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Carlos vs Sandoval

These consolidated petitions emanated from a civil case filed by Juan de Dios Carlos (“Carlos”)
against respondents Felicidad Sandoval (“Sandoval”) and Teofilo Carlos II (Teofilo II) docketed with the
Regional Trial Court (RTC) of Muntinlupa City as Civil Case No. 95-135.

In his Complaint before the RTC, Carlos asserted that he was the sole surviving compulsory heir of his
parents, Felix B. Carlos and Felipa Elemia,
[1]
who had acquired during their marriage, six parcels of land
(subject properties). His brother, Teofilo (“Teofilo”), died intestate in 1992. At the time of his death,
Teofilo was apparently married to Sandoval, and cohabiting with her and their child, respondent Teofilo
II. Nonetheless, Carlos alleged in his Complaint that Teofilo and Sandoval were not validly married as they
had not obtained any marriage license.
[2]
Furthermore, Carlos also asserted that Teofilo II could not be
considered as Teofilo’s child. As a result, Carlos concluded that he was also the sole heir of his brother
Teofilo, since the latter had died without leaving any heirs.

Carlos also claimed that Teofilo, prior to their father Felix’s death in 1963, developed a scheme to
save the elder Carlos’s estate from inheritance taxes. Under the scheme, the properties of the father
would be transferred to Teofilo who would, in turn, see to it that the shares of the legal heirs are
protected and delivered to them. Felix assented to the plan, and the subject properties were transferred
in the name of Teofilo. After Teofilo’s death, Carlos entered into certain agreements with Sandoval in
connection with the subject properties. Carlos did so, believing that the latter was the lawful wife of his
brother Teofilo. Subsequently though, Carlos discovered that Sandoval and his brother were never validly
married, as their marriage was contracted without a marriage license.
[3]


Carlos now sought to nullify these agreements with Sandoval for want of consideration, the
premise for these contracts being non-existent. Thus, Carlos prayed of the RTC to declare the alleged
marriage between Teofilo and Sandoval void ab initio, provided that Teofilo died without issue, order that
new titles covering the subject properties be issued in the name of Carlos, and require Sandoval to
restitute Carlos in the amount of P18,924,800.00.
[4]


Carlos likewise prayed for the issuance of the provisional relief of preliminary attachment. The RTC
issued an Order dated 7 September 1995 granting the prayer for preliminary attachment, and on 15
September 1995, a writ of preliminary attachment. Carlos posted a bond for P20,000,000.00 issued by
herein petitioner SIDDCOR Insurance Corporation (SIDDCOR).
[5]
Shortly thereafter, a Notice of
Garnishment was served upon the Philippine National Bank (PNB) over the deposit accounts maintained
by respondents.

Respondents filed an Urgent Motion to Discharge the Writ of Attachment, which was opposed
by Carlos. On 4 December 1995, the RTC rendered an order denying the motion. This caused respondents
to file a Petition for Certiorari with the Court of Appeals, seeking to set aside the RTC order granting the
writ of preliminary attachment denying the motion for the discharge of the writ. This case was docketed
as CA-G.R. SP No. 39267.
[6]


On 27 February 1996, the Court of Appeals Second Division promulgated its Decision in CA-G.R.
SP No. 39267, wherein it granted the Petition for Certiorari and ordered the discharge and dissolution of
the Writ of Attachment and Notice of Garnishment.
[7]
The Court of Appeals found that there was no
sufficient cause of action to warrant the preliminary attachment, since Carlos had merely alleged general
averments in order to support his prayer.
[8]
Carlos elevated the said Decision to this Court by way of
Petition for Review on Certiorari, which was docketed as G.R. No. L-125717. In a Resolution dated 21
October 1996, the Court denied Carlos’s Petition, and thus the Court of Appeals’ Decision ordering the
dissolution of the Writ of Attachment and Notice of Garnishment became final.

In the meantime, the hearing on Carlos’s Complaint ensued before the RTC. Respondents duly filed
their Answer and thereafter filed a Motion for Summary Judgment. Carlos opposed the motion and
countered with his own Motion for Summary Judgment. On 8 April 1996, the RTC rendered a summary
judgment in favor of Carlos. Carlos’s victory was wholesale, with the RTC making the following
pronouncements:

1. Declaring the marriage between defendant Felicidad Sandoval and Teofilo
Carlos solemnized at Silang, Cavite, on May 14, 1962, evidenced by the Marriage Contract
submitted in this case, null and void ab initio for lack of the requisite marriage license;

2. Declaring that the defendant minor, Teofilo S. Carlos II, is not the natural,
illegitimate, or legally adopted child of the late Teofilo E. Carlos;

3. Ordering defendant Sandoval to pay and restitute to plaintiff the sum of
P18,924,800.00, together with the interest thereon at the legal rate from date of filing of
the instant complaint until fully paid;

4. Declaring plaintiff as the sole and exclusive owner of the parcel of land, less
the portion adjudicated to the plaintiffs in Civil Case No. 11975, covered by TCT No. 139061
of the Register of Deeds of Makati City, and ordering said Register of Deeds to cancel said
title and to issue another title in the sole name of plaintiff herein;

5. Declaring the Contract, Annex K of the Complaint, between plaintiff and
defendant Sandoval null and void, and ordering the Register of Deeds of Makati City to
cancel TCT No. 139058 in the name of Teofilo Carlos, and to issue another title in the sole
name of the plaintiff herein;

6. Declaring the Contract, Annex M of the Complaint, between plaintiff and
defendant Sandoval null and void;

7. Ordering the cancellation of TCT No. 210877 in the names of defendant
Sandoval and defendant minor Teofilo S. Carlos II and ordering the Register of Deeds of
Manila to issue another title in the exclusive name of plaintiff herein.

8. Ordering the cancellation of TCT No. 210878 in the names of defendant
Sandoval and defendant minor Teofilo S. Carlos II and ordering the Register of Deeds of
Manila to issue another title in the sole name of plaintiff herein.
[9]



Upon promulgation of the Summary Judgment, Carlos moved before the RTC for execution pending
appeal. The RTC granted the motion for execution pending appeal upon the filing of a bond.
[10]
On 27 May
1996, the RTC issued a Writ of Execution.


Meanwhile, respondents filed a Motion for Reconsideration of the Summary Judgment, which
was denied in an Order dated 20 May 1996. Respondents then appealed the RTC Decision to the Court of
Appeals, wherein such appeal was docketed as CA-G.R. CV No. 53229. The case was raffled to the
appellate courts’ Fourteenth Division for completion of records. Sandoval and Carlos also filed a Petition
for Certiorari with Temporary Restraining Order dated 2 June 1996. This special civil action primarily
attacked the allowance of execution pending appeal, and prayed for the annulment of the Order granting
execution pending appeal, and of the Writ of Execution

On 10 December 1996, in CA-G.R. CV No. 53229, respondents filed a Motion for Judgment On the
Attachment Bond. They noted that the Court of Appeals had already ruled that the Writ of Preliminary
Attachment issued by the RTC was improperly granted and that its Decision, as affirmed by the Supreme
Court, had attained finality. Accordingly, they were entitled to damages under Section 20, Rule 57 of the
then Rules of Civil Procedure, which governed claims for damages on account of unlawful attachment. In
support of their allegation of damages, they cite the Notice of Garnishment served on PNB Malolos
Branch, where Felicidad Carlos maintained deposits amounting to P15,546,121.98.
[11]
Also presented in
support of the motion was a Notice of Delivery/Payment by the RTC Sheriff, directing the PNB Malolos
Branch to deliver the amounts previously garnished by virtue of the Writ of Execution dated 27 May
1996;
[12]
a Manifestation filed by PNB dated 19 July 1996 in CA-G.R. SP No. 40819, stating that PNB had
already delivered to the RTC Sheriff on 27 June 1996 the amount of P15,384,509.98 drawn against the
accounts of Carlos; and a Certification to the same effect issued by the PNB Malolos Branch. In an
Addendum to Motion for Judgment on the Attachment Bond, respondents additionally prayed for moral
and exemplary damages.
[13]


After various pleadings were duly filed by the parties, the Court of Appeals Special Fourth Division
issued a Resolution dated 23 March 1998, certifying that all the necessary pleadings have been filed, and
that the case may already be referred to the Raffle Committee for assignment to a ponente for study and
report. The same Resolution likewise denied without elaboration a Motion to Dismiss on the ground of
forum-shopping filed earlier by Carlos.
[14]


On such denial, Carlos filed a Motion for Reconsideration. Respondents likewise filed a Motion
for Partial Reconsideration dated 17 April 1998, arguing that under the Revised Internal Rules of the Court
of Appeals (RIRCA), the case may be re-raffled for assignment for study and report only after there is a
resolution that the case is deemed submitted for decision.
[15]
They pointed out that re-raffle could not yet
be effected, as there were still pending incidents, particularly the motions for reconsideration of Carlos
and themselves, as well as the Motion for Judgment on Attachment Bond.

On 26 June 1998, the Court of Appeals Former Special Fourth Division promulgated two
resolutions.
[16]
The first, in response to Carlos’s Motion for Reconsideration, again denied Carlos’s Motion
to Dismiss the Appeal and Motion for Suspension, but explained the reasons for such denial.

The second resolution is at the center of the present petitions. The assailed Resolution agreed with
respondents that it was first necessary to resolve the pending incidents before the case could be re-
raffled for study and report. Accordingly, the Court of Appeals
proceeded to rule on these pending incidents. While the first resolution dwelt on the pending motions
filed by Carlos, this Resolution tackled the other matter left unresolved, the Motion for Judgment on
Attachment Bond. The Court of Appeals found the claim for damages meritorious, citing the earlier
decisions ruling that Carlos was not entitled to the preliminary attachment. Invoking Section 20, Rule 57
of the Rules of Court, as well as jurisprudence,
[17]
the Court of Appeals ruled that it was not necessary for
the determination of damages on the injunction bond to await the decision on appeal.

The Court of Appeals then proceeded to determine to what damages respondents were entitled to.
In ruling that the award of actual damages was warranted, the court noted:

It is also not disputed that the PNB, on June 27, 1996, issued two
manager’s checks: MC No. 938541 for P4,932,621.09 and MC 938542 for
P10,451,888.89 payable to the order of “Luis C. Bucayon II, Sheriff IV, RTC, Branch
256, Muntinlupa”, duly received by the latter in the total amount of PESOS
FIFTEEN MILLION THREE HUNDRED EIGHTY FOUR THOUSAND FIVE HUNDRED
NINE & 98/100 (P15,384,509.98), drawn against the accounts of Ms. Felicidad
Sandoval Vda. de Carlos which were earlier garnished for the satisfaction of the
above-mentioned writ of attachment (Annex “E”, Motion for Judgment on the
Attachment Bond, pp. 7-8)
[18]


. . . .

The contention of [Carlos] that the writ of attachment was not
implemented falls flat on the face of the manifestation of PNB that the delivery
of the garnished P15,384,509.98 to him was effected through the sheriff.
[19]



The Court of Appeals found that moral and exemplary damages were not warranted, there being no
malice in pursuing the attachment. The appellate court also found the claim of P2,000,000.00 for
attorney’s fees as excessive, and reduced the sum by half. Correspondingly, the dispositive portion of the
assailed Resolution reads:

WHEREFORE, premises considered, judgment is hereby rendered against the
attachment bond, ordering SIDDCOR INSURANCE CORPORATION and plaintiff-
appellee to pay defendants-appellants, jointly and severally, the sum of
P15,384,509.98 and 12% interest per annum from June 27, 1996 when the unlawful
garnishment was effected until fully paid and P1,000,000.00 as attorney’s fees with
6% interest thereon from the trial court’s decision on April 8, 1986 until fully paid.

SO ORDERED.
[20]


Both Carlos and SIDDCOR filed their respective motions for reconsideration of the Resolution. For
their part, respondents filed a Motion for Immediate Execution dated 7 August 1998 in regard to the
Resolution of 26 June 1998 awarding them damages.

In the Resolution dated 10 October 1998,
[21]
the Court of Appeals denied the motions for
reconsideration and granted the Motion for Immediate Execution. In granting the Motion for Immediate
Execution, the Court of Appeals cited the reasons that the appeal to be undertaken from the 26 June
1998 Resolution was patently dilatory; that there were no material and substantial defenses against the
motion for judgment on the attachment bond, rendering the appeal pro-forma and dilatory; that
Sandoval was of advanced age and might not enjoy the fruits of the judgment on the attachment bond;
and that immediate execution would end her suffering due to the arbitrary garnishment of her account
pursuant to an improper attachment.
[22]







In its Motion for Reconsideration, SIDDCOR explicitly assailed the allowance of the Motion for
Immediate Execution.
[23]
This was denied by the Court of Appeals in a Resolution dated 22 December
1998.
[24]


From these antecedents, the following petitions were filed before this Court:

G.R. No. 135830

This Appeal by Certiorari with Prayer for Temporary Restraining Order/Preliminary Injunction dated
26 October 1998 filed by Carlos assailed the two resolutions of the Court of Appeals both dated 26 June
1998, as well as the Resolution of 10 October 1998, which denied Carlos’s motion for reconsideration.
Carlos argues that the Court of Appeals, through the Former Special Fourth Division, could not have
resolved the Motion for Judgment on the Attachment Bond since the case had not yet been re-raffled
under the two-raffle system for study and report; that the Court of Appeals erred in resolving the motion
without conducting any hearing; that the Court of Appeals had no jurisdiction over the motion as the
docketing fees had not yet been filed; that the motion for judgment, which did not contain any
certification against forum-shopping, was an application subject to the requirements of certification
against forum-shopping; that there was no supporting evidence to support the award of damages; and
that the Court of Appeals committed grave abuse of discretion in denying the Motion for Reconsideration
without adverting to specific reasons mentioned for the denial of each issue.
[25]


Carlos likewise ascribes grave abuse of discretion to the Court of Appeals in its other Resolution
dated 26 June 1998 for its refusal to dismiss CA-G.R. CV No. 53229 on the ground of forum-shopping,
adding that the appellate court should have deferred resolution of the Motion for Judgment on the
Attachment Bond considering the prejudicial question raised in Carlos’s motion to dismiss the main case
on the ground of forum-shopping.

G.R. No. 136035

This concerns a Petition for Review filed by SIDDCOR, likewise challenging the Resolution of 26 June
1998 of the Court of Appeals and the 10 October 1998 Resolution wherein Siddcor’s Motion for
Reconsideration, among others, was denied. Siddcor argues therein that the Court of Appeals erred in
ruling on the motion for damages without awaiting judgment in the main case; granting that damages
may be awarded, these should encompass only such damages incurred during the pendency of the
appeal; and that a hearing was necessary to prove the claim for damages and the appellate court erred in
granting the award for damages despite lack of hearing.

G.R. No. 137743

The third petition for adjudication, a Petition for Certiorari under Rule 65 with Prayer for Temporary
Restraining Order or Preliminary Injunction, was also filed by SIDDCOR. This petition, dated 8 March 1999,
specifically assails the allowance by the Court of Appeals of the immediate execution of the award of
damages, made through the resolutions dated 10 October 1998 and 22 December 1998.

SIDDCOR hereunder argues that Section 2, Rule 39 of the Rules of Civil Procedure requires that
execution of a judgment or final order pending appeal may be made only on motion of the prevailing
party and may be made “even before the expiration of the period to appeal.”
[26]
Respondents had argued
in their Motion for Immediate Execution that the judgment sought to be executed (that on the
attachment bond) was interlocutory and not appealable, yet cited rulings on execution pending appeal
under Section 2, Rule 39 in support of their position. SIDDCOR cites this inconsistency as proof of a
change of theory on the part of respondents which could not be done for the theories are incompatible.
Such being the case, SIDDCOR argues, the Court of Appeals gravely abused its discretion in granting
immediate execution since respondents had filed its motion on the premise that the award on the
judgment bond was interlocutory and not appealable. SIDDCOR also claims that the judgment on the
attachment bond is not interlocutory, citing Stronghold Insurance Co., Inc. v. Court of Appeals
[27]
wherein
it was ruled that such indeed constitutes a final and appealable order.

SIDDCOR points out that no hearing was conducted on the Motion for Immediate Execution
despite the requirement in Section 2, Rule 39 that “discretionary execution may only issue upon good
reasons to be stated in a special order after due hearing.” SIDDCOR likewise notes that the motion
granting immediate execution was granted in the very same resolution which had denied the motion for
reconsideration of the resolution sought to be immediately executed. For SIDDCOR, such constituted a
denial of procedural due process insofar as its statutory right to appeal was concerned, as the resolution
that it intended to appeal from was already the subject of immediate execution.

Finally, SIDDCOR contests the special reasons cited by the Court of Appeals in granting the
Motion for Immediate Execution.

Facts Arising Subsequent to the Filing of Instant Petitions

On 7 May 1999, the Court of Appeals issued a Writ of Execution directing the enforcement of
the judgment on the attachment bond.
[28]
However, in a Resolution dated 9 June 1999, this Court through
the First Division issued a Temporary Restraining Order, enjoining the enforcement of the said Writ of
Execution.

On 15 October 2002, the Court of Appeals First Division rendered a Decision
[29]
on the merits of
CA-G.R. CV No. 53229, setting aside the Summary Judgment and ordering the remand of the case for
further proceedings.
[30]
Both parties filed their respective motions for reconsideration.
[31]
In addition,
Carlos filed a motion to inhibit the author of the assailed decision, Justice Rebecca de Guia-Salvador,
[32]

who thereafter agreed to inhibit herself.
[33]
Then on 7 August 2003, the Court of Appeals Former First
Division issued a Resolution deferring action on the motions for reconsideration in light of the temporary
restraining order issued by this Court until the resolution of the present petitions.

The factual background may be complicated, but the court need only concern itself with the
propriety of the judgment on the attachment bond and the subsequent moves to secure immediate
execution of such judgment. Should this Court be called upon to tackle the merits of the original action,
Carlos’s complaint, it shall be in the review of the final resolution of the Court of Appeals in CA-G.R. CV
No. 53229.

Consolidation of Issues in
G.R. Nos. 135830 and 136035

The petitions in G.R. Nos. 135830 and 136035 are concerned with the award of damages on the
attachment bond. They may be treated separately from the petition in G.R. No. 137743, which relates to
the immediate execution of the said award.



We consolidate the main issues in G.R. Nos. 135830 and 136035, as follows: (1) whether the
assailed judgment on the attachment bond could have been rendered, as it was, prior to the adjudication
of the main case; (2) whether the Court of Appeals properly complied with the hearing requirement
under Section 20, Rule 57 prior to its judgment on the attachment bond; and (3) whether the Court of
Appeals properly ascertained the amount of damages it awarded in the judgment on the attachment
bond.

Resolving these issues requires the determination of the proper scope and import of Section
20, Rule 57 of the 1997 Rules of Civil Procedure. The provision governs the disposal of claims for damages
on account of improper, irregular or excessive attachment.

SECTION 20. Claim for damages on account of improper, irregular or excessive
attachment.—An application for damages on account of improper, irregular or excessive
attachment must be filed before the trial or before appeal is perfected or before the
judgment becomes executory, with due notice to the attaching obligee or his surety or
sureties, setting forth the facts showing his right to damages and the amount thereof. Such
damages may be awarded only after proper hearing and shall be included in the
judgment on the main case.

If the judgment of the appellate court be favorable to the party against whom
the attachment was issued, he must claim damages sustained during the pendency of the
appeal by filing an application in the appellate court with notice to the party in whose
favor the attachment was issued or his surety or sureties, before the judgment of the
appellate court becomes executory. The appellate court may allow the application to be
heard and decided by the trial court.

Nothing herein contained shall prevent the party against whom the attachment
was issued from recovering in the same action the damages awarded to him from any
property of the attaching obligee not exempt from execution should the bond or deposit
given by the latter be insufficient or fail to fully satisfy the award. (Emphasis supplied.)


Section 20 essentially allows the application to be filed at any time before the judgment
becomes executory. It should be filed in the same case that is the main action, and cannot be instituted
separately.
[34]
It should be filed with the court having jurisdiction over the case at the time of the
application.
[35]
The remedy provided by law is exclusive and by failing to file a motion for the
determination of the damages on time and while the judgment is still under the control of the court, the
claimant loses his right to damages.
[36]


There is no question in this case that the Motion for Judgment on the Attachment Bond filed by
respondents on 10 December 1996 was properly filed since it was filed with the Court of Appeals during
the pendency of the appeal in the main case and also as an incident thereto. The core questions though
lie in the proper interpretation of the condition under Section 20, Rule 57 that reads: “Such damages may
be awarded only after proper hearing and shall be included in the judgment on the main case.”
Petitioners assert that there was no proper hearing on the application for damages and that the Court of
Appeals had wrongfully acted on the application in that it resolved it prior to the rendition of the main
judgment.


“Such Damages May Be Awarded
Only After Proper Hearing….”

We first discuss whether the “proper hearing” requirement under Section 20, Rule 57 had been
satisfied prior to the award by the Court of Appeals of damages on the attachment bond.

Section 20 of Rule 57 requires that there be a “proper hearing” before the application for
damages on the attachment bond may be granted. The hearing requirement ties with the indispensable
demand of procedural due process. Due notice to the adverse party and its surety setting forth the facts
supporting the applicant's right to damages and the amount thereof under the bond is essential. No
judgment for damages may be entered and executed against the surety without giving it an
opportunity to be heard as to the reality or reasonableness of the damages resulting from the wrongful
issuance of the writ.
[37]


In Paramount Insurance v. Court of Appeals,
[38]
the Court held that under the rule, it was neither
mandatory nor fatal that there should be a separate hearing in order that damages upon the bond can be
claimed, ascertained and awarded.
[39]
What is necessary only is for the attaching party and his surety or
sureties to be duly notified and given the opportunity to be heard.
[40]


In this case, both Carlos and SIDDCOR were duly notified by the appellate court of the Motion
for Judgment on the Attachment Bond and were required to file their respective comments thereto.
[41]

Carlos and SIDDCOR filed their respective comments in opposition to private respondents’ motion.
[42]

Clearly, all the relevant parties had been afforded the bare right to be heard on the matter.

Concededly, the facts of this case differ from that in Paramount, wherein the award of damages
was predicated under Section 8, Rule 58, and the trial on the merits included the claim for damages on
the attachment bond. The Court did note therein that the counsel of the surety was present during the
hearings.
[43]
In this case, unlike in Paramount, there were no open court hearings conducted by the Court
of Appeals, and it is precisely this absence that the petitioners assert as fatal.

Plainly, there is no express requirement under the rule that the hearing be done in open court,
or that the parties be allowed to confront adverse witnesses to the claim of damages on the bond. The
proper scope of the hearing requirement was explained before Paramount in Peroxide Philippines Corp. v.
Court of Appeals,
[44]
thus:

. . . [It] is undeniable that when the attachment is challenged for having been illegally or
improperly issued, there must be a hearing with the burden of proof to sustain the writ
being on the attaching creditor. That hearing embraces not only the right to present
evidence but also a reasonable opportunity to know the claims of the opposing parties and
meet them. The right to submit arguments implies that opportunity, otherwise the right
would be a barren one. It means a fair and open hearing.


From this pronouncement, we can discern that the “proper hearing” contemplated would not merely
encompass the right of the parties to submit their respective positions, but also to present evidence in
support of their claims, and to rebut the submissions and evidence of the adverse party. This is especially
crucial considering that the necessary elements to be established in an application for damages are
essentially factual: namely, the fact of damage or injury, and the quantifiable amount of damages
sustained. Such matters cannot be established on the mere say-so of the applicant, but require
evidentiary support. At the same time, there was no equivocal statement from the Court in Peroxide that
the hearing required under the rule should be a full-blown hearing on the merits

In this case, we rule that the demands of a “proper hearing” were satisfied as of the time the Court of
Appeals rendered its assailed judgment on the attachment bond. The circumstances in this case that we
consider particularly telling are the settled premises that the judicial finding on the wrongfulness of the
attachment was then already conclusive and beyond review, and that the amount of actual damages
sustained was likewise indubitable as it indeed could be found in the official case record in CA-G.R. CV
No. 53229. As a result, petitioners would have been precluded from either raising the defenses that the
preliminary attachment was valid or disputing the amount of actual damages sustained by reason of the
garnishment. The only matter of controversy that could be litigable through the traditional hearing would
be the matter of moral and exemplary damages, but the Court of Appeals appropriately chose not to
award such damages.

Moreover, petitioners were afforded the opportunity to counter the arguments extended by the
respondents. They fully availed of that right by submitting their respective comments/oppositions. In fine,
the due process guarantee has been satisfied in this case.

It should be noted that this case poses a situation different from what is normally contemplated
under Section 20, Rule 57—wherein the very wrongfulness of the attachment remains one of the issues in
contention in the main case. In such a case, there would be a greater demand for a more extensive
hearing on the application of damages. The modality of hearing should remain within the discretion of
the court having jurisdiction to hear the application for damages. The only demand, concordant to due
process, would be the satisfaction of the right to be heard, to present evidence, and to rebut the
evidence and arguments of the opposing party.

Some disquisition is necessary on whether or not, as petitioners submit, a full-blown hearing in
open court is compulsory under Section 20, Rule 57. To impose this as a mandatory requirement would
ultimately prove too onerous to our judicial system. Perhaps such a demand would be less burdensome
on the regional trial courts, which, as a matter of routine, receive testimonial or documentary evidence
offered de novo, and to formulate conclusions on the admissibility and credibility of the same.

However, a different situation applies if it is the Court of Appeals or the Supreme Court before which
the application for damages is filed. Both these courts, which are capacitated to receive and act on such
actions, are generally not triers of facts, and do not, in the course of daily routine, conduct hearings. It is
partly for such reason that Section 20, Rule 57 authorizes these appellate courts to refer the application
for damages to the trial court for hearing and decision. The trial courts are functionally attuned to
ascertain and evaluate at the first instance the necessary factual premises that would establish the right
to damages. Still, reference of the application for damages to the trial court is discretionary on the part of
the appellate courts. The latter, despite their traditional appellate jurisdiction and review function, are
still empowered under Section 20 to rule on the application for damages, notwithstanding the factual
dimension such question presents.

To impose as mandatory on the Court of Appeals or the Supreme Court to hear the application for
damages through full-blown hearings in open court is supremely unwise and beyond the demands of
Section 20, Rule 57. The effect would be unduly disruptive on the daily workflow of appellate courts such
as the Court of Appeals and the Supreme Court, which rarely conduct open court hearings. Neither could
the Court see what is so markedly special about an application for damages, fact-oriented as it may be,
that would require it to be heard by the appellate courts in open court when no such mandatory rule
applies to other judicial matters for resolution that are also factual in nature.

For example, the review of death penalty convictions by the Court of Appeals and the Supreme
Court necessitates a thorough evaluation of the evidence presented, notwithstanding the prior factual
appreciation made by the trial court.
[45]
Notwithstanding the factual nature of the questions involved,
there is no rule requiring the Court of Appeals or the Supreme Court to call death penalty cases for
hearing or oral argument. If no such mandatory rule for hearing is imposed on the appellate courts when
the supreme penalty of death is involved, why then should an exceptional rule be imposed in the case for
the relatively insignificant application for damages on the attachment bond?

If open court hearings are ever resorted to by appellate courts, such result from the exercise of
discretion rather than by imposition by statute or procedural rule. Indeed, there is no existing statute,
procedural rule, or jurisprudential fiat that makes it mandatory on the Court of Appeals or the Supreme
Court to conduct an open-court hearing on any matter for resolution. There is nothing demonstrably
urgent with an application for damages under Section 20, Rule 57 that would necessitate this Court to
adopt an unprecedented rule mandating itself or the Court of Appeals to conduct full-blown open court
hearings on a particular type of action.

This pronouncement does not contradict our ruling in Hanil Development v. IAC,
[46]
which Carlos
interprets as requiring the Court of Appeals to conduct a proper hearing on an application for damages on
the attachment bond. Hanil concerned the refusal by the Intermediate Appellate Court (now Court of
Appeals) to take cognizance of the application for damages on the attachment bond, such refusal being
reversed by the Court, which ruled that the Intermediate Appellate Court (IAC) had jurisdiction to accept
and rule on such application. While the Court therein recognized that the IAC was empowered to try
cases and conduct hearings, or otherwise perform acts necessary to resolve factual issues in cases,
[47]
it
did not require the appellate court to conduct a hearing in open court, but merely to reinstate the
application for damages.

Admittedly, the dispositive portion of Hanil required the Court of Appeals to conduct hearings
on the application for damages,
[48]
but nowhere in the decision was a general rule laid down mandating
the appellate court to conduct such hearings in open court. The ascertainment of the need to conduct
full-blown hearings is best left to the discretion of the appellate court which chooses to hear the
application. At the same time, the Court cautions the appellate courts to carefully exercise their
discretion in determining the need for open-court hearings on the application for damages on the
attachment bond. The Court does not sanction the indolent award of damages on the attachment bond
by the appellate court without affording the adverse party and the bonding company concerned the
opportunity to present their sides and adduce evidence in their behalf, or on the basis of unsubstantiated
evidence.

“…And Shall be Included in the
Judgment on the Main Case”

Section 20, Rule 57 does state that the award of damages shall be included in the judgment on
the main case, and seemingly indicates that it should not be rendered prior to the adjudication of the
main case.

The rule, which guarantees a right to damages incurred by reason of wrongful attachment, has
long been recognized in this jurisdiction.
[49]
Under Section 20, Rule 57 of the 1964 Rules of Court, it was
provided that there must be first a judgment on the action in favor of the party against whom attachment
was issued before damages can be claimed by such party.
[50]
The Court however subsequently clarified
that under the rule, “recovery for damages may be had by the party thus prejudiced by the wrongful
attachment, even if the judgment be adverse to him.”
[51]


The language used in the 1997 revision of the Rules of Civil Procedure leaves no doubt that
there is no longer need for a favorable judgment in favor of the party against whom attachment was
issued in order that damages may be awarded. It is indubitable that even a party who loses the action in
main but is able to establish a right to damages by reason of improper, irregular, or excessive attachment
may be entitled to damages. This bolsters the notion that the claim for damages arising from such
wrongful attachment may arise and be decided separately from the merits of the main action. As noted
by the Court in Philippine Charter Insurance Corp. v. Court of Appeals:
[52]




The surety does not, to be sure, become liable on its bond simply because
judgment is subsequently rendered against the party who obtained the preliminary
attachment. The surety becomes liable only when and if "the court shall finally adjudge
that the applicant was not entitled to the attachment." This is so regardless of the nature
and character of the judgment on the merits of the principal claims, counterclaims or
cross-claims, etc. asserted by the parties against each other. Indeed, since an applicant's
cause of action may be entirely different from the ground relied upon by him for a
preliminary attachment, it may well be that although the evidence warrants judgment in
favor of said applicant, the proofs may nevertheless also establish that said applicant's
proferred ground for attachment was inexistent or specious and hence, the writ should
not have issued at all; i.e., he was not entitled thereto in the first place. In that event, the
final verdict should logically award to the applicant the relief sought in his basic pleading,
but at the same time sentence him—usually on the basis of a counterclaim—to pay
damages caused to his adversary by the wrongful attachment. [Emphasis supplied.]


Moreover, a separate rule—Section 8, Rule 58— covers instances when it is the trial court that
awards damages upon the bond for preliminary injunction of the adverse party. Tellingly, it requires that
the amount of damages to be awarded be claimed, ascertained, and awarded under the same procedure
prescribed in Section 20 of Rule 57.

In this case, we are confronted with a situation wherein the determination that the attachment
was wrongful did not come from the trial court, or any court having jurisdiction over the main action. It
was rendered by the Court of Appeals in the exercise of its certiorari jurisdiction in the original action
reviewing the propriety of the issuance of the Writ of Preliminary Attachment against the private
respondents. Said ruling attained finality when it was affirmed by this Court.

The courts are thus bound to respect the conclusiveness of this final judgment, deeming as it
does the allowance by the RTC of preliminary attachment as improper. This conclusion is no longer
subject to review, even by the court called upon to resolve the application for damages on the
attachment bond. The only matter left for adjudication is the proper amount of damages.

Nevertheless, Section 20, Rule 57 explicitly provides that the award for damages be included in
the judgment on the main case. This point was apparently not lost on the Court of Appeals when it
rendered its Resolution dated 23 March 1998, certifying that the case may now be referred to the Raffle
Committee for assignment to a ponente. The appellate court stated therein: “The Resolution of
defendants-appellants’ motion for judgment on the attachment may be incorporated in the decision by
the ponente for study and report,”
[53]
and such observation is in conformity with Section 20.

However, this reasoning was assailed by respondents, who argued that the motion for
judgment on the attachment bond was a pending incident that should be decided before the case can be
re-raffled to a ponente for decision. Respondents may be generally correct on the point that a case can
only be deemed submitted for decision only after all pending incidents are resolved. Yet since Section 20,
Rule 57 provides that their application for damages on the attachment bond “shall be included in the
judgment on the main case,” it is clear that the award for damages need not be resolved before the case
is submitted for decision, but should instead be resolved and included in the judgment on the main case,
or the decision on the Appeal by Certiorari filed by the respondents.

Thus, the action of the Court of Appeals in resolving the application for damages even before
the main judgment was issued does not conform to Section 20, Rule 57. However, the special particular
circumstances of this case lead us to rule that such error is not mortal to the award of damages.

As noted earlier, the award of damages was made after a proper hearing had occurred wherein
all the concerned parties had been given the opportunity to present their arguments and evidence in
support and in rebuttal of the application for damages. The premature award of damages does not
negate the fact that the parties were accorded due process, and indeed availed of their right to be heard.

Moreover, we are compelled to appreciate the particular circumstance in this case that the
right of private respondents to acquire relief through the award of damages on account of the wrongful
preliminary attachment has been conclusively affirmed by the highest court of the land. This differs from
the normal situation under Section 20, Rule 57 wherein the court having jurisdiction over the main action
is still required to ascertain whether the applicant actually has a right to damages. To mandatorily require
that the award of damages be included in the judgment in the main case makes all the sense if the right
to damages would be ascertained at the same time the main judgment is made. However, when the said
right is already made viable by reason of a final judgment which is no longer subject to review, there
should be no unnecessary impediments to its immediate implementation.

And finally, any ruling on our part voiding the award of damages solely for the reason that it was not
included in the judgment on the main case, and remanding the motion to the Court of Appeals for proper
adjudication together with the main case may exhibit fealty to the letter of the procedural rule, but not
its avowed aims of promoting a just and speedy disposition of every action and proceeding. After all, if we
were to compel the Court of Appeals to decide again on the application for damages and incorporate its
ruling in the judgment on the main action, the appellate court will be examining exactly the same
evidence and applying exactly the same rules as it already did when it issued the assailed resolution
awarding damages on the bond. This would be unnecessarily redundant especially considering that the
Supreme Court had already affirmed that there was wrongful attachment in this case.

There is also the fact that remanding the question of damages, singly for the purpose of
adhering to the letter of the procedural rule, would further prolong the resolution of the main case,
which has been with the Court of Appeals for more than nine years now.
[54]
Our Rules of Court precisely
requires liberal construction of the procedural rules to promote the objective of securing a just, speedy
and inexpensive disposition of every action and proceeding.
[55]
With this precept, all the more
justification is supplied for allowing the award for damages despite its apparent prematurity, if it is in all
other respects proper.

The same reasons apply in resolving the question of whether the Court of Appeals could have
decided the Motion for Judgment on the Attachment Bond considering that the case had not yet been re-
raffled under the two-raffle system for study and report. Under Section 5, Rule 3 of the RIRCA, a case filed
with the Court of Appeals undergoes two raffles for assignment to a particular Justice. The first raffle is
made for completion of records.
[56]
Afterwards, “all raffled appealed cases, the records of which have
been completed and submitted for decision, shall be re-raffled for assignment to a Justice for study and
report.”
[57]


The fact that Section 20, Rule 57 provides that the award of damages on the attachment bond
“shall be included in the judgment on the main case” necessarily implies that it is to be made only after
the case has been re-raffled for study and report, and concurrently decided with the judgment of the
ponente in the main case. Again, the Court of Appeals failed to consider Section 20, Rule 57 when it acted
upon the application even before the second raffle was made.

Had Section 20, Rule 57 been faithfully complied with, a different Justice of the Court of
Appeals would have penned the ruling on the application for damages, in accordance with the RIRCA. Yet
this circumstance does not outweigh the other considerations earlier mentioned that would warrant a
liberal interpretation of the procedural rules in favor of respondents. The parties had adduced all their
arguments and evidence before the Court of Appeals, and indeed, these were appreciated on first
instance by Justice Demetria, who eventually penned the assailed resolutions. There was already a final
determination that the attachment was wrongful. And any delay brought about by requiring that it be the
ponencia, determined after the second raffle, who decides the application for damages may bear pro
forma adherence to the letter of the rule, but would only cause the delay of the resolution of this long-
pending case. Procedural rules are designed, and must therefore be so interpreted as, to give effect to
lawful and valid claims and not to frustrate them.
[58]


Even SIDDCOR acknowledges that there are recognized instances where the award of damages
or judgment on the attachment bond may not be included in the decision on the main case, such as if the
main case was dismissed for lack of jurisdiction and no claim for damages could have been presented in
the main case.
[59]


Scope of Damages
Properly Awardable


Next, we examine the particular award of damages made in this case, consisting of P15,384,509.98,
plus interest, as well as P1,000,000.00 as attorney’s fees. There seems to be no dispute that the former
amount constituted the amount drawn against the account of Sandoval by reason of the writ of execution
issued by the trial court on 27 May 1996. This fact was confirmed by the PNB, in its Manifestation dated
19 July 1996, confirming the garnishment.

Respondents’ burden in proving damages in this case was considerably lessened by the fact that
there was already a final judgment, no longer subject to review, that the preliminary attachment allowed
by the trial court was indeed wrongful. Hence, all that was necessary to be proved was the amount of
damage actually sustained by respondents by reason of the wrongful attachment. It is unquestioned that
by virtue of the writ of preliminary attachment, a Notice of Garnishment was served upon the PNB over
deposit accounts maintained by respondents. Said Notice of Garnishment placed under the control of the
RTC all the accounts maintained by respondents, and prevented the transfer or disposition of these
accounts.
[60]
Then the subsequent Writ of Execution dated 27 May 1996 ordered the delivery to Carlos of
these accounts earlier subjected to garnishment.
[61]


Clearly, the amount of actual pecuniary loss sustained by respondents has been well established. The
Manifestation submitted by the PNB further affirmed the actual amount seized by Carlos, an amount
which could not have been acquired had it not been for the writ of preliminary attachment which was
wrongfully issued.

