot insist upon an apportionment. 68 Respondents Go. Continental Cement Corporation. necessarily. The damages can not be apportioned among them. when affirmed by the appellate court. in the exercise of his rights and in the performance of his duties. the act complained of must be intentional. Landicho and Tecson were therefore correctly held liable for the balance of petitioner Cordero’s commission from the sale of the first SEACAT 25. (2) but which is contrary to morals. Ocampo. . They are jointly and severally liable for the whole amount.1avvphi1 The persons injured may sue all of them or any number less than all. x x x Of course. in the amount of US$31. and all together are jointly liable for the whole damage. except among themselves. or public policy. (3) for the sole intent of prejudicing or injuring another. a legal wrong is thereby committed for which the wrongdoer must be responsible. There can be but satisfaction. cooperate in.

 In selling its low-grade oil. serious anxiety.  This single transaction between plaintiff and defendant was effected.  In marketing these two types of oil. PAREDES. 28 CC SHELL COMPANY OF THE PHILIPPINES. attorney’s fees may also be awarded in consonance with Article 2208 (1). Trial courts are given discretion in determining the amount. as a practice.S. Pecson Lozano. No. SECURITIES-RELATED TORTS D. including lubricating oil.00 and P200. respectively. UNFAIR COMPETITION..00. 2004 as modified by the Resolution dated July 22. we find the sums awarded by the trial court as moral and exemplary damages as reduced by the CA. and similar injuries unjustly caused. social humiliation. ...000. however. which was consummated with Conrado Uichangco a dealer of petitioner's gasoline and lubricating oil. There is no hard-and-fast rule in determining what would be a fair and reasonable amount of moral damages.  Defendant Insular Petroleum Refining Co. INSULAR PETROLEUM REFINING CO. and he also told me that he could sell this kind of oil (Insoil) to me at a much cheaper price so that I could make a bigger margin of profits Q.70 The award of exemplary damages is thus in order. And some of those miscellaneous containers are the Shell containers.. but before filling the empty drums we obliterate the markings of the drums)  In one transaction. (used drums may be belonging to the U. the petitions are DENIED.. wounded feelings. Although incapable of pecuniary estimation. still excessive under the circumstances. is a corporation engaged in the sale of petroleum products. J. petitioner. respondent. and another. utilizes for the high grade oil containers. moral shock. Shell Co.R. it must be commensurate to the loss or injury suffered. the amount must somehow be proportional to and in approximation of the suffering inflicted. Because exemplary damages are awarded. 2004 of the Court of Appeals in CA-G.  The essential difference between the two types lies in the fact that the high-grade oil contains an additive element which is not found in the other type. miscellaneous drums of other companies. mental anguish.000." Indeed. respondent use miscellaneous containers. Army or other drums may be belonging to the Caltex. and who has been losing during the first eight and ten months of operation of his station. With costs against the petitioner in G. WHEREFORE..00. according to Conrado Uichangco an operator of a Shell service station at the corner of San Andres and Tuason Privado Streets. respectively. is a registered limited partnership. he tried to show me a chemical analysis of Insoil which he claimed was very close to the analysis of Shell oil. with a special sealing device at its opening which cannot be removed unless the oil is used. 164703.00 as moral and exemplary damages.000. B. would be sufficient and reasonable.R. However.71 We believe that the amounts of P300. Moral damages are not punitive in nature and were never intended to enrich the claimant at the expense of the defendant. SO ORDERED. F. INTERFERENCE WITH PROSPECTIVE ADVANTAGE C. Manila. the lowgrade oil that was sold to said operator was contained in a drum with the petitioner's mark or brand "Shell" still stenciled without having been erased. What did you reply? A. . but they are used drums. painted black on the sides and yellow on top and on the bottom with its tradename stenciled thereon.00 andP200. although he had money to back up his losses. of the Phil. besmirched reputation. LTD. 69113 are hereby AFFIRMED with MODIFICATION in that the awards of moral and exemplary damages are hereby reduced to P300.  From the used oil. and COURT OF APPEALS.000. Pecson Lozano that if his intention was to sell me Insoil for me to .. or the Stanvac we have some that belonged to the Union. The Decision dated March 16. repaired at his station and "tried to convince me that Insoil is a good oil". fright. ART. Ltd. whose principal business is collecting used lubricating oil.oppressive or malevolent manner. with the limitation that it "should not be palpably and scandalously excessive. vs. a first grade or high-grade oil. LTD. 72 We affirm the appellate court’s award of attorney’s fees in the amount of P50. I told Mr. when a certain F. since each case must be governed by its own peculiar facts..000.:  Petitioner. As a matter of fact.. Moral damages are meant to compensate and alleviate the physical suffering. Ltd.  The packages and containers of its goods bear its trademark. in agent of the defendant. respondents. CV No. labeled or stenciled thereon. respondent produces two types of lubricating oil one. a straight mineral oil classified as second grade or low-grade oil..

