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STRICT LIABILITY

A.

FALLING OBJECTS

B.

EMPLOYERS

C.

ANIMALS

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

and

AGUSTIN

VESTIL

FACTS:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

AFFIRMED

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that the death certificate is not conclusive proof of the

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

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

54 and 55 decibels. Realizing as a physician that the latter was disturbing or depriving him of sleep and affecting both his physical and mental well being. Article 2203 prescribes that "The party suffering loss or injury must exercise the diligence of a good father of a family to minimize the damages resulting from the act or omission in question". Agan.  Constancio Soria testified that "The way the transformers are built. That the sub-station is needed for the Meralco to be able to serve well its customers is no reason. Jr. several factors that mitigate defendant's liability in damages.s.000. no law or ordinance has been cited specifying that it is the city engineer's duty to initiate the removal or demolition of.. Section 24 (d). This was not done. as he testified. In the present case."  FOR THE FOREGOING REASONS. which embodies the previous jurisprudence on the point. predisposed him to. On the third allegation.. the appealed decision is affirmed. The second allegation is not true. The absence of suit neither lessens the company's liability under the law nor weakens the right of others against it to demand their just due. why it should be operated to the detriment and discomfort of others. No costs..00 in damages and P5. Admitting that the sound cannot be eliminated. moreover. and on a 60 day option. There is also evidence that at the time the plaintiff-appellant appears to have been largely indebted to various credit institutions. 3 clearly obligates the injured party to undertake measures that will alleviate and not aggravate his condition after the infliction of the injury. 857.000.00. a co-defendant. requires an order by. apparently hoping that he would thereby saddle appellee with large damages. his claim therefore was correctly disallowed by the trial court. and (3) did not initiate its removal or demolition and the criminal prosecution of the officials of the Meralco. Inc. he could have leased it and rented other premises for sleeping and maintaining his office and thus preserve his health as ordinary prudence demanded. as a precipitating factor. and to pay the said plaintiff-appellant P20. the company emphasizes that the substation was constructed for public convenience. . as per Section 1.  Since there is no evidence upon which to compute any loss or damage allegedly incurred by the plaintiff by the frustration of the sale on account of the noise. Quezon City. Plaintiff's case is manifestly stronger. as a result of his unsuccessful gubernatorial campaign.000. To evade them appellant did not even have to sell his house. namely. he did not take any steps to bring action to abate the nuisance or remove himself from the affected area as soon as the deleterious effects became noticeable. it was not Agan's duty to require the Meralco to secure a permit before the construction but for Meralco to apply for it.  As to the damages caused by the noise. because the sound from the sub-station was interminable and monotonous. Instead he obstinately stayed until his health became gravely affected. The record does not support these allegations. for P95. or for the criminal prosecution of. has caused him anxiety neurosis. the average of three readings along the plaintiff's fence was only 44 decibels but. himself a physician. there is no proof that it cannot be reduced. In all other respects.  The law in this jurisdiction is clear.  Agan was included as a party defendant because he allegedly (1) did not require the Meralco to secure a building permit for the construction of the substation. or take appropriate measures to reduce its noise at the property line between the defendant company's compound and that of the plaintiff-appellant to an average of forty (40) to fifty (50) decibels within 90 days from finality of this decision. On the first plea. but that the prospective buyer backed out on account of his wife objecting to the noise of the substation. or previous approval of. Anderson. (2) even defended its construction by not insisting on such building permit. 1530. those persons who are responsible for the nuisance. On this testimony. Republic Act 537. the mayor for the city engineer to cause or order the removal of buildings or structures in violation of law or ordinances. and places upon him the burden of explaining why he could not do so. This codal rule. Diliman. because Agan wrote the Meralco requiring it to submit the plan and to pay permit fees (T. the three readings along the property line are 52.n. 2  The fact that the Meralco had received no complaint although it had been operating hereabouts for the past 50 years with substations similar to the one in controversy is not a valid argument. but the mayor could not be expected to take action because he was of the belief. Anastacio A. as heretofore noted. ureteritis and others. It may be added that there is no showing of any further attempts on the part of appellant to dispose of the house. The defendant-appellee Manila Electric Company is hereby ordered to either transfer its substation at South D and South 6 Streets. the other ailments which he was suffering at the time of the trial.00 for attorney's fees. The first is that the noise from the substation does not appear to be an exclusive causative factor of plaintiff-appellant's illnesses. in turn. relied upon by the plaintiff. 156 SW. This is proved by the circumstance that no other person in Velasco's own household nor in his immediate neighborhood was shown to have become sick despite the noise complained of. of Quezon City. There are. pages 2081-2082). Ordinance No. that these resulted in the loss of his professional income and reduced his life expectancy.  The last issue is whether the City Engineer of Quezon City. and this fact suffices to raise doubts as to whether he truly intended to dispose of it. in September. In Kentucky and West Virginia Co. 14 January 1960. which. or is concomitant with. the court authorized an injunction and damages. the appealed decision is hereby reversed in part and affirmed in part. may be held solidarily liable with Meralco. the humming sound cannot be avoided". and this court can take judicial cognizance of the fact that financial worries can affect unfavorably the debtor's disposition and mentality. He had no actual need to do so in order to escape deterioration of his health. pyelonephritis.  The other factor militating against full recovery by the petitioner Velasco in his passivity in the face of the damage caused to him by the noise of the substation. claimed that the noise. 1953. appellant Velasco.  Appellant Velasco introduced evidence to the effect that he tried to sell his house to Jose Valencia. vs. that the sound "did not have any effect on his body. however.