Carlos lamely argues in his petition that there was no concrete or supporting evidence to justify the
amount of actual damages, a claim that is belied by the official case records. The more substantive
argument is presented by SIDDCOR, which submits that any damages that may be awarded to
respondents can include only those that were incurred, if any, during the pendency of the appeal. But
this contention is belied by Section 4, Rule 57 of the 1997 Rules of Civil Procedure, which provides that
the bond issued for preliminary attachment is conditioned that the applicant “will pay all the costs which
may be adjudged to the adverse party and all damages which he may sustain by reason of the
attachment, if the court shall finally adjudge that the applicant was not entitled thereto.”
[62]


The case Paramount Insurance Corp. v. Court of Appeals
[63]
is instructive. It discusses the scope of the
bond executed by upon an application for preliminary injunction,
[64]
which similarly covers “all damages
which [may be] sustain[ed] by reason of the injunction or temporary restraining order if the court should
finally decide that the applicant was not entitled thereto.”
[65]
The surety in that case claimed that it could
be liable “only to the amount of damages accruing from the time the injunction bond was issued until the
termination of the case, and not from the time the suit was commenced.”
[66]
In rebutting this claim, the
Court ruled:


. . . . Rule 58, Section 4(b), provides that a bond is executed in favor of the party enjoined
to answer for all damages which he may sustain by reason of the injunction. This Court
already had occasion to rule on this matter in Mendoza v. Cruz, where it held that "(t)he
injunction bond is intended as a security for damages in case it is finally decided that the
injunction ought not to have been granted. It is designed to cover all damages which the
party enjoined can possibly suffer. Its principal purpose is to protect the enjoined party
against loss or damage by reason of an injunction." No distinction was made as to when
the damages should have been incurred.
[67]



Our ruling in Philippine Charter Insurance Corp. v. Court of Appeals, relied upon by the Court of
Appeals, squarely applies to this case:

Under the circumstances, too, there can be no gainsaying the surety’s full
awareness of its undertakings under its bond: that, as the law puts it: "the plaintiff will pay
all costs which may be adjudged to the defendant(s), and all damages which may be
sustained by reason of the attachment, if the same shall finally be adjudged to have been
wrongful and without cause," and that those damages plainly comprehended not only
those sustained during the trial of the action but also those during the pendency of the
appeal. This is the law, and this is how the surety's liability should be understood. The
surety's liability may be enforced whether the application for damages for wrongful
attachment be submitted in the original proceedings before the Trial Court, or on appeal,
so long as the judgment has not become executory. The surety's liability is not and cannot
be limited to the damages caused by the improper attachment only during the pendency
of the appeal. That would be absurd. The plain and patent intendment of the law is that
the surety shall answer for all damages that the party may suffer as a result of the illicit
attachment, for all the time that the attachment was in force; from levy to dissolution. . .
.

The fact that the second paragraph of the rule speaks only of "damages
sustained during the pendency of the appeal" is of no moment; it obviously proceeds
from the assumption in the first paragraph that the award for the damages suffered
during the pendency of the case in the trial court was in fact "included in the final
judgment" (or applied for therein before the appeal was perfected or the judgment
became executory); hence, it states that the damages additionally suffered thereafter, i.e.,
during the pendency of the appeal, should be claimed before the judgment of the
appellate tribunal becomes executory. It however bears repeating that where. as in the
case at bar, the judgment of the Trial Court has expressly or impliedly sustained the
attachment and thus has given rise to no occasion to speak of, much less, file an
application for damages for wrongful attachment, and it is only in the decision of the
Court of Appeals that the attachment is declared wrongful and that the applicant "was
not entitled thereto," the rule is, as it should be, that it is entirely proper at this time for
the application for damages for such wrongful attachment to be filed—i.e., for all
the damages sustained thereby, during all the time that it was in force, not only
during the pendency of the appeal. . . .
[68]



The rule is thus well-settled that the bond issued upon an application for preliminary
attachment answers for all damages, incurred at whatever stage, which are sustained by reason of the
attachment. The award of actual damages by the Court of Appeals is thus proper in amount. However, we
disagree that the rate of legal interest be counted from the date of the “unlawful garnishment,” or on 27
June 1996. Properly, interest should start to accrue only from the moment it had been finally determined
that the attachment was unlawful, since it is on that basis that the right to damages comes to existence.
In this case, legal interest commences from the date the Court of Appeals decision in CA-G.R. SP No.
39267 became final, by reason of its affirmation by this Court.

The award of attorney’s fees in the amount of P1,000,000.00 is also questioned before this Court,
considering that the Court of Appeals did not award moral or exemplary damages. The general rule may
be that an award of attorney’s fees should be deleted where the award of moral and exemplary damages
are eliminated.
[69]
Nonetheless, attorney’s fees may be awarded under the Civil Code where the court
deems it just and equitable that attorney’s fees and expenses of litigation should be recovered,
[70]
even if
moral and exemplary damages are unavailing.
[71]


Particularly, the Court has recognized as just and equitable that attorney's fees be awarded when a
party is compelled to incur expenses to lift a wrongfully issued writ of attachment.
[72]
The amount of
money garnished, and the length of time respondents have been deprived from use of their money by
reason of the wrongful attachment, all militate towards a finding that attorney’s fees are just and
equitable under the circumstances. However, we deem the amount of P1,000,000.00 as excessive, and
modify the award of attorney’s fees to P500,000.00 which represents merely approximately three
percent of the actual damages suffered by and awarded to respondents. We also delete the imposition of
legal interest made by the Court of Appeals on the awarded attorney’s fees.

Other Issues Raised in G.R. No. 135830

The issues raised in G.R. No. 136035 have been dispensed with, and the remaining issues in G.R. No.
135830 are relatively minor. There is no need to dwell at length on them.

Carlos insists that respondents were liable to have paid docket fees upon filing of their Motion for
Judgment on Attachment Bond, on the theory that they claimed therein for the first time the alleged
damages resulting from the dissolved attachment. The said motion is characterized as an initiatory
proceeding because it is claimed therein for the first time, the damages arising from the attachment. In
the same vein, Carlos argues that the absence of a certification against forum-shopping attached to the
motion renders the said motion as fatal. Again, it is pointed out that initiatory pleadings must contain the
said certification against forum-shopping.

Our ruling in Santo Tomas University Hospital v. Surla
[73]
is instructive. It was argued therein that the
requirement of the certification against forum-shopping, as contained in Administrative Circular No. 04-
94,
[74]
covered compulsory counterclaims. The Court ruled otherwise:

It bears stressing, once again, that the real office of Administrative Circular No.
04-94, made effective on 01 April 1994, is to curb the malpractice commonly referred to
also as forum-shopping. . . . The language of the circular distinctly suggests that it is
primarily intended to cover an initiatory pleading or an incipient application of a party
asserting a claim for relief.

It should not be too difficult, the foregoing rationale of the circular aptly
taken, to sustain the view that the circular in question has not, in fact, been
contemplated to include a kind of claim which, by its very nature as being auxiliary to
the proceeding in the suit and as deriving its substantive and jurisdictional support
therefrom, can only be appropriately pleaded in the answer and not remain
outstanding for independent resolution except by the court where the main case
pends. Prescinding from the foregoing, the proviso in the second paragraph of Section 5,
Rule 8, of the 1997 Rules of Civil Procedure, i.e., that the violation of the anti-forum
shopping rule "shall not be curable by mere amendment . . . but shall be cause for the
dismissal of the case without prejudice," being predicated on the applicability of the
need for a certification against forum shopping, obviously does not include a claim
which cannot be independently set up.
[75]
(Emphasis supplied.)

It is clear that under Section 20, Rule 57, the application for damages on the attachment bond cannot
be independently set up, but must be filed in the main case, before the judgment therein becomes final
and executory. Santo Tomas squarely applies in determining that no certification against forum-shopping
was required in the Motion for Judgment on the Attachment Bond. The same reasoning also sustains a
ruling that neither legal fees were required for the filing of the said motion. Section 1, Rule 141 of the
Rules of Court provides that legal fees are prescribed upon the filing of the pleading or other application
which initiates an action or proceeding.
[76]
Since the said application for judgment on the attachment
bond cannot be considered as an initiatory pleading, as it cannot be independently set up from the main
action, it is not likewise chargeable with legal fees.

As to the issue relating to the other Resolution dated 26 June 1998 denying the motion to dismiss
appeal on the ground of forum-shopping, we find Carlos’s arguments as unmeritorious. Forum-shopping
allegedly existed because petitioners had filed two cases before the Court of Appeals, CA-G.R. CV No.
53229, and the Petition for Certiorari with Temporary Restraining Order dated 2 June 1996 attacking the
allowance of execution pending appeal. Evidently, the two causes of action in these two petitions are
different, CA-G.R. CV No. 53229 being an appeal from the Summary Judgment rendered by the RTC, and
the second petition assailing the subsequent allowance by the RTC of execution pending appeal. There is
no identity between these two causes of action that would warrant a finding of forum-shopping.

Issues Raised in G.R. No. 137743

To recount, respondents, having obtained a favorable decision on their Motion for Judgment on the
Attachment Bond, filed a Motion for Immediate Execution of the award of damages. This was granted by
the Court of Appeals in its Resolution dated 16 October 1998, said resolution now specifically assailed by
SIDDCOR in G.R. No. 137743.

In their Motion for Immediate Execution, respondents’ theory in seeking the immediate execution of
the award of damages was that said award was not subject to appeal, the ruling thereupon being an
interlocutory order.
[77]
This position was not adopted by the Court of Appeals in its 16 October 1998
Resolution, which was otherwise favorably disposed to respondents. Instead, the Court of Appeals
predicated the immediate execution on the following grounds: (1) that the judicial finding that the writ of
preliminary attachment was wrongful was already final and beyond review; (2) there were no material
and substantial defenses against the motion for the issuance of the judgment bond; (3) Sandoval was
elderly and sickly, without means of livelihood and may not be able to enjoy the fruits of the judgment on
the attachment bond; (4) that immediate execution would end her suffering caused by the arbitrary
garnishment of her PNB account.

There is no doubt that a judgment on the attachment bond is a final and appealable order. As stated
earlier, it is, under normal course, included in the main judgment, which in turn is final and appealable.
Respondents admit that they had erred in earlier characterizing the said judgment as an interlocutory
order. Still, SIDDCOR argues that such earlier error is fatal, and that the Court of Appeals abused its
discretion in ruling on the motion on a theory different from that urged on by respondents.

By no means could respondents be deemed as estopped from changing their legal theory, since the
rule on estoppel applies to questions of fact and not questions of law.
[78]
Moreover, courts are
empowered to decide cases even if the parties raise legal rationales other than that which would actually
apply in the case. The basis of whether respondents are entitled to immediate execution arises from law,
particularly Section 2(a), Rule 39 of the Rules of Court, and not solely on whatever allegations may be
raised by the movant.

Thus, we find no grave abuse of discretion on the part of the Court of Appeals, even though it
allowed execution pending appeal on a legal basis different from that originally adduced by respondents.
After all, the reasoning ultimately employed by the appellate court is correct, and it hardly would be
judicious to require the lower court to adhere to the movant’s erroneous ratiocination and preclude the
proper application of the law.

We need not review in length the justification of the Court of Appeals in allowing execution pending
appeal. The standard set under Section 2(a), Rule 39 merely requires “good reasons,” a “special order,”
and “due hearing.” Due hearing would not require a hearing in open court, but simply the right to be
heard, which SIDDCOR availed of when it filed its opposition to the motion for immediate execution. The
Resolution dated 16 October 1998 satisfies the “special order” requirement, and it does enumerate at
length the “good reasons” for allowing execution pending appeal. As to the appreciation of “good
reasons,” we simply note that the advanced age alone of Sandoval would have sufficiently justified
execution pending appeal, pursuant to the well-settled jurisprudential rule.
[79]
The wrongfulness of the
attachment, and the length of time respondents have been deprived of their money by reason of the
wrongful attachment further justifies execution pending appeal under these circumstances.

WHEREFORE, the petitions are DISMISSED. The Temporary Restraining Order issued in the Resolution
dated 9 June 1999 is hereby LIFTED. The assailed Resolution of the Court of Appeals Special Fourth
Division dated 26 June 1998 is AFFIRMED with the MODIFICATIONS that the legal interest on the award of
actual damages should commence from the date of the finality of the Decision of the Court of Appeals in
CA G.R. SP No. 39267 and that the award of attorney’s fees is in the amount of P500,000. Costs against
petitioners.

SO ORDERED.

CHENG vs SY
NACHURA, J.:
This is a petition
1
for review on certiorari under Rule 45 of the Rules of Court of the Order dated
January 2, 2006
2
of the Regional Trial Court (RTC), Branch 18, Manila in Civil Case No. 05-112452 entitled
Anita Cheng v. Spouses William Sy and Tessie Sy.

The antecedents are as follows—

Petitioner Anita Cheng filed two (2) estafa cases before the RTC, Branch 7, Manila against
respondent spouses William and Tessie Sy (Criminal Case No. 98-969952 against Tessie Sy and Criminal
Case No. 98-969953 against William Sy) for issuing to her Philippine Bank of Commerce (PBC) Check Nos.
171762 and 71860 for P300,000.00 each, in payment of their loan, both of which were dishonored upon
presentment for having been drawn against a closed account.

Meanwhile, based on the same facts, petitioner, on January 20, 1999, filed against respondents
two (2) cases for violation of Batas Pambansa Bilang (BP Blg.) 22 before the Metropolitan Trial Court
(MeTC), Branch 25, Manila (Criminal Case Nos. 341458-59).

On March 16, 2004, the RTC, Branch 7, Manila dismissed the estafa cases for failure of the
prosecution to prove the elements of the crime. The Order dismissing Criminal Case No. 98-969952
contained no declaration as to the civil liability of Tessie Sy.
3
On the other hand, the Order in Criminal
Case No. 98-969953 contained a statement, “Hence, if there is any liability of the accused, the same is
purely ‘civil,’ not criminal in nature.”
4


Later, the MeTC, Branch 25, Manila, dismissed, on demurrer, the BP Blg. 22 cases in its Order
5

dated February 7, 2005 on account of the failure of petitioner to identify the accused respondents in
open court. The Order also did not make any pronouncement as to the civil liability of accused
respondents.

On April 26, 2005, petitioner lodged against respondents before the RTC, Branch 18, Manila, a
complaint
6
for collection of a sum of money with damages (Civil Case No. 05-112452) based on the same
loaned amount of P600,000.00 covered by the two PBC checks previously subject of the estafa and BP
Blg. 22 cases.

1
Rollo, pp. 3-19.
2
Id. at 22-27.
3
Id. at 45-47.
4
Id. at 48-50.
5
Id. at 42-44.
6
Id. at 51-53.

In the assailed Order
7
dated January 2, 2006, the RTC, Branch 18, Manila, dismissed the
complaint for lack of jurisdiction, ratiocinating that the civil action to collect the amount of P600,000.00
with damages was already impliedly instituted in the BP Blg. 22 cases in light of Section 1, paragraph (b)
of Rule 111 of the Revised Rules of Court.

Petitioner filed a motion for reconsideration
8
which the court denied in its Order
9
dated June 5,
2006. Hence, this petition, raising the sole legal issue –

Whether or not Section 1 of Rule 111 of the 2000 Rules of Criminal
Procedure and Supreme Court Circular No. 57-97 on the Rules and Guidelines in the
filing and prosecution of criminal cases under BP Blg. 22 are applicable to the present
case where the nature of the order dismissing the cases for bouncing checks against
the respondents was [based] on the failure of the prosecution to identify both the
accused (respondents herein)?
10



Essentially, petitioner argues that since the BP Blg. 22 cases were filed on January 20, 1999, the
2000 Revised Rules on Criminal Procedure promulgated on December 1, 2000 should not apply, as it must
be given only prospective application. She further contends that that her case falls within the following
exceptions to the rule that the civil action correspondent to the criminal action is deemed instituted with
the latter—

(1) additional evidence as to the identities of the accused is necessary for the
resolution of the civil aspect of the case;

(2) a separate complaint would be just as efficacious as or even more expedient
than a timely remand to the trial court where the criminal action was
decided for further hearings on the civil aspect of the case;

(3) the trial court failed to make any pronouncement as to the civil liability of
the accused amounting to a reservation of the right to have the civil liability
litigated in a separate action;

(4) the trial court did not declare that the facts from which the civil liability
might arise did not exist;

(5) the civil complaint is based on an obligation ex-contractu and not ex-delicto
pursuant to Article 31
11
of the Civil Code; and

7
Supra note 2.
8
Rollo, pp. 28-38.
9
Id. at 41.
10
Id. at 6.
11
Art. 31. When the civil action is based on an obligation not arising
from the act or omission complained of as a felony, such civil action may

(6) the claim for civil liability for damages may be had under Article 29
12
of the
Civil Code.

Petitioner also points out that she was not assisted by any private prosecutor in the BP Blg. 22
proceedings.

The rule is that upon the filing of the estafa and BP Blg. 22 cases against respondents, where
the petitioner has not made any waiver, express reservation to litigate separately, or has not instituted
the corresponding civil action to collect the amount of P600,000.00 and damages prior to the criminal
action, the civil action is deemed instituted with the criminal cases.
13


proceed independently of the criminal proceedings and regardless of the result
of the latter.
12
Art. 29. When the accused in a criminal prosecution is acquitted on
the ground that his guilt has not been proved beyond reasonable doubt, a civil
action for damages for the same act or omission may be instituted. Such
action requires only a preponderance of evidence. Upon motion of the
defendant, the court may require the plaintiff to file a bond to answer for
damages in case the complaint should be found to be malicious.
13
Section 1. Institution of criminal and civil actions. – When a
criminal action is instituted, the civil action for the recovery of civil liability is
impliedly instituted with the criminal action, unless the offended party waives
the civil action, reserves his right to institute it separately, or institutes the civil
action prior to the criminal action.
Such civil action includes recovery of indemnity under the Revised
Penal Code, and damages under Articles 32, 33, 34 and 2176 of the Civil Code
of the Philippines arising from the same act or omission of the accused.
A waiver of any of the civil actions extinguishes the others. The
institution of, or the reservation of the right to file, any of said civil actions
separately waives the others.
The reservation of the right to institute the separate civil actions shall
be made before the prosecution starts to present its evidence and under
circumstances affording the offended party a reasonable opportunity to make
such reservation.
In no case may the offended party recover damages twice for the same
act or omission of the accused.
When the offended party seeks to enforce civil liability against the
accused by way of moral, nominal, temperate or exemplary damages, the filing
fees for such civil action as provided in these Rules shall constitute a first lien
on the judgment except in an award for actual damages.
In cases wherein the amount of damages, other than actual, is alleged
in the complaint or information, the corresponding filing fees shall be paid by

This rule applies especially with the advent of the 2000 Revised Rules on Criminal Procedure.
Thus, during the pendency of both the estafa and the BP Blg. 22 cases, the action to recover the civil
liability was impliedly instituted and remained pending before the respective trial courts. This is
consonant with our ruling in Rodriguez v. Ponferrada
14
that the possible single civil liability arising from
the act of issuing a bouncing check can be the subject of both civil actions deemed instituted with the
estafa case and the prosecution for violation of BP Blg. 22, simultaneously available to the complaining
party, without traversing the prohibition against forum shopping.
15
Prior to the judgment in either the
estafa case or the BP Blg. 22 case, petitioner, as the complainant, cannot be deemed to have elected
either of the civil actions both impliedly instituted in the said criminal proceedings to the exclusion of the
other.
16

The dismissal of the estafa cases for failure of the prosecution to prove the elements of the
crime beyond reasonable doubt—where in Criminal Case No. 98-969952 there was no pronouncement as
regards the civil liability of the accused and in Criminal Case No. 98-969953 where the trial court declared
that the liability of the accused was only civil in nature—produced the legal effect of a reservation by the
petitioner of her right to litigate separately the civil action impliedly instituted with the estafa cases,
following Article 29 of the Civil Code.
17


However, although this civil action could have been litigated separately on account of the
dismissal of the estafa cases on reasonable doubt, the petitioner was deemed to have also elected that
such civil action be prosecuted together with the BP Blg. 22 cases in light of the Rodriguez v. Ponferrada
ruling.

With the dismissal of the BP Blg. 22 cases for failure to establish the identity of the accused, the
question that arises is whether such dismissal would have the same legal effect as the dismissed estafa
cases. Put differently, may petitioner’s action to recover respondents’ civil liability be also allowed to
prosper separately after the BP Blg. 22 cases were dismissed?

Section 1 (b), Rule 111 of the 2000 Revised Rules on Criminal Procedure states –

Section 1. Institution of criminal and civil actions. –

x x x

(b) The criminal action for violation of Batas Pambansa Blg. 22 shall be
deemed to include the corresponding civil action. No reservation to file such civil
action separately shall be allowed.

the offended party upon the filing thereof in court for trial. (Rule 111, 1988
Rules on Criminal Procedure)
14
G.R. Nos. 155531-34, July 29, 2005, 465 SCRA 338.
15
Rodriguez v. Ponferrada, id. at 350.
16
Ibid.
17
Jarantilla v. Court of Appeals, 253 Phil. 425, 433 (1989), citing
Bernaldes, Jr. v. Bohol Land Transportation, Inc., 117 Phil. 288, 291-292 (1963)
and Bachrach Motors Co. v. Gamboa, 101 Phil. 1219 (1957).

Upon filing of the joint criminal and civil actions, the offended party shall
pay in full the filing fees based on the amount of the check involved, which shall be
considered as the actual damages claimed. Where the complaint or information also
seeks to recover liquidated, moral, nominal, temperate or exemplary damages, the
offended party shall pay the filing fees based on the amounts alleged therein. If the
amounts are not so alleged but any of these damages [is] subsequently awarded by
the court, the filing fees based on the amount awarded shall constitute a first lien on
the judgment.

Where the civil action has been filed separately and trial thereof has not yet
commenced, it may be consolidated with the criminal action upon application with
the court trying the latter case. If the application is granted, the trial of both actions
shall proceed in accordance with section 2 of this Rule governing consolidation of the
civil and criminal actions.


Petitioner is in error when she insists that the 2000 Rules on Criminal Procedure should not
apply because she filed her BP Blg. 22 complaints in 1999. It is now settled that rules of procedure apply
even to cases already pending at the time of their promulgation. The fact that procedural statutes may
somehow affect the litigants’ rights does not preclude their retroactive application to pending actions. It
is axiomatic that the retroactive application of procedural laws does not violate any right of a person who
may feel that he is adversely affected, nor is it constitutionally objectionable. The reason for this is that,
as a general rule, no vested right may attach to, nor arise from, procedural laws.
18


Indeed, under the present revised Rules, the criminal action for violation of BP Blg. 22 includes
the corresponding civil action to recover the amount of the checks. It should be stressed, this policy is
intended to discourage the separate filing of the civil action. In fact, the Rules even prohibits the
reservation of a separate civil action, i.e., one can no longer file a separate civil case after the criminal
complaint is filed in court. The only instance when separate proceedings are allowed is when the civil
action is filed ahead of the criminal case. Even then, the Rules encourages the consolidation of the civil
and criminal cases. Thus, where petitioner’s rights may be fully adjudicated in the proceedings before the
court trying the BP Blg. 22 cases, resort to a separate action to recover civil liability is clearly unwarranted
on account of res judicata, for failure of petitioner to appeal the civil aspect of the cases. In view of this
special rule governing actions for violation of BP Blg. 22, Article 31 of the Civil Code is not applicable.
19


Be it remembered that rules governing procedure before the courts, while not cast in stone, are
for the speedy, efficient, and orderly dispensation of justice and should therefore be adhered to in order
to attain this objective.
20



18
Tan, Jr. v. Court of Appeals, 424 Phil. 556, 559 (2002).
19
Hyatt Industrial Manufacturing Corp. v. Asia Dynamic Electrix Corp.,
G.R. No. 163597, July 29, 2005, 465 SCRA 454, 461-462.
20
Id.
However, in applying the procedure discussed above, it appears that petitioner would be left
without a remedy to recover from respondents the P600,000.00 allegedly loaned from her. This could
prejudice even the petitioner’s Notice of Claim involving the same amount filed in Special Proceedings
No. 98-88390 (Petition for Voluntary Insolvency by Kolin Enterprises, William Sy and Tessie Sy), which case
was reportedly archived for failure to prosecute the petition for an unreasonable length of time.
21

Expectedly, respondents would raise the same defense that petitioner had already elected to litigate the
civil action to recover the amount of the checks along with the BP Blg. 22 cases.

It is in this light that we find petitioner’s contention that she was not assisted by a private
prosecutor during the BP Blg. 22 proceedings critical. Petitioner indirectly protests that the public
prosecutor failed to protect and prosecute her cause when he failed to have her establish the identities of
the accused during the trial and when he failed to appeal the civil action deemed impliedly instituted with
the BP Blg. 22 cases. On this ground, we agree with petitioner.

Faced with the dismissal of the BP Blg. 22 cases, petitioner’s recourse pursuant to the prevailing
rules of procedure would have been to appeal the civil action to recover the amount loaned to
respondents corresponding to the bounced checks. Hence, the said civil action may proceed requiring
only a preponderance of evidence on the part of petitioner. Her failure to appeal within the
reglementary period was tantamount to a waiver altogether of the remedy to recover the civil liability of
respondents. However, due to the gross mistake of the prosecutor in the BP Blg. 22 cases, we are
constrained to digress from this rule.

It is true that clients are bound by the mistakes, negligence and omission of their counsel.
22
But
this rule admits of exceptions – (1) where the counsel’s mistake is so great and serious that the client is
prejudiced and denied his day in court, or (2) where the counsel is guilty of gross negligence resulting in
the client’s deprivation of liberty or property without due process of law.
23
Tested against these
guidelines, we hold that petitioner’s lot falls within the exceptions.

It is an oft-repeated exhortation to counsels to be well-informed of existing laws and rules and
to keep abreast with legal developments, recent enactments and jurisprudence. Unless they faithfully
comply with such duty, they may not be able to discharge competently and diligently their obligations as
members of the Bar.
24
Further, lawyers in the government service are expected to be more conscientious
in the performance of their duties as they are subject to public scrutiny. They are not only members of
the Bar but are also public servants who owe utmost fidelity to public service.
25
Apparently, the public
prosecutor neglected to equip himself with the knowledge of the proper procedure for BP Blg. 22 cases
under the 2000 Rules on Criminal Procedure such that he failed to appeal the civil action impliedly
instituted with the BP Blg. 22 cases, the only remaining remedy available to petitioner to be able to

21
Rollo, p. 23.
22
Lynx Industries Contractor, Inc. v. Tala, G.R. No. 164333, August 24,
2007, 531 SCRA 169, 176.
23
Ceniza-Manantan v. People, G.R. No. 156248, August 28, 2007, 531
SCRA 364, 380.
24
Santiago v. Atty. Rafanan, 483 Phil. 94, 105 (2004).
25
Ramos v. Imbang, A.C. No. 6788, August 23, 2007, 530 SCRA 759,
768.
recover the money she loaned to respondents, upon the dismissal of the criminal cases on demurrer. By
this failure, petitioner was denied her day in court to prosecute the respondents for their obligation to
pay their loan.

Moreover, we take into consideration the trial court’s observation when it dismissed the estafa
charge in Criminal Case No. 98-969953 that if there was any liability on the part of respondents, it was
civil in nature. Hence, if the loan be proven true, the inability of petitioner to recover the loaned amount
would be tantamount to unjust enrichment of respondents, as they may now conveniently evade
payment of their obligation merely on account of a technicality applied against petitioner.

There is unjust enrichment when (1) a person is unjustly benefited, and (2) such benefit is
derived at the expense of or with damages to another. This doctrine simply means that a person shall not
be allowed to profit or enrich himself inequitably at another’s expense. One condition for invoking this
principle of unjust enrichment is that the aggrieved party has no other recourse based on contract, quasi-
contract, crime, quasi-delict or any other provision of law.
26


Court litigations are primarily designed to search for the truth, and a liberal interpretation and
application of the rules which will give the parties the fullest opportunity to adduce proof is the best way
to ferret out the truth. The dispensation of justice and vindication of legitimate grievances should not be
barred by technicalities.
27
For reasons of substantial justice and equity, as the complement of the legal
jurisdiction that seeks to dispense justice where courts of law, through the inflexibility of their rules and
want of power to adapt their judgments to the special circumstances of cases, are incompetent to do
so,
28
we thus rule, pro hac vice, in favor of petitioner.

WHEREFORE, the petition is GRANTED. Civil Case No. 05-112452 entitled Anita Cheng v.
Spouses William Sy and Tessie Sy is hereby ordered REINSTATED. No pronouncement as to costs.

SO ORDERED.



26
Chieng v. Santos, G.R. No. 169647, August 31, 2007, 531 SCRA 730,
747-748.
27
LCK Industries, Inc. v. Planters Development Bank, G.R. No. 170606,
November 23, 2007, 538 SCRA 634, 653.
28
Id. at 652.









ALICE REYES VAN DORN, petitioner, vs. HON. MANUEL V. ROMILLO, JR., as Presiding Judge of Branch
CX, Regional Trial Court of the National Capital Region Pasay City and RICHARD UPTON respondents.
MELENCIO-HERRERA, J.:\
In this Petition for certiorari and Prohibition, petitioner Alice Reyes Van Dorn seeks to set aside the
Orders, dated September 15, 1983 and August 3, 1984, in Civil Case No. 1075-P, issued by respondent
Judge, which denied her Motion to Dismiss said case, and her Motion for Reconsideration of the Dismissal
Order, respectively.
The basic background facts are that petitioner is a citizen of the Philippines while private respondent is a
citizen of the United States; that they were married in Hongkong in 1972; that, after the marriage, they
established their residence in the Philippines; that they begot two children born on April 4, 1973 and
December 18, 1975, respectively; that the parties were divorced in Nevada, United States, in 1982; and
that petitioner has re-married also in Nevada, this time to Theodore Van Dorn.
Dated June 8, 1983, private respondent filed suit against petitioner in Civil Case No. 1075-P of the
Regional Trial Court, Branch CXV, in Pasay City, stating that petitioner's business in Ermita, Manila, (the
Galleon Shop, for short), is conjugal property of the parties, and asking that petitioner be ordered to
render an accounting of that business, and that private respondent be declared with right to manage the
conjugal property. Petitioner moved to dismiss the case on the ground that the cause of action is barred
by previous judgment in the divorce proceedings before the Nevada Court wherein respondent had
acknowledged that he and petitioner had "no community property" as of June 11, 1982. The Court below
denied the Motion to Dismiss in the mentioned case on the ground that the property involved is located
in the Philippines so that the Divorce Decree has no bearing in the case. The denial is now the subject of
this certiorari proceeding.
Generally, the denial of a Motion to Dismiss in a civil case is interlocutory and is not subject to appeal.
certiorari and Prohibition are neither the remedies to question the propriety of an interlocutory order of
the trial Court. However, when a grave abuse of discretion was patently committed, or the lower Court
acted capriciously and whimsically, then it devolves upon this Court in a certiorari proceeding to exercise
its supervisory authority and to correct the error committed which, in such a case, is equivalent to lack of
jurisdiction. 1 Prohibition would then lie since it would be useless and a waste of time to go ahead with
the proceedings. 2 Weconsider the petition filed in this case within the exception, and we have given it
due course.
For resolution is the effect of the foreign divorce on the parties and their alleged conjugal property in the
Philippines. Petitioner contends that respondent is estopped from laying claim on the alleged conjugal
property because of the representation he made in the divorce proceedings before the American Court
that they had no community of property; that the Galleon Shop was not established through conjugal
funds, and that respondent's claim is barred by prior judgment.
For his part, respondent avers that the Divorce Decree issued by the Nevada Court cannot prevail over
the prohibitive laws of the Philippines and its declared national policy; that the acts and declaration of a
foreign Court cannot, especially if the same is contrary to public policy, divest Philippine Courts of
jurisdiction to entertain matters within its jurisdiction.
For the resolution of this case, it is not necessary to determine whether the property relations between
petitioner and private respondent, after their marriage, were upon absolute or relative community
property, upon complete separation of property, or upon any other regime. The pivotal fact in this case is
the Nevada divorce of the parties.
The Nevada District Court, which decreed the divorce, had obtained jurisdiction over petitioner who
appeared in person before the Court during the trial of the case. It also obtained jurisdiction over private
respondent who, giving his address as No. 381 Bush Street, San Francisco, California, authorized his
attorneys in the divorce case, Karp & Gradt Ltd., to agree to the divorce on the ground of incompatibility
in the understanding that there were neither community property nor community obligations. 3 As
explicitly stated in the Power of Attorney he executed in favor of the law firm of KARP & GRAD LTD., 336
W. Liberty, Reno, Nevada, to represent him in the divorce proceedings:
xxx xxx xxx
You are hereby authorized to accept service of Summons, to file an Answer, appear on my behalf and do
an things necessary and proper to represent me, without further contesting, subject to the following:
1. That my spouse seeks a divorce on the ground of incompatibility.
2. That there is no community of property to be adjudicated by the Court.
3. 'I'hat there are no community obligations to be adjudicated by the court.
xxx xxx xxx 4
There can be no question as to the validity of that Nevada divorce in any of the States of the United
States. The decree is binding on private respondent as an American citizen. For instance, private
respondent cannot sue petitioner, as her husband, in any State of the Union. What he is contending in
this case is that the divorce is not valid and binding in this jurisdiction, the same being contrary to local
law and public policy.
It is true that owing to the nationality principle embodied in Article 15 of the Civil Code, 5 only Philippine
nationals are covered by the policy against absolute divorces the same being considered contrary to our
concept of public police and morality. However, aliens may obtain divorces abroad, which may be
recognized in the Philippines, provided they are valid according to their national law. 6 In this case, the
divorce in Nevada released private respondent from the marriage from the standards of American law,
under which divorce dissolves the marriage. As stated by the Federal Supreme Court of the United States
in Atherton vs. Atherton, 45 L. Ed. 794, 799: The purpose and effect of a decree of divorce from the bond
of matrimony by a court of competent jurisdiction are to change the existing status or domestic relation
of husband and wife, and to free them both from the bond. The marriage tie when thus severed as to one
party, ceases to bind either. A husband without a wife, or a wife without a husband, is unknown to the
law. When the law provides, in the nature of a penalty. that the guilty party shall not marry again, that
party, as well as the other, is still absolutely freed from the bond of the former marriage.
Thus, pursuant to his national law, private respondent is no longer the husband of petitioner. He would
have no standing to sue in the case below as petitioner's husband entitled to exercise control over
conjugal assets. As he is bound by the Decision of his own country's Court, which validly exercised
jurisdiction over him, and whose decision he does not repudiate, he is estopped by his own
representation before said Court from asserting his right over the alleged conjugal property.
To maintain, as private respondent does, that, under our laws, petitioner has to be considered still
married to private respondent and still subject to a wife's obligations under Article 109, et. seq. of the
Civil Code cannot be just. Petitioner should not be obliged to live together with, observe respect and
fidelity, and render support to private respondent. The latter should not continue to be one of her heirs
with possible rights to conjugal property. She should not be discriminated against in her own country if
the ends of justice are to be served.
WHEREFORE, the Petition is granted, and respondent Judge is hereby ordered to dismiss the Complaint
filed in Civil Case No. 1075-P of his Court.
Without costs.
SO ORDERED.

IMELDA MANALAYSAY PILAPIL, petitioner,
vs.
HON. CORONA IBAY-SOMERA, in her capacity as Presiding Judge of the Regional Trial Court of Manila,
Branch XXVI; HON. LUIS C. VICTOR, in his capacity as the City Fiscal of Manila; and ERICH EKKEHARD
GEILING, respondents.