and in fact the instruction of Crespo to Uichangco could mean — to buy Insoil oil contained in a Shell drum. or.000.00 for attorneys fees. Uichangco was apprised beforehand that a Shell drum would be used. . The buyer could not have been deceived or confused that he was not buying Insoil Oil. v.. Actual or probable deception and confusion on the part of the customers by reason of defendant's practices must always appear. A prayer for double the actual damages was made. 42020 under the Revised Penal Code (Art.. There is reason to believe that the transaction was consummated in pursuance of a plan of Mr..ñët Respondent Insular answering the complaint. Q. 42020. is. intended to mislead the buying public to the prejudice of petitioner and the general public.000. . etc.000..00. as shown from the established facts.000. Crespo told me "that is not true".00 for legal expenses and P25. as a matter of fact. . Lozano was insistent that I buy Insoil package in a Shell drum I called up Mr. P5. Each case is. Pedro Kayanan and F. Q. Proof of this may be clearly deduced from the fact that. The other issue discussed by the Court of Appeals.00 for legal expenses and P10. Do you know whether that one drum of oil was ever sold by you or by the Shell company to the public? A. disquisitioned: On the question of whether or not... The question to be determined in every case is whether or not.00 by way of exemplary damages and the costs. In the civil case. and that the action is barred by the decision in the criminal case No. thus: "No inflexible rule can be laid down as to what will constitute unfair competition. A counterclaim for P81. "can you order one drum of that oil for me. . A writ of preliminary injunction was requested to enjoin respondent herein to cease and desist from using for the sale of any of its products and more particularly for the sale of its low-grade lubricating oil." Encompassing the facts of the case to the foregoing ruling in the Alhambra case. True. 30? A.. Nothing less than conduct tending to pass off one man's goods or business as that of another will constitute unfair competition. Q.000. . after the usual admissions and denials. Crespo to obtain evidence for the filing of a case. P4. Tecson Lozano. moral and exemplary damages. with the exception of the sale of one drum of low-grade oil by defendant's agent to Uichangco no other companies whose drums or containers have been used by the defendant in its business have filed any complaint to protect against the practices of the defendant. My question to you is: He never made any misrepresentation to you that he was selling you any oil other than Insoil Motor oil. and Mr. .. or pass off its goods as those of another. brought about the presentation with the Manila CFI.. . F. alleged that it "has never attempted to pass off its products as that of another nor to persuade anyone to do the same". 189) against Donald Mead. passing off defendant's goods as plaintiffs goods or his business as plaintiff's business.00 for actual. The defendant did not pass off or attempt to pass off upon the public its goods as the goods of another. we deem it wise to preface the discussion by citing certain passages in the decision of the Supreme Court in the case of Alhambra Cigar. as aforesaid. The universal test question is whether the public is likely to be deceived. by reason of which petitioner bad suffered damages in the form of decrease in sales. the defendant is guilty of unfair competition in the conduct of its trade or business in the marketing of its low-grade oil. the accused therein were acquitted. And it is also a fact that you stated in the Fiscal's Office and in the Court of First Instance during the trial there that there was no seal whatsoever appearing in the opening of the drum. Q. is that correct? A. before marketing to the public its low-grade oil in containers the brands or marks of the different companies stenciled on the containers are totally obliterated and erased. .00 for actual damages. constituted a bar to the filing of the civil case or amounted to res judicata.00 for legal expenses with interposed by respondent. But. P1. Crespo and I risked him in effect why we have to kill ourselves when there is a man here who came to my station and told me that he has oil that approximates the analysis of Shell oil which he could sell to me at a very much cheaper price. the CFI found for Shell and ordered respondent to pay P20. is. Crespo. to state it in another way. because.. whether defendant. as a matter of fact.pass as any of the Shell oils. Charge it against me. that a drum with the brand Shell remaining unerased was used by the defendant. the defendant is guilty of unfair competition. The practices do not show a conduct to the end and probable effect to which is to deceive the public. that is. The sales invoice states that Insoil Oil was sold. I just charged them the invoice price. as hereinabove narrated. . by his conduct. You mean you bought in your own name and you sold it to the Shell company at a profit? A. In reversing the above judgment. There is also the categorical testimony of Uichangco that defendant's agent did not make any representation that said agent was selling any oil other than Insoil motor oil. However. I re-sold it to the Shell Company of the Philippines. 