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

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

et al. and ABELLA. Thus. OCCIDENTAL. REMANDED TO RTC RATIO:  According to ABELLA. pray that the respective rulings of the RTC of General Santos City and the RTC of Davao City in Civil Case Nos. also filed their Comment dated September 14.  In addition. stated no cause of action against the defendant companies. No. and ABELLA..  Said fact allegedly constitutes reasonable basis for our courts to assume jurisdiction over the case.. 127856. the courts a quo should have dismissed the civil cases on the ground that the Amended Joint-Complaints of NAVIDA. 1997. et al. DOW and OCCIDENTAL added that they have fully complied with their obligations set forth in the 1997 Compromise Agreements. et al. 5617 and 24. NAVIDA.251-96 be reversed and that the said cases be remanded to the courts a quo for further proceedings. et al. HELD: YES.. assert that the provisions of Chapter 2 of the Preliminary Title of the Civil Code. 125598 has become moot and academic because Civil Case No..ISSUE: WON the RP has jurisdiction over the case. DOLE states that if there were no actionable wrongs committed under Philippine law. and ABELLA. the RTC of Davao City has jurisdiction over the subject matter of the case since Articles 2176 and 2187 of the Civil Code are broad enough to cover the acts complained of and to support their claims for damages. et al. April 28. No. point to . 2004. No. distributed or otherwise put into the stream of commerce by defendant companies happened in the Philippines.  Specifically. are broad enough to cover their claim for damages. On the issue of jurisdiction  Essentially.. and SHELL sometime in July 1997. 125598.  DOLE similarly maintains that the acts attributed to defendant companies constitute a quasi-delict. the general principles of law. 5617 had already been amicably settled by the parties in 1997. OCCIDENTAL." which were attached to the said motion.. 55 stating that they agree with the view of DOW and OCCIDENTAL that the petition in G.. et al. applying the customs of the place and. et al. by the RTC of Davao City is bereft of basis. and 128398. 126654.R.  The plaintiff claimants alleged that they had amicably settled their cases with DOW. Nos. DOLE posits that the Philippines is the situs of the tortious acts allegedly committed by defendant companies as NAVIDA. and Hold Harmless Agreement. This settlement agreement was evidenced by facsimiles of the "Compromise Settlement.R.. 125598  On July 13. and SHELL as Party-Respondents filed by NAVIDA. OCCIDENTAL. 1997. the plaintiff claimants sought to withdraw their petitions as against DOW. and ABELLA. 1999. The Consolidated Motion to Drop DOW. Pursuant to said agreement. the crux of the controversy in the petitions at bar is whether the RTC of General Santos City and the RTC of Davao City erred in dismissing Civil Case Nos.  NAVIDA. further aver that the dismissal of the case. 125078. et al. as well as Article 2176 thereof. DOW and OCCIDENTAL filed a Motion to Withdraw Petition for Review in G. for lack of jurisdiction. NAVIDA. and March 10. based on the opinions of legal luminaries reported in a newspaper.. and SHELL. this Court consolidated G. 53explaining that the said petition "is already moot and academic and no longer presents a justiciable controversy" since they have already entered into an amicable settlement with NAVIDA.  The court may still resolve the case. in the absence thereof.251-96. et al. which falls under Article 2176 of the Civil Code. et al..R. 2004. 5617 and 24.  ABELLA.R. et al.. respectively. et al.  Furthermore.  NAVIDA. et al. The Motion to Withdraw Petition for Review in G.  In the Resolutions dated February 10.. the use of and exposure to DBCP that was manufactured. et al. et al. and ABELLA. their cause of action is based on quasi-delict under Article 2176 of the Civil Code.  They also maintain that the absence of jurisprudence regarding the award of damages in favor of those adversely affected by the DBCP does not preclude them from presenting evidence to prove their allegations that their exposure to DBCP caused their sterility and/or infertility. argue that the allegedly tortious acts and/or omissions of defendant companies occurred within Philippine territory.  According to them. et al. and ABELLA. 125598. Indemnity..