REGALADO, J.:
An ill-starred marriage of a Filipina and a foreigner which ended in a foreign absolute divorce, only to be
followed by a criminal infidelity suit of the latter against the former, provides Us the opportunity to lay
down a decisional rule on what hitherto appears to be an unresolved jurisdictional question.
On September 7, 1979, petitioner Imelda Manalaysay Pilapil, a Filipino citizen, and private respondent
Erich Ekkehard Geiling, a German national, were married before the Registrar of Births, Marriages and
Deaths at Friedensweiler in the Federal Republic of Germany. The marriage started auspiciously enough,
and the couple lived together for some time in Malate, Manila where their only child, Isabella Pilapil
Geiling, was born on April 20, 1980.
1

Thereafter, marital discord set in, with mutual recriminations between the spouses, followed by a
separation de facto between them.
After about three and a half years of marriage, such connubial disharmony eventuated in private
respondent initiating a divorce proceeding against petitioner in Germany before the Schoneberg Local
Court in January, 1983. He claimed that there was failure of their marriage and that they had been living
apart since April, 1982.
2

Petitioner, on the other hand, filed an action for legal separation, support and separation of property
before the Regional Trial Court of Manila, Branch XXXII, on January 23, 1983 where the same is still
pending as Civil Case No. 83-15866.
3

On January 15, 1986, Division 20 of the Schoneberg Local Court, Federal Republic of Germany,
promulgated a decree of divorce on the ground of failure of marriage of the spouses. The custody of the
child was granted to petitioner. The records show that under German law said court was locally and
internationally competent for the divorce proceeding and that the dissolution of said marriage was legally
founded on and authorized by the applicable law of that foreign jurisdiction.
4

On June 27, 1986, or more than five months after the issuance of the divorce decree, private respondent
filed two complaints for adultery before the City Fiscal of Manila alleging that, while still married to said
respondent, petitioner "had an affair with a certain William Chia as early as 1982 and with yet another
man named Jesus Chua sometime in 1983". Assistant Fiscal Jacinto A. de los Reyes, Jr., after the
corresponding investigation, recommended the dismissal of the cases on the ground of insufficiency of
evidence.
5
However, upon review, the respondent city fiscal approved a resolution, dated January 8,
1986, directing the filing of two complaints for adultery against the petitioner.
6
The complaints were
accordingly filed and were eventually raffled to two branches of the Regional Trial Court of Manila. The
case entitled "People of the Philippines vs. Imelda Pilapil and William Chia", docketed as Criminal Case No.
87-52435, was assigned to Branch XXVI presided by the respondent judge; while the other case, "People
of the Philippines vs. Imelda Pilapil and James Chua", docketed as Criminal Case No. 87-52434 went to the
sala of Judge Leonardo Cruz, Branch XXV, of the same court.
7

On March 14, 1987, petitioner filed a petition with the Secretary of Justice asking that the aforesaid
resolution of respondent fiscal be set aside and the cases against her be dismissed.
8
A similar petition
was filed by James Chua, her co-accused in Criminal Case No. 87-52434. The Secretary of Justice, through
the Chief State Prosecutor, gave due course to both petitions and directed the respondent city fiscal to
inform the Department of Justice "if the accused have already been arraigned and if not yet arraigned, to
move to defer further proceedings" and to elevate the entire records of both cases to his office for
review.
9

Petitioner thereafter filed a motion in both criminal cases to defer her arraignment and to suspend
further proceedings thereon.
10
As a consequence, Judge Leonardo Cruz suspended proceedings in
Criminal Case No. 87-52434. On the other hand, respondent judge merely reset the date of the
arraignment in Criminal Case No. 87-52435 to April 6, 1987. Before such scheduled date, petitioner
moved for the cancellation of the arraignment and for the suspension of proceedings in said Criminal
Case No. 87-52435 until after the resolution of the petition for review then pending before the Secretary
of Justice.
11
A motion to quash was also filed in the same case on the ground of lack of
jurisdiction,
12
which motion was denied by the respondent judge in an order dated September 8, 1987.
The same order also directed the arraignment of both accused therein, that is, petitioner and William
Chia. The latter entered a plea of not guilty while the petitioner refused to be arraigned. Such refusal of
the petitioner being considered by respondent judge as direct contempt, she and her counsel were fined
and the former was ordered detained until she submitted herself for arraignment.
13
Later, private
respondent entered a plea of not guilty.
14

On October 27, 1987, petitioner filed this special civil action for certiorari and prohibition, with a prayer
for a temporary restraining order, seeking the annulment of the order of the lower court denying her
motion to quash. The petition is anchored on the main ground that the court is without jurisdiction "to
try and decide the charge of adultery, which is a private offense that cannot be prosecuted de officio (sic),
since the purported complainant, a foreigner, does not qualify as an offended spouse having obtained a
final divorce decree under his national law prior to his filing the criminal complaint."
15

On October 21, 1987, this Court issued a temporary restraining order enjoining the respondents from
implementing the aforesaid order of September 8, 1987 and from further proceeding with Criminal Case
No. 87-52435. Subsequently, on March 23, 1988 Secretary of Justice Sedfrey A. Ordoñez acted on the
aforesaid petitions for review and, upholding petitioner's ratiocinations, issued a resolution directing the
respondent city fiscal to move for the dismissal of the complaints against the petitioner.
16

We find this petition meritorious. The writs prayed for shall accordingly issue.
Under Article 344 of the Revised Penal Code,
17
the crime of adultery, as well as four other crimes against
chastity, cannot be prosecuted except upon a sworn written complaint filed by the offended spouse. It
has long since been established, with unwavering consistency, that compliance with this rule is a
jurisdictional, and not merely a formal, requirement.
18
While in point of strict law the jurisdiction of the
court over the offense is vested in it by the Judiciary Law, the requirement for a sworn written complaint
is just as jurisdictional a mandate since it is that complaint which starts the prosecutory proceeding
19
and
without which the court cannot exercise its jurisdiction to try the case.
Now, the law specifically provides that in prosecutions for adultery and concubinage the person who can
legally file the complaint should be the offended spouse, and nobody else. Unlike the offenses of
seduction, abduction, rape and acts of lasciviousness, no provision is made for the prosecution of the
crimes of adultery and concubinage by the parents, grandparents or guardian of the offended party. The
so-called exclusive and successive rule in the prosecution of the first four offenses above mentioned do
not apply to adultery and concubinage. It is significant that while the State, as parens patriae, was added
and vested by the 1985 Rules of Criminal Procedure with the power to initiate the criminal action for a
deceased or incapacitated victim in the aforesaid offenses of seduction, abduction, rape and acts of
lasciviousness, in default of her parents, grandparents or guardian, such amendment did not include the
crimes of adultery and concubinage. In other words, only the offended spouse, and no other, is
authorized by law to initiate the action therefor.
Corollary to such exclusive grant of power to the offended spouse to institute the action, it necessarily
follows that such initiator must have the status, capacity or legal representation to do so at the time of
the filing of the criminal action. This is a familiar and express rule in civil actions; in fact, lack of legal
capacity to sue, as a ground for a motion to dismiss in civil cases, is determined as of the filing of the
complaint or petition.
The absence of an equivalent explicit rule in the prosecution of criminal cases does not mean that the
same requirement and rationale would not apply. Understandably, it may not have been found necessary
since criminal actions are generally and fundamentally commenced by the State, through the People of
the Philippines, the offended party being merely the complaining witness therein. However, in the so-
called "private crimes" or those which cannot be prosecuted de oficio, and the present prosecution for
adultery is of such genre, the offended spouse assumes a more predominant role since the right to
commence the action, or to refrain therefrom, is a matter exclusively within his power and option.
This policy was adopted out of consideration for the aggrieved party who might prefer to suffer the
outrage in silence rather than go through the scandal of a public trial.
20
Hence, as cogently argued by
petitioner, Article 344 of the Revised Penal Code thus presupposes that the marital relationship is still
subsisting at the time of the institution of the criminal action for, adultery. This is a logical consequence
since the raison d'etre of said provision of law would be absent where the supposed offended party had
ceased to be the spouse of the alleged offender at the time of the filing of the criminal case.
21

In these cases, therefore, it is indispensable that the status and capacity of the complainant to commence
the action be definitely established and, as already demonstrated, such status or capacity must
indubitably exist as of the time he initiates the action. It would be absurd if his capacity to bring the
action would be determined by his status before or subsequent to the commencement thereof, where
such capacity or status existed prior to but ceased before, or was acquired subsequent to but did not
exist at the time of, the institution of the case. We would thereby have the anomalous spectacle of a
party bringing suit at the very time when he is without the legal capacity to do so.
To repeat, there does not appear to be any local precedential jurisprudence on the specific issue as to
when precisely the status of a complainant as an offended spouse must exist where a criminal
prosecution can be commenced only by one who in law can be categorized as possessed of such status.
Stated differently and with reference to the present case, the inquiry ;would be whether it is necessary in
the commencement of a criminal action for adultery that the marital bonds between the complainant and
the accused be unsevered and existing at the time of the institution of the action by the former against
the latter.
American jurisprudence, on cases involving statutes in that jurisdiction which are in pari materia with
ours, yields the rule that after a divorce has been decreed, the innocent spouse no longer has the right to
institute proceedings against the offenders where the statute provides that the innocent spouse shall
have the exclusive right to institute a prosecution for adultery. Where, however, proceedings have been
properly commenced, a divorce subsequently granted can have no legal effect on the prosecution of the
criminal proceedings to a conclusion.
22

In the cited Loftus case, the Supreme Court of Iowa held that —
'No prosecution for adultery can be commenced except on the complaint of the
husband or wife.' Section 4932, Code. Though Loftus was husband of defendant when
the offense is said to have been committed, he had ceased to be such when the
prosecution was begun; and appellant insists that his status was not such as to entitle
him to make the complaint. We have repeatedly said that the offense is against the
unoffending spouse, as well as the state, in explaining the reason for this provision in
the statute; and we are of the opinion that the unoffending spouse must be such
when the prosecution is commenced. (Emphasis supplied.)
We see no reason why the same doctrinal rule should not apply in this case and in our jurisdiction,
considering our statutory law and jural policy on the matter. We are convinced that in cases of such
nature, the status of the complainant vis-a-vis the accused must be determined as of the time the
complaint was filed. Thus, the person who initiates the adultery case must be an offended spouse, and by
this is meant that he is still married to the accused spouse, at the time of the filing of the complaint.
In the present case, the fact that private respondent obtained a valid divorce in his country, the Federal
Republic of Germany, is admitted. Said divorce and its legal effects may be recognized in the Philippines
insofar as private respondent is concerned
23
in view of the nationality principle in our civil law on the
matter of status of persons.
Thus, in the recent case of Van Dorn vs. Romillo, Jr., et al.,
24
after a divorce was granted by a United
States court between Alice Van Dornja Filipina, and her American husband, the latter filed a civil case in a
trial court here alleging that her business concern was conjugal property and praying that she be ordered
to render an accounting and that the plaintiff be granted the right to manage the business. Rejecting his
pretensions, this Court perspicuously demonstrated the error of such stance, thus:
There can be no question as to the validity of that Nevada divorce in any of the States
of the United States. The decree is binding on private respondent as an American
citizen. For instance, private respondent cannot sue petitioner, as her husband, in any
State of the Union. ...
It is true that owing to the nationality principle embodied in Article 15 of the Civil
Code, only Philippine nationals are covered by the policy against absolute divorces the
same being considered contrary to our concept of public policy and morality.
However, aliens may obtain divorces abroad, which may be recognized in the
Philippines, provided they are valid according to their national law. ...
Thus, pursuant to his national law, private respondent is no longer the husband of
petitioner. He would have no standing to sue in the case below as petitioner's
husband entitled to exercise control over conjugal assets. ...
25

Under the same considerations and rationale, private respondent, being no longer the husband of
petitioner, had no legal standing to commence the adultery case under the imposture that he was the
offended spouse at the time he filed suit.
The allegation of private respondent that he could not have brought this case before the decree of
divorce for lack of knowledge, even if true, is of no legal significance or consequence in this case. When
said respondent initiated the divorce proceeding, he obviously knew that there would no longer be a
family nor marriage vows to protect once a dissolution of the marriage is decreed. Neither would there
be a danger of introducing spurious heirs into the family, which is said to be one of the reasons for the
particular formulation of our law on adultery,
26
since there would thenceforth be no spousal relationship
to speak of. The severance of the marital bond had the effect of dissociating the former spouses from
each other, hence the actuations of one would not affect or cast obloquy on the other.
The aforecited case of United States vs. Mata cannot be successfully relied upon by private respondent.
In applying Article 433 of the old Penal Code, substantially the same as Article 333 of the Revised Penal
Code, which punished adultery "although the marriage be afterwards declared void", the Court merely
stated that "the lawmakers intended to declare adulterous the infidelity of a married woman to her
marital vows, even though it should be made to appear that she is entitled to have her marriage contract
declared null and void, until and unless she actually secures a formal judicial declaration to that effect".
Definitely, it cannot be logically inferred therefrom that the complaint can still be filed after the
declaration of nullity because such declaration that the marriage is void ab initio is equivalent to stating
that it never existed. There being no marriage from the beginning, any complaint for adultery filed after
said declaration of nullity would no longer have a leg to stand on. Moreover, what was consequently
contemplated and within the purview of the decision in said case is the situation where the criminal
action for adultery was filed before the termination of the marriage by a judicial declaration of its
nullity ab initio. The same rule and requisite would necessarily apply where the termination of the
marriage was effected, as in this case, by a valid foreign divorce.
Private respondent's invocation of Donio-Teves, et al. vs. Vamenta, hereinbefore cited,
27
must suffer the
same fate of inapplicability. A cursory reading of said case reveals that the offended spouse therein had
duly and seasonably filed a complaint for adultery, although an issue was raised as to its sufficiency but
which was resolved in favor of the complainant. Said case did not involve a factual situation akin to the
one at bar or any issue determinative of the controversy herein.
WHEREFORE, the questioned order denying petitioner's motion to quash is SET ASIDE and another one
entered DISMISSING the complaint in Criminal Case No. 87-52435 for lack of jurisdiction. The temporary
restraining order issued in this case on October 21, 1987 is hereby made permanent.
SO ORDERED.
FE D. QUITA, petitioner, vs. COURT OF APPEALS and BLANDINA DANDAN,
*
respondents.
D E C I S I O N
BELLOSILLO, J .:
FE D. QUITA and Arturo T. Padlan, both Filipinos, were married in the Philippines on 18 May
1941. They were not however blessed with children. Somewhere along the way their relationship
soured. Eventually Fe sued Arturo for divorce in San Francisco, California, U.S.A. She submitted in the
divorce proceedings a private writing dated 19 July 1950 evidencing their agreement to live separately
from each other and a settlement of their conjugal properties. On 23 July 1954 she obtained a final
judgment of divorce. Three (3) weeks thereafter she married a certain Felix Tupaz in the same locality
but their relationship also ended in a divorce. Still in the U.S.A., she married for the third time, to a
certain Wernimont.
On 16 April 1972 Arturo died. He left no will. On 31 August 1972 Lino Javier Inciong filed a petition
with the Regional Trial Court of Quezon City for issuance of letters of administration concerning the
estate of Arturo in favor of the Philippine Trust Company. Respondent Blandina Dandan (also referred to
as Blandina Padlan), claiming to be the surviving spouse of Arturo Padlan, and Claro, Alexis, Ricardo,
Emmanuel, Zenaida and Yolanda, all surnamed Padlan, named in the petition as surviving children of
Arturo Padlan, opposed the petition and prayed for the appointment instead of Atty. Leonardo Cabasal,
which was resolved in favor of the latter. Upon motion of the oppositors themselves, Atty. Cabasal was
later replaced by Higino Castillon. On 30 April 1973 the oppositors (Blandina and the Padlan children)
submitted certified photocopies of the 19 July 1950 private writing and the final judgment of divorce
between petitioner and Arturo. Later Ruperto T. Padlan, claiming to be the sole surviving brother of the
deceased Arturo, intervened.
On 7 October 1987 petitioner moved for the immediate declaration of heirs of the decedent and
the distribution of his estate. At the scheduled hearing on 23 October 1987, private respondent as well as
the six (6) Padlan children and Ruperto failed to appear despite due notice. On the same day, the trial
court required the submission of the records of birth of the Padlan children within ten (10) days from
receipt thereof, after which, with or without the documents, the issue on the declaration of heirs would
be considered submitted for resolution. The prescribed period lapsed without the required documents
being submitted.
The trial court invoking Tenchavez v. Escaño
[1]
which held that "a foreign divorce between Filipino
citizens sought and decreed after the effectivity of the present Civil Code (Rep. Act 386) was not
entitled to recognition as valid in this jurisdiction,"
[2]
disregarded the divorce between petitioner and
Arturo. Consequently, it expressed the view that their marriage subsisted until the death of Arturo in
1972. Neither did it consider valid their extrajudicial settlement of conjugal properties due to lack of
judicial approval.
[3]
On the other hand, it opined that there was no showing that marriage existed
between private respondent and Arturo, much less was it shown that the alleged Padlan children had
been acknowledged by the deceased as his children with her. As regards Ruperto, it found that he was a
brother of Arturo. On 27 November 1987
[4]
only petitioner and Ruperto were declared the intestate heirs
of Arturo. Accordingly, equal adjudication of the net hereditary estate was ordered in favor of the two
intestate heirs.
[5]

On motion for reconsideration, Blandina and the Padlan children were allowed to present proofs
that the recognition of the children by the deceased as his legitimate children, except Alexis who was
recognized as his illegitimate child, had been made in their respective records of birth. Thus on 15
February 1988
[6]
partial reconsideration was granted declaring the Padlan children, with the exception of
Alexis, entitled to one-half of the estate to the exclusion of Ruperto Padlan, and petitioner to the other
half.
[7]
Private respondent was not declared an heir. Although it was stated in the aforementioned
records of birth that she and Arturo were married on 22 April 1947, their marriage was clearly void since
it was celebrated during the existence of his previous marriage to petitioner.
In their appeal to the Court of Appeals, Blandina and her children assigned as one of the errors
allegedly committed by the trial court the circumstance that the case was decided without a hearing, in
violation of Sec. 1, Rule 90, of the Rules of Court, which provides that if there is a controversy before the
court as to who are the lawful heirs of the deceased person or as to the distributive shares to which each
person is entitled under the law, the controversy shall be heard and decided as in ordinary cases.
Respondent appellate court found this ground alone sufficient to sustain the appeal; hence, on 11
September 1995 it declared null and void the 27 November 1987 decision and 15 February 1988 order of
the trial court, and directed the remand of the case to the trial court for further proceedings.
[8]
On 18
April 1996 it denied reconsideration.
[9]

Should this case be remanded to the lower court for further proceedings? Petitioner insists that
there is no need because, first, no legal or factual issue obtains for resolution either as to the heirship of
the Padlan children or as to their respective shares in the intestate estate of the decedent; and, second,
the issue as to who between petitioner and private respondent is the proper heir of the decedent is one
of law which can be resolved in the present petition based on established facts and admissions of the
parties.
We cannot sustain petitioner. The provision relied upon by respondent court is clear: If there is
a controversy before the court as to who are the lawful heirs of the deceased person or as to the
distributive shares to which each person is entitled under the law, the controversy shall be heard and
decided as in ordinary cases.
We agree with petitioner that no dispute exists either as to the right of the six (6) Padlan children to
inherit from the decedent because there are proofs that they have been duly acknowledged by him and
petitioner herself even recognizes them as heirs of Arturo Padlan;
[10]
nor as to their respective hereditary
shares. But controversy remains as to who is the legitimate surviving spouse of Arturo. The trial court,
after the parties other than petitioner failed to appear during the scheduled hearing on 23 October 1987
of the motion for immediate declaration of heirs and distribution of estate, simply issued an order
requiring the submission of the records of birth of the Padlan children within ten (10) days from receipt
thereof, after which, with or without the documents, the issue on declaration of heirs would be deemed
submitted for resolution.
We note that in her comment to petitioner's motion private respondent raised, among others, the
issue as to whether petitioner was still entitled to inherit from the decedent considering that she had
secured a divorce in the U.S.A. and in fact had twice remarried. She also invoked the above quoted
procedural rule.
[11]
To this, petitioner replied that Arturo was a Filipino and as such remained legally
married to her in spite of the divorce they obtained.
[12]
Reading between the lines, the implication is that
petitioner was no longer a Filipino citizen at the time of her divorce from Arturo. This should have
prompted the trial court to conduct a hearing to establish her citizenship. The purpose of a hearing is to
ascertain the truth of the matters in issue with the aid of documentary and testimonial evidence as well
as the arguments of the parties either supporting or opposing the evidence. Instead, the lower court
perfunctorily settled her claim in her favor by merely applying the ruling in Tenchavez v. Escaño.
Then in private respondent's motion to set aside and/or reconsider the lower court's decision she
stressed that the citizenship of petitioner was relevant in the light of the ruling in Van Dorn v. Romillo
Jr.
[13]
that aliens may obtain divorces abroad, which may be recognized in the Philippines, provided they
are valid according to their national law. She prayed therefore that the case be set for
hearing.
[14]
Petitioner opposed the motion but failed to squarely address the issue on her
citizenship.
[15]
The trial court did not grant private respondent's prayer for a hearing but proceeded to
resolve her motion with the finding that both petitioner and Arturo were "Filipino citizens and were
married in the Philippines."
[16]
It maintained that their divorce obtained in 1954 in San Francisco,
California, U.S.A., was not valid in Philippine jurisdiction. We deduce that the finding on their
citizenship pertained solely to the time of their marriage as the trial court was not supplied with a
basis to determine petitioner's citizenship at the time of their divorce. The doubt persisted as to
whether she was still a Filipino citizen when their divorce was decreed. The trial court must have
overlooked the materiality of this aspect. Once proved that she was no longer a Filipino citizen at the
time of their divorce, Van Dorn would become applicable and petitioner could very well lose her right to
inherit from Arturo.
Respondent again raised in her appeal the issue on petitioner's citizenship;
[17]
it did not merit
enlightenment however from petitioner.
[18]
In the present proceeding, petitioner's citizenship is brought
anew to the fore by private respondent. She even furnishes the Court with the transcript of stenographic
notes taken on 5 May 1995 during the hearing for the reconstitution of the original of a certain transfer
certificate title as well as the issuance of new owner's duplicate copy thereof before another trial
court. When asked whether she was an American citizen petitioner answered that she was since
1954.
[19]
Significantly, the decree of divorce of petitioner and Arturo was obtained in the same
year. Petitioner however did not bother to file a reply memorandum to erase the uncertainty about her
citizenship at the time of their divorce, a factual issue requiring hearings to be conducted by the trial
court. Consequently, respondent appellate court did not err in ordering the case returned to the trial
court for further proceedings.
We emphasize however that the question to be determined by the trial court should be limited only
to the right of petitioner to inherit from Arturo as his surviving spouse. Private respondent's claim to
heirship was already resolved by the trial court. She and Arturo were married on 22 April 1947 while the
prior marriage of petitioner and Arturo was subsisting thereby resulting in a bigamous marriage
considered void from the beginning under Arts. 80 and 83 of the Civil Code. Consequently, she is not a
surviving spouse that can inherit from him as this status presupposes a legitimate relationship.
[20]

As regards the motion of private respondent for petitioner and her counsel to be declared in
contempt of court and that the present petition be dismissed for forum shopping,
[21]
the same lacks
merit. For forum shopping to exist the actions must involve the same transactions and same essential
facts and circumstances. There must also be identical causes of action, subject matter and issue.
[22]
The
present petition deals with declaration of heirship while the subsequent petitions filed before the three
(3) trial courts concern the issuance of new owner's duplicate copies of titles of certain properties
belonging to the estate of Arturo. Obviously, there is no reason to declare the existence of forum
shopping.
WHEREFORE, the petition is DENIED. The decision of respondent Court of Appeals ordering the
remand of the case to the court of origin for further proceedings and declaring null and void its decision
holding petitioner Fe D. Quita and Ruperto T. Padlan as intestate heirs is AFFIRMED. The order of the
appellate court modifying its previous decision by granting one-half (1/2) of the net hereditary estate to
the Padlan children, namely, Claro, Ricardo, Emmanuel, Zenaida and Yolanda, with the exception of
Alexis, all surnamed Padlan, instead of Arturo's brother Ruperto Padlan, is likewise AFFIRMED. The Court
however emphasizes that the reception of evidence by the trial court should be limited to the hereditary
rights of petitioner as the surviving spouse of Arturo Padlan.
The motion to declare petitioner and her counsel in contempt of court and to dismiss the present
petition for forum shopping is DENIED.
SO ORDERED.

[Syllabus]
SECOND DIVISION
[G.R. No. 118870. March 29, 1996]
NERISSA Z. PEREZ, petitioner, vs. THE COURT OF APPEALS (Ninth Division) and RAY C. PEREZ,
respondents.
D E C I S I O N
ROMERO, J.:
Parties herein would have this Court duplicate the feat of King Solomon who was hailed in Biblical times
for his sagacious, if, at times unorthodox, manner of resolving conflicts, the most celebrated case being
that when his authority was invoked to determine the identity of the real mother as between two women
claiming the same infant. Since there could only be one mother, the daunting task that confronted the
king/judge was to choose the true one.
In the instant case, we are faced with the challenge of deciding, as between father and mother, who
should have rightful custody of a child who bears in his person both their genes.
While there is a provision of law squarely in point, the two courts whose authority have been invoked to
render a decision have arrived at diametrically opposite conclusions.
It has fallen upon us now to likewise act as judge between the trial court, on the one hand, and the
appellate, on the other.
On the issue of custody over the minor Ray Perez II, respondent Court of Appeals ruled in favor of the
boy’s father Ray C. Perez, reversing the trial court’s decision to grant custody to Nerissa Z. Perez, the
child’s mother.
Ray Perez, private respondent, is a doctor of medicine practicing in Cebu while Nerissa, his wife who is
petitioner herein, is a registered nurse. They were married in Cebu on December 6, 1986. After six
miscarriages, two operations and a high-risk pregnancy, petitioner finally gave birth to Ray Perez II in New
York on July 20, 1992.
Petitioner who began working in the United States in October 1988, used part of her earnings to build a
modest house in Mandaue City, Cebu. She also sought medical attention for her successive miscarriages
in New York. She became a resident alien in February 1992. Private respondent stayed with her in the U.S.
twice and took care of her when she became pregnant. Unlike his wife, however, he had only a tourist
visa and was not employed.
On January 17, 1993, the couple and their baby arrived in Cebu. After a few weeks, only Nerissa returned
to the U.S. She alleged that they came home only for a five-week vacation and that they all had round-trip
tickets. However, her husband stayed behind to take care of his sick mother and promised to follow her
with the baby. According to Ray, they had agreed to reside permanently in the Philippines but once
Nerissa was in New York, she changed her mind and continued working. She was supposed to come back
immediately after winding up her affairs there.
When Nerissa came home a few days before Ray II’s first birthday, the couple was no longer on good
terms. That their love for each other was fading became apparent from their serious quarrels. Petitioner
did not want to live near her in-laws and rely solely on her husband’s meager income of P5,000.00.1 She
longed to be with her only child but he was being kept away from her by her husband. Thus, she did not
want to leave RJ (Ray Junior) with her husband and in-laws. She wished for her son to grow up with his
mother.
On the other hand, Ray wanted to stay here, where he could raise his son even as he practiced his
profession. He maintained that it would not be difficult to live here since they have their own home and a
car. They could live comfortably on his P 15,000.00 monthly income2 as they were not burdened with
having to pay any debts.
Petitioner was forced to move to her parents’ home on Guizo Street in Mandaue. Despite mediation by
the priest who solemnized their marriage, the couple failed to reconcile.
On July 26, 1993, Nerissa Z. Perez filed a petition for habeas corpus3 asking respondent Ray C. Perez to
surrender the custody of their son, Ray Z. Perez II, to her.
On August 27, 1993, the court a quo issued an Order awarding custody of the one-year old child to his
mother, Nerissa Perez, citing the second paragraph of Article 213 of the Family Code which provides that
no child under seven years of age shall be separated from the mother, unless the court finds compelling
reasons to order otherwise. The dispositive portion of the Order reads:
“WHEREFORE, foregoing premises considered, Order is hereby issued ordering the respondent to turn
over the custody of their child Ray Cortes Perez II, his passport and roundtrip ticket to herein petitioner
with a warning that if he will escape together with the child for the purpose of hiding the minor child
instead of complying with this Order, that warrant for his arrest will be issued.
SO ORDERED.”4
Upon appeal by Ray Perez, the Court of Appeals, on September 27, 1994, reversed the trial court’s order
and awarded custody of the boy to his father.5 Petitioner’s motion for reconsideration having been
denied,6 she filed the instant petition for review where the sole issue is the custody of Ray Perez II, now
three years old.
Respondent court differed in opinion from the trial court and ruled that there were enough reasons to
deny Nerissa Perez custody over Ray II even if the child is under seven years old. It held that granting
custody to the boy’s father would be for the child’s best interest and welfare.7
Before us is the unedifying situation of a husband and wife in marital discord, struggling for custody of
their only child. It is sad that petitioner and private respondent have not found it in their hearts to
understand each other and live together once again as a family. Separated in fact, they now seek the
Court’s assistance in the matter of custody or parental authority over the child.
The wisdom and necessity for the exercise of joint parental authority need not be belabored. The father
and the mother complement each other in giving nurture and providing that holistic care which takes into
account the physical, emotional, psychological, mental, social and spiritual needs of the child. By precept
and example, they mold his character during his crucial formative years.
However, the Court’s intervention is sought in order that a decision may be made as to which parent shall
be given custody over the young boy. The Court’s duty is to determine whether Ray Perez II will be better
off with petitioner or with private respondent. We are not called upon to declare which party committed
the greater fault in their domestic quarrel.
When the parents of the child are separated, Article 213 of the Family Code is the applicable law. It
provides:
“ART. 213. In case of separation of the parents, parental authority shall be exercised by the parent
designated by the Court. The Court shall take into account all relevant considerations, especially the
choice of the child over seven years of age, unless the parent chosen is unfit.
No child under seven years of age shall be separated from the mother, unless the court finds compelling
reasons to order otherwise.” (Italics supplied)
Since the Code does not qualify the word “separation” to mean “legal separation” decreed by a court,
couples who are separated in fact, such as petitioner and private respondent, are covered within its
terms.8
The Revised Rules of Court also contains a similar provision. Rule 99, Section 6 (Adoption and Custody of
Minors) provides:
“SEC. 6. Proceedings as to child whose parents are separated. Appeal. - When husband and wife are
divorced or living separately and apart from each other, and the questions as to the care, custody, and
control of a child or children of their marriage is brought before a Court of First Instance by petition or as
an incident to any other proceeding, the court, upon hearing the testimony as may be pertinent, shall
award the care, custody, and control of each such child as will be for its best interest, permitting the child
to choose which parent it prefers to live with if it be over ten years of age, unless the parent chosen be
unfit to take charge of the child by reason of moral depravity, habitual drunkenness, incapacity, or
poverty x x x. No child under seven years of age shall be separated from its mother, unless the court finds
there are compelling reasons therefor.” (Italics supplied)
The provisions of law quoted above clearly mandate that a child under seven years of age shall not be
separated from his mother unless the court finds compelling reasons to order otherwise. The use of the
word “shall” in Article 213 of the Family Code and Rule 99, Section 6 of the Revised Rules of Court
connotes a mandatory character. In the case of Lacson v. San Jose-Lacson,9 the Court declared:
“The use of the word shall in Article 36310 of the Civil Code, coupled with the observations made by the
Code Commission in respect to the said legal provision, underscores its mandatory character. It prohibits
in no uncertain terms the separation of a mother and her child below seven years, unless such separation
is grounded upon compelling reasons as determined by a court.”11
The rationale for awarding the custody of children younger than seven years of age to their mother was
explained by the Code Commission:
“The general rule is recommended in order to avoid many a tragedy where a mother has seen her baby
torn away from her. No man can sound the deep sorrows of a mother who is deprived of her child of
tender age. The exception allowed by the rule has to be for ‘compelling reasons’ for the good of the child;
those cases must indeed be rare, if the mother’s heart is not to be unduly hurt. If she has erred, as in
cases of adultery, the penalty of imprisonment and the divorce decree (relative divorce) will ordinarily be
sufficient punishment for her. Moreover, moral dereliction will not have any effect upon the baby who is
as yet unable to understand her situation.” (Report of the Code Commission, p. 12)12
The Family Code, in reverting to the provision of the Civil Code that a child below seven years old should
not be separated from the mother (Article 363), has expressly repealed the earlier Article 17, paragraph
three of the Child and Youth Welfare Code (Presidential Decree No. 603) which reduced the child’s age to
five years.13
The general rule that a child under seven years of age shall not be separated from his mother finds its
raison d’etre in the basic need of a child for his mother’s loving care.14 Only the most compelling of
reasons shall justify the court’s awarding the custody of such a child to someone other than his mother,
such as her unfitness to exercise sole parental authority. In the past the following grounds have been
considered ample
justification to deprive a mother of custody and parental authority: neglect, abandonment,15
unemployment and immorality,16 habitual drunkenness,17 drug addiction, maltreatment of the child,
insanity and being sick with a communicable disease.18
It has long been settled that in custody cases,19 the foremost consideration is always the Welfare and
best interest of the child. In fact, no less than an international instrument, the Convention on the Rights
of the Child provides: “In all actions concerning children, whether undertaken by public or private social
welfare institutions, courts of law, administrative authorities or legislative bodies, the best interests of
the child shall be a primary consideration.”20
Courts invariably look into all relevant factors presented by the contending parents, such as their material
resources, social and moral situations.21
In the case at bench, financial capacity is not a determinative factor inasmuch as both parties have
demonstrated that they have ample means.
Respondent court stated that petitioner has no permanent place of work in the U.S.A. and has taken this
point against her. The records, however, show that she is employed in a New Yorkhospital22 and was, at
the time the petition was filed, still abroad.23 She testified that she intends to apply for a job elsewhere,
presumably to improve her work environment and augment her income, as well as for convenience.24
The Court takes judicial notice of the fact that a registered nurse, such as petitioner, is still very much in
demand in the United States. Unlike private respondent, a doctor who by his own admission could not
find employment there, petitioner immediately got a job in New York. Considering her skill and
experience, petitioner should find no difficulty in obtaining work elsewhere, should she desire to do so.
The decision under review casts doubt on petitioner’s capability to take care of the child, particularly
since she works on twelve-hour shifts thrice weekly, at times, even at night. There being no one to help
her look after the child, it is alleged that she cannot properly attend to him. This conclusion is as
unwarranted as it is unreasonable. First, her present work schedule is not so unmanageable as to deprive
her of quality time for Ray II. Quite a number of working mothers who are away from home for longer
periods of time are still able to raise a family well, applying time management principles judiciously.
Second, many a mother, finding herself in such a position, has invited her own mother or relative to join
her abroad, providing the latter with plane tickets and liberal allowances, to look after the child until he is
able to take care of himself. Others go on leave from work until such time as the child can be entrusted to
day-care centers. Delegating child care temporarily to qualified persons who run day-care centers does
not detract from being a good mother, as long as the latter exercises supervision, for even in our culture,
children are often brought up by housemaids or “yayas” under the eagle eyes of the mother. Third,
private respondent’s work schedule was not presented in evidence at the trial. Although he is a general
practitioner, the records merely show that he maintains a clinic, works for several companies on retainer
basis and teaches part-time.25 Hence, respondent court’s conclusion that “his work schedule is flexible
(and h)e can always find time for his son”26 is not well-founded. Fourth, the fact that private respondent
lives near his parents and sister is not crucial in this case. Fifth, petitioner’s work schedule cited in the
respondent court’s decision is not necessarily permanent. Hospitals work in shifts and, given a mother’s
instinctive desire to lavish upon her child the utmost care, petitioner may be expected to arrange her
schedule in such a way as to allocate time for him. Finally, it does not follow that petitioner values her
career more than her family simply because she wants to work in the United States. There are any
number of reasons for a person’s seeking a job outside the country, e.g. to augment her income for the
family’s benefit and welfare, and for psychological fulfillment, to name a few. In the instant case, it has
been shown that petitioner earned enough from her job to be able to construct a house for the family in
Mandaue City. The record describes sketchily the relations between Ray and Nerissa Perez. The
transcripts of the three hearings are inadequate to show that petitioner did not exert earnest efforts and
make sacrifices to save her marriage.
It is not difficult to imagine how heart-rending it is for a mother whose attempts at having a baby were
frustrated several times over a period of six years to finally bear one, only for the infant to be snatched
from her before he has even reached his first year. The mother’s role in the life of her child, such as Ray II,
is well-nigh irreplaceable. In prose and poetry, the depth of a mother’s love has been immortalized times
without number, finding as it does, its justification, not in fantasy but in reality.
WHEREFORE, the petition for review is GRANTED. The decision of the Court of Appeals dated September
27, 1994 as well as its Resolution dated January 24, 1995 are hereby REVERSED and SET ASIDE. The Order
of the trial court dated August 27, 1993 is hereby REINSTATED. Custody over the minor Ray Z. Perez II is
awarded to his mother, herein petitioner Nerissa Z. Perez. This decision is immediately executory.
SO ORDERED.