27 Phil. . Unfair competition is dumps a question of fact. After trial. Well. with the exception of that single transaction regarding the one drum of oil sold by the defendant's agent to the plaintiff's dealer. The oil was never sold to the public because the plaintiff never intended or contemplated doing so. There is evidence showing that the use of the defendant of the drum or container with the Shell brand stenciled thereon was with the knowledge and consent of Uichangco. P1. We agree with the appellate court that there is no res judicata. a law unto itself. the Court of Appeals.00 for attorney's fees. Mojica. straight mineral SAE No. as a matter of fact. Lozano on your own volition or on orders of the Shell management? A. in a measure. Now we shall dwell on the transaction between defendant's agent and plaintiff's dealer.000.000. and (2) defendant had attempted to persuade Shell dealers to purchase its low-grade oil and to pass the same to the public as Shell oil. There was no seal by the Insoil or by the Shell Company. particularly in the single transaction between defendant's agent and plaintiff's dealer. the Court having found that the element of deceit was absent. I was not agreeable because I did not want to cheat my customers." I told him "Yes I will.000. without erasing the marks or brands labeled or stencilled thereon. 1äwphï1. It was never re-sold to the public. Pecson Lozano. Q. 266. P5. as a matter of fact. Shell containers with Shell markings still on them. pursuant to section 23 of Republic Act 166. this is the story as to how I happened to order that one drum of Insoil oil that was inside that Shell drum. The motion to dissolve the injunction granted." So I ordered that one drum of Insoil from Mr. I did not profit anything from it. There is neither express nor implied representation to that effect. a case for damages on the allegation of unfair competition and a Criminal Case No. petitioner herein invoked two causes of action: (1) that respondent in selling its low-grade oil in Shell containers. Manager. You ordered a Shell drum from Mr. In the criminal case. whether the acquittal of the officers and employees of the respondent in the criminal case (supra). . was denied by the court a quo. estimated at least P10. to our mind.000.000. not necessary to resolve in the instant appeal. I sold it to the Shell company because it was an order of Mr.000. The incident between petitioner's operator and respondent's agent.00 for exemplary damages. the name or mark used by the defendant has previously come to indicate and designate plaintiffs goods.00 for attorney's fees and P5. Rep. and then he further added. it clearly appears that defendant's practices in marketing its low-grade oil did not cause actual or probable deception and confusion on the part of the general public. That is what he told me. When Mr. Uichangco to determine whether or not.

deliver oil to oil dealers or gasoline stations in drums. even in places where the goods of petitioner had long been sold or extensively advertised. (1940) N. Not just because a manufacturer used a container still bearing a competitor's marking in the sale of one's products. defining unfair competition.A. The drum in question did not reach the buying public. for purposes of argument. the determination of whether unfair competition was committed in the case at bar. Those cases were predicated on facts and circumstances different from those of the present. a law unto itself and as unfair competition is always a question of fact. showing that the defendant has passed of or attempted to pass off his own goods as those of another and that the customer was deceived with respect to the origin of the goods. 475. I Callman's. Uichangco was apprised beforehand that Lozano would sell Insoil oil in a Shell drum. if ever it has ever been done. as found and exposed by the Court of Appeals in the portion of its decision above-quoted. the competing products involving the offending bottles. . that is their responsibility. Linatoc. for. The complaint was predicated on section 29 of Rep.. for. In one case. May such eventuality make respondent liable for unfair competition? There is no prohibition for respondent to sell its goods. stated elsewhere in this opinion. for which reason it argues that the sale of respondent's low-grade oil in Shell containers was the cause. p. (I Nim's The Law of Unfair Competition and Trademarks. Uichangco the Shell dealer. package or marked. is transferred by a SHELL dealer to a SHELL "tall boy". Kyburz. must have to depend upon the fact as found by the Court of Appeals. there seem to be no need of discussing the merits and demerits of the theory. v. 4th ed. 28 Phil. or who shall commit any act calculated to produce said result. all the marks and brands on the containers used were erased or obliterated. 209. It was found by the Court of Appeals that in all transactions of the low-grade Insoil. We are more inclined to believe that several factors contributed to the decrease of such sales. etc. it is the form in which the wares or products come to the ultimate consumer that was significant. as product of Shell was not performed by the respondent or its agent. Whatever container INSOIL uses would be of no moment. however. From the above definition and authorities interpretative of the same. The Supreme Court can not examine the question of whether or not the Court of Appeals was right when that tribunal concluded from the uncontroverted evidence that there had been no deceit. in a measure. supra). it constitutes a deceit on the buying public. In other words. From these cases. to the definitiveness of which We are bound (I Moran's Rules of Court. We are reluctant to share the logic of the argument. 