PUT THE SAME into the stream of commerce. on a particular court or body. SOLD. THE DEFENDANTS WERE AT FAULT OR WERE NEGLIGENT IN THAT THEY MANUFACTURED. and costs or the value of the property in controversy exceeds One hundred thousand pesos (P100. – Regional Trial Courts shall exercise exclusive original jurisdiction: (8) In all other cases in which the demand. including. . the jurisdiction over the subject matter or nature of the action cannot be dislodged by anybody other than by the legislature through the enactment of a law. 5617 and 24. 5617 and 24. respectively  The rule is settled that jurisdiction over the subject matter of a case is conferred by law and is determined by the allegations in the complaint and the character of the relief sought. Failed to adequately warn Plaintiffs of the dangerous characteristics of DBCP. DOLE adds that the RTC of Davao City gravely erred in relying upon newspaper reports in dismissing Civil Case No. used. The Defendants WHO MANUFACTURED.  This is in consonance with the lex loci delicti commisi theory in determining the situs of a tort. At the time of the filing of the complaints.  CHIQUITA and the other defendant companies also submitted themselves to the jurisdiction of the RTC by making voluntary appearances and seeking for affirmative reliefs during the course of the proceedings. 24. the plaintiffs suffered serious and permanent injuries TO THEIR HEALTH. DBCP-containing materials which THEY knew. WITHOUT INFORMING THE USERS OF ITS HAZARDOUS EFFECTS ON HEALTH AND/OR WITHOUT INSTRUCTIONS ON ITS PROPER USE AND APPLICATION. Jurisdiction in civil cases..their alleged exposure to DBCP which occurred in the Philippines. 59 Once vested by law.251-96 to the RTC of General Santos City and the RTC of Davao City. 129. sale. PRODUCED. where the demand. was: SEC. THE CAUSES OF ACTION 4. attorney’s fees. which states that the law of the place where the alleged wrong was committed will govern the action. distribution. et al. exclusive of the abovementioned items exceeds Two hundred thousand pesos (P200. AND/OR MADE AVAILABLE IN COMMERCE nematocides containing the chemical dibromochloropropane. exclusive of interest. respectively. packaging. The RTC of General Santos City and the RTC of Davao City have jurisdiction over Civil Case Nos. produced. and ABELLA. as the cause of the sterility and other reproductive system problems that they allegedly suffered. of the said chemical. fall within the purview of the definition of the jurisdiction of the RTC under Batas Pambansa Blg. sold.7 million for each of the plaintiff claimants.000. CHIQUITA.251-96.  Finally. THEY allowed Plaintiffs to be exposed to. which plagued banana plantations.. 5. CHIQUITA argues that the courts a quo had jurisdiction over the subject matter of the cases filed before them. MADE AVAILABLE OR PUT DBCP INTO THE STREAM OF COMMERCE were negligent OR AT FAULT in that they a.7 million in damages for each plaintiff claimant. prays for the remand of Civil Case Nos. and/or (b) they resided within the agricultural area WHERE IT WAS USED. were highly harmful and injurious to the Plaintiffs’ health and wellbeing. 6.000. irrespective of whether the plaintiffs are entitled to all or some of the claims asserted therein. and/or USED DBCP and/or otherwise.. AS IT TURNED OUT.00). INCLUDING THOSE in the Philippines.  The RTCs unmistakably have jurisdiction over the cases filed in General Santos City and Davao City. it is clear that the claim for damages is the main cause of action and that the total amount sought in the complaints is approximately P2. the jurisdiction of the RTC in civil cases under Batas Pambansa Blg.60  From the foregoing. 129. as both claims by NAVIDA.  CHIQUITA avers that the pertinent matter is the place of the alleged exposure to DBCP. 7691. sold. As a result of such exposure. The plaintiffs were exposed to DBCP in the 1970s up to the early 1980s WHILE (a) they used this product in the banana plantations WHERE they were employed. THE CHEMICAL WAS USED AGAINST the parasite known as the nematode. litigation expenses. as amended by Republic Act No. but not limited to. thus. or in the exercise of ordinary care and prudence ought to have known. 19. IT ALSO CAUSED ILLEFFECTS ON THE HEALTH OF PERSONS EXPOSED TO IT AFFECTING the human reproductive system as well. etc. The Defendants manufactured. et al.00) or. 7. not the place of manufacture. which amount falls within the jurisdiction of the RTC. The Amended Joint-Complaints sought approximately P2. DBCP not only destroyed nematodes.251-96 given that newspaper articles are hearsay and without any evidentiary value. or to cause their subsidiaries or affiliates to so warn plaintiffs. damages of whatever kind. DISTRIBUTED.  In a similar vein. commonly known as DBCP. STERILITY and severe injuries to their reproductive capacities. distributed. None of the defendant companies ever objected to the exercise of jurisdiction by the courts a quo over their persons. in such other cases in Metro Manila.