SAN LUIS vs SAN LUIS
Before us are consolidated petitions for review assailing the February 4, 1998 Decision
1
of the Court of
Appeals in CA-G.R. CV No. 52647, which reversed and set aside the September 12, 1995
2
and January 31,
1996
3
Resolutions of the Regional Trial Court of Makati City, Branch 134 in SP. Proc. No. M-3708; and its
May 15, 1998 Resolution
4
denying petitioners’ motion for reconsideration.
The instant case involves the settlement of the estate of Felicisimo T. San Luis (Felicisimo), who was the
former governor of the Province of Laguna. During his lifetime, Felicisimo contracted three marriages. His
first marriage was with Virginia Sulit on March 17, 1942 out of which were born six children, namely:
Rodolfo, Mila, Edgar, Linda, Emilita and Manuel. On August 11, 1963, Virginia predeceased Felicisimo.
Five years later, on May 1, 1968, Felicisimo married Merry Lee Corwin, with whom he had a son, Tobias.
However, on October 15, 1971, Merry Lee, an American citizen, filed a Complaint for Divorce
5
before the
Family Court of the First Circuit, State of Hawaii, United States of America (U.S.A.), which issued a Decree
Granting Absolute Divorce and Awarding Child Custody on December 14, 1973.
6

On June 20, 1974, Felicisimo married respondent Felicidad San Luis, then surnamed Sagalongos, before
Rev. Fr. William Meyer, Minister of the United Presbyterian at Wilshire Boulevard, Los Angeles, California,
U.S.A.
7
He had no children with respondent but lived with her for 18 years from the time of their
marriage up to his death on December 18, 1992.
Thereafter, respondent sought the dissolution of their conjugal partnership assets and the settlement of
Felicisimo’s estate. On December 17, 1993, she filed a petition for letters of administration
8
before the
Regional Trial Court of Makati City, docketed as SP. Proc. No. M-3708 which was raffled to Branch 146
thereof.
Respondent alleged that she is the widow of Felicisimo; that, at the time of his death, the decedent was
residing at 100 San Juanico Street, New Alabang Village, Alabang, Metro Manila; that the decedent’s
surviving heirs are respondent as legal spouse, his six children by his first marriage, and son by his second
marriage; that the decedent left real properties, both conjugal and exclusive, valued at P30,304,178.00
more or less; that the decedent does not have any unpaid debts. Respondent prayed that the conjugal
partnership assets be liquidated and that letters of administration be issued to her.
On February 4, 1994, petitioner Rodolfo San Luis, one of the children of Felicisimo by his first marriage,
filed a motion to dismiss
9
on the grounds of improper venue and failure to state a cause of action.
Rodolfo claimed that the petition for letters of administration should have been filed in the Province of
Laguna because this was Felicisimo’s place of residence prior to his death. He further claimed that
respondent has no legal personality to file the petition because she was only a mistress of Felicisimo since
the latter, at the time of his death, was still legally married to Merry Lee.
On February 15, 1994, Linda invoked the same grounds and joined her brother Rodolfo in seeking the
dismissal
10
of the petition. On February 28, 1994, the trial court issued an Order
11
denying the two
motions to dismiss.
Unaware of the denial of the motions to dismiss, respondent filed on March 5, 1994 her
opposition
12
thereto. She submitted documentary evidence showing that while Felicisimo exercised the
powers of his public office in Laguna, he regularly went home to their house in New Alabang Village,
Alabang, Metro Manila which they bought sometime in 1982. Further, she presented the decree of
absolute divorce issued by the Family Court of the First Circuit, State of Hawaii to prove that the marriage
of Felicisimo to Merry Lee had already been dissolved. Thus, she claimed that Felicisimo had the legal
capacity to marry her by virtue of paragraph 2,
13
Article 26 of the Family Code and the doctrine laid down
in Van Dorn v. Romillo, Jr.
14

Thereafter, Linda, Rodolfo and herein petitioner Edgar San Luis, separately filed motions for
reconsideration from the Order denying their motions to dismiss.
15
They asserted that paragraph 2,
Article 26 of the Family Code cannot be given retroactive effect to validate respondent’s bigamous
marriage with Felicisimo because this would impair vested rights in derogation of Article 256
16
of the
Family Code.
On April 21, 1994, Mila, another daughter of Felicisimo from his first marriage, filed a motion to disqualify
Acting Presiding Judge Anthony E. Santos from hearing the case.
On October 24, 1994, the trial court issued an Order
17
denying the motions for reconsideration. It ruled
that respondent, as widow of the decedent, possessed the legal standing to file the petition and that
venue was properly laid. Meanwhile, the motion for disqualification was deemed moot and
academic
18
because then Acting Presiding Judge Santos was substituted by Judge Salvador S. Tensuan
pending the resolution of said motion.
Mila filed a motion for inhibition
19
against Judge Tensuan on November 16, 1994. On even date, Edgar
also filed a motion for reconsideration
20
from the Order denying their motion for reconsideration arguing
that it does not state the facts and law on which it was based.
On November 25, 1994, Judge Tensuan issued an Order
21
granting the motion for inhibition. The case
was re-raffled to Branch 134 presided by Judge Paul T. Arcangel.
On April 24, 1995,
22
the trial court required the parties to submit their respective position papers on the
twin issues of venue and legal capacity of respondent to file the petition. On May 5, 1995, Edgar
manifested
23
that he is adopting the arguments and evidence set forth in his previous motion for
reconsideration as his position paper. Respondent and Rodolfo filed their position papers on June
14,
24
and June 20,
25
1995, respectively.
On September 12, 1995, the trial court dismissed the petition for letters of administration. It held that, at
the time of his death, Felicisimo was the duly elected governor and a resident of the Province of Laguna.
Hence, the petition should have been filed in Sta. Cruz, Laguna and not in Makati City. It also ruled that
respondent was without legal capacity to file the petition for letters of administration because her
marriage with Felicisimo was bigamous, thus, void ab initio. It found that the decree of absolute divorce
dissolving Felicisimo’s marriage to Merry Lee was not valid in the Philippines and did not bind Felicisimo
who was a Filipino citizen. It also ruled that paragraph 2, Article 26 of the Family Code cannot be
retroactively applied because it would impair the vested rights of Felicisimo’s legitimate children.
Respondent moved for reconsideration
26
and for the disqualification
27
of Judge Arcangel but said
motions were denied.
28

Respondent appealed to the Court of Appeals which reversed and set aside the orders of the trial court in
its assailed Decision dated February 4, 1998, the dispositive portion of which states:
WHEREFORE, the Orders dated September 12, 1995 and January 31, 1996 are hereby REVERSED and SET
ASIDE; the Orders dated February 28 and October 24, 1994 are REINSTATED; and the records of the case
is REMANDED to the trial court for further proceedings.
29

The appellante court ruled that under Section 1, Rule 73 of the Rules of Court, the term "place of
residence" of the decedent, for purposes of fixing the venue of the settlement of his estate, refers to the
personal, actual or physical habitation, or actual residence or place of abode of a person as distinguished
from legal residence or domicile. It noted that although Felicisimo discharged his functions as governor in
Laguna, he actually resided in Alabang, Muntinlupa. Thus, the petition for letters of administration was
properly filed in Makati City.
The Court of Appeals also held that Felicisimo had legal capacity to marry respondent by virtue of
paragraph 2, Article 26 of the Family Code and the rulings in Van Dorn v. Romillo, Jr.
30
and Pilapil v. Ibay-
Somera.
31
It found that the marriage between Felicisimo and Merry Lee was validly dissolved by virtue of
the decree of absolute divorce issued by the Family Court of the First Circuit, State of Hawaii. As a result,
under paragraph 2, Article 26, Felicisimo was capacitated to contract a subsequent marriage with
respondent. Thus –
With the well-known rule – express mandate of paragraph 2, Article 26, of the Family Code of the
Philippines, the doctrines in Van Dorn, Pilapil, and the reason and philosophy behind the enactment of
E.O. No. 227, — there is no justiciable reason to sustain the individual view — sweeping statement — of
Judge Arc[h]angel, that "Article 26, par. 2 of the Family Code, contravenes the basic policy of our state
against divorce in any form whatsoever." Indeed, courts cannot deny what the law grants. All that the
courts should do is to give force and effect to the express mandate of the law. The foreign divorce having
been obtained by the Foreigner on December 14, 1992,
32
the Filipino divorcee, "shall x x x have capacity
to remarry under Philippine laws". For this reason, the marriage between the deceased and petitioner
should not be denominated as "a bigamous marriage.
Therefore, under Article 130 of the Family Code, the petitioner as the surviving spouse can institute the
judicial proceeding for the settlement of the estate of the deceased. x x x
33

Edgar, Linda, and Rodolfo filed separate motions for reconsideration
34
which were denied by the Court of
Appeals.
On July 2, 1998, Edgar appealed to this Court via the instant petition for review on certiorari.
35
Rodolfo
later filed a manifestation and motion to adopt the said petition which was granted.
36

In the instant consolidated petitions, Edgar and Rodolfo insist that the venue of the subject petition for
letters of administration was improperly laid because at the time of his death, Felicisimo was a resident of
Sta. Cruz, Laguna. They contend that pursuant to our rulings in Nuval v. Guray
37
and Romualdez v. RTC,
Br. 7, Tacloban City,
38
"residence" is synonymous with "domicile" which denotes a fixed permanent
residence to which when absent, one intends to return. They claim that a person can only have one
domicile at any given time. Since Felicisimo never changed his domicile, the petition for letters of
administration should have been filed in Sta. Cruz, Laguna.
Petitioners also contend that respondent’s marriage to Felicisimo was void and bigamous because it was
performed during the subsistence of the latter’s marriage to Merry Lee. They argue that paragraph 2,
Article 26 cannot be retroactively applied because it would impair vested rights and ratify the void
bigamous marriage. As such, respondent cannot be considered the surviving wife of Felicisimo; hence,
she has no legal capacity to file the petition for letters of administration.
The issues for resolution: (1) whether venue was properly laid, and (2) whether respondent has legal
capacity to file the subject petition for letters of administration.
The petition lacks merit.
Under Section 1,
39
Rule 73 of the Rules of Court, the petition for letters of administration of the estate of
Felicisimo should be filed in the Regional Trial Court of the province "in which he resides at the time of his
death." In the case of Garcia Fule v. Court of Appeals,
40
we laid down the doctrinal rule for determining
the residence – as contradistinguished from domicile – of the decedent for purposes of fixing the venue
of the settlement of his estate:
[T]he term "resides" connotes ex vi termini "actual residence" as distinguished from "legal residence or
domicile." This term "resides," like the terms "residing" and "residence," is elastic and should be
interpreted in the light of the object or purpose of the statute or rule in which it is employed. In the
application of venue statutes and rules – Section 1, Rule 73 of the Revised Rules of Court is of such nature
– residence rather than domicile is the significant factor. Even where the statute uses the word "domicile"
still it is construed as meaning residence and not domicile in the technical sense. Some cases make a
distinction between the terms "residence" and "domicile" but as generally used in statutes fixing venue,
the terms are synonymous, and convey the same meaning as the term "inhabitant." In other words,
"resides" should be viewed or understood in its popular sense, meaning, the personal, actual or physical
habitation of a person, actual residence or place of abode. It signifies physical presence in a place and
actual stay thereat. In this popular sense, the term means merely residence, that is, personal residence,
not legal residence or domicile. Residence simply requires bodily presence as an inhabitant in a given
place, while domicile requires bodily presence in that place and also an intention to make it one’s
domicile. No particular length of time of residence is required though; however, the residence must be
more than temporary.
41
(Emphasis supplied)
It is incorrect for petitioners to argue that "residence," for purposes of fixing the venue of the settlement
of the estate of Felicisimo, is synonymous with "domicile." The rulings in Nuval and Romualdez are
inapplicable to the instant case because they involve election cases. Needless to say, there is a distinction
between "residence" for purposes of election laws and "residence" for purposes of fixing the venue of
actions. In election cases, "residence" and "domicile" are treated as synonymous terms, that is, the fixed
permanent residence to which when absent, one has the intention of returning.
42
However, for purposes
of fixing venue under the Rules of Court, the "residence" of a person is his personal, actual or physical
habitation, or actual residence or place of abode, which may not necessarily be his legal residence or
domicile provided he resides therein with continuity and consistency.
43
Hence, it is possible that a person
may have his residence in one place and domicile in another.
In the instant case, while petitioners established that Felicisimo was domiciled in Sta. Cruz, Laguna,
respondent proved that he also maintained a residence in Alabang, Muntinlupa from 1982 up to the time
of his death. Respondent submitted in evidence the Deed of Absolute Sale
44
dated January 5, 1983
showing that the deceased purchased the aforesaid property. She also presented billing
statements
45
from the Philippine Heart Center and Chinese General Hospital for the period August to
December 1992 indicating the address of Felicisimo at "100 San Juanico, Ayala Alabang, Muntinlupa."
Respondent also presented proof of membership of the deceased in the Ayala Alabang Village
Association
46
and Ayala Country Club, Inc.,
47
letter-envelopes
48
from 1988 to 1990 sent by the
deceased’s children to him at his Alabang address, and the deceased’s calling cards
49
stating that his
home/city address is at "100 San Juanico, Ayala Alabang Village, Muntinlupa" while his office/provincial
address is in "Provincial Capitol, Sta. Cruz, Laguna."
From the foregoing, we find that Felicisimo was a resident of Alabang, Muntinlupa for purposes of fixing
the venue of the settlement of his estate. Consequently, the subject petition for letters of administration
was validly filed in the Regional Trial Court
50
which has territorial jurisdiction over Alabang, Muntinlupa.
The subject petition was filed on December 17, 1993. At that time, Muntinlupa was still a municipality
and the branches of the Regional Trial Court of the National Capital Judicial Region which had territorial
jurisdiction over Muntinlupa were then seated in Makati City as per Supreme Court Administrative Order
No. 3.
51
Thus, the subject petition was validly filed before the Regional Trial Court of Makati City.
Anent the issue of respondent Felicidad’s legal personality to file the petition for letters of administration,
we must first resolve the issue of whether a Filipino who is divorced by his alien spouse abroad may
validly remarry under the Civil Code, considering that Felicidad’s marriage to Felicisimo was solemnized
on June 20, 1974, or before the Family Code took effect on August 3, 1988. In resolving this issue, we
need not retroactively apply the provisions of the Family Code, particularly Art. 26, par. (2) considering
that there is sufficient jurisprudential basis allowing us to rule in the affirmative.
The case of Van Dorn v. Romillo, Jr.
52
involved a marriage between a foreigner and his Filipino wife,
which marriage was subsequently dissolved through a divorce obtained abroad by the latter. Claiming
that the divorce was not valid under Philippine law, the alien spouse alleged that his interest in the
properties from their conjugal partnership should be protected. The Court, however, recognized the
validity of the divorce and held that the alien spouse had no interest in the properties acquired by the
Filipino wife after the divorce. Thus:
In this case, the divorce in Nevada released private respondent from the marriage from the standards of
American law, under which divorce dissolves the marriage. As stated by the Federal Supreme Court of the
United States in Atherton vs. Atherton, 45 L. Ed. 794, 799:
"The purpose and effect of a decree of divorce from the bond of matrimony by a competent jurisdiction
are to change the existing status or domestic relation of husband and wife, and to free them both from
the bond. The marriage tie, when thus severed as to one party, ceases to bind either. A husband without
a wife, or a wife without a husband, is unknown to the law. When the law provides, in the nature of a
penalty, that the guilty party shall not marry again, that party, as well as the other, is still absolutely freed
from the bond of the former marriage."
Thus, pursuant to his national law, private respondent is no longer the husband of petitioner. He would
have no standing to sue in the case below as petitioner’s husband entitled to exercise control over
conjugal assets. As he is bound by the Decision of his own country’s Court, which validly exercised
jurisdiction over him, and whose decision he does not repudiate, he is estopped by his own
representation before said Court from asserting his right over the alleged conjugal property.
53

As to the effect of the divorce on the Filipino wife, the Court ruled that she should no longer be
considered married to the alien spouse. Further, she should not be required to perform her marital duties
and obligations. It held:
To maintain, as private respondent does, that, under our laws, petitioner has to be considered still
married to private respondent and still subject to a wife's obligations under Article 109, et. seq. of the
Civil Code cannot be just. Petitioner should not be obliged to live together with, observe respect and
fidelity, and render support to private respondent. The latter should not continue to be one of her heirs
with possible rights to conjugal property. She should not be discriminated against in her own country if
the ends of justice are to be served.
54
(Emphasis added)
This principle was thereafter applied in Pilapil v. Ibay-Somera
55
where the Court recognized the validity of
a divorce obtained abroad. In the said case, it was held that the alien spouse is not a proper party in filing
the adultery suit against his Filipino wife. The Court stated that "the severance of the marital bond had
the effect of dissociating the former spouses from each other, hence the actuations of one would not
affect or cast obloquy on the other."
56

Likewise, in Quita v. Court of Appeals,
57
the Court stated that where a Filipino is divorced by his
naturalized foreign spouse, the ruling in Van Dorn applies.
58
Although decided on December 22, 1998,
the divorce in the said case was obtained in 1954 when the Civil Code provisions were still in effect.
The significance of the Van Dorn case to the development of limited recognition of divorce in the
Philippines cannot be denied. The ruling has long been interpreted as severing marital ties between
parties in a mixed marriage and capacitating the Filipino spouse to remarry as a necessary consequence
of upholding the validity of a divorce obtained abroad by the alien spouse. In his treatise, Dr. Arturo M.
Tolentino cited Van Dorn stating that "if the foreigner obtains a valid foreign divorce, the Filipino spouse
shall have capacity to remarry under Philippine law."
59
In Garcia v. Recio,
60
the Court likewise cited the
aforementioned case in relation to Article 26.
61

In the recent case of Republic v. Orbecido III,
62
the historical background and legislative intent behind
paragraph 2, Article 26 of the Family Code were discussed, to wit:
Brief Historical Background
On July 6, 1987, then President Corazon Aquino signed into law Executive Order No. 209, otherwise
known as the "Family Code," which took effect on August 3, 1988. Article 26 thereof states:
All marriages solemnized outside the Philippines in accordance with the laws in force in the country
where they were solemnized, and valid there as such, shall also be valid in this country, except those
prohibited under Articles 35, 37, and 38.
On July 17, 1987, shortly after the signing of the original Family Code, Executive Order No. 227 was
likewise signed into law, amending Articles 26, 36, and 39 of the Family Code. A second paragraph was
added to Article 26. As so amended, it now provides:
ART. 26. All marriages solemnized outside the Philippines in accordance with the laws in force in the
country where they were solemnized, and valid there as such, shall also be valid in this country, except
those prohibited under Articles 35(1), (4), (5) and (6), 36, 37 and 38.
Where a marriage between a Filipino citizen and a foreigner is validly celebrated and a divorce is
thereafter validly obtained abroad by the alien spouse capacitating him or her to remarry, the Filipino
spouse shall have capacity to remarry under Philippine law. (Emphasis supplied)
x x x x
Legislative Intent
Records of the proceedings of the Family Code deliberations showed that the intent of Paragraph 2 of
Article 26, according to Judge Alicia Sempio-Diy, a member of the Civil Code Revision Committee, is to
avoid the absurd situation where the Filipino spouse remains married to the alien spouse who, after
obtaining a divorce, is no longer married to the Filipino spouse.
Interestingly, Paragraph 2 of Article 26 traces its origin to the 1985 case of Van Dorn v. Romillo,
Jr. TheVan Dorn case involved a marriage between a Filipino citizen and a foreigner. The Court held
therein that a divorce decree validly obtained by the alien spouse is valid in the Philippines, and
consequently, the Filipino spouse is capacitated to remarry under Philippine law.
63
(Emphasis added)
As such, the Van Dorn case is sufficient basis in resolving a situation where a divorce is validly obtained
abroad by the alien spouse. With the enactment of the Family Code and paragraph 2, Article 26 thereof,
our lawmakers codified the law already established through judicial precedent.1awphi1.net
Indeed, when the object of a marriage is defeated by rendering its continuance intolerable to one of the
parties and productive of no possible good to the community, relief in some way should be
obtainable.
64
Marriage, being a mutual and shared commitment between two parties, cannot possibly be
productive of any good to the society where one is considered released from the marital bond while the
other remains bound to it. Such is the state of affairs where the alien spouse obtains a valid divorce
abroad against the Filipino spouse, as in this case.
Petitioners cite Articles 15
65
and 17
66
of the Civil Code in stating that the divorce is void under Philippine
law insofar as Filipinos are concerned. However, in light of this Court’s rulings in the cases discussed
above, the Filipino spouse should not be discriminated against in his own country if the ends of justice are
to be served.
67
In Alonzo v. Intermediate Appellate Court,
68
the Court stated:
But as has also been aptly observed, we test a law by its results; and likewise, we may add, by its
purposes. It is a cardinal rule that, in seeking the meaning of the law, the first concern of the judge should
be to discover in its provisions the intent of the lawmaker. Unquestionably, the law should never be
interpreted in such a way as to cause injustice as this is never within the legislative intent. An
indispensable part of that intent, in fact, for we presume the good motives of the legislature, is to render
justice.
Thus, we interpret and apply the law not independently of but in consonance with justice. Law and justice
are inseparable, and we must keep them so. To be sure, there are some laws that, while generally valid,
may seem arbitrary when applied in a particular case because of its peculiar circumstances. In such a
situation, we are not bound, because only of our nature and functions, to apply them just the same, in
slavish obedience to their language. What we do instead is find a balance between the word and the will,
that justice may be done even as the law is obeyed.
As judges, we are not automatons. We do not and must not unfeelingly apply the law as it is worded,
yielding like robots to the literal command without regard to its cause and consequence. "Courts are apt
to err by sticking too closely to the words of a law," so we are warned, by Justice Holmes again, "where
these words import a policy that goes beyond them."
x x x x
More than twenty centuries ago, Justinian defined justice "as the constant and perpetual wish to render
every one his due." That wish continues to motivate this Court when it assesses the facts and the law in
every case brought to it for decision. Justice is always an essential ingredient of its decisions. Thus when
the facts warrants, we interpret the law in a way that will render justice, presuming that it was the
intention of the lawmaker, to begin with, that the law be dispensed with justice.
69

Applying the above doctrine in the instant case, the divorce decree allegedly obtained by Merry Lee
which absolutely allowed Felicisimo to remarry, would have vested Felicidad with the legal personality to
file the present petition as Felicisimo’s surviving spouse. However, the records show that there is
insufficient evidence to prove the validity of the divorce obtained by Merry Lee as well as the marriage of
respondent and Felicisimo under the laws of the U.S.A. In Garcia v. Recio,
70
the Court laid down the
specific guidelines for pleading and proving foreign law and divorce judgments. It held that presentation
solely of the divorce decree is insufficient and that proof of its authenticity and due execution must be
presented. Under Sections 24 and 25 of Rule 132, a writing or document may be proven as a public or
official record of a foreign country by either (1) an official publication or (2) a copy thereof attested by the
officer having legal custody of the document. If the record is not kept in the Philippines, such copy must
be (a) accompanied by a certificate issued by the proper diplomatic or consular officer in the Philippine
foreign service stationed in the foreign country in which the record is kept and (b) authenticated by the
seal of his office.
71

With regard to respondent’s marriage to Felicisimo allegedly solemnized in California, U.S.A., she
submitted photocopies of the Marriage Certificate and the annotated text
72
of the Family Law Act of
California which purportedly show that their marriage was done in accordance with the said law. As
stated in Garcia, however, the Court cannot take judicial notice of foreign laws as they must be alleged
and proved.
73

Therefore, this case should be remanded to the trial court for further reception of evidence on the
divorce decree obtained by Merry Lee and the marriage of respondent and Felicisimo.
Even assuming that Felicisimo was not capacitated to marry respondent in 1974, nevertheless, we find
that the latter has the legal personality to file the subject petition for letters of administration, as she may
be considered the co-owner of Felicisimo as regards the properties that were acquired through their joint
efforts during their cohabitation.
Section 6,
74
Rule 78 of the Rules of Court states that letters of administration may be granted to the
surviving spouse of the decedent. However, Section 2, Rule 79 thereof also provides in part:
SEC. 2. Contents of petition for letters of administration. – A petition for letters of administration must be
filed by an interested person and must show, as far as known to the petitioner: x x x.
An "interested person" has been defined as one who would be benefited by the estate, such as an heir, or
one who has a claim against the estate, such as a creditor. The interest must be material and direct, and
not merely indirect or contingent.
75

In the instant case, respondent would qualify as an interested person who has a direct interest in the
estate of Felicisimo by virtue of their cohabitation, the existence of which was not denied by petitioners.
If she proves the validity of the divorce and Felicisimo’s capacity to remarry, but fails to prove that her
marriage with him was validly performed under the laws of the U.S.A., then she may be considered as a
co-owner under Article 144
76
of the Civil Code. This provision governs the property relations between
parties who live together as husband and wife without the benefit of marriage, or their marriage is void
from the beginning. It provides that the property acquired by either or both of them through their work
or industry or their wages and salaries shall be governed by the rules on co-ownership. In a co-ownership,
it is not necessary that the property be acquired through their joint labor, efforts and industry. Any
property acquired during the union is prima facie presumed to have been obtained through their joint
efforts. Hence, the portions belonging to the co-owners shall be presumed equal, unless the contrary is
proven.
77

Meanwhile, if respondent fails to prove the validity of both the divorce and the marriage, the applicable
provision would be Article 148 of the Family Code which has filled the hiatus in Article 144 of the Civil
Code by expressly regulating the property relations of couples living together as husband and wife but are
incapacitated to marry.
78
In Saguid v. Court of Appeals,
79
we held that even if the cohabitation or the
acquisition of property occurred before the Family Code took effect, Article 148 governs.
80
The Court
described the property regime under this provision as follows:
The regime of limited co-ownership of property governing the union of parties who are not legally
capacitated to marry each other, but who nonetheless live together as husband and wife, applies to
properties acquired during said cohabitation in proportion to their respective contributions. Co-
ownership will only be up to the extent of the proven actual contribution of money, property or industry.
Absent proof of the extent thereof, their contributions and corresponding shares shall be presumed to be
equal.
x x x x
In the cases of Agapay v. Palang, and Tumlos v. Fernandez, which involved the issue of co-ownership of
properties acquired by the parties to a bigamous marriage and an adulterous relationship, respectively,
we ruled that proof of actual contribution in the acquisition of the property is essential. x x x
As in other civil cases, the burden of proof rests upon the party who, as determined by the pleadings or
the nature of the case, asserts an affirmative issue. Contentions must be proved by competent evidence
and reliance must be had on the strength of the party’s own evidence and not upon the weakness of the
opponent’s defense. x x x
81

In view of the foregoing, we find that respondent’s legal capacity to file the subject petition for letters of
administration may arise from her status as the surviving wife of Felicisimo or as his co-owner under
Article 144 of the Civil Code or Article 148 of the Family Code.
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals reinstating and affirming the
February 28, 1994 Order of the Regional Trial Court which denied petitioners’ motion to dismiss and its
October 24, 1994 Order which dismissed petitioners’ motion for reconsideration is AFFIRMED. Let this
case be REMANDED to the trial court for further proceedings.
SO ORDERED.

FELICITAS AMOR-CATALAN, Petitioner, vs. COURT OF APPEALS, MANILA, ORLANDO B. CATALAN and
MEROPE E. BRAGANZA, Respondents.
D E C I S I O N
YNARES-SANTIAGO, J.:
This petition for review assails the Decision1 of the Court of Appeals in CA-G.R. CV No. 69875 dated
August 6, 2004, which reversed the Decision2 of the Regional Trial Court (RTC) of Dagupan City, Branch
44, in Civil Case No. D-10636, declaring the marriage between respondents Orlando B. Catalan and
Merope E. Braganza void on the ground of bigamy, as well as the Resolution3 dated January 27, 2005,
which denied the motion for reconsideration.
Petitioner Felicitas Amor-Catalan married respondent Orlando on June 4, 1950 in Mabini,
Pangasinan.4Thereafter, they migrated to the United States of America and allegedly became naturalized
citizens thereof. After 38 years of marriage, Felicitas and Orlando divorced in April 1988.5
Two months after the divorce, or on June 16, 1988, Orlando married respondent Merope in Calasiao,
Pangasinan.6 Contending that said marriage was bigamous since Merope had a prior subsisting marriage
with Eusebio Bristol, petitioner filed a petition for declaration of nullity of marriage with damages in the
RTC of Dagupan City7 against Orlando and Merope.
Respondents filed a motion to dismiss8 on the ground of lack of cause of action as petitioner was
allegedly not a real party-in-interest, but it was denied.9 Trial on the merits ensued.
On October 10, 2000, the RTC rendered judgment in favor of the petitioner, the dispositive portion of
which reads:
WHEREFORE, judgment is declared in favor of plaintiff Felicitas Amor Catalan and against defendants
Orlando B. Catalan and Merope E. Braganza, as follows:
1) The subsequent marriage of Merope Braganza with Orlando B. Catalan is declared null and void ab
initio;
2) The defendants are ordered jointly and severally to pay plaintiff by way of moral damages the amount
of P300,000.00, exemplary damages in the amount of P200,000.00 and attorney’s fees in the amount of
P50,000.00, including costs of this suit; and
3) The donation in consideration of marriage is ordered revoked and the property donated is ordered
awarded to the heirs of Juliana Braganza. Furnish copies of this Decision to Atty. Napoleon B. Arenas, Jr.
and Atty. Nolan Evangelista.
SO ORDERED.10
Respondents appealed the decision to the Court of Appeals, which reversed the decision of the RTC, thus:
WHEREFORE, premises considered, we hereby GRANT the appeal and consequently REVERSE and SET
ASIDE the appealed decision. We likewise DISMISS Civil Case No. D-10636, RTC, Branch 44, Dagupan City.
No costs.
SO ORDERED.11
After the motion for reconsideration was denied, petitioner filed the instant petition for review raising
the following issues:
I.
WHETHER PETITIONER HAS THE REQUIRED STANDING IN COURT TO QUESTION THE NULLITY OF THE
MARRIAGE BETWEEN RESPONDENTS;
II.
WHETHER THE FAILURE OF THE COURT OF APPEALS TO DECLARE THE QUESTIONED MARRIAGE VOID
CONSTITUTES REVERSIBLE ERROR.12
Petitioner contends that the bigamous marriage of the respondents, which brought embarrassment to
her and her children, confers upon her an interest to seek judicial remedy to address her grievances and
to protect her family from further embarrassment and humiliation. She claims that the Court of Appeals
committed reversible error in not declaring the marriage void despite overwhelming evidence and the
state policy discouraging illegal and immoral marriages.13
The main issue to be resolved is whether petitioner has the personality to file a petition for the
declaration of nullity of marriage of the respondents on the ground of bigamy. However, this issue may
not be resolved without first determining the corollary factual issues of whether the petitioner and
respondent Orlando had indeed become naturalized American citizens and whether they had actually
been judicially granted a divorce decree.
While it is a settled rule that the Court is not a trier of facts and does not normally undertake the re-
examination of the evidence presented by the contending parties during the trial of the case,14 there are,
however, exceptions to this rule, like when the findings of facts of the RTC and the Court of Appeals are
conflicting, or when the findings are conclusions without citation of specific evidence on which they are
based.15
Both the RTC and the Court of Appeals found that petitioner and respondent Orlando were naturalized
American citizens and that they obtained a divorce decree in April 1988. However, after a careful review
of the records, we note that other than the allegations in the complaint and the testimony during the
trial, the records are bereft of competent evidence to prove their naturalization and divorce.
The Court of Appeals therefore had no basis when it held: In light of the allegations of Felicitas’ complaint
and the documentary and testimonial evidence she presented, we deem it undisputed that Orlando and
Felicitas are American citizens and had this citizenship status when they secured their divorce decree in
April 1988. We are not therefore dealing in this case with Filipino citizens whose marital status is
governed by the Family Code and our Civil Code, but with American citizens who secured their divorce in
the U.S. and who are considered by their national law to be free to contract another marriage. x x x16
Further, the Court of Appeals mistakenly considered the failure of the petitioner to refute or contest the
allegation in respondents’ brief, that she and respondent Orlando were American citizens at the time
they secured their divorce in April 1988, as sufficient to establish the fact of naturalization and divorce.17
We note that it was the petitioner who alleged in her complaint that they acquired American citizenship
and that respondent Orlando obtained a judicial divorce decree.18 It is settled rule that one who alleges a
fact has the burden of proving it and mere allegation is not evidence.19
Divorce means the legal dissolution of a lawful union for a cause arising after marriage. But divorces are
of different types. The two basic ones are (1) absolute divorce or a vinculo matrimonii and (2) limited
divorce or a mensa et thoro. The first kind terminates the marriage, while the second suspends it and
leaves the bond in full force.20 A divorce obtained abroad by an alien may be recognized in our
jurisdiction, provided such decree is valid according to the national law of the foreigner.21 However,
before it can be recognized by our courts, the party pleading it must prove the divorce as a fact and
demonstrate its conformity to the foreign law allowing it, which must be proved considering that our
courts cannot take judicial notice of foreign laws.22
Without the divorce decree and foreign law as part of the evidence, we cannot rule on the issue of
whether petitioner has the personality to file the petition for declaration of nullity of marriage. After all,
she may have the personality to file the petition if the divorce decree obtained was a limited divorce or a
mensa et thoro; or the foreign law may restrict remarriage even after the divorce decree becomes
absolute.23 In such case, the RTC would be correct to declare the marriage of the respondents void for
being bigamous, there being already in evidence two existing marriage certificates, which were both
obtained in the Philippines, one in Mabini, Pangasinan dated December 21, 1959 between Eusebio Bristol
and respondent Merope,24 and the other, in Calasiao, Pangasinan dated June 16, 1988 between the
respondents.25
However, if there was indeed a divorce decree obtained and which, following the national law of Orlando,
does not restrict remarriage, the Court of Appeals would be correct in ruling that petitioner has no legal
personality to file a petition to declare the nullity of marriage, thus:
Freed from their existing marital bond, each of the former spouses no longer has any interest nor should
each have the personality to inquire into the marriage that the other might subsequently contract. x x x
Viewed from another perspective, Felicitas has no existing interest in Orlando’s subsequent marriage
since the validity, as well as any defect or infirmity, of this subsequent marriage will not affect the
divorced status of Orlando and Felicitas. x x x26
True, under the New Civil Code which is the law in force at the time the respondents were married, or
even in the Family Code, there is no specific provision as to who can file a petition to declare the nullity of
marriage; however, only a party who can demonstrate "proper interest" can file the same. A petition to
declare the nullity of marriage, like any other actions, must be prosecuted or defended in the name of the
real party in interest27 and must be based on a cause of action.28 Thus, in Niñal v. Bayadog,29 the Court
held that the children have the personality to file the petition to declare the nullity of the marriage of
their deceased father to their stepmother as it affects their successional rights.1awphi1.net Significantly,
Section 2(a) of The Rule on Declaration of Absolute Nullity of Void Marriages and Annulment of Voidable
Marriages, which took effect on March 15, 2003, now specifically provides:
SECTION 2. Petition for declaration of absolute nullity of void marriages. —
(a) Who may file. — A petition for declaration of absolute nullity of void marriage may be filed solely by
the husband or the wife.
x x x x
In fine, petitioner’s personality to file the petition to declare the nullity of marriage cannot be ascertained
because of the absence of the divorce decree and the foreign law allowing it. Hence, a remand of the case
to the trial court for reception of additional evidence is necessary to determine whether respondent
Orlando was granted a divorce decree and whether the foreign law which granted the same allows or
restricts remarriage. If it is proved that a valid divorce decree was obtained and the same did not allow
respondent Orlando’s remarriage, then the trial court should declare respondents’ marriage as bigamous
and void ab initio but reduce the amount of moral damages from P300,000.00 to P50,000.00 and
exemplary damages from P200,000.00 to P25,000.00. On the contrary, if it is proved that a valid divorce
decree was obtained which allowed Orlando to remarry, then the trial court must dismiss the instant
petition to declare nullity of marriage on the ground that petitioner Felicitas Amor-Catalan lacks legal
personality to file the same.
WHEREFORE, in view of the foregoing, let this case be REMANDED to the trial court for its proper
disposition. No costs.
SO ORDERED.