74 Phil. And this could easily be done. Petitioner submits the adoption in the case at bar of the "service station is package theory" — that the service stations of oil companies are packages in themselves. 52-53. Act No. unfair competition is born. therefore. to sell to said motorist any other kind of products without apprising them beforehand that they are not Shell products. one feature common to all comes out in bold relief and that is. In other words. 317. for that matter. no less than satisfactory and convincing evidence is essential. were. S. If there was any such effort to deceive the public. and shall be subject to an action therefor. But let us assume. irrespective of to whom and how the sale is made. packages or marks reached. Hence.In the petition. it is seen that to hold a defendant guilty of unfair competition. Y. Alhambra Cigar.. as each case is. but petitioner's dealers. as respondents' counsel put it — The point we would like to drive home is that if a SHELL dealer wants to fool the public by passing off INSOIL as SHELL oil he could do this by the simple expedient of placing the INSOIL oil or any other oil for that matter in the "tall boys" and dispense it to the public as SHELL oil.. as long as respondent does not deceive said dealers. these dealers transfer the contents of the drums to retailing dispensers known as "tall boys". In view. to the present case. summer. with a view of obtaining evidence against someone who might have been committing unfair business practices. 320. for those of the one having established such goodwill.. the falsehood must be told by the article itself in order to make the law of unfair competition applicable. not applicable to the one at bar. the inherent element of unfair competition is fraud or deceit. except the present one. We find those cases." (De Luna. absence of a clear showing. And the existence of connivance or conspiracy. such that all products emanating therefrom are expected to be those of the company whose marks the station bear. to wit: Any person who shall employ deception or any other means contrary to good faith by which he shall pass off the goods manufactured by him or in which he deals. L. Shell claims three (3) errors allegedly committed by the Court of Appeals. the trade name of plaintiff was stamped on the goods of defendant and they were being passed as those of the plaintiff. It was merely a shell dealer or an operator of a Shell Station who purchased the drum not to be resold to the public. the dealers to whom the defendant (respondent) sold its products and not the latter. And the facts of the case at bar. a fact which finds corroboration in the receipt issued for the sale of the drum. Petitioner contends that there had been a marked decrease in the volume of sales of low-grade oil of the company. much in the same way that the appearance of one swallow does not make a season. as has been well said. legally responsible for such deception.. all of which pose the singular issue of whether respondent in the isolated transaction. committed an act of unfair competition and should be held liable. that when a motorist drives to a Shell station. ". wrappers. however. so bottled. 29 Phil. the hands of the ultimate consumer. wrapped. we respectfully maintain that the responsibility of INSOIL ceases from the moment its oil. . (Third assignment of error). that the presence of respondent's low-grade oil in the market contributed to such decrease. It was shown that Shell and other oil companies. but to be sold to the petitioner company.. are. There was no evidence that defendant or its agent attempted to persuade Uichangco or any Shell dealer. which act respondent had no control whatever. 166. 699 & cases cited therein). pp. can there be a conclusion that the buying public has been misled or will be misled. . for the dealer had found that his income was dwindling in his gasoline station. As no inflexible rule can be laid down as to what will constitute unfair competition. 266. Mojica. 329. U. therefore. Rev. shall be guilty of unfair competition. the law of unfair competition does not protect purchasers against falsehood which the tradesman may tell. et al. between dealer Uichangco and Agent Lozano has not in the least been insinuated. The passing of said oil. or whether the same is applicable or not. 15). If petitioner's dealers pass off Insoil oil as Shell oil. that INSOIL and the SHELL dealer connived or conspired. testified that Lozano (respondent's agent) did not all make any representation that he (Lozano) was selling any oil other than Insoil motor oil. 1957 Ed. to purchase its low-grade oil and to pass the same to the public as Shell oil. of the findings and conclusions reached. The Law of Unfair Competition and Trademarks. This circumstance does not obtain here. This Court is not unaware of the decisions cited by petitioner to bolster its contention. he does so with the intention of buying Shell products and that he is naturally guided by the marking of the station itself. refer to passage quoted in the decision of C. Respondent should not be blamed if some petitioner's dealers by Insoil oil. v. from which the oil is retailed to the public by liters. and. v. Roger's New Directions in the Law of Unfair Competition. citing Paul on Trademarks. sec. and cases cited therein. The single transaction at bar will not render defendant's act an unfair competition.

CONFORMABLY WITH ALL THE FOREGOING. is in accordance with the fact. with costs against petitioner. in both instances. The same is affirmed. . the law and jurisprudence on the matter. We find that the decision of the Court of Appeals appealed from.