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

1990. and each of the creditors is entitled to demand the satisfaction of the whole obligation from any or all of the debtors. the RTC of General Santos City and the RTC of Davao City should first receive in evidence and examine all of the alleged compromise settlements involved in the cases at bar to determine the propriety of dropping any party as a defendant therefrom. and its subsequent Order dated December 16. (ABB) and BBC Brown Boveri. Such compensation is referred to as actual or compensatory damages. 1996 of the Regional Trial Court of Davao City. It is a consensual contract.251-96. CORPORATION VS ASEA BROWN BOVERI. there is no right of reimbursement to speak of as yet. in Civil Case No. 126654.9  Petitioner alleged that: On July 11.040 MTD per day from October 5 to October 9. and 128398. AND TORD B. Branch 37. 1990. We REVERSE and SET ASIDE the Order dated May 20. 79 In addition. Branch 16. Eriksson. Eriksson (Eriksson).5 obtained the services of respondents6 Asea Brown Boveri. 125078. much less divest the court of the jurisdiction over the case. A trial on the merits must necessarily be conducted first in order to establish whether or not defendant companies are liable for the claims for damages filed by the plaintiff claimants. 1996 of the Regional Trial Court of General Santos City. It was only on October 9. VicePresident of the Service Division of the respondent ABB. Any error that the court may commit in the exercise of its jurisdiction is merely an error of judgment. was personally directing the repair of the said Kiln Drive Motor. perfected by mere consent. BBC BROWN BOVERI. the decision on all questions arising therefrom is but an exercise of such jurisdiction. due to the repeated failure of respondents to repair the Kiln Drive Motor.  On October 4. CORP. an extrajudicial compromise agreement is not excepted from rules and principles of a contract. It is true that.** Respondents. where a court has jurisdiction over the persons of the defendants and the subject matter. petitioner Continental Cement Corporation (CCC). 1990. which does not affect its authority to decide the case. CONTINENTAL CEMENT ERIKSON.7  On October 23. 76 Judicial approval is not required for its perfection.a corporation engaged in the business of producing cement. as in the case of the courts a quo.: "Except as provided by law or by stipulation.80 In light of the foregoing legal precepts. to repair its 160 KW Kiln DC Drive Motor (Kiln Drive Motor). a compromise agreement determines the rights and obligations of only the parties to it. 5617. ." Jurisdiction refers to the authority to decide a case. 5617 and 24. 24. "[a] compromise is a contract whereby the parties. the plaintiff delivered the 160 KW Kiln DC Drive Motor to the defendants to be repaired. the responsibility of two or more persons who are liable for the same quasi-delict is solidary. A solidary obligation is one in which each of the debtors is liable for the entire obligation. SO ORDERED. 1990 that the plaintiff resumed operation. the Court hereby GRANTS the petitions for review on certiorari in G. Accordingly.. under Article 2194 of the Civil Code. Tord B. one is entitled to an adequate compensation only for such pecuniary loss suffered by him as he has duly proved. the 160 KW Kiln Drive Motor was installed for testing on October 3. The plaintiff lost 1. Nos.251-96. DEL CASTILLO. Inc.70 Plaintiffs’ purported bad faith in filing the subject civil cases in Philippine courts  Court finds such argument much too speculative to deserve any merit. against respondent corporations and respondent Tord B. and the Order dated October 1. as a binding contract.  After the first repair by the defendants. 77 A compromise has upon the parties the effect and authority of res judicata78 and this holds true even if the agreement has not been judicially approved. The plaintiff removed the DC Drive Motor and replaced it with its old motor. by making reciprocal concessions.R." Like any other contract. Under Article 2028 of the Civil Code. and REMAND the records of this case to the respective Regional Trial Courts of origin for further and appropriate proceedings in line with the ruling herein that said courts have jurisdiction over the subject matter of the amended complaints in Civil Case Nos. It may also be pertinently stressed that "jurisdiction" is different from the "exercise of jurisdiction.. 1996 denying reconsideration in Civil Case No. INC. which would necessarily give rise to an obligation to pay on the part of the defendants. 1990 the test failed. petitioner filed with Branch 101 of the RTC of Quezon City a Complaint for sum of money and damages. not the orders or the decision rendered therein. avoid a litigation or put an end to one already commenced. the latter being manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract. Corp. J. WHEREFORE.  The defendant."1 FACTS:  Sometime in July 1990. 1991.81 In the cases at bar.