Republic of the Philippines SUPREME COURT Manila
EN BANC
G.R. No. L-19671 November 29, 1965
PASTOR B. TENCHAVEZ, plaintiff-appellant, vs. VICENTA F. ESCAÑO, ET AL., defendants-appellees.
I. V. Binamira & F. B. Barria for plaintiff-appellant. Jalandoni & Jarnir for defendants-appellees.
REYES, J.B.L., J.:
Direct appeal, on factual and legal questions, from the judgment of the Court of First Instance of Cebu, in
its Civil Case No. R-4177, denying the claim of the plaintiff-appellant, Pastor B. Tenchavez, for legal
separation and one million pesos in damages against his wife and parents-in-law, the defendants-
appellees, Vicente, Mamerto and Mena,1 all surnamed "Escaño," respectively.2
The facts, supported by the evidence of record, are the following:
Missing her late afternoon classes on 24 February 1948 in the University of San Carlos, Cebu City, where
she was then enrolled as a second year student of commerce, Vicenta Escaño, 27 years of age (scion of a
well-to-do and socially prominent Filipino family of Spanish ancestry and a "sheltered colegiala"),
exchanged marriage vows with Pastor Tenchavez, 32 years of age, an engineer, ex-army officer and of
undistinguished stock, without the knowledge of her parents, before a Catholic chaplain, Lt. Moises
Lavares, in the house of one Juan Alburo in the said city. The marriage was the culmination of a previous
love affair and was duly registered with the local civil register.
Vicenta's letters to Pastor, and his to her, before the marriage, indicate that the couple were deeply in
love. Together with a friend, Pacita Noel, their matchmaker and go-between, they had planned out their
marital future whereby Pacita would be the governess of their first-born; they started saving money in a
piggy bank. A few weeks before their secret marriage, their engagement was broken; Vicenta returned
the engagement ring and accepted another suitor, Joseling Lao. Her love for Pastor beckoned; she
pleaded for his return, and they reconciled. This time they planned to get married and then elope. To
facilitate the elopement, Vicenta had brought some of her clothes to the room of Pacita Noel in St. Mary's
Hall, which was their usual trysting place.
Although planned for the midnight following their marriage, the elopement did not, however, materialize
because when Vicente went back to her classes after the marriage, her mother, who got wind of the
intended nuptials, was already waiting for her at the college. Vicenta was taken home where she
admitted that she had already married Pastor. Mamerto and Mena Escaño were surprised, because
Pastor never asked for the hand of Vicente, and were disgusted because of the great scandal that the
clandestine marriage would provoke (t.s.n., vol. III, pp. 1105-06). The following morning, the Escaño
spouses sought priestly advice. Father Reynes suggested a recelebration to validate what he believed to
be an invalid marriage, from the standpoint of the Church, due to the lack of authority from the
Archbishop or the parish priest for the officiating chaplain to celebrate the marriage. The recelebration
did not take place, because on 26 February 1948 Mamerto Escaño was handed by a maid, whose name he
claims he does not remember, a letter purportedly coming from San Carlos college students and
disclosing an amorous relationship between Pastor Tenchavez and Pacita Noel; Vicenta translated the
letter to her father, and thereafter would not agree to a new marriage. Vicenta and Pastor met that day
in the house of Mrs. Pilar Mendezona. Thereafter, Vicenta continued living with her parents while Pastor
returned to his job in Manila. Her letter of 22 March 1948 (Exh. "M"), while still solicitous of her
husband's welfare, was not as endearing as her previous letters when their love was aflame.
Vicenta was bred in Catholic ways but is of a changeable disposition, and Pastor knew it. She fondly
accepted her being called a "jellyfish." She was not prevented by her parents from communicating with
Pastor (Exh. "1-Escaño"), but her letters became less frequent as the days passed. As of June, 1948 the
newlyweds were already estranged (Exh. "2-Escaño"). Vicenta had gone to Jimenez, Misamis Occidental,
to escape from the scandal that her marriage stirred in Cebu society. There, a lawyer filed for her a
petition, drafted by then Senator Emmanuel Pelaez, to annul her marriage. She did not sign the petition
(Exh. "B-5"). The case was dismissed without prejudice because of her non-appearance at the hearing
(Exh. "B-4").
On 24 June 1950, without informing her husband, she applied for a passport, indicating in her application
that she was single, that her purpose was to study, and she was domiciled in Cebu City, and that she
intended to return after two years. The application was approved, and she left for the United States. On
22 August 1950, she filed a verified complaint for divorce against the herein plaintiff in the Second
Judicial District Court of the State of Nevada in and for the County of Washoe, on the ground of "extreme
cruelty, entirely mental in character." On 21 October 1950, a decree of divorce, "final and absolute", was
issued in open court by the said tribunal.
In 1951 Mamerto and Mena Escaño filed a petition with the Archbishop of Cebu to annul their daughter's
marriage to Pastor (Exh. "D"). On 10 September 1954, Vicenta sought papal dispensation of her marriage
(Exh. "D"-2).
On 13 September 1954, Vicenta married an American, Russell Leo Moran, in Nevada. She now lives with
him in California, and, by him, has begotten children. She acquired American citizenship on 8 August
1958.
But on 30 July 1955, Tenchavez had initiated the proceedings at bar by a complaint in the Court of First
Instance of Cebu, and amended on 31 May 1956, against Vicenta F. Escaño, her parents, Mamerto and
Mena Escaño, whom he charged with having dissuaded and discouraged Vicenta from joining her
husband, and alienating her affections, and against the Roman Catholic Church, for having, through its
Diocesan Tribunal, decreed the annulment of the marriage, and asked for legal separation and one million
pesos in damages. Vicenta claimed a valid divorce from plaintiff and an equally valid marriage to her
present husband, Russell Leo Moran; while her parents denied that they had in any way influenced their
daughter's acts, and counterclaimed for moral damages.
The appealed judgment did not decree a legal separation, but freed the plaintiff from supporting his wife
and to acquire property to the exclusion of his wife. It allowed the counterclaim of Mamerto Escaño and
Mena Escaño for moral and exemplary damages and attorney's fees against the plaintiff-appellant, to the
extent of P45,000.00, and plaintiff resorted directly to this Court.
The appellant ascribes, as errors of the trial court, the following:
1. In not declaring legal separation; in not holding defendant Vicenta F. Escaño liable for damages and in
dismissing the complaint;. 2. In not holding the defendant parents Mamerto Escano and the heirs of Doña
Mena Escaño liable for damages;.
3 In holding the plaintiff liable for and requiring him to pay the damages to the defendant parents on
their counterclaims; and.
4. In dismissing the complaint and in denying the relief sought by the plaintiff.
That on 24 February 1948 the plaintiff-appellant, Pastor Tenchavez, and the defendant-appellee, Vicenta
Escaño, were validly married to each other, from the standpoint of our civil law, is clearly established by
the record before us. Both parties were then above the age of majority, and otherwise qualified; and
both consented to the marriage, which was performed by a Catholic priest (army chaplain Lavares) in the
presence of competent witnesses. It is nowhere shown that said priest was not duly authorized under
civil law to solemnize marriages.
The chaplain's alleged lack of ecclesiastical authorization from the parish priest and the Ordinary, as
required by Canon law, is irrelevant in our civil law, not only because of the separation of Church and
State but also because Act 3613 of the Philippine Legislature (which was the marriage law in force at the
time) expressly provided that —
SEC. 1. Essential requisites. Essential requisites for marriage are the legal capacity of the contracting
parties and consent. (Emphasis supplied)
The actual authority of the solemnizing officer was thus only a formal requirement, and, therefore, not
essential to give the marriage civil effects,3 and this is emphasized by section 27 of said marriage act,
which provided the following:
SEC. 27. Failure to comply with formal requirements. No marriage shall be declared invalid because of the
absence of one or several of the formal requirements of this Act if, when it was performed, the spouses
or one of them believed in good faith that the person who solemnized the marriage was actually
empowered to do so, and that the marriage was perfectly legal.
The good faith of all the parties to the marriage (and hence the validity of their marriage) will be
presumed until the contrary is positively proved (Lao vs. Dee Tim, 45 Phil. 739, 745; Francisco vs. Jason,
60 Phil. 442, 448). It is well to note here that in the case at bar, doubts as to the authority of the
solemnizing priest arose only after the marriage, when Vicenta's parents consulted Father Reynes and the
archbishop of Cebu. Moreover, the very act of Vicenta in abandoning her original action for annulment
and subsequently suing for divorce implies an admission that her marriage to plaintiff was valid and
binding.
Defendant Vicenta Escaño argues that when she contracted the marriage she was under the undue
influence of Pacita Noel, whom she charges to have been in conspiracy with appellant Tenchavez. Even
granting, for argument's sake, the truth of that contention, and assuming that Vicenta's consent was
vitiated by fraud and undue influence, such vices did not render her marriage ab initio void, but merely
voidable, and the marriage remained valid until annulled by a competent civil court. This was never done,
and admittedly, Vicenta's suit for annulment in the Court of First Instance of Misamis was dismissed for
non-prosecution.
It is equally clear from the record that the valid marriage between Pastor Tenchavez and Vicenta Escaño
remained subsisting and undissolved under Philippine law, notwithstanding the decree of absolute
divorce that the wife sought and obtained on 21 October 1950 from the Second Judicial District Court of
Washoe County, State of Nevada, on grounds of "extreme cruelty, entirely mental in character." At the
time the divorce decree was issued, Vicenta Escaño, like her husband, was still a Filipino citizen.4 She was
then subject to Philippine law, and Article 15 of the Civil Code of the Philippines (Rep. Act No. 386),
already in force at the time, expressly provided:
Laws relating to family rights and duties or to the status, condition and legal capacity of persons are
binding upon the citizens of the Philippines, even though living abroad.
The Civil Code of the Philippines, now in force, does not admit absolute divorce, quo ad vinculo
matrimonii; and in fact does not even use that term, to further emphasize its restrictive policy on the
matter, in contrast to the preceding legislation that admitted absolute divorce on grounds of adultery of
the wife or concubinage of the husband (Act 2710). Instead of divorce, the present Civil Code only
provides for legal separation (Title IV, Book 1, Arts. 97 to 108), and, even in that case, it expressly
prescribes that "the marriage bonds shall not be severed" (Art. 106, subpar. 1).
For the Philippine courts to recognize and give recognition or effect to a foreign decree of absolute
divorce betiveen Filipino citizens could be a patent violation of the declared public policy of the state,
specially in view of the third paragraph of Article 17 of the Civil Code that prescribes the following:
Prohibitive laws concerning persons, their acts or property, and those which have for their object public
order, policy and good customs, shall not be rendered ineffective by laws or judgments promulgated, or
by determinations or conventions agreed upon in a foreign country.
Even more, the grant of effectivity in this jurisdiction to such foreign divorce decrees would, in effect, give
rise to an irritating and scandalous discrimination in favor of wealthy citizens, to the detriment of those
members of our polity whose means do not permit them to sojourn abroad and obtain absolute divorces
outside the Philippines.
From this point of view, it is irrelevant that appellant Pastor Tenchavez should have appeared in the
Nevada divorce court. Primarily because the policy of our law cannot be nullified by acts of private parties
(Civil Code,Art. 17, jam quot.); and additionally, because the mere appearance of a non-resident consort
cannot confer jurisdiction where the court originally had none (Area vs. Javier, 95 Phil. 579).
From the preceding facts and considerations, there flows as a necessary consequence that in this
jurisdiction Vicenta Escaño's divorce and second marriage are not entitled to recognition as valid; for her
previous union to plaintiff Tenchavez must be declared to be existent and undissolved. It follows,
likewise, that her refusal to perform her wifely duties, and her denial of consortium and her desertion of
her husband constitute in law a wrong caused through her fault, for which the husband is entitled to the
corresponding indemnity (Civil Code, Art. 2176). Neither an unsubstantiated charge of deceit nor an
anonymous letter charging immorality against the husband constitute, contrary to her claim, adequate
excuse. Wherefore, her marriage and cohabitation with Russell Leo Moran is technically "intercourse with
a person not her husband" from the standpoint of Philippine Law, and entitles plaintiff-appellant
Tenchavez to a decree of "legal separation under our law, on the basis of adultery" (Revised Penal Code,
Art. 333).
The foregoing conclusions as to the untoward effect of a marriage after an invalid divorce are in accord
with the previous doctrines and rulings of this court on the subject, particularly those that were rendered
under our laws prior to the approval of the absolute divorce act (Act 2710 of the Philippine Legislature).
As a matter of legal history, our statutes did not recognize divorces a vinculo before 1917, when Act 2710
became effective; and the present Civil Code of the Philippines, in disregarding absolute divorces, in
effect merely reverted to the policies on the subject prevailing before Act 2710. The rulings, therefore,
under the Civil Code of 1889, prior to the Act above-mentioned, are now, fully applicable. Of these, the
decision in Ramirez vs. Gmur, 42 Phil. 855, is of particular interest. Said this Court in that case:
As the divorce granted by the French Court must be ignored, it results that the marriage of Dr. Mory and
Leona Castro, celebrated in London in 1905, could not legalize their relations; and the circumstance that
they afterwards passed for husband and wife in Switzerland until her death is wholly without legal
significance. The claims of the very children to participate in the estate of Samuel Bishop must therefore
be rejected. The right to inherit is limited to legitimate, legitimated and acknowledged natural children.
The children of adulterous relations are wholly excluded. The word "descendants" as used in Article 941
of the Civil Code cannot be interpreted to include illegitimates born of adulterous relations. (Emphasis
supplied)
Except for the fact that the successional rights of the children, begotten from Vicenta's marriage to Leo
Moran after the invalid divorce, are not involved in the case at bar, the Gmur case is authority for the
proposition that such union is adulterous in this jurisdiction, and, therefore, justifies an action for legal
separation on the part of the innocent consort of the first marriage, that stands undissolved in Philippine
law. In not so declaring, the trial court committed error.
True it is that our ruling gives rise to anomalous situations where the status of a person (whether
divorced or not) would depend on the territory where the question arises. Anomalies of this kind are not
new in the Philippines, and the answer to them was given in Barretto vs. Gonzales, 58 Phil. 667:
The hardship of the existing divorce laws in the Philippine Islands are well known to the members of the
Legislature. It is the duty of the Courts to enforce the laws of divorce as written by Legislature if they are
constitutional. Courts have no right to say that such laws are too strict or too liberal. (p. 72)
The appellant's first assignment of error is, therefore, sustained.
However, the plaintiff-appellant's charge that his wife's parents, Dr. Mamerto Escaño and his wife, the
late Doña Mena Escaño, alienated the affections of their daughter and influenced her conduct toward her
husband are not supported by credible evidence. The testimony of Pastor Tenchavez about the Escaño's
animosity toward him strikes us to be merely conjecture and exaggeration, and are belied by Pastor's
own letters written before this suit was begun (Exh. "2-Escaño" and "Vicenta," Rec. on App., pp. 270-274).
In these letters he expressly apologized to the defendants for "misjudging them" and for the "great
unhappiness" caused by his "impulsive blunders" and "sinful pride," "effrontery and audacity" [sic].
Plaintiff was admitted to the Escaño house to visit and court Vicenta, and the record shows nothing to
prove that he would not have been accepted to marry Vicente had he openly asked for her hand, as good
manners and breeding demanded. Even after learning of the clandestine marriage, and despite their
shock at such unexpected event, the parents of Vicenta proposed and arranged that the marriage be
recelebrated in strict conformity with the canons of their religion upon advice that the previous one was
canonically defective. If no recelebration of the marriage ceremony was had it was not due to defendants
Mamerto Escaño and his wife, but to the refusal of Vicenta to proceed with it. That the spouses Escaño
did not seek to compel or induce their daughter to assent to the recelebration but respected her decision,
or that they abided by her resolve, does not constitute in law an alienation of affections. Neither does the
fact that Vicenta's parents sent her money while she was in the United States; for it was natural that they
should not wish their daughter to live in penury even if they did not concur in her decision to divorce
Tenchavez (27 Am. Jur. 130-132). There is no evidence that the parents of Vicenta, out of improper
motives, aided and abetted her original suit for annulment, or her subsequent divorce; she appears to
have acted independently, and being of age, she was entitled to judge what was best for her and ask that
her decisions be respected. Her parents, in so doing, certainly cannot be charged with alienation of
affections in the absence of malice or unworthy motives, which have not been shown, good faith being
always presumed until the contrary is proved.
SEC. 529. Liability of Parents, Guardians or Kin. — The law distinguishes between the right of a parent to
interest himself in the marital affairs of his child and the absence of rights in a stranger to intermeddle in
such affairs. However, such distinction between the liability of parents and that of strangers is only in
regard to what will justify interference. A parent isliable for alienation of affections resulting from his own
malicious conduct, as where he wrongfully entices his son or daughter to leave his or her spouse, but he
is not liable unless he acts maliciously, without justification and from unworthy motives. He is not liable
where he acts and advises his child in good faith with respect to his child's marital relations in the interest
of his child as he sees it, the marriage of his child not terminating his right and liberty to interest himself
in, and be extremely solicitous for, his child's welfare and happiness, even where his conduct and advice
suggest or result in the separation of the spouses or the obtaining of a divorce or annulment, or where he
acts under mistake or misinformation, or where his advice or interference are indiscreet or unfortunate,
although it has been held that the parent is liable for consequences resulting from recklessness. He may
in good faith take his child into his home and afford him or her protection and support, so long as he has
not maliciously enticed his child away, or does not maliciously entice or cause him or her to stay away,
from his or her spouse. This rule has more frequently been applied in the case of advice given to a
married daughter, but it is equally applicable in the case of advice given to a son.
Plaintiff Tenchavez, in falsely charging Vicenta's aged parents with racial or social discrimination and with
having exerted efforts and pressured her to seek annulment and divorce, unquestionably caused them
unrest and anxiety, entitling them to recover damages. While this suit may not have been impelled by
actual malice, the charges were certainly reckless in the face of the proven facts and circumstances. Court
actions are not established for parties to give vent to their prejudices or spleen.
In the assessment of the moral damages recoverable by appellant Pastor Tenchavez from defendant
Vicente Escaño, it is proper to take into account, against his patently unreasonable claim for a million
pesos in damages, that (a) the marriage was celebrated in secret, and its failure was not characterized by
publicity or undue humiliation on appellant's part; (b) that the parties never lived together; and (c) that
there is evidence that appellant had originally agreed to the annulment of the marriage, although such a
promise was legally invalid, being against public policy (cf. Art. 88, Civ. Code). While appellant is unable to
remarry under our law, this fact is a consequence of the indissoluble character of the union that appellant
entered into voluntarily and with open eyes rather than of her divorce and her second marriage. All told,
we are of the opinion that appellant should recover P25,000 only by way of moral damages and
attorney's fees.
With regard to the P45,000 damages awarded to the defendants, Dr. Mamerto Escaño and Mena Escaño,
by the court below, we opine that the same are excessive. While the filing of this unfounded suit must
have wounded said defendants' feelings and caused them anxiety, the same could in no way have
seriously injured their reputation, or otherwise prejudiced them, lawsuits having become a common
occurrence in present society. What is important, and has been correctly established in the decision of
the court below, is that said defendants were not guilty of any improper conduct in the whole deplorable
affair. This Court, therefore, reduces the damages awarded to P5,000 only. Summing up, the Court rules:
(1) That a foreign divorce between Filipino citizens, sought and decreed after the effectivity of the
present Civil Code (Rep. Act 386), is not entitled to recognition as valid in this jurisdiction; and neither is
the marriage contracted with another party by the divorced consort, subsequently to the foreign decree
of divorce, entitled to validity in the country;
(2) That the remarriage of divorced wife and her co-habitation with a person other than the lawful
husband entitle the latter to a decree of legal separation conformably to Philippine law;
(3) That the desertion and securing of an invalid divorce decree by one consort entitles the other to
recover damages;
(4) That an action for alienation of affections against the parents of one consort does not lie in the
absence of proof of malice or unworthy motives on their part.
WHEREFORE, the decision under appeal is hereby modified as follows;
(1) Adjudging plaintiff-appellant Pastor Tenchavez entitled to a decree of legal separation from defendant
Vicenta F. Escaño;
(2) Sentencing defendant-appellee Vicenta Escaño to pay plaintiff-appellant Tenchavez the amount of
P25,000 for damages and attorneys' fees;
(3) Sentencing appellant Pastor Tenchavez to pay the appellee, Mamerto Escaño and the estate of his
wife, the deceased Mena Escaño, P5,000 by way of damages and attorneys' fees.
Neither party to recover costs.
GLOBE MACKAY CABLE AND RADIO CORP., and HERBERT C. HENDRY, petitioners,
vs.
THE HONORABLE COURT OF APPEALS and RESTITUTO M. TOBIAS, respondents.
Atencia & Arias Law Offices for petitioners.
Romulo C. Felizmena for private respondent.

CORTES, J.:
Private respondent Restituto M. Tobias was employed by petitioner Globe Mackay Cable and Radio
Corporation (GLOBE MACKAY) in a dual capacity as a purchasing agent and administrative assistant to the
engineering operations manager. In 1972, GLOBE MACKAY discovered fictitious purchases and other
fraudulent transactions for which it lost several thousands of pesos.
According to private respondent it was he who actually discovered the anomalies and reported them on
November 10, 1972 to his immediate superior Eduardo T. Ferraren and to petitioner Herbert C. Hendry
who was then the Executive Vice-President and General Manager of GLOBE MACKAY.
On November 11, 1972, one day after private respondent Tobias made the report, petitioner Hendry
confronted him by stating that he was the number one suspect, and ordered him to take a one week
forced leave, not to communicate with the office, to leave his table drawers open, and to leave the office
keys.
On November 20, 1972, when private respondent Tobias returned to work after the forced leave,
petitioner Hendry went up to him and called him a "crook" and a "swindler." Tobias was then ordered to
take a lie detector test. He was also instructed to submit specimen of his handwriting, signature, and
initials for examination by the police investigators to determine his complicity in the anomalies.
On December 6,1972, the Manila police investigators submitted a laboratory crime report (Exh. "A")
clearing private respondent of participation in the anomalies.
Not satisfied with the police report, petitioners hired a private investigator, retired Col. Jose G.
Fernandez, who on December 10, 1972, submitted a report (Exh. "2") finding Tobias guilty. This report
however expressly stated that further investigation was still to be conducted.
Nevertheless, on December 12, 1972, petitioner Hendry issued a memorandum suspending Tobias from
work preparatory to the filing of criminal charges against him.
On December 19,1972, Lt. Dioscoro V. Tagle, Metro Manila Police Chief Document Examiner, after
investigating other documents pertaining to the alleged anomalous transactions, submitted a second
laboratory crime report (Exh. "B") reiterating his previous finding that the handwritings, signatures, and
initials appearing in the checks and other documents involved in the fraudulent transactions were not
those of Tobias. The lie detector tests conducted on Tobias also yielded negative results.
Notwithstanding the two police reports exculpating Tobias from the anomalies and the fact that the
report of the private investigator, was, by its own terms, not yet complete, petitioners filed with the City
Fiscal of Manila a complaint for estafa through falsification of commercial documents, later amended to
just estafa. Subsequently five other criminal complaints were filed against Tobias, four of which were for
estafa through Falsification of commercial document while the fifth was for of Article 290 of' the Revised
Penal Code (Discovering Secrets Through Seizure of Correspondence).lâwphî1.ñèt Two of these
complaints were refiled with the Judge Advocate General's Office, which however, remanded them to the
fiscal's office. All of the six criminal complaints were dismissed by the fiscal. Petitioners appealed four of
the fiscal's resolutions dismissing the criminal complaints with the Secretary of Justice, who, however,
affirmed their dismissal.
In the meantime, on January 17, 1973, Tobias received a notice (Exh. "F") from petitioners that his
employment has been terminated effective December 13, 1972. Whereupon, Tobias filed a complaint for
illegal dismissal. The labor arbiter dismissed the complaint. On appeal, the National Labor Relations
Commission (NLRC) reversed the labor arbiter's decision. However, the Secretary of Labor, acting on
petitioners' appeal from the NLRC ruling, reinstated the labor arbiter's decision. Tobias appealed the
Secretary of Labor's order with the Office of the President. During the pendency of the appeal with said
office, petitioners and private respondent Tobias entered into a compromise agreement regarding the
latter's complaint for illegal dismissal.
Unemployed, Tobias sought employment with the Republic Telephone Company (RETELCO). However,
petitioner Hendry, without being asked by RETELCO, wrote a letter to the latter stating that Tobias was
dismissed by GLOBE MACKAY due to dishonesty.
Private respondent Tobias filed a civil case for damages anchored on alleged unlawful, malicious,
oppressive, and abusive acts of petitioners. Petitioner Hendry, claiming illness, did not testify during the
hearings. The Regional Trial Court (RTC) of Manila, Branch IX, through Judge Manuel T. Reyes rendered
judgment in favor of private respondent by ordering petitioners to pay him eighty thousand pesos
(P80,000.00) as actual damages, two hundred thousand pesos (P200,000.00) as moral damages, twenty
thousand pesos (P20,000.00) as exemplary damages, thirty thousand pesos (P30,000.00) as attorney's
fees, and costs. Petitioners appealed the RTC decision to the Court of Appeals. On the other hand, Tobias
appealed as to the amount of damages. However, the Court of Appeals, an a decision dated August 31,
1987 affirmed the RTC decision in toto. Petitioners' motion for reconsideration having been denied, the
instant petition for review on certiorari was filed.
The main issue in this case is whether or not petitioners are liable for damages to private respondent.
Petitioners contend that they could not be made liable for damages in the lawful exercise of their right to
dismiss private respondent.
On the other hand, private respondent contends that because of petitioners' abusive manner in
dismissing him as well as for the inhuman treatment he got from them, the Petitioners must indemnify
him for the damage that he had suffered.
One of the more notable innovations of the New Civil Code is the codification of "some basic principles
that are to be observed for the rightful relationship between human beings and for the stability of the
social order." [REPORT ON THE CODE COMMISSION ON THE PROPOSED CIVIL CODE OF THE PHILIPPINES,
p. 39]. The framers of the Code, seeking to remedy the defect of the old Code which merely stated the
effects of the law, but failed to draw out its spirit, incorporated certain fundamental precepts which were
"designed to indicate certain norms that spring from the fountain of good conscience" and which were
also meant to serve as "guides for human conduct [that] should run as golden threads through society, to
the end that law may approach its supreme ideal, which is the sway and dominance of justice" (Id.)
Foremost among these principles is that pronounced in Article 19 which provides:
Art. 19. Every person must, in the exercise of his rights and in the performance of his
duties, act with justice, give everyone his due, and observe honesty and good faith.
This article, known to contain what is commonly referred to as the principle of abuse of rights, sets
certain standards which must be observed not only in the exercise of one's rights but also in the
performance of one's duties. These standards are the following: to act with justice; to give everyone his
due; and to observe honesty and good faith. The law, therefore, recognizes a primordial limitation on all
rights; that in their exercise, the norms of human conduct set forth in Article 19 must be observed. A
right, though by itself legal because recognized or granted by law as such, may nevertheless become the
source of some illegality. When a right is exercised in a manner which does not conform with the norms
enshrined in Article 19 and results in damage to another, a legal wrong is thereby committed for which
the wrongdoer must be held responsible. But while Article 19 lays down a rule of conduct for the
government of human relations and for the maintenance of social order, it does not provide a remedy for
its violation. Generally, an action for damages under either Article 20 or Article 21 would be proper.
Article 20, which pertains to damage arising from a violation of law, provides that:
Art. 20. Every person who contrary to law, wilfully or negligently causes damage to
another, shall indemnify the latter for the same.
However, in the case at bar, petitioners claim that they did not violate any provision of law since they
were merely exercising their legal right to dismiss private respondent. This does not, however, leave
private respondent with no relief because Article 21 of the Civil Code provides that:
Art. 21. Any person who wilfully causes loss or injury to another in a manner that is
contrary to morals, good customs or public policy shall compensate the latter for the
damage.
This article, adopted to remedy the "countless gaps in the statutes, which leave so many victims of moral
wrongs helpless, even though they have actually suffered material and moral injury" [Id.] should
"vouchsafe adequate legal remedy for that untold number of moral wrongs which it is impossible for
human foresight to provide for specifically in the statutes" [Id. it p. 40; See also PNB v. CA, G.R. No. L-
27155, May 18,1978, 83 SCRA 237, 247].
In determining whether or not the principle of abuse of rights may be invoked, there is no rigid test which
can be applied. While the Court has not hesitated to apply Article 19 whether the legal and factual
circumstances called for its application [See for e.g., Velayo v. Shell Co. of the Phil., Ltd., 100 Phil. 186
(1956); PNB v. CA, supra;Grand Union Supermarket, Inc. v. Espino, Jr., G.R. No. L-48250, December 28,
1979, 94 SCRA 953; PAL v. CA, G.R. No. L-46558, July 31,1981,106 SCRA 391; United General Industries,
Inc, v. Paler G.R. No. L-30205, March 15,1982,112 SCRA 404; Rubio v. CA, G.R. No. 50911, August 21,
1987, 153 SCRA 183] the question of whether or not the principle of abuse of rights has been violated
resulting in damages under Article 20 or Article 21 or other applicable provision of law, depends on the
circumstances of each case. And in the instant case, the Court, after examining the record and
considering certain significant circumstances, finds that all petitioners have indeed abused the right that
they invoke, causing damage to private respondent and for which the latter must now be indemnified.
The trial court made a finding that notwithstanding the fact that it was private respondent Tobias who
reported the possible existence of anomalous transactions, petitioner Hendry "showed belligerence and
told plaintiff (private respondent herein) that he was the number one suspect and to take a one week
vacation leave, not to communicate with the office, to leave his table drawers open, and to leave his keys
to said defendant (petitioner Hendry)" [RTC Decision, p. 2; Rollo, p. 232]. This, petitioners do not dispute.
But regardless of whether or not it was private respondent Tobias who reported the anomalies to
petitioners, the latter's reaction towards the former upon uncovering the anomalies was less than civil.
An employer who harbors suspicions that an employee has committed dishonesty might be justified in
taking the appropriate action such as ordering an investigation and directing the employee to go on a
leave. Firmness and the resolve to uncover the truth would also be expected from such employer. But the
high-handed treatment accorded Tobias by petitioners was certainly uncalled for. And this reprehensible
attitude of petitioners was to continue when private respondent returned to work on November 20, 1972
after his one week forced leave. Upon reporting for work, Tobias was confronted by Hendry who said.
"Tobby, you are the crook and swindler in this company." Considering that the first report made by the
police investigators was submitted only on December 10, 1972 [See Exh. A] the statement made by
petitioner Hendry was baseless. The imputation of guilt without basis and the pattern of harassment
during the investigations of Tobias transgress the standards of human conduct set forth in Article 19 of
the Civil Code. The Court has already ruled that the right of the employer to dismiss an employee should
not be confused with the manner in which the right is exercised and the effects flowing therefrom. If the
dismissal is done abusively, then the employer is liable for damages to the employee [Quisaba v. Sta. Ines-
Melale Veneer and Plywood Inc., G.R. No. L-38088, August 30, 1974, 58 SCRA 771; See also Philippine
Refining Co., Inc. v. Garcia, G.R. No. L-21871, September 27,1966, 18 SCRA 107] Under the circumstances
of the instant case, the petitioners clearly failed to exercise in a legitimate manner their right to dismiss
Tobias, giving the latter the right to recover damages under Article 19 in relation to Article 21 of the Civil
Code.
But petitioners were not content with just dismissing Tobias. Several other tortious acts were committed
by petitioners against Tobias after the latter's termination from work. Towards the latter part of January,
1973, after the filing of the first of six criminal complaints against Tobias, the latter talked to Hendry to
protest the actions taken against him. In response, Hendry cut short Tobias' protestations by telling him
to just confess or else the company would file a hundred more cases against him until he landed in jail.
Hendry added that, "You Filipinos cannot be trusted." The threat unmasked petitioner's bad faith in the
various actions taken against Tobias. On the other hand, the scornful remark about Filipinos as well as
Hendry's earlier statements about Tobias being a "crook" and "swindler" are clear violations of 'Tobias'
personal dignity [See Article 26, Civil Code].
The next tortious act committed by petitioners was the writing of a letter to RETELCO sometime in
October 1974, stating that Tobias had been dismissed by GLOBE MACKAY due to dishonesty. Because of
the letter, Tobias failed to gain employment with RETELCO and as a result of which, Tobias remained
unemployed for a longer period of time. For this further damage suffered by Tobias, petitioners must
likewise be held liable for damages consistent with Article 2176 of the Civil Code. Petitioners, however,
contend that they have a "moral, if not legal, duty to forewarn other employers of the kind of employee
the plaintiff (private respondent herein) was." [Petition, p. 14; Rollo, p. 15]. Petitioners further claim that
"it is the accepted moral and societal obligation of every man to advise or warn his fellowmen of any
threat or danger to the latter's life, honor or property. And this includes warning one's brethren of the
possible dangers involved in dealing with, or accepting into confidence, a man whose honesty and
integrity is suspect" [Id.]. These arguments, rather than justify petitioners' act, reveal a seeming obsession
to prevent Tobias from getting a job, even after almost two years from the time Tobias was dismissed.
Finally, there is the matter of the filing by petitioners of six criminal complaints against Tobias. Petitioners
contend that there is no case against them for malicious prosecution and that they cannot be "penalized
for exercising their right and prerogative of seeking justice by filing criminal complaints against an
employee who was their principal suspect in the commission of forgeries and in the perpetration of
anomalous transactions which defrauded them of substantial sums of money" [Petition, p. 10, Rollo, p.
11].
While sound principles of justice and public policy dictate that persons shall have free resort to the courts
for redress of wrongs and vindication of their rights [Buenaventura v. Sto. Domingo, 103 Phil. 239 (1958)],
the right to institute criminal prosecutions can not be exercised maliciously and in bad faith [Ventura v.
Bernabe, G.R. No. L-26760, April 30, 1971, 38 SCRA 5871.] Hence, in Yutuk V. Manila Electric Co., G.R. No.
L-13016, May 31, 1961, 2 SCRA 337, the Court held that the right to file criminal complaints should not be
used as a weapon to force an alleged debtor to pay an indebtedness. To do so would be a clear
perversion of the function of the criminal processes and of the courts of justice. And in Hawpia CA, G.R.
No. L-20047, June 30, 1967. 20 SCRA 536 the Court upheld the judgment against the petitioner for actual
and moral damages and attorney's fees after making a finding that petitioner, with persistence, filed at
least six criminal complaints against respondent, all of which were dismissed.
To constitute malicious prosecution, there must be proof that the prosecution was prompted by a design
to vex and humiliate a person and that it was initiated deliberately by the defendant knowing that the
charges were false and groundless [Manila Gas Corporation v. CA, G.R. No. L-44190, October 30,1980, 100
SCRA 602]. Concededly, the filing of a suit by itself, does not render a person liable for malicious
prosecution [Inhelder Corporation v. CA, G.R. No. 52358, May 301983122 SCRA 576]. The mere dismissal
by the fiscal of the criminal complaint is not a ground for an award of damages for malicious prosecution
if there is no competent evidence to show that the complainant had acted in bad faith [Sison v. David,
G.R. No. L-11268, January 28,1961, 1 SCRA 60].
In the instant case, however, the trial court made a finding that petitioners acted in bad faith in filing the
criminal complaints against Tobias, observing that:
x x x
Defendants (petitioners herein) filed with the Fiscal's Office of Manila a total of six (6)
criminal cases, five (5) of which were for estafa thru falsification of commercial
document and one for violation of Art. 290 of the Revised Penal Code "discovering
secrets thru seizure of correspondence," and all were dismissed for insufficiency or
lack of evidence." The dismissal of four (4) of the cases was appealed to the Ministry
of Justice, but said Ministry invariably sustained the dismissal of the cases. As above
adverted to, two of these cases were refiled with the Judge Advocate General's Office
of the Armed Forces of the Philippines to railroad plaintiffs arrest and detention in the
military stockade, but this was frustrated by a presidential decree transferring
criminal cases involving civilians to the civil courts.
x x x
To be sure, when despite the two (2) police reports embodying the findings of Lt.
Dioscoro Tagle, Chief Document Examiner of the Manila Police Department, clearing
plaintiff of participation or involvement in the fraudulent transactions complained of,
despite the negative results of the lie detector tests which defendants compelled
plaintiff to undergo, and although the police investigation was "still under follow-up
and a supplementary report will be submitted after all the evidence has been
gathered," defendants hastily filed six (6) criminal cases with the city Fiscal's Office of
Manila, five (5) for estafa thru falsification of commercial document and one (1) for
violation of Art. 290 of the Revised Penal Code, so much so that as was to be
expected, all six (6) cases were dismissed, with one of the investigating fiscals, Asst.
Fiscal de Guia, commenting in one case that, "Indeed, the haphazard way this case
was investigated is evident. Evident likewise is the flurry and haste in the filing of this
case against respondent Tobias," there can be no mistaking that defendants would
not but be motivated by malicious and unlawful intent to harass, oppress, and cause
damage to plaintiff.
x x x
[RTC Decision, pp. 5-6; Rollo, pp. 235-236].
In addition to the observations made by the trial court, the Court finds it significant that the criminal
complaints were filed during the pendency of the illegal dismissal case filed by Tobias against petitioners.
This explains the haste in which the complaints were filed, which the trial court earlier noted. But
petitioners, to prove their good faith, point to the fact that only six complaints were filed against Tobias
when they could have allegedly filed one hundred cases, considering the number of anomalous
transactions committed against GLOBE MACKAY. However, petitioners' good faith is belied by the threat
made by Hendry after the filing of the first complaint that one hundred more cases would be filed against
Tobias. In effect, the possible filing of one hundred more cases was made to hang like the sword of
Damocles over the head of Tobias. In fine, considering the haste in which the criminal complaints were
filed, the fact that they were filed during the pendency of the illegal dismissal case against petitioners, the
threat made by Hendry, the fact that the cases were filed notwithstanding the two police reports
exculpating Tobias from involvement in the anomalies committed against GLOBE MACKAY, coupled by
the eventual dismissal of all the cases, the Court is led into no other conclusion than that petitioners were
motivated by malicious intent in filing the six criminal complaints against Tobias.
Petitioners next contend that the award of damages was excessive. In the complaint filed against
petitioners, Tobias prayed for the following: one hundred thousand pesos (P100,000.00) as actual
damages; fifty thousand pesos (P50,000.00) as exemplary damages; eight hundred thousand pesos
(P800,000.00) as moral damages; fifty thousand pesos (P50,000.00) as attorney's fees; and costs. The trial
court, after making a computation of the damages incurred by Tobias [See RTC Decision, pp. 7-8; Rollo,
pp. 154-1551, awarded him the following: eighty thousand pesos (P80,000.00) as actual damages; two
hundred thousand pesos (P200,000.00) as moral damages; twenty thousand pesos (P20,000.00) as
exemplary damages; thirty thousand pesos (P30,000.00) as attorney's fees; and, costs. It must be
underscored that petitioners have been guilty of committing several actionable tortious acts, i.e., the
abusive manner in which they dismissed Tobias from work including the baseless imputation of guilt and
the harassment during the investigations; the defamatory language heaped on Tobias as well as the
scornful remark on Filipinos; the poison letter sent to RETELCO which resulted in Tobias' loss of possible
employment; and, the malicious filing of the criminal complaints. Considering the extent of the damage
wrought on Tobias, the Court finds that, contrary to petitioners' contention, the amount of damages
awarded to Tobias was reasonable under the circumstances.
Yet, petitioners still insist that the award of damages was improper, invoking the principle of damnum
absqueinjuria. It is argued that "[t]he only probable actual damage that plaintiff (private respondent
herein) could have suffered was a direct result of his having been dismissed from his employment, which
was a valid and legal act of the defendants-appellants (petitioners herein).lâwphî1.ñèt " [Petition, p. 17;
Rollo, p. 18].
According to the principle of damnum absque injuria, damage or loss which does not constitute a
violation of a legal right or amount to a legal wrong is not actionable [Escano v. CA, G.R. No. L-47207,
September 25, 1980, 100 SCRA 197; See also Gilchrist v. Cuddy 29 Phil, 542 (1915); The Board of
Liquidators v. Kalaw, G.R. No. L-18805, August 14, 1967, 20 SCRA 987]. This principle finds no application
in this case. It bears repeating that even granting that petitioners might have had the right to dismiss
Tobias from work, the abusive manner in which that right was exercised amounted to a legal wrong for
which petitioners must now be held liable. Moreover, the damage incurred by Tobias was not only in
connection with the abusive manner in which he was dismissed but was also the result of several other
quasi-delictual acts committed by petitioners.
Petitioners next question the award of moral damages. However, the Court has already ruled in Wassmer
v. Velez, G.R. No. L-20089, December 26, 1964, 12 SCRA 648, 653, that [p]er express provision of Article
2219 (10) of the New Civil Code, moral damages are recoverable in the cases mentioned in Article 21 of
said Code." Hence, the Court of Appeals committed no error in awarding moral damages to Tobias.
Lastly, the award of exemplary damages is impugned by petitioners. Although Article 2231 of the Civil
Code provides that "[i]n quasi-delicts, exemplary damages may be granted if the defendant acted with
gross negligence," the Court, in Zulueta v. Pan American World Airways, Inc., G.R. No. L- 28589, January 8,
1973, 49 SCRA 1, ruled that if gross negligence warrants the award of exemplary damages, with more
reason is its imposition justified when the act performed is deliberate, malicious and tainted with bad
faith. As in the Zuluetacase, the nature of the wrongful acts shown to have been committed by
petitioners against Tobias is sufficient basis for the award of exemplary damages to the latter.
WHEREFORE, the petition is hereby DENIED and the decision of the Court of Appeals in CA-G.R. CV No.
09055 is AFFIRMED.
SO ORDERED.
FAREAST BANK vs. PAcilan
Before the Court is the petition for review on certiorari filed by Far East Bank and Trust Company (now
Bank of the Philippines Islands) seeking the reversal of the Decision
[1]
dated August 30, 2002 of the Court
of Appeals (CA) in CA-G.R. CV No. 36627 which ordered it, together with its branch accountant, Roger
Villadelgado, to pay respondent Themistocles Pacilan, Jr.
[2]
the total sum of P100,000.00 as moral and
exemplary damages. The assailed decision affirmed with modification that of the Regional Trial Court
(RTC) of Negros Occidental, Bacolod City, Branch 54, in Civil Case No. 4908. Likewise sought to be
reversed and set aside is the Resolution dated January 17, 2003 of the appellate court, denying petitioner
bank’s motion for reconsideration.

The case stemmed from the following undisputed facts:

Respondent Pacilan opened a current account with petitioner bank’s Bacolod Branch on May 23,
1980. His account was denominated as Current Account No. 53208 (0052-00407-4). The respondent had
since then issued several postdated checks to different payees drawn against the said account. Sometime
in March 1988, the respondent issued Check No. 2434886 in the amount of P680.00 and the same was
presented for payment to petitioner bank on April 4, 1988.

Upon its presentment on the said date, Check No. 2434886 was dishonored by petitioner bank.
The next day, or on April 5, 1988, the respondent deposited to his current account the amount
of P800.00. The said amount was accepted by petitioner bank; hence, increasing the balance of the
respondent’s deposit to P1,051.43.

Subsequently, when the respondent verified with petitioner bank about the dishonor of Check
No. 2434866, he discovered that his current account was closed on the ground that it was “improperly
handled.” The records of petitioner bank disclosed that between the period of March 30, 1988 and April
5, 1988, the respondent issued four checks, to wit: Check No. 2480416 for P6,000.00; Check No. 2480419
for P50.00; Check No. 2434880 for P680.00 and; Check No. 2434886 for P680.00, or a total amount
of P7,410.00. At the time, however, the respondent’s current account with petitioner bank only had a
deposit of P6,981.43. Thus, the total amount of the checks presented for payment on April 4, 1988
exceeded the balance of the respondent’s deposit in his account. For this reason, petitioner bank,
through its branch accountant, Villadelgado, closed the respondent’s current account effective the
evening of April 4, 1988 as it then had an overdraft of P428.57. As a consequence of the overdraft, Check
No. 2434886 was dishonored.

On April 18, 1988, the respondent wrote to petitioner bank complaining that the closure of his
account was unjustified. When he did not receive a reply from petitioner bank, the respondent filed with
the RTC of Negros Occidental, Bacolod City, Branch 54, a complaint for damages against petitioner bank
and Villadelgado. The case was docketed as Civil Case No. 4908. The respondent, as complainant
therein, alleged that the closure of his current account by petitioner bank was unjustified because on the
first banking hour of April 5, 1988, he already deposited an amount sufficient to fund his checks. The
respondent pointed out that Check No. 2434886, in particular, was delivered to petitioner bank at the
close of banking hours on April 4, 1988 and, following normal banking procedure, it (petitioner bank) had
until the last clearing hour of the following day, or on April 5, 1988, to honor the check or return it, if not
funded. In disregard of this banking procedure and practice, however, petitioner bank hastily closed the
respondent’s current account and dishonored his Check No. 2434886.

The respondent further alleged that prior to the closure of his current account, he had issued
several other postdated checks. The petitioner bank’s act of closing his current account allegedly
preempted the deposits that he intended to make to fund those checks. Further, the petitioner bank’s
act exposed him to criminal prosecution for violation ofBatas Pambansa Blg. 22.

According to the respondent, the indecent haste that attended the closure of his account was
patently malicious and intended to embarrass him. He claimed that he is a Cashier of Prudential Bank
and Trust Company, whose branch office is located just across that of petitioner bank, and a prominent
and respected leader both in the civic and banking communities. The alleged malicious acts of petitioner
bank besmirched the respondent’s reputation and caused him “social humiliation, wounded feelings,
insurmountable worries and sleepless nights” entitling him to an award of damages.

In their answer, petitioner bank and Villadelgado maintained that the respondent’s current account
was subject to petitioner bank’s Rules and Regulations Governing the Establishment and Operation of
Regular Demand Deposits which provide that “the Bank reserves the right to close an account if the
depositor frequently draws checks against insufficient funds and/or uncollected deposits” and that “the
Bank reserves the right at any time to return checks of the depositor which are drawn against insufficient
funds or for any reason.”
[3]


They showed that the respondent had improperly and irregularly handled his current account. For
example, in 1986, the respondent’s account was overdrawn 156 times, in 1987, 117 times and in 1988, 26
times. In all these instances, the account was overdrawn due to the issuance of checks against
insufficient funds. The respondent had also signed several checks with a different signature from the
specimen on file for dubious reasons.

When the respondent made the deposit on April 5, 1988, it was obviously to cover for issuances
made the previous day against an insufficiently funded account. When his Check No. 2434886 was
presented for payment on April 4, 1988, he had already incurred an overdraft; hence, petitioner bank
rightfully dishonored the same for insufficiency of funds.

After due proceedings, the court a quo rendered judgment in favor of the respondent as it ordered
the petitioner bank and Villadelgado, jointly and severally, to pay the respondent the amounts
of P100,000.00 as moral damages and P50,000.00 as exemplary damages and costs of suit. In so ruling,
the court a quo also cited petitioner bank’s rules and regulations which state that “a charge of P10.00
shall be levied against the depositor for any check that is taken up as a returned item due to ‘insufficiency
of funds’ on the date of receipt from the clearing office even if said check is honored and/or covered by
sufficient deposit the following banking day.” The same rules and regulations also provide that “a check
returned for insufficiency of funds for any reason of similar import may be subsequently recleared for one
more time only, subject to the same charges.”