it was installed in the kiln.00 . 27 What applies are Articles 1170 and 2201 of the Civil Code. petitioner in effect accepted the General Conditions appended to respondent ABB’s letter of offer.30  Respondents likewise defend the ruling of the CA that there could be no implied warranty on the repair made by respondent ABB as the warranty of the fitness of the equipment should be enforced directly against the manufacturer of the Kiln Drive Motor. SC: Petitioner and respondent ABB entered into a contract for the repair of petitioner’s Kiln Drive Motor with the following terms and conditions: a) Total Price: P197. Whether the [CA] gravely erred in applying the terms of the "General Conditions" of Purchase Orders Nos.  As a consequence of the failure of the defendants to comply with their contractual obligation to repair the 160 KW Kiln DC Drive Motor.24 HELD:YES TO BOTH RATIO: Petitioner’s Arguments  Petitioner reiterates that the General Conditions cannot exculpate respondents because petitioner never agreed to be bound by it nor did petitioner receive a copy of it.  The plaintiff resumed operation with its old motor on November 19. The plaintiff sustained production losses at the rate of 1. the plaintiff sustained the Total Damages OF 10.  The defendants were given a third chance to repair the 160 KW Kiln DC Drive Motor. 1990. Whether the [CA] seriously erred in applying the concepts of ‘implied warranty’ and ‘warranty against hidden defects’ of the New Civil Code in order to exculpate the respondents from its contractual obligation.  CA: REVERSED The CA applied the exculpatory clause in the General Conditions and ruled that there is no implied warranty on repair work.11 attached to the letter of offer12dated July 4. the liability of respondent ABB "does not extend to consequential damages either direct or indirect. but the latter refused to do so without valid justification.28 Respondents’ Arguments  Conversely. 1991." 13  RTC: in favor of petitioner. The test failed again. 17136 and 17137 to exculpate the respondents from liability in this case.  Respondents claimed that under Clause 7 of the General Conditions. the test failed.29  By issuing Purchase Order Nos.42  The plaintiff has made several demands on the defendants for the payment of the above-enumerated damages. the motor was installed and tested. The plaintiff resumed operation on March 15. The plaintiff suffered production losses for five days at the rate of 1. 17136-37. after the defendants had undertaken the second repair of the motor in question. 1990 issued by respondent ABB to petitioner. thus.  On March 13.25  Petitioner contends that these concepts are not applicable because the instant case does not involve a contract of sale.450.040 MTD daily. respondents insist that petitioner is bound by the General Conditions. The RTC rejected the defense of limited liability interposed by respondents since they failed to prove that petitioner received a copy of the General Conditions. 1991. the repairman cannot be made to pay for loss of production as a result of the unsuccessful repair. Issues 1. Again. 1990. On November 14.017.040 MTD for two days. 2.983.