According to the court a quo, following these rules and regulations, the respondent, as depositor,
had the right to put up sufficient funds for a check that was taken as a returned item for insufficient funds
the day following the receipt of said check from the clearing office. In fact, the said check could still be
recleared for one more time. In previous instances, petitioner bank notified the respondent when he
incurred an overdraft and he would then deposit sufficient funds the following day to cover the overdraft.
Petitioner bank thus acted unjustifiably when it immediately closed the respondent’s account on April 4,
1988 and deprived him of the opportunity to reclear his check or deposit sufficient funds therefor the
following day.

As a result of the closure of his current account, several of the respondent’s checks were
subsequently dishonored and because of this, the respondent was humiliated, embarrassed and lost his
credit standing in the business community. The court a quo further ratiocinated that even
granting arguendo that petitioner bank had the right to close the respondent’s account, the manner
which attended the closure constituted an abuse of the said right. Citing Article 19 of the Civil Code of
the Philippines which states that “*e+very person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due, and observe honesty and good faith”
and Article 20 thereof which states that “*e+very person who, contrary to law, wilfully or negligently
causes damage to another, shall indemnify the latter for the same,” the court a quo adjudged petitioner
bank of acting in bad faith. It held that, under the foregoing circumstances, the respondent is entitled to
an award of moral and exemplary damages.

The decretal portion of the court a quo’s decision reads:

WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered:

1. Ordering the defendants [petitioner bank and Villadelgado], jointly and
severally, to pay plaintiff [the respondent] the sum of P100,000.00 as moral
damages;

2. Ordering the defendants, jointly and severally, to pay plaintiff the sum
of P50,000.00 as exemplary damages plus costs and expenses of the suit;
and

3. Dismissing *the+ defendants’ counterclaim for lack of merit.

SO ORDERED.
[4]



On appeal, the CA rendered the Decision dated August 30, 2002, affirming with modification the
decision of the court a quo.

The appellate court substantially affirmed the factual findings of the court a quo as it held that
petitioner bank unjustifiably closed the respondent’s account notwithstanding that its own rules and
regulations

allow that a check returned for insufficiency of funds or any reason of similar import, may be
subsequently recleared for one more time, subject to standard charges. Like the court a quo, the
appellate court observed that in several instances in previous years, petitioner bank would inform the
respondent when he incurred an overdraft and allowed him to make a timely deposit to fund the checks
that were initially dishonored for insufficiency of funds. However, on April 4, 1988, petitioner bank
immediately closed the respondent’s account without even notifying him that he had incurred an
overdraft. Even when they had already closed his account on April 4, 1988, petitioner bank still accepted
the deposit that the respondent made on April 5, 1988, supposedly to cover his checks.

Echoing the reasoning of the court a quo, the CA declared that even as it may be conceded that
petitioner bank had reserved the right to close an account for repeated overdrafts by the respondent, the
exercise of that right must never be despotic or arbitrary. That petitioner bank chose to close the
account outright and return the check, even after accepting a deposit sufficient to cover the said check, is
contrary to its duty to handle the respondent’s account with utmost fidelity. The exercise of the right is
not absolute and good faith, at least, is required. The manner by which petitioner bank closed the
account of the respondent runs afoul of Article 19 of the Civil Code which enjoins every person, in the
exercise of his rights, “to give every one his due, and observe honesty and good faith.”
The CA concluded that petitioner bank’s precipitate and imprudent closure of the respondent’s
account had caused him, a respected officer of several civic and banking associations, serious anxiety and
humiliation. It had, likewise, tainted his credit standing. Consequently, the award of damages is
warranted. The CA, however, reduced the amount of damages awarded by the court a quo as it found
the same to be excessive:

We, however, find excessive the amount of damages awarded by the RTC.
In our view the reduced amount of P75,000.00 as moral damages and P25,000.00 as
exemplary damages are in order. Awards for damages are not meant to enrich the
plaintiff-appellee [the respondent] at the expense of defendants-appellants [the
petitioners], but to obviate the moral suffering he has undergone. The award is
aimed at the restoration, within limits possible, of the status quo ante, and should be
proportionate to the suffering inflicted.
[5]


The dispositive portion of the assailed CA decision reads:

WHEREFORE, the decision appealed from is hereby AFFIRMED, subject to
the MODIFICATION that the award of moral damages is reduced to P75,000.00 and
the award of exemplary damages reduced to P25,000.00.

SO ORDERED.
[6]


Petitioner bank sought the reconsideration of the said decision but in the assailed Resolution dated
January 17, 2003, the appellate court denied its motion. Hence, the recourse to this Court.

Petitioner bank maintains that, in closing the account of the respondent in the evening of April 4,
1988, it acted in good faith and in accordance with the rules and regulations governing the operation
of a

regular demand deposit which reserves to the bank “the right to close an account if the depositor
frequently draws checks against insufficient funds and/or uncollected deposits.” The same rules and
regulations also provide that “the depositor is not entitled, as a matter of right, to overdraw on this
deposit and the bank reserves the right at any time to return checks of the depositor which are drawn
against insufficient funds or for any reason.”

It cites the numerous instances that the respondent had overdrawn his account and those instances
where he deliberately signed checks using a signature different from the specimen on file. Based on
these facts, petitioner bank was constrained to close the respondent’s account for improper and
irregular handling and returned his Check No. 2434886 which was presented to the bank for payment on
April 4, 1988.

Petitioner bank further posits that there is no law or rule which gives the respondent a legal right to
make good his check or to deposit the corresponding amount to cover said check within 24 hours after
the same is dishonored or returned by the bank for having been drawn against insufficient funds. It
vigorously denies having violated Article 19 of the Civil Code as it insists that it acted in good faith and in
accordance with the pertinent banking rules and regulations.

The petition is impressed with merit.A perusal of the respective decisions of the court a quo and the
appellate court show that the award of damages in the respondent’s favor was anchored mainly on
Article 19 of the Civil Code which, quoted anew below, reads:
Art. 19. Every person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due, and observe
honesty and good faith.

The elements of abuse of rights are the following: (a) the existence of a legal right or duty; (b)
which is exercised in bad faith; and (c) for the sole intent of prejudicing or injuring another.
[7]
Malice or
bad faith is at the core of the said provision.
[8]
The law always presumes good faith and any person who
seeks to be awarded damages due to acts of another has the burden of proving that the latter acted in
bad faith or with ill-motive.
[9]
Good faith refers to the state of the mind which is manifested by the acts
of the individual concerned. It consists of the intention to abstain from taking an unconscionable and
unscrupulous advantage of another.
[10]
Bad faith does not simply connote bad judgment or simple
negligence, dishonest purpose or some moral obliquity and conscious doing of a wrong, a breach of
known duty due to some motives or interest or ill-will that partakes of the nature of fraud.
[11]
Malice
connotes ill-will or spite and speaks not in response to duty. It implies an intention to do ulterior and
unjustifiable harm. Malice is bad faith or bad motive.
[12]


Undoubtedly, petitioner bank has the right to close the account of the respondent based on the
following provisions of its Rules and Regulations Governing the Establishment and Operation of Regular
Demand Deposits:

10) The Bank reserves the right to close an account if the depositor frequently
draws checks against insufficient funds and/or uncollected deposits.



12) …
However, it is clearly understood that the depositor is not entitled, as a matter
of right, to overdraw on this deposit and the bank reserves the right at any
time to return checks of the depositor which are drawn against insufficient
funds or for any other reason.


The facts, as found by the court a quo and the appellate court, do not establish that, in the
exercise of this right, petitioner bank committed an abuse thereof. Specifically, the second and third
elements for abuse of rights are not attendant in the present case. The evidence presented by petitioner
bank negates the existence of bad faith or malice on its part in closing the respondent’s account on April
4, 1988 because on the said date the same was already overdrawn. The respondent issued four checks,
all due on April 4, 1988, amounting to P7,410.00 when the balance of his current account deposit was
only P6,981.43. Thus, he incurred an overdraft of P428.57 which resulted in the dishonor of his Check
No. 2434886. Further, petitioner bank showed that in 1986, the current account of the respondent was
overdrawn 156 times due to his issuance of checks against insufficient funds.
[13]
In 1987, the said account
was overdrawn 117 times for the same reason.
[14]
Again, in 1988, 26 times.
[15]
There were also several
instances when the respondent issued checks deliberately using a signature different from his specimen
signature on file with petitioner bank.
[16]
All these circumstances taken together justified the petitioner
bank’s closure of the respondent’s account on April 4, 1988 for “improper handling.”

It is observed that nowhere under its rules and regulations is petitioner bank required to notify
the respondent, or any depositor for that matter, of the closure of the account for frequently drawing
checks against insufficient funds. No malice or bad faith could be imputed on petitioner bank for so
acting since the records bear out that the respondent had indeed been improperly and irregularly
handling his account not just a few times but hundreds of times. Under the circumstances, petitioner
bank could not be faulted for exercising its right in accordance with the express rules and regulations
governing the current accounts of its depositors. Upon the opening of his account, the respondent had
agreed to be bound by these terms and conditions.

Neither the fact that petitioner bank accepted the deposit made by the respondent the day
following the closure of his account constitutes bad faith or malice on the part of petitioner bank. The
same could be characterized as simple negligence by its personnel. Said act, by itself, is not constitutive
of bad faith.
The respondent had thus failed to discharge his burden of proving bad faith on the part of
petitioner bank or that it was motivated by ill-will or spite in closing his account on April 4, 1988 and in
inadvertently accepting his deposit on April 5, 1988.

Further, it has not been shown that these acts were done by petitioner bank with the sole
intention of prejudicing and injuring the respondent. It is conceded that the respondent may have
suffered damages as a result of the closure of his current account. However, there is a material
distinction between damages and injury. The Court had the occasion to explain the distinction between
damages and injury in this wise:

… Injury is the illegal invasion of a legal right; damage is the loss, hurt or
harm which results from the injury; and damages are the recompense or
compensation awarded for the damage suffered. Thus, there can be damage without
injury in those instances in which the loss or harm was not the result of a violation of
a legal duty. In such cases, the consequences must be borne by the injured person
alone, the law affords no remedy for damages resulting from an act which does not
amount to a legal injury or wrong. These situations are often called damnum absque
injuria.

In other words, in order that a plaintiff may maintain an action for the injuries of
which he complains, he must establish that such injuries resulted from a breach of
duty which the defendant owed to the plaintiff – a concurrence of injury to the
plaintiff and legal responsibility by the person causing it. The underlying basis for the
award of tort damages is the premise that the individual was injured in contemplation
of law. Thus, there must first be a breach of some duty and the imposition of liability
for that breach before damages may be awarded; and the breach of such duty should
be the proximate cause of the injury.
[17]


Whatever damages the respondent may have suffered as a consequence, e.g., dishonor of his other
insufficiently funded checks, would have to be borne by him alone. It was the respondent’s repeated
improper

and irregular handling of his account which constrained petitioner bank to close the same in accordance
with the rules and regulations governing its depositors’ current accounts. The respondent’s case is clearly
one of damnum absque injuria.

WHEREFORE, the petition is GRANTED. The Decision dated August 30, 2002 and Resolution
dated January 17, 2003 of the Court of Appeals in CA-G.R. CV No. 36627 are REVERSED AND SET ASIDE.

SO ORDERED.

ERNESTO RAMAS UYPITCHING and RAMAS UYPITCHING SONS, INC., petitioners,
vs.
ERNESTO QUIAMCO, respondent.
Honeste vivere, non alterum laedere et jus suum cuique tribuere. To live virtuously, not to injure others
and to give everyone his due. These supreme norms of justice are the underlying principles of law and
order in society. We reaffirm them in this petition for review on certiorari assailing the July 26, 2000
decision
1
and October 18, 2000 resolution of the Court of Appeals (CA) in CA-G.R. CV No. 47571.
In 1982, respondent Ernesto C. Quiamco was approached by Juan Davalan,
2
Josefino Gabutero and Raul
Generoso to amicably settle the civil aspect of a criminal case for robbery
3
filed by Quiamco against them.
They surrendered to him a red Honda XL-100 motorcycle and a photocopy of its certificate of registration.
Respondent asked for the original certificate of registration but the three accused never came to see him
again. Meanwhile, the motorcycle was parked in an open space inside respondent’s business
establishment, Avesco-AVNE Enterprises, where it was visible and accessible to the public.
It turned out that, in October 1981, the motorcycle had been sold on installment basis to Gabutero by
petitioner Ramas Uypitching Sons, Inc., a family-owned corporation managed by petitioner Atty. Ernesto
Ramas Uypitching. To secure its payment, the motorcycle was mortgaged to petitioner corporation.
4

When Gabutero could no longer pay the installments, Davalan assumed the obligation and continued the
payments. In September 1982, however, Davalan stopped paying the remaining installments and told
petitioner corporation’s collector, Wilfredo Veraño, that the motorcycle had allegedly been "taken by
respondent’s men."
Nine years later, on January 26, 1991, petitioner Uypitching, accompanied by policemen,
5
went to
Avesco-AVNE Enterprises to recover the motorcycle. The leader of the police team, P/Lt. Arturo Vendiola,
talked to the clerk in charge and asked for respondent. While P/Lt. Vendiola and the clerk were talking,
petitioner Uypitching paced back and forth inside the establishment uttering "Quiamco is a thief of a
motorcycle."
On learning that respondent was not in Avesco-AVNE Enterprises, the policemen left to look for
respondent in his residence while petitioner Uypitching stayed in the establishment to take photographs
of the motorcycle. Unable to find respondent, the policemen went back to Avesco-AVNE Enterprises and,
on petitioner Uypitching’s instruction and over the clerk’s objection, took the motorcycle.
On February 18, 1991, petitioner Uypitching filed a criminal complaint for qualified theft and/or violation
of the Anti-Fencing Law
6
against respondent in the Office of the City Prosecutor of Dumaguete
City.
7
Respondent moved for dismissal because the complaint did not charge an offense as he had neither
stolen nor bought the motorcycle. The Office of the City Prosecutor dismissed the complaint
8
and denied
petitioner Uypitching’s subsequent motion for reconsideration.
Respondent filed an action for damages against petitioners in the RTC of Dumaguete City, Negros
Oriental, Branch 37.
9
He sought to hold the petitioners liable for the following: (1) unlawful taking of the
motorcycle; (2) utterance of a defamatory remark (that respondent was a thief) and (3) precipitate filing
of a baseless and malicious complaint. These acts humiliated and embarrassed the respondent and
injured his reputation and integrity.
On July 30, 1994, the trial court rendered a decision
10
finding that petitioner Uypitching was motivated
with malice and ill will when he called respondent a thief, took the motorcycle in an abusive manner and
filed a baseless complaint for qualified theft and/or violation of the Anti-Fencing Law. Petitioners’ acts
were found to be contrary to Articles 19
11
and 20
12
of the Civil Code. Hence, the trial court held
petitioners liable to respondent forP500,000 moral damages, P200,000 exemplary damages and P50,000
attorney’s fees plus costs.
Petitioners appealed the RTC decision but the CA affirmed the trial court’s decision with modification,
reducing the award of moral and exemplary damages to P300,000 and P100,000,
respectively.
13
Petitioners sought reconsideration but it was denied. Thus, this petition.
In their petition and memorandum, petitioners submit that the sole (allegedly) issue to be resolved here
is whether the filing of a complaint for qualified theft and/or violation of the Anti-Fencing Law in the
Office of the City Prosecutor warranted the award of moral damages, exemplary damages, attorney’s fees
and costs in favor of respondent.
Petitioners’ suggestion is misleading. They were held liable for damages not only for instituting a
groundless complaint against respondent but also for making a slanderous remark and for taking the
motorcycle from respondent’s establishment in an abusive manner.
Correctness of the Findings of the RTC and CA
As they never questioned the findings of the RTC and CA that malice and ill will attended not only the
public imputation of a crime to respondent
14
but also the taking of the motorcycle, petitioners were
deemed to have accepted the correctness of such findings. This alone was sufficient to hold petitioners
liable for damages to respondent.
Nevertheless, to address petitioners’ concern, we also find that the trial and appellate courts correctly
ruled that the filing of the complaint was tainted with malice and bad faith. Petitioners themselves in fact
described their action as a "precipitate act."
15
Petitioners were bent on portraying respondent as a thief.
In this connection, we quote with approval the following findings of the RTC, as adopted by the CA:
x x x There was malice or ill-will [in filing the complaint before the City Prosecutor’s Office+
because Atty. Ernesto Ramas Uypitching knew or ought to have known as he is a lawyer, that
there was no probable cause at all for filing a criminal complaint for qualified theft and fencing
activity against [respondent]. Atty. Uypitching had no personal knowledge that [respondent]
stole the motorcycle in question. He was merely told by his bill collector ([i.e.] the bill collector
of Ramas Uypitching Sons, Inc.)[,] Wilfredo Veraño[,] that Juan Dabalan will [no longer] pay the
remaining installment(s) for the motorcycle because the motorcycle was taken by the men of
[respondent]. It must be noted that the term used by Wilfredo Veraño in informing Atty.
Ernesto Ramas Uypitching of the refusal of Juan Dabalan to pay for the remaining installment
was *‘+taken*’+, not *‘+unlawfully taken*’+ or ‘stolen.’ Yet, despite the double hearsay, Atty.
Ernesto Ramas Uypitching not only executed the [complaint-affidavit] wherein he named
*respondent+ as ‘the suspect’ of the stolen motorcycle but also charged [respondent] of
‘qualified theft and fencing activity’ before the City *Prosecutor’s+ Office of Dumaguete. The
absence of probable cause necessarily signifies the presence of malice. What is deplorable in all
these is that Juan Dabalan, the owner of the motorcycle, did not accuse [respondent] or the
latter’s men of stealing the motorcycle*,+ much less bother*ed+ to file a case for qualified theft
before the authorities. That Atty. Uypitching’s act in charging *respondent+ with qualified theft
and fencing activity is tainted with malice is also shown by his answer to the question of Cupid
Gonzaga
16
[during one of their conversations] - "why should you still file a complaint? You have
already recovered the motorcycle…"*:+ "Aron motagam ang kawatan ug motor." ("To teach a
lesson to the thief of motorcycle.")
17

Moreover, the existence of malice, ill will or bad faith is a factual matter. As a rule, findings of fact of the
trial court, when affirmed by the appellate court, are conclusive on this Court. We see no compelling
reason to reverse the findings of the RTC and the CA.
Petitioners Abused Their Right of Recovery as Mortgagee(s)
Petitioners claim that they should not be held liable for petitioner corporation’s exercise of its right as
seller-mortgagee to recover the mortgaged vehicle preliminary to the enforcement of its right to
foreclose on the mortgage in case of default. They are clearly mistaken.
True, a mortgagee may take steps to recover the mortgaged property to enable it to enforce or protect its
foreclosure right thereon. There is, however, a well-defined procedure for the recovery of possession of
mortgaged property: if a mortgagee is unable to obtain possession of a mortgaged property for its sale on
foreclosure, he must bring a civil action either to recover such possession as a preliminary step to the sale,
or to obtain judicial foreclosure.
18

Petitioner corporation failed to bring the proper civil action necessary to acquire legal possession of the
motorcycle. Instead, petitioner Uypitching descended on respondent’s establishment with his policemen
and ordered the seizure of the motorcycle without a search warrant or court order. Worse, in the course
of the illegal seizure of the motorcycle, petitioner Uypitching even mouthed a slanderous statement.
No doubt, petitioner corporation, acting through its co-petitioner Uypitching, blatantly disregarded the
lawful procedure for the enforcement of its right, to the prejudice of respondent. Petitioners’ acts
violated the law as well as public morals, and transgressed the proper norms of human relations.
The basic principle of human relations, embodied in Article 19 of the Civil Code, provides:
Art. 19. Every person must in the exercise of his rights and in the performance of his duties, act
with justice, give every one his due, and observe honesty and good faith.
Article 19, also known as the "principle of abuse of right," prescribes that a person should not use his
right unjustly or contrary to honesty and good faith, otherwise he opens himself to liability.
19
It seeks to
preclude the use of, or the tendency to use, a legal right (or duty) as a means to unjust ends.
There is an abuse of right when it is exercised solely to prejudice or injure another.
20
The exercise of a
right must be in accordance with the purpose for which it was established and must not be excessive or
unduly harsh; there must be no intention to harm another.
21
Otherwise, liability for damages to the
injured party will attach.
In this case, the manner by which the motorcycle was taken at petitioners’ instance was not only
attended by bad faith but also contrary to the procedure laid down by law. Considered in conjunction
with the defamatory statement, petitioners’ exercise of the right to recover the mortgaged vehicle was
utterly prejudicial and injurious to respondent. On the other hand, the precipitate act of filing an
unfounded complaint could not in any way be considered to be in accordance with the purpose for which
the right to prosecute a crime was established. Thus, the totality of petitioners’ actions showed a
calculated design to embarrass, humiliate and publicly ridicule respondent. Petitioners acted in an
excessively harsh fashion to the prejudice of respondent. Contrary to law, petitioners willfully caused
damage to respondent. Hence, they should indemnify him.
22

WHEREFORE, the petition is hereby DENIED. The July 26, 2000 decision and October 18, 2000 resolution
of the Court of Appeals in CA-G.R. CV No. 47571 are AFFIRMED.
Triple costs against petitioners, considering that petitioner Ernesto Ramas Uypitching is a lawyer and an
officer of the court, for his improper behavior.
SO ORDERED.
CEBU COUNTRY CLUB, INC., SABINO R. DAPAT, RUBEN D. ALMENDRAS, JULIUS Z. NERI, DOUGLAS L.
LUYM, CESAR T. LIBI, RAMONTITO
*
E. GARCIA and JOSE B. SALA, petitioners,
vs.
RICARDO F. ELIZAGAQUE, respondent.
D E C I S I O N
SANDOVAL-GUTIERREZ, J.:
For our resolution is the instant Petition for Review on Certiorari under Rule 45 of the 1997 Rules of Civil
Procedure, as amended, assailing the Decision
1
dated January 31, 2003 and Resolution dated October 2,
2003 of the Court of Appeals in CA-G.R. CV No. 71506.
The facts are:
Cebu Country Club, Inc. (CCCI), petitioner, is a domestic corporation operating as a non-profit and non-
stock private membership club, having its principal place of business in Banilad, Cebu City. Petitioners
herein are members of its Board of Directors.
Sometime in 1987, San Miguel Corporation, a special company proprietary member of CCCI, designated
respondent Ricardo F. Elizagaque, its Senior Vice President and Operations Manager for the Visayas and
Mindanao, as a special non-proprietary member. The designation was thereafter approved by the CCCI’s
Board of Directors.
In 1996, respondent filed with CCCI an application for proprietary membership. The application was
indorsed by CCCI’s two (2) proprietary members, namely: Edmundo T. Misa and Silvano Ludo.
As the price of a proprietary share was around the P5 million range, Benito Unchuan, then president of
CCCI, offered to sell respondent a share for only P3.5 million. Respondent, however, purchased the share
of a certain Dr. Butalid for only P3 million. Consequently, on September 6, 1996, CCCI issued Proprietary
Ownership Certificate No. 1446 to respondent.
During the meetings dated April 4, 1997 and May 30, 1997 of the CCCI Board of Directors, action on
respondent’s application for proprietary membership was deferred. In another Board meeting held on
July 30, 1997, respondent’s application was voted upon. Subsequently, or on August 1, 1997, respondent
received a letter from Julius Z. Neri, CCCI’s corporate secretary, informing him that the Board disapproved
his application for proprietary membership.
On August 6, 1997, Edmundo T. Misa, on behalf of respondent, wrote CCCI a letter of reconsideration. As
CCCI did not answer, respondent, on October 7, 1997, wrote another letter of reconsideration. Still, CCCI
kept silent. On November 5, 1997, respondent again sent CCCI a letter inquiring whether any member of
the Board objected to his application. Again, CCCI did not reply.
Consequently, on December 23, 1998, respondent filed with the Regional Trial Court (RTC), Branch 71,
Pasig City a complaint for damages against petitioners, docketed as Civil Case No. 67190.
After trial, the RTC rendered its Decision dated February 14, 2001 in favor of respondent, thus:
WHEREFORE, judgment is hereby rendered in favor of plaintiff:
1. Ordering defendants to pay, jointly and severally, plaintiff the amount of P2,340,000.00 as
actual or compensatory damages.
2. Ordering defendants to pay, jointly and severally, plaintiff the amount of P5,000,000.00 as
moral damages.
3. Ordering defendants to pay, jointly and severally, plaintiff the amount of P1,000,000.00 as
exemplary damages.
4. Ordering defendants to pay, jointly and severally, plaintiff the amount of P1,000,000.00 as
and by way of attorney’s fees and P80,000.00 as litigation expenses.
5. Costs of suit.
Counterclaims are hereby DISMISSED for lack of merit.
SO ORDERED.
2

On appeal by petitioners, the Court of Appeals, in its Decision dated January 31, 2003, affirmed the trial
court’s Decision with modification, thus:
WHEREFORE, premises considered, the assailed Decision dated February 14, 2001 of the
Regional Trial Court, Branch 71, Pasig City in Civil Case No. 67190 is hereby AFFIRMED with
MODIFICATION as follows:
1. Ordering defendants-appellants to pay, jointly and severally, plaintiff-appellee the amount
ofP2,000,000.00 as moral damages;
2. Ordering defendants-appellants to pay, jointly and severally, plaintiff-appellee the amount
ofP1,000,000.00 as exemplary damages;
3. Ordering defendants-appellants to pay, jointly and severally, plaintiff-appellee the mount
of P500,000.00 as attorney’s fees and P50,000.00 as litigation expenses; and
4. Costs of the suit.
The counterclaims are DISMISSED for lack of merit.
SO ORDERED.
3

On March 3, 2003, petitioners filed a motion for reconsideration and motion for leave to set the motion
for oral arguments. In its Resolution
4
dated October 2, 2003, the appellate court denied the motions for
lack of merit.
Hence, the present petition.
The issue for our resolution is whether in disapproving respondent’s application for proprietary
membership with CCCI, petitioners are liable to respondent for damages, and if so, whether their liability
is joint and several.
Petitioners contend, inter alia, that the Court of Appeals erred in awarding exorbitant damages to
respondent despite the lack of evidence that they acted in bad faith in disapproving the latter’s
application; and in disregarding their defense of damnum absque injuria.
For his part, respondent maintains that the petition lacks merit, hence, should be denied.
CCCI’s Articles of Incorporation provide in part:
SEVENTH: That this is a non-stock corporation and membership therein as well as the right of
participation in its assets shall be limited to qualified persons who are duly accredited owners
of Proprietary Ownership Certificates issued by the corporation in accordance with its By-Laws.
Corollary, Section 3, Article 1 of CCCI’s Amended By-Laws provides:
SECTION 3. HOW MEMBERS ARE ELECTED – The procedure for the admission of new members
of the Club shall be as follows:
(a) Any proprietary member, seconded by another voting proprietary member, shall submit to
the Secretary a written proposal for the admission of a candidate to the "Eligible-for-
Membership List";
(b) Such proposal shall be posted by the Secretary for a period of thirty (30) days on the Club
bulletin board during which time any member may interpose objections to the admission of the
applicant by communicating the same to the Board of Directors;
(c) After the expiration of the aforesaid thirty (30) days, if no objections have been filed or if
there are, the Board considers the objections unmeritorious, the candidate shall be qualified for
inclusion in the "Eligible-for-Membership List";
(d) Once included in the "Eligible-for-Membership List" and after the candidate shall have
acquired in his name a valid POC duly recorded in the books of the corporation as his own, he
shall become a Proprietary Member, upon a non-refundable admission fee of P1,000.00,
provided that admission fees will only be collected once from any person.
On March 1, 1978, Section 3(c) was amended to read as follows:
(c) After the expiration of the aforesaid thirty (30) days, the Board may, by unanimous vote of
all directors present at a regular or special meeting, approve the inclusion of the candidate in
the "Eligible-for-Membership List".
As shown by the records, the Board adopted a secret balloting known as the "black ball system" of voting
wherein each member will drop a ball in the ballot box. A white ball represents conformity to the
admission of an applicant, while a black ball means disapproval. Pursuant to Section 3(c), as amended,
cited above, a unanimous vote of the directors is required. When respondent’s application for proprietary
membership was voted upon during the Board meeting on July 30, 1997, the ballot box contained one (1)
black ball. Thus, for lack of unanimity, his application was disapproved.
Obviously, the CCCI Board of Directors, under its Articles of Incorporation, has the right to approve or
disapprove an application for proprietary membership. But such right should not be exercised arbitrarily.
Articles 19 and 21 of the Civil Code on the Chapter on Human Relations provide restrictions, thus:
Article 19. Every person must, in the exercise of his rights and in the performance of his duties,
act with justice, give everyone his due, and observe honesty and good faith.
Article 21. Any person who willfully causes loss or injury to another in a manner that is contrary
to morals, good customs or public policy shall compensate the latter for the damage.
In GF Equity, Inc. v. Valenzona,
5
we expounded Article 19 and correlated it with Article 21, thus:
This article, known to contain what is commonly referred to as the principle of abuse of rights,
sets certain standards which must be observed not only in the exercise of one's rights but also
in the performance of one's duties. These standards are the following: to act with justice; to
give everyone his due; and to observe honesty and good faith. The law, therefore, recognizes a
primordial limitation on all rights; that in their exercise, the norms of human conduct set forth
in Article 19 must be observed. A right, though by itself legal because recognized or granted by
law as such, may nevertheless become the source of some illegality. When a right is exercised
in a manner which does not conform with the norms enshrined in Article 19 and results in
damage to another, a legal wrong is thereby committed for which the wrongdoer must be
held responsible. But while Article 19 lays down a rule of conduct for the government of human
relations and for the maintenance of social order, it does not provide a remedy for its violation.
Generally, an action for damages under either Article 20 or Article 21 would be proper.
(Emphasis in the original)
In rejecting respondent’s application for proprietary membership, we find that petitioners violated the
rules governing human relations, the basic principles to be observed for the rightful relationship between
human beings and for the stability of social order. The trial court and the Court of Appeals aptly held that
petitioners committed fraud and evident bad faith in disapproving respondent’s applications. This is
contrary to morals, good custom or public policy. Hence, petitioners are liable for damages pursuant to
Article 19 in relation to Article 21 of the same Code.
It bears stressing that the amendment to Section 3(c) of CCCI’s Amended By-Laws requiring the
unanimous vote of the directors present at a special or regular meeting was not printed on the
application form respondent filled and submitted to CCCI. What was printed thereon was the original
provision of Section 3(c) which was silent on the required number of votes needed for admission of an
applicant as a proprietary member.
Petitioners explained that the amendment was not printed on the application form due to economic
reasons. We find this excuse flimsy and unconvincing. Such amendment, aside from being extremely
significant, was introduced way back in 1978 or almost twenty (20) years before respondent filed his
application. We cannot fathom why such a prestigious and exclusive golf country club, like the CCCI,
whose members are all affluent, did not have enough money to cause the printing of an updated
application form.
It is thus clear that respondent was left groping in the dark wondering why his application was
disapproved. He was not even informed that a unanimous vote of the Board members was required.
When he sent a letter for reconsideration and an inquiry whether there was an objection to his
application, petitioners apparently ignored him. Certainly, respondent did not deserve this kind of
treatment. Having been designated by San Miguel Corporation as a special non-proprietary member of
CCCI, he should have been treated by petitioners with courtesy and civility. At the very least, they should
have informed him why his application was disapproved.
The exercise of a right, though legal by itself, must nonetheless be in accordance with the proper norm.
When the right is exercised arbitrarily, unjustly or excessively and results in damage to another, a legal
wrong is committed for which the wrongdoer must be held responsible.
6
It bears reiterating that the trial
court and the Court of Appeals held that petitioners’ disapproval of respondent’s application is
characterized by bad faith.
As to petitioners’ reliance on the principle of damnum absque injuria or damage without injury, suffice it
to state that the same is misplaced. In Amonoy v. Gutierrez,
7
we held that this principle does not apply
when there is an abuse of a person’s right, as in this case.
As to the appellate court’s award to respondent of moral damages, we find the same in order. Under
Article 2219 of the New Civil Code, moral damages may be recovered, among others, in acts and actions
referred to in Article 21. We believe respondent’s testimony that he suffered mental anguish, social
humiliation and wounded feelings as a result of the arbitrary denial of his application. However, the
amount of P2,000,000.00 is excessive. While there is no hard-and-fast rule in determining what would be
a fair and reasonable amount of moral damages, the same should not be palpably and scandalously
excessive. Moral damages are not intended to impose a penalty to the wrongdoer, neither to enrich the
claimant at the expense of the defendant.
8
Taking into consideration the attending circumstances here,
we hold that an award to respondent of P50,000.00, instead of P2,000,000.00, as moral damages is
reasonable.
Anent the award of exemplary damages, Article 2229 allows it by way of example or correction for the
public good. Nonetheless, since exemplary damages are imposed not to enrich one party or impoverish
another but to serve as a deterrent against or as a negative incentive to curb socially deleterious
actions,
9
we reduce the amount from P1,000,000.00 to P25,000.00 only.
On the matter of attorney’s fees and litigation expenses, Article 2208 of the same Code provides, among
others, that attorney’s fees and expenses of litigation may be recovered in cases when exemplary
damages are awarded and where the court deems it just and equitable that attorney’s fees and expenses
of litigation should be recovered, as in this case. In any event, however, such award must be reasonable,
just and equitable. Thus, we reduce the amount of attorney’s fees (P500,000.00) and litigation expenses
(P50,000.00) to P50,000.00 andP25,000.00, respectively.
Lastly, petitioners’ argument that they could not be held jointly and severally liable for damages because
only one (1) voted for the disapproval of respondent’s application lacks merit.
Section 31 of the Corporation Code provides:
SEC. 31. Liability of directors, trustees or officers. — Directors or trustees who willfully and
knowingly vote for or assent to patently unlawful acts of the corporation or who are guilty of
gross negligence or bad faithin directing the affairs of the corporation or acquire any personal
or pecuniary interest in conflict with their duty as such directors, or trustees shall be liable
jointly and severally for all damages resulting therefrom suffered by the corporation, its
stockholders or members and other persons. (Emphasis ours)
WHEREFORE, we DENY the petition. The challenged Decision and Resolution of the Court of Appeals in
CA-G.R. CV No. 71506 are AFFIRMED with modification in the sense that (a) the award of moral damages
is reduced from P2,000,000.00 to P50,000.00; (b) the award of exemplary damages is reduced
from P1,000,000.00 to P25,000.00; and (c) the award of attorney’s fees and litigation expenses is reduced
from P500,000.00 andP50,000.00 to P50,000.00 and P25,000.00, respectively.
Costs against petitioners.
SO ORDERED.
Seeking the reversal of the Decision
[1]
dated 1 June 2004 of the Court of Appeals in CA-G.R. SP
No. 62331 and the reinstatement of the Decision dated 15 November 2000 of the Securities and
Exchange Commission (SEC) in SEC Case No. 04-98-5954, petitioner Calatagan Golf Club, Inc. (Calatagan)
filed this Rule 45 petition against respondent Sixto Clemente, Jr. (Clemente).

The key facts are undisputed.

Clemente applied to purchase one share of stock of Calatagan, indicating in his application
for membership his mailing address at “Phimco Industries, Inc. – P.O. Box 240, MCC,” complete
residential address, office and residence telephone numbers, as well as the company (Phimco) with which
he was connected, Calatagan issued to him Certificate of Stock No. A-01295 on 2 May 1990 after
paying P120,000.00 for the share.
[2]


Calatagan charges monthly dues on its members to meet expenses for general operations,
as well as costs for upkeep and improvement of the grounds and facilities. The provision on monthly dues
is incorporated in Calatagan’s Articles of Incorporation and By-Laws. It is also reproduced at the back of
each certificate of stock.
[3]
As reproduced in the dorsal side of Certificate of Stock No. A-01295, the
provision reads:

5. The owners of shares of stock shall be subject to the payment of monthly
dues in an amount as may be prescribed in the by-laws or by the Board of Directors
which shall in no case be less that [sic] P50.00 to meet the expenses for the general
operations of the club, and the maintenance and improvement of its premises and
facilities, in addition to such fees as may be charged for the actual use of the facilities x
x x

When Clemente became a member the monthly charge stood at P400.00. He
paid P3,000.00 for his monthly dues on 21 March 1991 and another P5,400.00 on 9 December 1991. Then
he ceased paying the dues. At that point, his balance amounted to P400.00.
[4]


Ten (10) months later, Calatagan made the initial step to collect Clemente’s back accounts
by sending a demand letter dated 21 September 1992. It was followed by a second letter dated 22
October 1992. Both letters were sent to Clemente’s mailing address as indicated in his membership
application but were sent back to sender with the postal note that the address had been closed.
[5]


Calatagan declared Clemente delinquent for having failed to pay his monthly dues for more
than sixty (60) days, specifically P5,600.00 as of 31 October 1992. Calatagan also included Clemente’s
name in the list of delinquent members posted on the club’s bulletin board. On 1 December 1992,
Calatagan’s board of directors adopted a resolution authorizing the foreclosure of shares of delinquent
members, including Clemente’s; and the public auction of these shares.

On 7 December 1992, Calatagan sent a third and final letter to Clemente, this time signed by its
Corporate Secretary, Atty. Benjamin Tanedo, Jr. The letter contains a warning that unless Clemente
settles his outstanding dues, his share would be included among the delinquent shares to be sold at
public auction on 15 January 1993. Again, this letter was sent to Clemente’s mailing address that had
already been closed.
[6]


On 5 January 1993, a notice of auction sale was posted on the Club’s bulletin board, as well as
on the club’s premises. The auction sale took place as scheduled on 15 January 1993, and Clemente’s
share sold for P64,000.
[7]
According to the Certificate of Sale issued by Calatagan after the sale,
Clemente’s share was purchased by a Nestor A. Virata.
[8]
At the time of the sale, Clemente’s accrued
monthly dues amounted to P5,200.00.
[9]
A notice of foreclosure of Clemente’s share was published in the
26 May 1993 issue of the Business World.
[10]


Clemente learned of the sale of his share only in November of 1997.
[11]
He filed a claim with the
Securities and Exchange Commission (SEC) seeking the restoration of his shareholding in Calatagan with
damages.







On 15 November 2000, the SEC rendered a decision dismissing Clemente’s complaint. Citing
Section 69 of the Corporation Code which provides that the sale of shares at an auction sale can only be
questioned within six (6) months from the date of sale, the SEC concluded that Clemente’s claim, filed
four (4) years after the sale, had already prescribed. The SEC further held that Calatagan had complied
with all the requirements for a valid sale of the subject share, Clemente having failed to inform Calatagan
that the address he had earlier supplied was no longer his address. Clemente, the SEC ruled, had acted in
bad faith in assuming as he claimed that his non-payment of monthly dues would merely render his
share “inactive.”