ART. the penalty in the amount of P987. 1991 upon the request of petitioner because the Kiln was under repair at the time the motor was delivered. hence. CONTRACTUAL INTERFERENCE. a repairman who fails to perform his obligation is liable to pay for the cost of the execution of the obligation plus damages. and 2201 of the Civil Code. which state:  Based on the foregoing. labor cost and rental of the crane in case it fails to repair the motor or incurs delay in delivering the same. up to the time the Kiln Drive Motor was finally returned to petitioner. BUSINESS TORTS A. 17136-37. thus. labor cost and the rental of crane  Article 1226 of the Civil Code further provides that if the obligor refuses to pay the penalty.  Besides. August 30. labor cost and the rental of the crane. 1170.49  For the foregoing reasons. Petitioner is entitled to penalties under Purchase Order Nos. such as in the instant case. since there is no stipulation to the contrary. such as loss of profits on account of delay or failure of delivery. In this case. 17136-37  As per Purchase Order Nos."35 This IS unavailing because respondents failed to show that petitioner was duly furnished with a copy of said General Conditions. prompting petitioner to sue for damages. the penalty clause takes the place of indemnity for damages and the payment of interests in case of non-compliance with the obligation. petitioner is not entitled to recover production loss. Clause 7 of the General Conditions is not binding on petitioner  Respondents contend that under Clause 7 of the General Conditions their liability "does not extend to consequential damages either direct or indirect. interests may still be recovered on top of the penalty. however. 1314. consequential damages.e. respondent ABB. Petitioner is not entitled to recover production loss. the load testing had to be postponed. the said motor was actually delivered to petitioner as early as January 7. respondent ABB is liable for damages pursuant to Articles 1167. Respondent ABB. production loss. CC 40 damages and . at the time it agreed to repair petitioner’s Kiln Drive Motor.48  Considering the nature of the obligation in the instant case.25 per day of delay covers all other damages (i. in addition to the penalties.25) per day of delay.  Damages claimed must be the natural and probable consequences of the breach. petitioner is entitled to penalties in the amount of P987. 1990 or six (6) weeks from receipt of order and down payment34 c) Penalty: One half of one percent of the total cost or Nine Hundred Eighty Seven Pesos and Twenty five centavos (P987. could not have reasonably foreseen that it would be made liable for production loss.37  The installation and testing was done only on March 13.38  Under Article 122639 of the Civil Code.b) Delivery Date: August 29.41  Thus. labor cost. especially since the motor under repair was a spare motor. which the parties have foreseen or could have reasonably foreseen at the time the obligation was constituted. petitioner seeks to recover as damages production loss. and rental of the crane) claimed by petitioner. 1991.  Records show that although the testing of Kiln Drive Motor was done on March 13. 1990. 1991.  Having breached the contract it entered with petitioner.25 per day from the time of delay. unless there is a stipulation to the contrary. not only incurred delay in performing its obligation but likewise failed to repair the Kiln Drive Motor. may be recovered only if such damages were reasonably foreseen or have been brought within the contemplation of the parties as the probable result of a breach at the time of or prior to contracting. labor cost and the rental of the crane.