Clemente filed a petition for review with the Court of Appeals. On 1 June 2004, the Court of
Appeals promulgated a decision reversing the SEC. The appellate court restored Clemente’s one share
with a directive to Calatagan to issue in his a new share, and awarded to Clemente a total of P400,000.00
in damages, less the unpaid monthly dues ofP5,200.00.

In rejecting the SEC’s finding that the action had prescribed, the Court of Appeals cited the SEC’s
own ruling in SEC Case No. 4160, Caram v. Valley Golf Country Club, Inc., that Section 69 of the
Corporation Code specifically refers to unpaid subscriptions to capital stock, and not to any other debt of
stockholders. With the insinuation that Section 69 does not apply to unpaid membership dues in non-
stock corporations, the appellate court employed Article 1140 of the Civil Code as the proper rule of
prescription. The provision sets the prescription period of actions to recover movables at eight (8) years.

The Court of Appeals also pointed out that since that Calatagan’s first two demand letters had
been returned to it as sender with the notation about the closure of the mailing address, it very well
knew that its third and final demand letter also sent to the same mailing address would not be received
by Clemente. It noted the by-law requirement that within ten (10) days after the Board has ordered the
sale at auction of a member’s share of stock for indebtedness, the Corporate Secretary shall notify the
owner thereof and advise the Membership Committee of such fact. Finally, the Court of Appeals
ratiocinated that “a person who is in danger of the imminent loss of his property has the right to be
notified and be given the chance to prevent the loss.”
[12]


Hence, the present appeal.

Calatagan maintains that the action of Clemente had prescribed pursuant to Section 69 of the
Corporation Code, and that the requisite notices under both the law and the by-laws had been rendered
to Clemente.

Section 69 of the Code provides that an action to recover delinquent stock sold must be
commenced by the filing of a complaint within six (6) months from the date of sale. As correctly pointed
out by the Court of Appeals, Section 69 is part of Title VIII of the Code entitled “Stocks and Stockholders”
and refers specifically to unpaid subscriptions to capital stock, the sale of which is governed by the
immediately preceding Section 68.

The Court of Appeals debunked both Calatagan’s and the SEC’s reliance on Section 69 by citing
another SEC ruling in the case of Caram v. Valley Golf. In connection with Section 69, Calatagan raises a
peripheral point made in the SEC’s Caram ruling. In Caram, the SEC, using as take-off Section 6 of the
Corporation Code which refers to “such rights, privileges or restrictions as may be stated in the articles of
incorporation,” pointed out that the Articles of Incorporation of Valley Golf does not “impose any lien,
liability or restriction on the Golf Share *of Caram+,” but only its (Valley Golf’s) By-Laws does. Here,
Calatagan stresses that its own Articles of Incorporation does provide that the monthly dues assessed on
owners of shares of the corporation, along with all other obligations of the shareholders to the club,
“shall constitute a first lien on the shares… and in the event of delinquency such shares may be ordered
sold by the Board of Directors in the manner provided in the By-Laws to satisfy said dues or other
obligations of the shareholders.”
[13]
With its illative but incomprehensible logic, Calatagan concludes that
the prescriptive period under Section 69 should also apply to the sale of Clemente’s share as the lien that
Calatagan perceives to be a restriction is stated in the articles of incorporation and not only in the by-
laws.

We remain unconvinced.

There are fundamental differences that defy equivalence or even analogy between the sale of
delinquent stock under Section 68 and the sale that occurred in this case. At the root of the sale of
delinquent stock is the non-payment of the subscription price for the share of stock itself. The
stockholder or subscriber has yet to fully pay for the value of the share or shares subscribed. In this case,
Clemente had already fully paid for the share in Calatagan and no longer had any outstanding obligation
to deprive him of full title to his share. Perhaps the analogy could have been made if Clemente had not
yet fully paid for his share and the non-stock corporation, pursuant to an article or by-law provision
designed to address that situation, decided to sell such share as a consequence. But that is not the case
here, and there is no purpose for us to apply Section 69 to the case at bar.

Calatagan argues in the alternative that Clemente’s suit is barred by Article 1146 of the Civil
Code which establishes four (4) years as the prescriptive period for actions based upon injury to the rights
of the plaintiff on the hypothesis that the suit is purely for damages. As a second alternative still,
Calatagan posits that Clemente’s action is governed by Article 1149 of the Civil Code which sets five (5)
years as the period of prescription for all other actions whose prescriptive periods are not fixed in the
Civil Code or in any other law. Neither article is applicable but Article 1140 of the Civil Code which
provides that an action to recover movables shall prescribe in eight (8) years. Calatagan’s action is for the
recovery of a share of stock, plus damages.



Calatagan’s advertence to the fact that the constitution of a lien on the member’s share by
virtue of the explicit provisions in its Articles of Incorporation and By-Laws is relevant but ultimately of no
help to its cause. Calatagan’s Articles of Incorporation states that the “dues, together with all other
obligations of members to the club, shall constitute a first lien on the shares, second only to any lien in
favor of the national or local government, and in the event of delinquency such shares may be ordered
sold by the Board of Directors in the manner provided in the By-Laws to satisfy said dues or other
obligations of the stockholders.”
[14]
In turn, there are several provisions in the By-laws that govern the
payment of dues, the lapse into delinquency of the member, and the constitution and execution on the
lien. We quote these provisions:

ARTICLE XII – MEMBER’S ACCOUNT

SEC. 31. (a) Billing Members, Posting of Delinquent Members – The Treasurer
shall bill al members monthly. As soon as possible after the end of every month, a
statement showing the account of bill of a member for said month will be prepared
and sent to him. If the bill of any member remains unpaid by the 20
th
of the month
following that in which the bill was incurred, the Treasurer shall notify him that if his
bill is not paid in full by the end of the succeeding month his name will be posted as
delinquent the following day at the Clubhouse bulletin board. While posted, a
member, the immediate members of his family, and his guests, may not avail of the
facilities of the Club.

(b) Members on the delinquent list for more than 60 days shall be reported to
the Board and their shares or the shares of the juridical entities they represent shall
thereafter be ordered sold by the Board at auction to satisfy the claims of the Club as
provided for in Section 32 hereon. A member may pay his overdue account at any time
before the auction sale.

Sec. 32. Lien on Shares; Sale of Share at Auction- The club shall have a first lien
on every share of stock to secure debts of the members to the Club. This lien shall be
annotated on the certificates of stock and may be enforced by the Club in the following
manner:

(a) Within ten (10) days after the Board has ordered the sale at auction of a
member’s share of stock for indebtedness under Section 31(b) hereof, the Secretary
shall notify the owner thereof, and shall advise the Membership Committee of such
fact.

(b) The Membership Committee shall then notify all applicants on the Waiting
List and all registered stockholders of the availability of a share of stock for sale at
auction at a specified date, time and place, and shall post a notice to that effect in the
Club bulletin board for at least ten (10) days prior to the auction sale.

(c) On the date and hour fixed, the Membership Committee shall proceed with
the auction by viva voce bidding and award the sale of the share of stock to the highest
bidder.

(d) The purchase price shall be paid by the winning bidder to the Club within
twenty-four (24) hours after the bidding. The winning bidder or the representative in
the case of a juridical entity shall become a Regular Member upon payment of the
purchase price and issuance of a new stock certificate in his name or in the name of
the juridical entity he represents. The proceeds of the sale shall be paid by the Club to
the selling stockholder after deducting his obligations to the Club.

(e) If no bids be received or if the winning bidder fails to pay the amount of this
bid within twenty-four (24) hours after the bidding, the auction procedures may be
repeated from time to time at the discretion of the Membership Committee until the
share of stock be sold.

(f) If the proceeds from the sale of the share of stock are not sufficient to pay in
full the indebtedness of the member, the member shall continue to be obligated to the
Club for the unpaid balance. If the member whose share of stock is sold fails or refuse
to surrender the stock certificate for cancellation, cancellation shall be effected in the
books of the Club based on a record of the proceedings. Such cancellation shall render
the unsurrendered stock certificate null and void and notice to this effect shall be duly
published.


It is plain that Calatagan had endeavored to install a clear and comprehensive procedure to
govern the payment of monthly dues, the declaration of a member as delinquent, and the constitution of
a lien on the shares and its eventual public sale to answer for the member’s debts. Under Section 91 of
the Corporation Code, membership in a non-stock corporation “shall be terminated in the manner and for
the causes provided in the articles of incorporation or the by-laws.” The By-law provisions are elaborate
in explaining the manner and the causes for the termination of membership in Calatagan, through the
execution on the lien of the share. The Court is satisfied that the By-Laws, as written, affords due
protection to the member by assuring that
the member should be notified by the Secretary of the looming execution sale that would
terminate membership in the club. In addition, the By-Laws guarantees that after the execution sale, the
proceeds of the sale would be returned to the former member after deducting the outstanding
obligations. If followed to the letter, the termination of membership under this procedure outlined in the
By-Laws would accord with substantial justice.

Yet, did Calatagan actually comply with the by-law provisions when it sold Clemente’s share?
The appellate court’s finding on this point warrants our approving citation, thus:


In accordance with this provision, Calatagan sent the third and final demand
letter to Clemente on December 7, 1992. The letter states that if the amount of
delinquency is not paid, the share will be included among the delinquent shares to be
sold at public auction. This letter was signed by Atty. Benjamin Tanedo, Jr.,
Calatagan Golf’s Corporate Secretary. It was again sent to Clemente’s mailing
address – Phimco Industries Inc., P.O. Box 240, MCC Makati. As expected, it was
returned because the post office box had been closed.

Under the By-Laws, the Corporate Secretary is tasked to “give or cause to be
given, all notices required by law or by these By-Laws. .. and … keep a record of the
addresses of all stockholders. As quoted above, Sec. 32 (a) of the By-Laws further
provides that “within ten (10) days after the Board has ordered the sale at auction of a
member’s share of stock for indebtedness under Section 31 (b) hereof, the Secretary
shall notify the owner thereof and shall advise the Membership Committee of such
fact.,” The records do not disclose what report the Corporate Secretary transmitted to
the Membership Committee to comply with Section 32(a). Obviously, the reason for
this mandatory requirement is to give the Membership Committee the opportunity to
find out, before the share is sold, if proper notice has been made to the shareholder
member.







We presume that the Corporate Secretary, as a lawyer is knowledgeable on
the law and on the standards of good faith and fairness that the law requires. As
custodian of corporate records, he should also have known that the first two letters
sent to Clemente were returned because the P.O. Box had been closed. Thus, we are
surprised – given his knowledge of the law and of corporate records – that he would
send the third and final letter – Clemente’s last chance before his share is sold and his
membership lost – to the same P.O. Box that had been closed.

Calatagan argues that it “exercised due diligence before the foreclosure sale”
and “sent several notices to Clemente’s specified mailing address.” We do not agree;
we cannot label as due diligence Calatagan’s act of sending the December 7,
1992 letter to Clemente’s mailing address knowing fully well that the P.O. Box had
been closed. Due diligence or good faith imposes upon the Corporate Secretary – the
chief repository of all corporate records – the obligation to check Clemente’s other
address which, under the By-Laws, have to be kept on file and are in fact on file. One
obvious purpose of giving the Corporate Secretary the duty to keep the addresses of
members on file is specifically for matters of this kind, when the member cannot be
reached through his or her mailing address. Significantly, the Corporate Secretary does
not have to do the actual verification of other addressees on record; a mere clerk can
do the very simple task of checking the files as in fact clerks actually undertake these
tasks. In fact, one telephone call to Clemente’s phone numbers on file would have
alerted him of his impending loss.


Ultimately, the petition must fail because Calatagan had failed to duly observe both the spirit
and letter of its own by-laws. The by-law provisions was clearly conceived to afford due notice to the
delinquent member of the impending sale, and not just to provide an intricate façade that would
facilitate Calatagan’s sale of the share. But then, the bad faith on Calatagan’s part is palpable. As found by
the Court of Appeals, Calatagan very well knew that Clemente’s postal box to which it sent its previous
letters had already been closed, yet it persisted in sending that final letter to the same postal box. What
for? Just for the exercise, it appears, as it had known very well that the letter would never actually reach
Clemente.

It is noteworthy that Clemente in his membership application had provided his residential
address along with his residence and office telephone numbers. Nothing in Section 32 of Calatagan’s By-
Laws requires that the final notice prior to the sale be made solely through the member’s mailing
address. Clemente cites our aphorism-like pronouncement inRizal Commercial Banking Corporation v.
Court of Appeals
[15]
that “*a+ simple telephone call and an ounce of good faith x x x could have prevented
this present controversy.” That memorable observation is quite apt in this case.

Calatagan’s bad faith and failure to observe its own By-Laws had resulted not merely in the loss
of Clemente’s privilege to play golf at its golf course and avail of its amenities, but also in significant
pecuniary damage to him. For that loss, the only blame that could be thrown Clemente’s way was his
failure to notify Calatagan of the closure of the P.O. Box. That lapse, if we uphold Calatagan would cost
Clemente a lot. But, in the first place, does he deserve answerability for failing to notify the club of the
closure of the postal box? Indeed, knowing as he did that Calatagan was in possession of his home
address as well as residence and office telephone numbers, he had every reason to assume that the club
would not be at a loss should it need to contact him. In addition, according to Clemente, he was not even
aware of the closure of the postal box, the maintenance of which was not his responsibility but his
employer Phimco’s.

The utter bad faith exhibited by Calatagan brings into operation Articles 19, 20 and 21 of the
Civil Code,
[16]
under the Chapter on Human Relations. These provisions, which the Court of Appeals did
apply, enunciate a general obligation under law for every person to act fairly and in good faith towards
one another. A non-stock corporation like Calatagan is not exempt from that obligation in its treatment of
its members. The obligation of a corporation to treat every person honestly and in good faith extends
even to its shareholders or members, even if the latter find themselves contractually bound to perform
certain obligations to the corporation. A certificate of stock cannot be a charter of dehumanization.



We turn to the matter of damages. The award of actual damages is of course warranted since
Clemente has sustained pecuniary injury by reason of Calatagan’s wrongful violation of its own By-Laws. It
would not be feasible to deliver Clemente’s original Certificate of Stock because it had already been
cancelled and a new one issued in its place in the name of the purchases at the auction who was not
impleaded in this case. However, the Court of Appeals instead directed that Calatagan to issue to
Clemente a new certificate of stock. That sufficiently redresses the actual damages sustained by
Clemente. After all, the certificate of stock is simply the evidence of the share.

The Court of Appeals also awarded Clemente P200,000.00 as moral damages, P100,000.00 as
exemplary damages, and P100,000.00 as attorney’s fees. We agree that the award of such damages is
warranted.

The Court of Appeals cited Calatagan for violation of Article 32 of the Civil Code, which allows
recovery of damages from any private individual “who directly or indirectly obstructs, defeats, violates or
in any manner impedes or impairs” the right “against deprivation of property without due process of
laws.” The plain letter of the provision squarely entitles Clemente to damages from Calatagan. Even
without Article 32 itself, Calatagan will still be bound to pay moral and exemplary damages to Clemente.
The latter was able to duly prove that he had sustained mental anguish, serious anxiety and wounded
feelings by reason of Calatagan’s acts, thereby entitling him to moral damages under Article 2217 of the
Civil Code. Moreover, it is evident that Calatagan’s bad faith as exhibited in the

course of its corporate actions warrants correction for the public good, thereby justifying exemplary
damages under Article 2229 of the Civil Code.

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals is AFFIRMED. Costs
against petitioner.

SO ORDERED.
CONRADO BUNAG, JR., petitioner,
vs.
HON. COURT OF APPEALS, First Division, and ZENAIDA B. CIRILO, respondents.

REGALADO, J.:
Petitioner appeals for the reversal of the decision
1
of respondent Court of Appeals promulgated on May
17, 1991 in CA-G.R. CV No. 07054, entitled "Zenaida B. Cirilo vs. Conrado Bunag, Sr. and Conrado Bunag,
Jr.," which affirmed in toto the decision of the Regional Trial Court, Branch XI at Bacoor, Cavite, and,
implicitly, respondent court's resolution of September 3, 1991
2
denying petitioner's motion for
reconsideration.
Respondent court having assiduously discussed the salient antecedents of this case, vis-a-vis the factual
findings of the court below, the evidence of record and the contentions of the parties, it is appropriate
that its findings, which we approve and adopt, be extensively reproduced hereunder:
Based on the evidence on record, the following facts are considered indisputable: On
the afternoon of September 8, 1973, defendant-appellant Bunag, Jr. brought plaintiff-
appellant to a motel or hotel where they had sexual intercourse. Later that evening,
said defendant-appellant brought plaintiff-appellant to the house of his grandmother
Juana de Leon in Pamplona, Las Piñas, Metro Manila, where they lived together as
husband and wife for 21 days, or until September 29, 1973. On September 10, 1973,
defendant-appellant Bunag, Jr. and plaintiff-appellant filed their respective
applications for a marriage license with the Office of the Local Civil Registrar of
Bacoor, Cavite. On October 1, 1973, after leaving plaintiff-appellant, defendant-
appellant Bunag, Jr. filed an affidavit withdrawing his application for a marriage
license.
Plaintiff-appellant contends that on the afternoon of September 8, 1973, defendant-
appellant Bunag, Jr., together with an unidentified male companion, abducted her in
the vicinity of the San Juan de Dios Hospital in Pasay City and brought her to a motel
where she was raped. The court a quo, which adopted her evidence, summarized the
same which we paraphrased as follows:
Plaintiff was 26 years old on November 5, 1974 when she
testified, single and had finished a college course in Commerce
(t.s.n., p. 4, Nov. 5, 1974). It appears that on September 8, 1973,
at about 4:00 o'clock in the afternoon, while she was walking
along Figueras Street, Pasay City on her way to the San Juan de
Dios Canteen to take her snack, defendant, Conrado Bunag, Jr.,
came riding in a car driven by a male companion. Plaintiff and
defendant Bunag, Jr. were sweethearts, but two weeks before
September 8, 1973, they had a quarrel, and Bunag, Jr. wanted to
talk matters over with plaintiff, so that he invited her to take their
merienda at the Aristocrat Restaurant in Manila instead of at the
San Juan de Dios Canteen, to which plaintiff obliged, as she
believed in his sincerity (t.s.n., pp. 8-10, Nov. 5, 1974).
Plaintiff rode in the car and took the front seat beside the driver
while Bunag, Jr. seated himself by her right side. The car travelled
north on its way to the Aristocrat Restaurant but upon reaching
San Juan Street in Pasay City, it turned abruptly to the right, to
which plaintiff protested, but which the duo ignored and instead
threatened her not to make any noise as they were ready to die
and would bump the car against the post if she persisted.
Frightened and silenced, the car travelled its course thru F.B.
Harrison Boulevard until they reached a motel. Plaintiff was then
pulled and dragged from the car against her will, and amidst her
cries and pleas. In spite of her struggle she was no match to the
joint strength of the two male combatants because of her natural
weakness being a woman and her small stature. Eventually, she
was brought inside the hotel where the defendant Bunag, Jr.
deflowered her against her will and consent. She could not fight
back and repel the attack because after Bunag, Jr. had forced her
to lie down and embraced her, his companion held her two feet,
removed her panty, after which he left. Bunag, Jr. threatened her
that he would ask his companion to come back and hold her feet
if she did not surrender her womanhood to him, thus he
succeeded in feasting on her virginity. Plaintiff described the pains
she felt and how blood came out of her private parts after her
vagina was penetrated by the penis of the defendant Bunag, Jr.
(t.s.n. pp. 17-24, Nov. 5, 1974).
After that outrage on her virginity, plaintiff asked Bunag, Jr. once
more to allow her to go home but the latter would not consent
and stated that he would only let her go after they were married
as he intended to marry her, so much so that she promised not to
make any scandal and to marry him. Thereafter, they took a taxi
together after the car that they used had already gone, and
proceeded to the house of Juana de Leon, Bunag, Jr.'s
grandmother in Pamplona, Las Piñas, Metro Manila where they
arrived at 9:30 o'clock in the evening (t.s.n., p. 26, Nov. 5, 1974).
At about ten (10) o'clock that same evening, defendant Conrado
Bunag, Sr., father of Bunag, Jr. arrived and assured plaintiff that
the following day which was a Monday, she and Bunag, Jr. would
go to Bacoor, to apply for a marriage license, which they did. They
filed their applications for marriage license (Exhibits "A" and "C")
and after that plaintiff and defendant Bunag, Jr. returned to the
house of Juana de Leon and lived there as husband and wife from
September 8, 1973 to September 29, 1973.
On September 29, 1973 defendant Bunag, Jr. left and never
returned, humiliating plaintiff and compelled her to go back to her
parents on October 3, 1973. Plaintiff was ashamed when she went
home and could not sleep and eat because of the deception done
against her by defendants-appellants (t.s.n., p. 35, Nov. 5, 1974).
The testimony of plaintiff was corroborated in toto by her uncle,
Vivencio Bansagan who declared that on September 8, 1973 when
plaintiff failed to arrive home at 9:00 o'clock in the evening, his
sister who is the mother of plaintiff asked him to look for her but
his efforts proved futile, and he told his sister that plaintiff might
have married (baka nag-asawa, t.s.n., pp. 5-6, March 18, 1976).
However, in the afternoon of the next day (Sunday), his sister told
him that Francisco Cabrera, accompanied by barrio captain Jacinto
Manalili of Ligas, Bacoor, Cavite, informed her that plaintiff and
Bunag, Jr. were in Cabrera's house, so that her sister requested
him to go and see the plaintiff, which he did, and at the house of
Mrs. Juana de Leon in Pamplona, Las Piñas, Metro Manila he met
defendant Conrado Bunag, Sr., who told him, "Pare, the children
are here already. Let us settle the matter and have them
married."
He conferred with plaintiff who told him that as she had already lost her honor, she
would bear her sufferings as Boy Bunag, Jr. and his father promised they would be
married.
Defendants-appellants, on the other hand, deny that defendant-appellant Conrado
Bunag, Jr. abducted and raped plaintiff-appellant on September 8, 1973. On the
contrary, plaintiff-appellant and defendant-appellant Bunag, Jr. eloped on that date
because of the opposition of the latter's father to their relationship.
Defendant-appellants claim that defendant-appellant Bunag, Jr. and plaintiff-
appellant had earlier made plans to elope and get married, and this fact was known to
their friends, among them, Architect Chito Rodriguez. The couple made good their
plans to elope on the afternoon of September 8, 1973, when defendant-appellant
Bunag, Jr., accompanied by his friend Guillermo Ramos, Jr., met plaintiff-appellant
and her officemate named Lydia in the vicinity of the San Juan de Dios Hospital. The
foursome then proceeded to (the) aforesaid hospital's canteen where they had some
snacks. Later, Guillermo Ramos, Jr. took Lydia to Quirino Avenue where she could get
a ride home, thereby leaving the defendant-appellant Bunag, Jr. and plaintiff-
appellant alone. According to defendant-appellant Bunag, Jr., after Guillermo Ramos,
Jr. and Lydia left, he and plaintiff-appellant took a taxi to the Golden Gate and
Flamingo Hotels where they tried to get a room, but these were full. They finally got a
room at the Holiday Hotel, where defendant-appellant registered using his real name
and residence certificate number. Three hours later, the couple check out of the hotel
and proceeded to the house of Juana de Leon at Pamplona, Las Piñas, where they
stayed until September 19, 1873. Defendant-appellant claims that bitter
disagreements with the plaintiff-appellant over money and the threats made to his
life prompted him to break off their plan to get married.
During this period, defendant-appellant Bunag, Sr. denied having gone to the house of
Juan de Leon and telling plaintiff-appellant that she would be wed to defendant-
appellant Bunag, Jr. In fact, he phoned Atty. Conrado Adreneda, member of the board
of directors of Mandala Corporation, defendant-appellant Bunag, Jr.'s employer,
three times between the evening of September 8, 1973 and September 9, 1973
inquiring as to the whereabouts of his son. He came to know about his son's
whereabouts when he was told of the couple's elopement late in the afternoon of
September 9, 1973 by his mother Candida Gawaran. He likewise denied having met
relatives and emissaries of plaintiff-appellant and agreeing to her marriage to his
son.
3

A complaint for damages for alleged breach of promise to marry was filed by herein private respondent
Zenaida B. Cirilo against petitioner Conrado Bunag, Jr. and his father, Conrado Bunag, Sr., as Civil Case No.
N-2028 of the Regional Trial Court, Branch XIX at Bacoor, Cavite. On August 20, 1983, on a finding, inter
alia, that petitioner had forcibly abducted and raped private respondent, the trial court rendered a
decision
4
ordering petitioner Bunag, Jr. to pay private respondent P80,000.00 as moral damages,
P20,000.00 as exemplary damages, P20,000.00 by way of temperate damages, and P10,000.00 for and as
attorney's fees, as well as the costs of suit. Defendant Conrado Bunag, Sr. was absolved from any and all
liability.
Private respondent appealed that portion of the lower court's decision disculpating Conrado Bunag, Sr.
from civil liability in this case. On the other hand, the Bunags, as defendants-appellants, assigned in their
appeal several errors allegedly committed by trial court, which were summarized by respondent court as
follows: (1) in finding that defendant-appellant Conrado Bunag, Jr. forcibly abducted and raped plaintiff-
appellant; (2) in finding that defendants-appellants promised plaintiff-appellant that she would be wed to
defendant-appellant Conrado Bunag, Jr.; and (3) in awarding plaintiff-appellant damages for the breach of
defendants-appellants' promise of marriage.
5

As stated at the outset, on May 17, 1991 respondent Court of Appeals rendered judgment dismissing
both appeals and affirming in toto the decision of the trial court. His motion for reconsideration having
been denied, petitioner Bunag, Jr. is before us on a petition for review, contending that (1) respondent
court failed to consider vital exhibits, testimonies and incidents for petitioner's defense, resulting in the
misapprehensions of facts and violative of the law on preparation of judgment; and (2) it erred in the
application of the proper law and jurisprudence by holding that there was forcible abduction with rape,
not just a simple elopement and an agreement to marry, and in the award of excessive damages.
6

Petitioner Bunag, Jr. first contends that both the trial and appellate courts failed to take into
consideration the alleged fact that he and private respondent had agreed to marry, and that there was no
case of forcible abduction with rape, but one of simple elopement and agreement to marry. It is averred
that the agreement to marry has been sufficiently proven by the testimonies of the witnesses for both
parties and the exhibits presented in court.
This submission, therefore, clearly hinges on the credibility of the witnesses and evidence presented by
the parties and the weight accorded thereto in the factual findings of the trial court and the Court of
Appeals. In effect, what petitioner would want this Court to do is to evaluate and analyze anew the
evidence, both testimonial and documentary, presented before and calibrated by the trial court, and as
further meticulously reviewed and discussed by respondent court.
The issue raised primarily and ineluctably involves questions of fact. We are, therefore, once again
constrained to stress the well-entrenched statutory and jurisprudential mandate that findings of fact of
the Court of Appeals are, as a rule, conclusive upon this Court. Only questions of law, distinctly set forth,
may be raised in a petition for review on certiorari under Rule 45 of the Rules of Court, subject to clearly
settled exceptions in case law.
Our jurisdiction in cases brought to us from the Court of Appeals is limited to reviewing and revising the
errors of law imputed to the latter, its findings of fact being conclusive. This Court has emphatically
declared that it is not its function to analyze or weigh such evidence all over again, its jurisdiction being
limited to reviewing errors of law that might have been committed by the lower court. Barring, therefore,
a showing that the findings complained of are totally devoid of support in the record, or that they are so
glaringly erroneous as to constitute serious abuse of discretion, such findings must stand, for this Court is
not expected or required to examine or contrast the oral and documentary evidence submitted by the
parties.
7
Neither does the instant case reveal any feature falling within, any of the exceptions which
under our decisional rules may warrant a review of the factual findings of the Court of Appeals. On the
foregoing considerations and our review of the records, we sustain the holding of respondent court in
favor of private respondent.
Petitioner likewise asserts that since action involves a breach of promise to marry, the trial court erred in
awarding damages.
It is true that in this jurisdiction, we adhere to the time-honored rule that an action for breach of promise
to marry has no standing in the civil law, apart from the right to recover money or property advanced by
the plaintiff upon the faith of such promise. 8 Generally, therefore, a breach of promise to marry per se is
not actionable, except where the plaintiff has actually incurred expenses for the wedding and the
necessary incidents thereof.
However, the award of moral damages is allowed in cases specified in or analogous to those provided in
Article 2219 of the Civil Code. Correlatively, under Article 21 of said Code, in relation to paragraph 10 of
said Article 2219, any person who wilfully causes loss or injury to another in a manner that is contrary to
morals, good customs or public policy shall compensate the latter for moral damages.
9
Article 21 was
adopted to remedy the countless gaps in the statutes which leave so many victims of moral wrongs
helpless even though they have actually suffered material and moral injury, and is intended to vouchsafe
adequate legal remedy for that untold number of moral wrongs which is impossible for human foresight
to specifically provide for in the statutes.
10

Under the circumstances obtaining in the case at bar, the acts of petitioner in forcibly abducting private
respondent and having carnal knowledge with her against her will, and thereafter promising to marry her
in order to escape criminal liability, only to thereafter renege on such promise after cohabiting with her
for twenty-one days, irremissibly constitute acts contrary to morals and good customs. These are grossly
insensate and reprehensible transgressions which indisputably warrant and abundantly justify the award
of moral and exemplary damages, pursuant to Article 21 in relation to paragraphs 3 and 10, Article 2219,
and Article 2229 and 2234 of Civil Code.
Petitioner would, however, belabor the fact that said damages were awarded by the trial court on the
basis of a finding that he is guilty of forcible abduction with rape, despite the prior dismissal of the
complaint therefor filed by private respondent with the Pasay City Fiscal's Office.
Generally, the basis of civil liability from crime is the fundamental postulate of our law that every person
criminally liable for a felony is also civilly liable. In other words, criminal liability will give rise to civil
liability ex delicto only if the same felonious act or omission results in damage or injury to another and is
the direct and proximate cause thereof.
11
Hence, extinction of the penal action does not carry with it the
extinction of civil liability unless the extinction proceeds from a declaration in a final judgment that the
fact from which the civil might arise did not exist.
12

In the instant case, the dismissal of the complaint for forcible abduction with rape was by mere resolution
of the fiscal at the preliminary investigation stage. There is no declaration in a final judgment that the fact
from which the civil case might arise did not exist. Consequently, the dismissal did not in any way affect
the right of herein private respondent to institute a civil action arising from the offense because such
preliminary dismissal of the penal action did not carry with it the extinction of the civil action.
The reason most often given for this holding is that the two proceedings involved are not between the
same parties. Furthermore, it has long been emphasized, with continuing validity up to now, that there
are different rules as to the competency of witnesses and the quantum of evidence in criminal and civil
proceedings. In a criminal action, the State must prove its case by evidence which shows the guilt of the
accused beyond reasonable doubt, while in a civil action it is sufficient for the plaintiff to sustain his cause
by preponderance of evidence only.
13
Thus, in Rillon, et al. vs. Rillon,
14
we stressed that it is not now
necessary that a criminal prosecution for rape be first instituted and prosecuted to final judgment before
a civil action based on said offense in favor of the offended woman can likewise be instituted and
prosecuted to final judgment.
WHEREFORE, the petition is hereby DENIED for lack of merit, and the assailed judgment and resolution
are hereby AFFIRMED.
SO ORDERED.
APOLONIO TANJANCO, petitioner,
vs.
HON. COURT OF APPEALS and ARACELI SANTOS, respondents.
P. Carreon and G. O. Veneracion, Jr. for petitioner.
Antonio V. Bonoan for respondents.
REYES, J.B.L., J.:
Appeal from a decision of the Court of Appeals (in its Case No. 27210-R) revoking an order of the Court of
First Instance of Rizal (in Civil Case No. Q-4797) dismissing appellant's action for support and damages.
The essential allegations of the complaint are to the effect that, from December, 1957, the defendant
(appellee herein), Apolonio Tanjanco, courted the plaintiff, Araceli Santos, both being of adult age; that
"defendant expressed and professed his undying love and affection for plaintiff who also in due time
reciprocated the tender feelings"; that in consideration of defendant's promise of marriage plaintiff
consented and acceded to defendant's pleas for carnal knowledge; that regularly until December 1959,
through his protestations of love and promises of marriage, defendant succeeded in having carnal access
to plaintiff, as a result of which the latter conceived a child; that due to her pregnant condition, to avoid
embarrassment and social humiliation, plaintiff had to resign her job as secretary in IBM Philippines, Inc.,
where she was receiving P230.00 a month; that thereby plaintiff became unable to support herself and
her baby; that due to defendant's refusal to marry plaintiff, as promised, the latter suffered mental
anguish, besmirched reputation, wounded feelings, moral shock, and social humiliation. The prayer was
for a decree compelling the defendant to recognize the unborn child that plaintiff was bearing; to pay her
not less than P430.00 a month for her support and that of her baby, plus P100,000.00 in moral and
exemplary damages, plus P10,000.00 attorney's fees.
Upon defendant's motion to dismiss, the court of first instance dismissed the complaint for failure to
state a cause of action.
Plaintiff Santos duly appealed to the Court of Appeals, and the latter ultimately decided the case, holding
with the lower court that no cause of action was shown to compel recognition of a child as yet unborn,
nor for its support, but decreed that the complaint did state a cause of action for damages, premised on
Article 21 of the Civil Code of the Philippines, prescribing as follows:
ART. 21. Any person who wilfully causes loss or injury to another in a manner that is contrary to
morals, good customs or public policy shall compensate the latter for the damage.
The Court of Appeals, therefore, entered judgment setting aside the dismissal and directing the court of
origin to proceed with the case.
Defendant, in turn, appealed to this Court, pleading that actions for breach of a promise to marry are not
permissible in this jurisdiction, and invoking the rulings of this Court in Estopa vs. Piansay, L-14733,
September 30, 1960;Hermosisima vs. Court of Appeals, L-14628, January 29, 1962; and De Jesus vs.
SyQuia, 58 Phil. 886.
We find this appeal meritorious.
In holding that the complaint stated a cause of action for damages, under Article 21 above mentioned,
the Court of Appeals relied upon and quoted from the memorandum submitted by the Code Commission
to the Legislature in 1949 to support the original draft of the Civil Code. Referring to Article 23 of the draft
(now Article 21 of the Code), the Commission stated:
But the Code Commission has gone farther than the sphere of wrongs defined or determined by
positive law. Fully sensible that there are countless gaps in the statutes, which leave so many
victims of moral wrongs helpless, even though they have actually suffered material and moral
injury, the Commission has deemed it necessary, in the interest of justice, to incorporate in the
proposed Civil Code the following rule:
"ART. 23. Any person who wilfully causes loss or injury to another in a manner that is
contrary to morals, good customs or public policy shall compensate the latter for the
damage."
An example will illustrate the purview of the foregoing norm: "A" seduces the nineteen-year old
daughter of "X". A promise of marriage either has not been made, or can not be proved. The girl
becomes pregnant. Under the present laws, there is no crime, as the girl is above eighteen
years of age. Neither can any civil action for breach of promise of marriage be filed. Therefore,
though the grievous moral wrong has been committed, and though the girl and her family have
suffered incalculable moral damage, she and her parents cannot bring any action for damages.
But under the proposed article, she and her parents would have such a right of action.
The Court of Appeals seems to have overlooked that the example set forth in the Code Commission's
memorandum refers to a tort upon a minor who has been seduced. The essential feature is seduction,
that in law is more than mere sexual intercourse, or a breach of a promise of marriage; it connotes
essentially the idea of deceit, enticement, superior power or abuse of confidence on the part of the
seducer to which the woman has yielded (U.S. vs. Buenaventura, 27 Phil. 121; U.S. vs. Arlante, 9 Phil.
595).
It has been ruled in the Buenaventura case (supra) that —
To constitute seduction there must in all cases be some sufficient promise or inducement and
the woman must yield because of the promise or other inducement. If she consents merely from
carnal lust and the intercourse is from mutual desire, there is no seduction (43 Cent. Dig. tit.
Seduction, par. 56). She must be induced to depart from the path of virtue by the use of some
species of arts, persuasions and wiles, which are calculated to have and do have that effect, and
which result in her ultimately submitting her person to the sexual embraces of her seducer (27
Phil. 123).
And in American Jurisprudence we find:
On the other hand, in an action by the woman, the enticement, persuasion or deception is the
essence of the injury; and a mere proof of intercourse is insufficient to warrant a recover.
Accordingly it is not seduction where the willingness arises out of sexual desire or curiosity of
the female, and the defendant merely affords her the needed opportunity for the commission
of the act. It has been emphasized that to allow a recovery in all such cases would tend to the
demoralization of the female sex, and would be a reward for unchastity by which a class of
adventuresses would be swift to profit." (47 Am. Jur. 662)
Bearing these principles in mind, let us examine the complaint. The material allegations there are as
follows:
I. That the plaintiff is of legal age, single, and residing at 56 South E. Diliman, Quezon City, while
defendant is also of legal age, single and residing at 525 Padre Faura, Manila, where he may be
served with summons;
II. That the plaintiff and the defendant became acquainted with each other sometime in
December, 1957 and soon thereafter, the defendant started visiting and courting the plaintiff;
III. That the defendant's visits were regular and frequent and in due time the defendant
expressed and professed his undying love and affection for the plaintiff who also in due time
reciprocated the tender feelings;
IV. That in the course of their engagement, the plaintiff and the defendant as are wont of young
people in love had frequent outings and dates, became very close and intimate to each other
and sometime in July, 1958, in consideration of the defendant's promises of marriage, the
plaintiff consented and acceded to the former's earnest and repeated pleas to have carnal
knowledge with him;
V. That subsequent thereto and regularly until about July, 1959 except for a short period in
December, 1958 when the defendant was out of the country, the defendant through his
protestations of love and promises of marriage succeeded in having carnal knowledge with the
plaintiff;
VI. That as a result of their intimate relationship, the plaintiff started conceiving which was
confirmed by a doctor sometime in July, 1959;
VII. That upon being certain of her pregnant condition, the plaintiff informed the defendant and
pleaded with him to make good his promises of marriage, but instead of honoring his promises
and righting his wrong, the defendant stopped and refrained from seeing the plaintiff since
about July, 1959 has not visited the plaintiff and to all intents and purposes has broken their
engagement and his promises.
Over and above the partisan allegations, the facts stand out that for one whole year, from 1958 to 1959,
the plaintiff-appellee, a woman of adult age, maintained intimate sexual relations with appellant, with
repeated acts of intercourse. Such conduct is incompatible with the idea of seduction. Plainly there is
here voluntariness and mutual passion; for had the appellant been deceived, had she surrendered
exclusively because of the deceit, artful persuasions and wiles of the defendant, she would not have again
yielded to his embraces, much less for one year, without exacting early fulfillment of the alleged promises
of marriage, and would have cut chart all sexual relations upon finding that defendant did not intend to
fulfill his promises. Hence, we conclude that no case is made under Article 21 of the Civil Code, and no
other cause of action being alleged, no error was committed by the Court of First Instance in dismissing
the complaint.
Of course, the dismissal must be understood as without prejudice to whatever actions may correspond to
the child of the plaintiff against the defendant-appellant, if any. On that point, this Court makes no
pronouncement, since the child's own rights are not here involved.
FOR THE FOREGOING REASONS, the decision of the Court of Appeals is reversed, and that of the Court of
First Instance is affirmed. No costs.
Buenaventura vs CA
These cases involve a petition for the declaration of nullity of marriage, which was filed by
petitioner Noel Buenaventura on July 12, 1992, on the ground of the alleged psychological incapacity of
his wife, Isabel Singh Buenaventura, herein respondent. After respondent filed her answer, petitioner,
with leave of court, amended his petition by stating that both he and his wife were psychologically
incapacitated to comply with the essential obligations of marriage. In response, respondent filed an
amended answer denying the allegation that she was psychologically incapacitated.
[1]