00.11 On August 21.742. they averred it was Cordero who stopped communicating with Go in connection with the purchase of the first vessel from AFFA and was not doing his part in making progress status reports and airing the client’s grievances to his principal. also wrote ACG Express Liner assailing the fraudulent actuations and misrepresentations committed by Go in connivance with his lawyers (Landicho and Tecson) in breach of Cordero’s exclusive distributorship appointment. and which offer is already being revoked by AFFA. Cordero tried to contact Go and Landicho to confirm the matter but they were nowhere to be found." Petitioner. The letter further stated that Cordero was offered the exclusive distributorship. only to find out that Go and Landicho were already there in Brisbane negotiating for the sale of the second SEACAT 25.512.000.43% of the purchase price. the lawyer of AFFA and Robinson. MORTIMER F. however. Despite repeated follow-up calls. the latter shall receive commissions totalling US$328.00. 98-35332. In a handwritten letter dated June 24. Respondent. 98-35332 seeking to hold Robinson. Tecson and Landicho liable jointly and solidarily for conniving and conspiring together in violating his exclusive distributorship in bad faith and wanton disregard of his rights. Jr. 1998. lawyers of Allan C. 1998.01 and unpaid commission for the sale of the second vessel in the amount of US$328. who is the Managing Director of Aluminium Fast Ferries Australia (AFFA).000. Australia. food. as well as attorney’s fees and litigation expenses. talked to him over the telephone and offered to amicably settle their dispute.m. 1999. AFFA. ventured into the business of marketing interisland passenger vessels. telecommunications bills and entertainment. 2000 of the Regional Trial Court (RTC) of Quezon City. 10 As to the response of Go. Vice-President of Pamana Marketing Corporation (Pamana). an Australian national based in Brisbane. CV No. JR. Atty. to monitor the progress of the building of the vessel. 2004 of the Court of Appeals (CA) in CA-G. Cordero claimed that Go and Robinson had conspired to undervalue the vessel by around US$500. Padua told Cordero that Go instructed him to fax the requested quotation of the second engine to the Park Royal Hotel in Brisbane where Go was then staying. it turned out. For review is the Decision1 dated March 16. Cordero informed Go that such act of dealing directly with Robinson violated his exclusive distributorship and demanded that they respect the same.6 Per agreement between Robinson and Cordero. set up a meeting with Cordero on June 29. Go.ALLAN C. However. Tabujara. Robinson was likewise declared in default for failure to file his answer within the period granted by the trial court. Go. Cordero then filed a complaint with the Bureau of Customs (BOC) to prohibit the entry of SEACAT 25 from Australia based on misdeclaration and undervaluation. The factual antecedents: Sometime in 1996. 69113. an Alert Order was issued by Acting BOC Commissioner Nelson Tan for the vessel which in fact arrived on July 17. transportation and entertainment during these trips. He also spent for long distance telephone calls to communicate regularly with Robinson. 1998. their motion to dismiss based on failure to state a cause of action was likewise denied by the trial court on February 26.742. moral and exemplary damages. He shouldered all the expenses for airfare. 7825 for one (1) high-speed catamaran (SEACAT 25) for the price of US$1. Branch 85 in Civil Case No. he came to meet Tony Robinson. doing business under the vs. Cordero later discovered that Go was dealing directly with Robinson when he was informed by Dennis Padua of Wartsila Philippines that Go was canvassing for a second catamaran engine from their company which provided the ship engine for the first SEACAT 25. Mortimer F. to 10:30 p. Cordero testified before the trial court that on the same day. GO. Robinson signed documents appointing Cordero as the exclusive distributor of AFFA catamaran and other fast ferry vessels in the Philippines. Go who is the owner/operator of ACG Express Liner of Cebu City. Cordero also prayed for the award of moral and exemplary damages.. which affirmed with modifications the Decision 3 dated May 31.522. J. Landicho. Tecson and Landicho offered to convince Go to honor his exclusive distributorship with AFFA and to purchase all vessels for ACG Express Liner through him for the next three (3) years. Go. such that Go engaged the services of Landicho to fly to Australia and . 1998 between 9:30 p. 14 Subsequently. In an effort to amicably settle the matter. only Landicho and Tecson came and no reason was given for Go’s absence. 12 Robinson filed a motion to dismiss grounded on lack of jurisdiction over his person and failure to state a cause of action. Ernesto A.4 After negotiations with Felipe Landicho and Vincent Tecson. the purchase of a high-speed catamaran vessel by ACG Express Liner in August 1997. Cordero.5 Accordingly. while Robinson refused to answer his calls. asserting that there was no act committed in violation of the distributorship agreement.00 representing expenses for airplane travel to Australia. Australia. As such exclusive distributor. And so it was agreed between him. hotel accommodations.R. the parties executed Shipbuilding Contract No. the terms of which were contained in a draft agreement which Cordero allegedly failed to return to AFFA within a reasonable time. Between June and August 1997. 1999. 8 Cordero’s lawyer. acting in behalf of Go. Landicho. a single proprietorship. Said motion was denied by the trial court on December 20. and on one (1) occasion even accompanied Go and his family and Landicho. Tecson and Landicho proposed that they will convince Go to pay him US$1.m. faxed a letter to ACCRA law firm asserting that the appointment of Cordero as AFFA’s distributor was for the purpose of one (1) transaction only. acting on behalf of Go. 9 Having been apprised of Cordero’s demand letter.465. Cordero instituted Civil Case No. at the Mactan Island Resort Hotel lobby. Landicho and Tecson who even made Cordero believe there would be no further sale between AFFA and ACG Express Liner. On the contrary. Cordero immediately flew to Brisbane to clarify matters with Robinson. no explanation was given by Robinson.00) and causing him actual. without prejudice to legal action against him and Robinson should they fail to heed the same. on account of AFFA’s untimely cancellation of the exclusive distributorship agreement. After contacting various overseas fast ferry manufacturers from all over the world. On said date. 13 As for Go and Tecson. No such report was made by either Tecson or Landicho who. 2004 as modified by the Resolution 2 dated July 22. Landicho and Tecson to his demand letter. of ACCRA law firm.: name and style "ACG Express Liner. Landicho and Tecson that the latter would give him a weekly status report and that the matter will be settled in three (3) to four (4) weeks and neither party will file an action against each other until a final report on the proposed settlement. from the sale of each vessel. had no intention to do so and were just buying time as the catamaran vessel was due to arrive from Australia.7 Cordero made two (2) trips to the AFFA Shipyard in Brisbane. Cordero was able to close a deal for the purchase of two (2) SEACAT 25 as evidenced by the Memorandum of Agreement dated August 7. thus depriving him of his due commissions (balance of unpaid commission from the sale of the first vessel in the amount of US$31.00. Thyne & Macartney.00 on the condition that they will get a cut of 20%. they filed their Answer denying that they have anything to do with the termination by AFFA of Cordero’s authority as exclusive distributor in the Philippines.VILLARAMA.500. Tecson and Landicho. that is. or 22. including P800. CORDERO. Cordero offered for sale to prospective buyers the 25-meter Aluminium Passenger catamaran known as the SEACAT 25.000. Consequently. 1997.