On July 31, 1995, the Regional Trial Court promulgated a Decision, the dispositive portion of which
reads:
WHEREFORE, judgment is hereby rendered as follows:
1) Declaring and decreeing the marriage entered into between plaintiff Noel A.
Buenaventura and defendant Isabel Lucia Singh Buenaventura on July 4, 1979, null and
void ab initio;
2) Ordering the plaintiff to pay defendant moral damages in the amount of 2.5 million pesos
and exemplary damages of 1 million pesos with 6% interest from the date of this
decision plus attorney’s fees of P100,000.00;
3) Ordering the plaintiff to pay the defendant expenses of litigation of P50,000.00, plus
costs;
4) Ordering the liquidation of the assets of the conjugal partnership property[,] particularly
the plaintiff’s separation/retirement benefits received from the Far East Bank [and]
Trust Company[,] by ceding, giving and paying to her fifty percent (50%) of the net
amount of P3,675,335.79 or P1,837,667.89 together with 12% interest per annum from
the date of this decision and one-half (1/2) of his outstanding shares of stock with
Manila Memorial Park and Provident Group of Companies;
5) Ordering him to give a regular support in favor of his son Javy Singh Buenaventura in the
amount of P15,000.00 monthly, subject to modification as the necessity arises;
6) Awarding the care and custody of the minor Javy Singh Buenaventura to his mother, the
herein defendant; and
7) Hereby authorizing the defendant to revert back to the use of her maiden family name
Singh.
Let copies of this decision be furnished the appropriate civil registry and registries of properties.
SO ORDERED.
[2]

Petitioner appealed the above decision to the Court of Appeals. While the case was pending in the
appellate court, respondent filed a motion to increase the P15,000 monthly supportpendente lite of their
son Javy Singh Buenaventura. Petitioner filed an opposition thereto, praying that it be denied or that such
incident be set for oral argument.
[3]

On September 2, 1996, the Court of Appeals issued a Resolution increasing the support pendente
lite to P20,000.
[4]
Petitioner filed a motion for reconsideration questioning the said Resolution.
[5]

On October 8, 1996, the appellate court promulgated a Decision dismissing petitioner’s appeal for
lack of merit and affirming in toto the trial court’s decision.
[6]
Petitioner filed a motion for
reconsideration which was denied. From the abovementioned Decision, petitioner filed the instant
Petition for Review on Certiorari.
On November 13, 1996, through another Resolution, the Court of Appeals denied petitioner’s
motion for reconsideration of the September 2, 1996 Resolution, which increased the monthly support
for the son.
[7]
Petitioner filed a Petition for Certiorari to question these two Resolutions.
On July 9, 1997, the Petition for Review on Certiorari
[8]
and the Petition for Certiorari
[9]
were
ordered consolidated by this Court.
[10]

In the Petition for Review on Certiorari petitioner claims that the Court of Appeals decided the case
not in accord with law and jurisprudence, thus:
1. WHEN IT AWARDED DEFENDANT-APPELLEE MORAL DAMAGES IN THE AMOUNT OF P2.5 MILLION
AND EXEMPLARY DAMAGES OF P1 MILLION, WITH 6% INTEREST FROM THE DATE OF ITS DECISION,
WITHOUT ANY LEGAL AND MORAL BASIS;
2. WHEN IT AWARDED P100,000.00 ATTORNEY’S FEES AND P50,000.00 EXPENSES OF LITIGATION,
PLUS COSTS, TO DEFENDANT-APPELLEE, WITHOUT FACTUAL AND LEGAL BASIS;
3. WHEN IT ORDERED PLAINTIFF-APPELLANT NOEL TO PAY DEFENDANT-APPELLEE ONE-HALF
OR P1,837,667.89 OUT OF HIS RETIREMENT BENEFITS RECEIVED FROM THE FAR EAST BANK AND TRUST
CO., WITH 12% INTEREST THEREON FROM THE DATE OF ITS DECISION, NOTWITHSTANDING THAT SAID
RETIREMENT BENEFITS ARE GRATUITOUS AND EXCLUSIVE PROPERTY OF NOEL, AND ALSO TO DELIVER TO
DEFENDANT-APPELLEE ONE-HALF OF HIS SHARES OF STOCK WITH THE MANILA MEMORIAL PARK AND
THE PROVIDENT GROUP OF COMPANIES, ALTHOUGH SAID SHARES OF STOCK WERE ACQUIRED BY NOEL
BEFORE HIS MARRIAGE TO RESPONDENT ISABEL AND ARE, THEREFORE, AGAIN HIS EXCLUSIVE
PROPERTIES; AND
4. WHEN IT AWARDED EXCLUSIVE CARE AND CUSTODY OVER THE PARTIES’ MINOR CHILD TO
DEFENDANT-APPELLEE WITHOUT ASKING THE CHILD (WHO WAS ALREADY 13 YEARS OLD AT THAT TIME)
HIS CHOICE AS TO WHOM, BETWEEN HIS TWO PARENTS, HE WOULD LIKE TO HAVE CUSTODY OVER HIS
PERSON.
[11]

In the Petition for Certiorari, petitioner advances the following contentions:
THE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION WHEN IT REFUSED TO SET RESPONDENT’S
MOTION FOR INCREASED SUPPORT FOR THE PARTIES’ SON FOR HEARING.
[12]

THERE WAS NO NEED FOR THE COURT OF APPEALS TO INCREASE JAVY’S MONTHLY SUPPORT OF
P15,000.00 BEING GIVEN BY PETITIONER EVEN AT PRESENT PRICES.
[13]

IN RESOLVING RESPONDENT’S MOTION FOR THE INCREASE OF JAVY’S SUPPORT, THE COURT OF APPEALS
SHOULD HAVE EXAMINED THE LIST OF EXPENSES SUBMITTED BY RESPONDENT IN THE LIGHT OF
PETITIONER’S OBJECTIONS THERETO, INSTEAD OF MERELY ASSUMING THAT JAVY IS ENTITLED TO A
P5,000 INCREASE IN SUPPORT AS SAID AMOUNT IS “TOO MINIMAL.”
[14]

LIKEWISE, THE COURT OF APPEALS SHOULD HAVE GIVEN PETITIONER AN OPPORTUNITY TO PROVE HIS
PRESENT INCOME TO SHOW THAT HE CANNOT AFFORD TO INCREASE JAVY’S SUPPORT.
[15]

With regard to the first issue in the main case, the Court of Appeals articulated:
On Assignment of Error C, the trial court, after findings of fact ascertained from the testimonies not only
of the parties particularly the defendant-appellee but likewise, those of the two psychologists, awarded
damages on the basis of Articles 21, 2217 and 2229 of the Civil Code of the Philippines.
Thus, the lower court found that plaintiff-appellant deceived the defendant-appellee into marrying him
by professing true love instead of revealing to her that he was under heavy parental pressure to marry
and that because of pride he married defendant-appellee; that he was not ready to enter into marriage as
in fact his career was and always would be his first priority; that he was unable to relate not only to
defendant-appellee as a husband but also to his son, Javy, as a father; that he had no inclination to make
the marriage work such that in times of trouble, he chose the easiest way out, that of leaving defendant–
appellee and their son; that he had no desire to keep defendant-appellee and their son as proved by his
reluctance and later, refusal to reconcile after their separation; that the aforementioned caused
defendant-appellee to suffer mental anguish, anxiety, besmirched reputation, sleepless nights not only in
those years the parties were together but also after and throughout their separation.
Plaintiff-appellant assails the trial court’s decision on the ground that unlike those arising from a breach
in ordinary contracts, damages arising as a consequence of marriage may not be awarded. While it is
correct that there is, as yet, no decided case by the Supreme Court where damages by reason of the
performance or non-performance of marital obligations were awarded, it does not follow that no such
award for damages may be made.
Defendant-appellee, in her amended answer, specifically prayed for moral and exemplary damages in the
total amount of 7 million pesos. The lower court, in the exercise of its discretion, found full justification
of awarding at least half of what was originally prayed for. We find no reason to disturb the ruling of the
trial court.
[16]

The award by the trial court of moral damages is based on Articles 2217 and 21 of the Civil Code,
which read as follows:
ART. 2217. Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social humiliation, and similar injury. Though incapable of
pecuniary computation, moral damages may be recovered if they are the proximate result of the
defendant’s wrongful act or omission.
ART. 21. Any person who wilfully causes loss or injury to another in a manner that is contrary to morals,
good customs or public policy shall compensate the latter for the damage.
The trial court referred to Article 21 because Article 2219
[17]
of the Civil Code enumerates the cases
in which moral damages may be recovered and it mentions Article 21 as one of the instances. It must be
noted that Article 21 states that the individual must willfully cause loss or injury to another. There is a
need that the act is willful and hence done in complete freedom. In granting moral damages, therefore,
the trial court and the Court of Appeals could not but have assumed that the acts on which the moral
damages were based were done willfully and freely, otherwise the grant of moral damages would have
no leg to stand on.
On the other hand, the trial court declared the marriage of the parties null and void based on
Article 36 of the Family Code, due to psychological incapacity of the petitioner, Noel Buenaventura.
Article 36 of the Family Code states:
A marriage contracted by any party who, at the time of the celebration, was psychologically incapacitated
to comply with the essential marital obligations of marriage, shall likewise be void even if such incapacity
becomes manifest only after its solemnization.
Psychological incapacity has been defined, thus:
. . . no less than a mental (not physical) incapacity that causes a party to be truly incognitive of the basic
marital covenants that concomitantly must be assumed and discharged by the parties to the
marriagewhich, as so expressed by Article 68 of the Family Code, include their mutual obligations to live
together, observe love, respect and fidelity and render help and support. There is hardly any doubt that
the intendment of the law has been to confine the meaning of "psychological incapacity" to the most
serious cases of personality disorders clearly demonstrative of an utter insensitivity or inability to give
meaning and significance to the marriage. . . .
[18]

The Court of Appeals and the trial court considered the acts of the petitioner after the marriage as
proof of his psychological incapacity, and therefore a product of his incapacity or inability to comply with
the essential obligations of marriage. Nevertheless, said courts considered these acts as willful and hence
as grounds for granting moral damages. It is contradictory to characterize acts as a product of
psychological incapacity, and hence beyond the control of the party because of an innate inability, while
at the same time considering the same set of acts as willful. By declaring the petitioner as psychologically
incapacitated, the possibility of awarding moral damages on the same set of facts was negated. The
award of moral damages should be predicated, not on the mere act of entering into the marriage, but on
specific evidence that it was done deliberately and with malice by a party who had knowledge of his or
her disability and yet willfully concealed the same. No such evidence appears to have been adduced in
this case.
For the same reason, since psychological incapacity means that one is truly incognitive of the basic
marital covenants that one must assume and discharge as a consequence of marriage, it removes the
basis for the contention that the petitioner purposely deceived the private respondent. If the private
respondent was deceived, it was not due to a willful act on the part of the petitioner. Therefore, the
award of moral damages was without basis in law and in fact.
Since the grant of moral damages was not proper, it follows that the grant of exemplary damages
cannot stand since the Civil Code provides that exemplary damages are imposed in addition to moral,
temperate, liquidated or compensatory damages.
[19]

With respect to the grant of attorney’s fees and expenses of litigation the trial court explained,
thus:
Regarding Attorney’s fees, Art. 2208 of the Civil Code authorizes an award of attorney’s fees and
expenses of litigation, other than judicial costs, when as in this case the plaintiff’s act or omission has
compelled the defendant to litigate and to incur expenses of litigation to protect her interest (par. 2), and
where the Court deems it just and equitable that attorney’s fees and expenses of litigation should be
recovered. (par. 11)
[20]

The Court of Appeals reasoned as follows:
On Assignment of Error D, as the award of moral and exemplary damages is fully justified, the award of
attorney’s fees and costs of litigation by the trial court is likewise fully justified.
[21]

The acts or omissions of petitioner which led the lower court to deduce his psychological incapacity,
and his act in filing the complaint for the annulment of his marriage cannot be considered as unduly
compelling the private respondent to litigate, since both are grounded on petitioner’s psychological
incapacity, which as explained above is a mental incapacity causing an utter inability to comply with the
obligations of marriage. Hence, neither can be a ground for attorney’s fees and litigation expenses.
Furthermore, since the award of moral and exemplary damages is no longer justified, the award of
attorney’s fees and expenses of litigation is left without basis.
Anent the retirement benefits received from the Far East Bank and Trust Co. and the shares of stock
in the Manila Memorial Park and the Provident Group of Companies, the trial court said:
The third issue that must be resolved by the Court is what to do with the assets of the conjugal
partnership in the event of declaration of annulment of the marriage. The Honorable Supreme Court has
held that the declaration of nullity of marriage carries ipso facto a judgment for the liquidation of
property (Domingo v. Court of Appeals, et al., G.R. No. 104818, Sept. 17, 1993, 226 SCRA, pp. 572 – 573,
586). Thus, speaking through Justice Flerida Ruth P. Romero, it was ruled in this case:
When a marriage is declared void ab initio, the law states that the final judgment therein shall provide for
the liquidation, partition and distribution of the properties of the spouses, the custody and support of the
common children and the delivery of their presumptive legitimes, unless such matters had been
adjudicated in the previous proceedings.
The parties here were legally married on July 4, 1979, and therefore, all property acquired during the
marriage, whether the acquisition appears to have been made, contracted or registered in the name of
one or both spouses, is presumed to be conjugal unless the contrary is proved (Art. 116, New Family
Code; Art. 160, Civil Code). Art. 117 of the Family Code enumerates what are conjugal partnership
properties. Among others they are the following:
1) Those acquired by onerous title during the marriage at the expense of the common fund, whether the
acquisition be for the partnership, or for only one of the spouses;
2) Those obtained from the labor, industry, work or profession of either or both of the spouses;
3) The fruits, natural, industrial, or civil, due or received during the marriage from the common property,
as well as the net fruits from the exclusive property of each spouse. . . .
Applying the foregoing legal provisions, and without prejudice to requiring an inventory of what are the
parties’ conjugal properties and what are the exclusive properties of each spouse, it was disclosed during
the proceedings in this case that the plaintiff who worked first as Branch Manager and later as Vice-
President of Far East Bank & Trust Co. received separation/retirement package from the said bank in the
amount ofP3,701,500.00 which after certain deductions amounting to P26,164.21 gave him a net amount
of P3,675,335.79 and actually paid to him on January 9, 1995 (Exhs. 6, 7, 8, 9, 10, 11). Not having shown
debts or obligations other than those deducted from the said retirement/separation pay, under Art. 129
of the Family Code “The net remainder of the conjugal partnership properties shall constitute the profits,
which shall be divided equally between husband and wife, unless a different proportion or division was
agreed upon in the marriage settlement or unless there has been a voluntary waiver or forfeiture of such
share as provided in this Code.” In this particular case, however, there had been no marriage settlement
between the parties, nor had there been any voluntary waiver or valid forfeiture of the defendant wife’s
share in the conjugal partnership properties. The previous cession and transfer by the plaintiff of his one-
half (1/2) share in their residential house and lot covered by T.C.T. No. S-35680 of the Registry of Deeds of
Parañaque, Metro Manila, in favor of the defendant as stipulated in their Compromise Agreement dated
July 12, 1993, and approved by the Court in its Partial Decision dated August 6, 1993, was actually
intended to be in full settlement of any and all demands for past support. In reality, the defendant wife
had allowed some concession in favor of the plaintiff husband, for were the law strictly to be followed, in
the process of liquidation of the conjugal assets, the conjugal dwelling and the lot on which it is situated
shall, unless otherwise agreed upon by the parties, be adjudicated to the spouse with whom their only
child has chosen to remain (Art. 129, par. 9). Here, what was done was one-half (1/2) portion of the
house was ceded to defendant so that she will not claim anymore for past unpaid support, while the
other half was transferred to their only child as his presumptive legitime.
Consequently, nothing yet has been given to the defendant wife by way of her share in the conjugal
properties, and it is but just, lawful and fair, that she be given one-half (1/2) share of the
separation/retirement benefits received by the plaintiff the same being part of their conjugal partnership
properties having been obtained or derived from the labor, industry, work or profession of said
defendant husband in accordance with Art. 117, par. 2 of the Family Code. For the same reason, she is
entitled to one-half (1/2) of the outstanding shares of stock of the plaintiff husband with the Manila
Memorial Park and the Provident Group of Companies.
[22]

The Court of Appeals articulated on this matter as follows:
On Assignment of Error E, plaintiff-appellant assails the order of the trial court for him to give one-half of
his separation/retirement benefits from Far East Bank & Trust Company and half of his outstanding
shares in Manila Memorial Park and Provident Group of Companies to the defendant-appellee as the
latter’s share in the conjugal partnership.
On August 6, 1993, the trial court rendered a Partial Decision approving the Compromise Agreement
entered into by the parties. In the same Compromise Agreement, the parties had agreed that
henceforth, their conjugal partnership is dissolved. Thereafter, no steps were taken for the liquidation of
the conjugal partnership.
Finding that defendant-appellee is entitled to at least half of the separation/retirement benefits which
plaintiff-appellant received from Far East Bank & Trust Company upon his retirement as Vice-President of
said company for the reason that the benefits accrued from plaintiff–appellant’s service for the bank for a
number of years, most of which while he was married to defendant-appellee, the trial court adjudicated
the same. The same is true with the outstanding shares of plaintiff-appellant in Manila Memorial Park
and Provident Group of Companies. As these were acquired by the plaintiff-appellant at the time he was
married to defendant-appellee, the latter is entitled to one-half thereof as her share in the conjugal
partnership. We find no reason to disturb the ruling of the trial court.
[23]

Since the present case does not involve the annulment of a bigamous marriage, the provisions of
Article 50 in relation to Articles 41, 42 and 43 of the Family Code, providing for the dissolution of the
absolute community or conjugal partnership of gains, as the case may be, do not apply. Rather, the
general rule applies, which is that in case a marriage is declared void ab initio, the property regime
applicable and to be liquidated, partitioned and distributed is that of equal co-ownership.
In Valdes v. Regional Trial Court, Branch 102, Quezon City,
[24]
this Court expounded on the
consequences of a void marriage on the property relations of the spouses and specified the applicable
provisions of law:
The trial court correctly applied the law. In a void marriage, regardless of the cause thereof, the property
relations of the parties during the period of cohabitation is governed by the provisions of Article 147 or
Article 148, such as the case may be, of the Family Code. Article 147 is a remake of Article 144 of the Civil
Code as interpreted and so applied in previous cases; it provides:
ART. 147. When a man and a woman who are capacitated to marry each other, live exclusively with
each other as husband and wife without the benefit of marriage or under a void marriage, their wages
and salaries shall be owned by them in equal shares and the property acquired by both of them through
their work or industry shall be governed by the rules on co-ownership.
In the absence of proof to the contrary, properties acquired while they lived together shall be presumed
to have been obtained by their joint efforts, work or industry, and shall be owned by them in equal
shares. For purposes of this Article, a party who did not participate in the acquisition by the other party of
any property shall be deemed to have contributed jointly in the acquisition thereof if the former's efforts
consisted in the care and maintenance of the family and of the household.
Neither party can encumber or dispose by acts inter vivos of his or her share in the property acquired
during cohabitation and owned in common, without the consent of the other, until after the termination
of their cohabitation.
When only one of the parties to a void marriage is in good faith, the share of the party in bad faith in the
co-ownership shall be forfeited in favor of their common children. In case of default of or waiver by any
or all of the common children or their descendants, each vacant share shall belong to the respective
surviving descendants. In the absence of descendants, such share shall belong to the innocent party. In all
cases, the forfeiture shall take place upon termination of the cohabitation.
This peculiar kind of co-ownership applies when a man and a woman, suffering no legal impediment to
marry each other, so exclusively live together as husband and wife under a void marriage or without the
benefit of marriage. The term "capacitated" in the provision (in the first paragraph of the law) refers to
the legal capacity of a party to contract marriage, i.e., any "male or female of the age of eighteen years or
upwards not under any of the impediments mentioned in Articles 37 and 38" of the Code.
Under this property regime, property acquired by both spouses through their work and industry shall be
governed by the rules on equal co-ownership. Any property acquired during the union is prima facie
presumed to have been obtained through their joint efforts. A party who did not participate in the
acquisition of the property shall still be considered as having contributed thereto jointly if said party's
"efforts consisted in the care and maintenance of the family household." Unlike the conjugal partnership
of gains, the fruits of the couple's separate property are not included in the co-ownership.
Article 147 of the Family Code, in substance and to the above extent, has clarified Article 144 of the Civil
Code; in addition, the law now expressly provides that —
(a) Neither party can dispose or encumber by act[s] inter vivos [of] his or her share in co-ownership
property, without the consent of the other, during the period of cohabitation; and
(b) In the case of a void marriage, any party in bad faith shall forfeit his or her share in the co-
ownership in favor of their common children; in default thereof or waiver by any or all of the common
children, each vacant share shall belong to the respective surviving descendants, or still in default
thereof, to the innocent party. The forfeiture shall take place upon the termination of the cohabitation or
declaration of nullity of the marriage.

In deciding to take further cognizance of the issue on the settlement of the parties' common property,
the trial court acted neither imprudently nor precipitately; a court which had jurisdiction to declare the
marriage a nullity must be deemed likewise clothed with authority to resolve incidental and
consequential matters. Nor did it commit a reversible error in ruling that petitioner and private
respondent own the "family home" and all their common property in equal shares, as well as in
concluding that, in the liquidation and partition of the property owned in common by them, the
provisions on co-ownership under the Civil Code, not Articles 50, 51 and 52, in relation to Articles 102 and
129, of the Family Code, should aptly prevail. The rules set up to govern the liquidation of either the
absolute community or the conjugal partnership of gains, the property regimes recognized for valid and
voidable marriages (in the latter case until the contract is annulled), are irrelevant to the liquidation of
the co-ownership that exists between common-law spouses. The first paragraph of Article 50 of the
Family Code, applying paragraphs (2), (3), (4) and (5) of Article 43, relates only, by its explicit terms,
to voidable marriages and, exceptionally, to void marriages under Article 40 of the Code, i.e., the
declaration of nullity of a subsequent marriage contracted by a spouse of a prior void marriage before the
latter is judicially declared void. The latter is a special rule that somehow recognizes the philosophy and
an old doctrine that void marriages are inexistent from the very beginning and no judicial decree is
necessary to establish their nullity. In now requiring for purposes of remarriage, the declaration of nullity
by final judgment of the previously contracted void marriage, the present law aims to do away with any
continuing uncertainty on the status of the second marriage. It is not then illogical for the provisions of
Article 43, in relation to Articles 41 and 42, of the Family Code, on the effects of the termination of a
subsequent marriage contracted during the subsistence of a previous marriage to be made applicable pro
hac vice. In all other cases, it is not to be assumed that the law has also meant to have coincident
property relations, on the one hand, between spouses in valid and voidable marriages (before
annulment) and, on the other, between common-law spouses or spouses of void marriages, leaving to
ordain, in the latter case, the ordinary rules on co-ownership subject to the provision of Article 147 and
Article 148 of the Family Code. It must be stressed, nevertheless, even as it may merely state the obvious,
that the provisions of the Family Code on the "family home," i.e., the provisions found in Title V, Chapter
2, of the Family Code, remain in force and effect regardless of the property regime of the spouses.
[25]

Since the properties ordered to be distributed by the court a quo were found, both by the trial
court and the Court of Appeals, to have been acquired during the union of the parties, the same would be
covered by the co-ownership. No fruits of a separate property of one of the parties appear to have been
included or involved in said distribution. The liquidation, partition and distribution of the properties
owned in common by the parties herein as ordered by the court a quo should, therefore, be sustained,
but on the basis of co-ownership and not of the regime of conjugal partnership of gains.
As to the issue on custody of the parties over their only child, Javy Singh Buenaventura, it is now
moot since he is about to turn twenty-five years of age on May 27, 2005
[26]
and has, therefore, attained
the age of majority.
With regard to the issues on support raised in the Petition for Certiorari, these would also now be
moot, owing to the fact that the son, Javy Singh Buenaventura, as previously stated, has attained the age
of majority.
WHEREFORE, the Decision of the Court of Appeals dated October 8, 1996 and its Resolution dated
December 10, 1996 which are contested in the Petition for Review (G.R. No. 127449), are hereby
MODIFIED, in that the award of moral and exemplary damages, attorney’s fees, expenses of litigation and
costs are deleted. The order giving respondent one-half of the retirement benefits of petitioner from Far
East Bank and Trust Co. and one-half of petitioner’s shares of stock in Manila Memorial Park and in the
Provident Group of Companies is sustained but on the basis of the liquidation, partition and distribution
of the co-ownership and not of the regime of conjugal partnership of gains. The rest of said Decision
and Resolution are AFFIRMED.
The Petition for Review on Certiorari (G.R. No. 127358) contesting the Court of Appeals’ Resolutions
of September 2, 1996 and November 13, 1996 which increased the support pendente lite in favor of the
parties’ son, Javy Singh Buenaventura, is now MOOT and ACADEMIC and is, accordingly, DISMISSED.
No costs.
SO ORDERED.
REPUBLIC OF THE PHILIPPINES, represented by the DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS,
COMMISSION ON AUDIT and THE NATIONAL TREASURER, Petitioner,
vs.
CARLITO LACAP, doing business under the name and style CARWIN CONSTRUCTION AND
CONSTRUCTION SUPPLY, Respondent.
D E C I S I O N
AUSTRIA-MARTINEZ, J.:
Before the Court is a Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court
assailing the Decision
1
dated April 28, 2003 of the Court of Appeals (CA) in CA-G.R. CV No. 56345 which
affirmed with modification the Decision
2
of the Regional Trial Court, Branch 41, San Fernando, Pampanga
(RTC) in Civil Case No. 10538, granting the complaint for Specific Performance and Damages filed by
Carlito Lacap (respondent) against the Republic of the Philippines (petitioner).
The factual background of the case is as follows:
The District Engineer of Pampanga issued and duly published an "Invitation To Bid" dated January 27,
1992. Respondent, doing business under the name and style Carwin Construction and Construction
Supply (Carwin Construction), was pre-qualified together with two other contractors. Since respondent
submitted the lowest bid, he was awarded the contract for the concreting of Sitio 5 Bahay Pare.
3
On
November 4, 1992, a Contract Agreement was executed by respondent and petitioner.
4
On September
25, 1992, District Engineer Rafael S. Ponio issued a Notice to Proceed with the concreting
of Sitio 5 Bahay Pare.
5
Accordingly, respondent undertook the works, made advances for the purchase of
the materials and payment for labor costs.
6

On October 29, 1992, personnel of the Office of the District Engineer of San Fernando, Pampanga
conducted a final inspection of the project and found it 100% completed in accordance with the approved
plans and specifications. Accordingly, the Office of the District Engineer issued Certificates of Final
Inspection and Final Acceptance.
7

Thereafter, respondent sought to collect payment for the completed project.
8
The DPWH prepared the
Disbursement Voucher in favor of petitioner.
9
However, the DPWH withheld payment from respondent
after the District Auditor of the Commission on Audit (COA) disapproved the final release of funds on the
ground that the contractor’s license of respondent had expired at the time of the execution of the
contract. The District Engineer sought the opinion of the DPWH Legal Department on whether the
contracts of Carwin Construction for various Mount Pinatubo rehabilitation projects were valid and
effective although its contractor’s license had already expired when the projects were contracted.
10

In a Letter-Reply dated September 1, 1993, Cesar D. Mejia, Director III of the DPWH Legal Department
opined that since Republic Act No. 4566 (R.A. No. 4566), otherwise known as the Contractor’s License
Law, does not provide that a contract entered into after the license has expired is void and there is no law
which expressly prohibits or declares void such contract, the contract is enforceable and payment may be
paid, without prejudice to any appropriate administrative liability action that may be imposed on the
contractor and the government officials or employees concerned.
11

In a Letter dated July 4, 1994, the District Engineer requested clarification from the DPWH Legal
Department on whether Carwin Construction should be paid for works accomplished despite an expired
contractor’s license at the time the contracts were executed.
12

In a First Indorsement dated July 20, 1994, Cesar D. Mejia, Director III of the Legal Department,
recommended that payment should be made to Carwin Construction, reiterating his earlier legal
opinion.
13
Despite such recommendation for payment, no payment was made to respondent.
Thus, on July 3, 1995, respondent filed the complaint for Specific Performance and Damages against
petitioner before the RTC.
14

On September 14, 1995, petitioner, through the Office of the Solicitor General (OSG), filed a Motion to
Dismiss the complaint on the grounds that the complaint states no cause of action and that the RTC had
no jurisdiction over the nature of the action since respondent did not appeal to the COA the decision of
the District Auditor to disapprove the claim.
15

Following the submission of respondent’s Opposition to Motion to Dismiss,
16
the RTC issued an Order
dated March 11, 1996 denying the Motion to Dismiss.
17
The OSG filed a Motion for Reconsideration
18
but
it was likewise denied by the RTC in its Order dated May 23, 1996.
19

On August 5, 1996, the OSG filed its Answer invoking the defenses of non-exhaustion of administrative
remedies and the doctrine of non-suability of the State.
20

Following trial, the RTC rendered on February 19, 1997 its Decision, the dispositive portion of which reads
as follows:
WHEREFORE, in view of all the foregoing consideration, judgment is hereby rendered in favor of the
plaintiff and against the defendant, ordering the latter, thru its District Engineer at Sindalan, San
Fernando, Pampanga, to pay the following:
a) P457,000.00 – representing the contract for the concreting project of Sitio 5 road, Bahay Pare,
Candaba, Pampanga plus interest at 12% from demand until fully paid; and
b) The costs of suit.
SO ORDERED.
21

The RTC held that petitioner must be required to pay the contract price since it has accepted the
completed project and enjoyed the benefits thereof; to hold otherwise would be to overrun the long
standing and consistent pronouncement against enriching oneself at the expense of another.
22

Dissatisfied, petitioner filed an appeal with the CA.
23
On April 28, 2003, the CA rendered its Decision
sustaining the Decision of the RTC. It held that since the case involves the application of the principle of
estoppel against the government which is a purely legal question, then the principle of exhaustion of
administrative remedies does not apply; that by its actions the government is estopped from questioning
the validity and binding effect of the Contract Agreement with the respondent; that denial of payment to
respondent on purely technical grounds after successful completion of the project is not countenanced
either by justice or equity.
The CA rendered herein the assailed Decision dated April 28, 2003, the dispositive portion of which reads:
WHEREFORE, the decision of the lower court is hereby AFFIRMED with modification in that the interest
shall be six percent (6%) per annum computed from June 21, 1995.
SO ORDERED.
24

Hence, the present petition on the following ground:
THE COURT OF APPEALS ERRED IN NOT FINDING THAT RESPONDENT HAS NO CAUSE OF ACTION AGAINST
PETITIONER, CONSIDERING THAT:
(a) RESPONDENT FAILED TO EXHAUST ADMINISTRATIVE REMEDIES; AND
(b) IT IS THE COMMISSION ON AUDIT WHICH HAS THE PRIMARY JURISDICTION TO RESOLVE
RESPONDENT’S MONEY CLAIM AGAINST THE GOVERNMENT.
25

Petitioner contends that respondent’s recourse to judicial action was premature since the proper remedy
was to appeal the District Auditor’s disapproval of payment to the COA, pursuant to Section 48,
Presidential Decree No. 1445 (P.D. No. 1445), otherwise known as the Government Auditing Code of the
Philippines; that the COA has primary jurisdiction to resolve respondent’s money claim against the
government under Section 2(1),
26
Article IX of the 1987 Constitution and Section 26
27
of P.D. No. 1445;
that non-observance of the doctrine of exhaustion of administrative remedies and the principle of
primary jurisdiction results in a lack of cause of action.
Respondent, on the other hand, in his Memorandum
28
limited his discussion to Civil Code provisions
relating to human relations. He submits that equity demands that he be paid for the work performed;
otherwise, the mandate of the Civil Code provisions relating to human relations would be rendered
nugatory if the State itself is allowed to ignore and circumvent the standard of behavior it sets for its
inhabitants.
The present petition is bereft of merit.
The general rule is that before a party may seek the intervention of the court, he should first avail of all
the means afforded him by administrative processes.
29
The issues which administrative agencies are
authorized to decide should not be summarily taken from them and submitted to a court without first
giving such administrative agency the opportunity to dispose of the same after due deliberation.
30

Corollary to the doctrine of exhaustion of administrative remedies is the doctrine of primary jurisdiction;
that is, courts cannot or will not determine a controversy involving a question which is within the
jurisdiction of the administrative tribunal prior to the resolution of that question by the administrative
tribunal, where the question demands the exercise of sound administrative discretion requiring the
special knowledge, experience and services of the administrative tribunal to determine technical and
intricate matters of fact.
31

Nonetheless, the doctrine of exhaustion of administrative remedies and the corollary doctrine of primary
jurisdiction, which are based on sound public policy and practical considerations, are not inflexible rules.
There are many accepted exceptions, such as: (a) where there is estoppel on the part of the party
invoking the doctrine; (b) where the challenged administrative act is patently illegal, amounting to lack of
jurisdiction; (c) where there is unreasonable delay or official inaction that will irretrievably prejudice the
complainant; (d) where the amount involved is relatively small so as to make the rule impractical and
oppressive; (e) where the question involved is purely legal and will ultimately have to be decided by the
courts of justice;
32
(f) where judicial intervention is urgent; (g) when its application may cause great and
irreparable damage; (h) where the controverted acts violate due process; (i) when the issue of non-
exhaustion of administrative remedies has been rendered moot;
33
(j) when there is no other plain, speedy
and adequate remedy; (k) when strong public interest is involved; and, (l) in quo warranto
proceedings.
34
Exceptions (c) and (e) are applicable to the present case.
Notwithstanding the legal opinions of the DPWH Legal Department rendered in 1993 and 1994 that
payment to a contractor with an expired contractor’s license is proper, respondent remained unpaid for
the completed work despite repeated demands. Clearly, there was unreasonable delay and official
inaction to the great prejudice of respondent.
Furthermore, whether a contractor with an expired license at the time of the execution of its contract is
entitled to be paid for completed projects, clearly is a pure question of law. It does not involve an
examination of the probative value of the evidence presented by the parties. There is a question of law
when the doubt or difference arises as to what the law is on a certain state of facts, and not as to the
truth or the falsehood of alleged facts.
35
Said question at best could be resolved only tentatively by the
administrative authorities. The final decision on the matter rests not with them but with the courts of
justice. Exhaustion of administrative remedies does not apply, because nothing of an administrative
nature is to be or can be done.
36
The issue does not require technical knowledge and experience but one
that would involve the interpretation and application of law.
Thus, while it is undisputed that the District Auditor of the COA disapproved respondent’s claim against
the Government, and, under Section 48
37
of P.D. No. 1445, the administrative remedy available to
respondent is an appeal of the denial of his claim by the District Auditor to the COA itself, the Court holds
that, in view of exceptions (c) and (e) narrated above, the complaint for specific performance and
damages was not prematurely filed and within the jurisdiction of the RTC to resolve, despite the failure to
exhaust administrative remedies. As the Court aptly stated in Rocamora v. RTC-Cebu (Branch VIII):
38

The plaintiffs were not supposed to hold their breath and wait until the Commission on Audit and the
Ministry of Public Highways had acted on the claims for compensation for the lands appropriated by the
government. The road had been completed; the Pope had come and gone; but the plaintiffs had yet to be
paid for the properties taken from them. Given this official indifference, which apparently would continue
indefinitely, the private respondents had to act to assert and protect their interests.
39

On the question of whether a contractor with an expired license is entitled to be paid for completed
projects, Section 35 of R.A. No. 4566 explicitly provides:
SEC. 35. Penalties. Any contractor who, for a price, commission, fee or wage, submits or attempts to
submit a bid to construct, or contracts to or undertakes to construct, or assumes charge in a supervisory
capacity of a construction work within the purview of this Act, without first securing a license to engage in
the business of contracting in this country; or who shall present or file the license certificate of another,
give false evidence of any kind to the Board, or any member thereof in obtaining a certificate or license,
impersonate another, or use an expired or revoked certificate or license, shall be deemed guilty of
misdemeanor, and shall, upon conviction, be sentenced to pay a fine of not less than five hundred pesos
but not more than five thousand pesos. (Emphasis supplied)
The "plain meaning rule" or verba legis in statutory construction is that if the statute is clear, plain and
free from ambiguity, it must be given its literal meaning and applied without interpretation.
40
This rule
derived from the maximIndex animi sermo est (speech is the index of intention) rests on the valid
presumption that the words employed by the legislature in a statute correctly express its intention or will
and preclude the court from construing it differently. The legislature is presumed to know the meaning of
the words, to have used words advisedly, and to have expressed its intent by use of such words as are
found in the statute.
41
Verba legis non est recedendum, or from the words of a statute there should be no
departure.
42

The wordings of R.A. No. 4566 are clear. It does not declare, expressly or impliedly, as void contracts
entered into by a contractor whose license had already expired. Nonetheless, such contractor is liable for
payment of the fine prescribed therein. Thus, respondent should be paid for the projects he completed.
Such payment, however, is without prejudice to the payment of the fine prescribed under the law.
Besides, Article 22 of the Civil Code which embodies the maxim Nemo ex alterius incommode debet
lecupletari (no man ought to be made rich out of another’s injury) states:
Art. 22. Every person who through an act of performance by another, or any other means, acquires or
comes into possession of something at the expense of the latter without just or legal ground, shall return
the same to him.
This article is part of the chapter of the Civil Code on Human Relations, the provisions of which were
formulated as "basic principles to be observed for the rightful relationship between human beings and for
the stability of the social order, x x x designed to indicate certain norms that spring from the fountain of
good conscience, x x x guides human conduct [that] should run as golden threads through society to the
end that law may approach its supreme ideal which is the sway and dominance of justice."
43
The rules
thereon apply equally well to the Government.
44
Since respondent had rendered services to the full
satisfaction and acceptance by petitioner, then the former should be compensated for them. To allow
petitioner to acquire the finished project at no cost would undoubtedly constitute unjust enrichment for
the petitioner to the prejudice of respondent. Such unjust enrichment is not allowed by law.
WHEREFORE, the present petition is DENIED for lack of merit. The assailed Decision of the Court of
Appeals dated April 28, 2003 in CA-G.R. CV No. 56345 is AFFIRMED. No pronouncement as to costs.
SO ORDERED.