it held that Cordero is entitled only to commission for the sale of the first catamaran obtained through his efforts with the remaining unpaid sum of US$31.R.19 In its Order dated July 28. Cordero’s testimony regarding his transaction with defendants Go. the trial court denied the motion for reconsideration and on August 21. the notice of appeal was denied for failure to pay the appellate court docket fee within the prescribed period. Landicho and Tecson had no transaction whatsoever with Cordero who had no document to show any such shipbuilding contract. the trial court denied the motion for new trial. the CA rendered judgment granting the petition for certiorari in CA-G. the dispositive portion of which reads as follows: WHEREFORE. 2000 despite due notice. Go with his family.000.522. Defendants moved to reconsider the said order insofar as it granted the motion for execution pending appeal.291. In any case.000 as otherwise he will expose in the media the alleged undervaluation of the vessel with the BOC. As to the supposed meeting to settle their dispute. Tabujara at Shangri-la’s Mactan Island Resort. Landicho and Tecson. As prayed for. Cordero no longer had cause of action for his commission for the sale of the second vessel under the memorandum of agreement dated August 7. the trial court rendered its decision.43% of the price of each vessel or US$328. The trial court further confirmed that said defendants misled the trial court in moving for continuance during the pre-trial conference held on December 10. the CA issued a temporary restraining order at the instance of defendants in the certiorari case they filed with said court docketed as CA-G.00=P43. the trial court reconsidered the resetting of the pre-trial to another date for the third time as requested by Go.22 On August 18.000. 1997. and with payments of US$297.16 Accordingly. Costs against the defendants. 2000 Order granting the ex-parte motion for release of garnished funds. SP No. 2004. the sum of ONE MILLION PESOS (P1. SP No. CV No.000. claiming that they have been unduly prejudiced by the negligence of their counsel who was allegedly unaware that the pre-trial conference on January 28. as requested by the defendants.000. judgment is hereby rendered in favor of Plaintiff and against defendants Allan C.00 rate) with . 2000.000. Tecson and Atty. 2001. 2000. Landicho and Tecson filed a motion for new trial.43) as actual damages with legal interest from 25 June 1998 until fully paid. 2. Consequently.27 On January 29. On the Fourth Cause of Action. and denied the ex-parte Motion for Break-Open Order and Ex-Parte Motion for Encashment of Check filed by Cordero. the CA in CA-G. 2000. this was due to the malicious demand of Cordero to be given US$3.000. vouchers and bank transmittals were presented to prove that: (1) Cordero was properly authorized and actually transacted in behalf of AFFA as exclusive distributor in the Philippines. (2) in finding that it was Cordero and not Pamana who was appointed by AFFA as the exclusive distributor in the Philippines of its SEACAT 25 and other fast ferry vessels.355. 20 In the same order. cancelled the scheduled public auction sale of levied real properties. 2000 denying due course to the notice of appeal and forthwith directed the transmittal of the records to the CA.28 On March 16. 2000. 1999. However. Go. the sum of ONE MILLION PESOS (P1.25 On September 29. and (3) AFFA through Robinson paid Cordero his commissions from each scheduled payment made by Go for the first SEACAT 25 purchased from AFFA pursuant to Shipbuilding Contract No.00) as attorney’s fees. 2000. 24 Defendants filed a motion for reconsideration and to transmit the case records to the CA. The CA sustained the trial court in ruling that Cordero is entitled to damages for the breach of his exclusive distributorship agreement with AFFA. However. PREMISES CONSIDERED. 2000. and the latter’s offer of settlement. 3. the writ of execution pending appeal was issued. Tony Robinson. Robinson.R. and also various documents. 60354 questioning the execution orders issued by the trial court. 7825. and Vincent Tecson.15 Pre-trial was reset twice to afford the parties opportunity to reach a settlement. in view of the latter’s failure to appear at the pre-trial conference on January 7. 1997 considering the termination of his authority by AFFA’s lawyers on June 26.449. On the Second Cause of Action.742. the trial court reconsidered its Order dated August 21. 1998. the following: 1. 2000. the sum of ONE MILLION PESOS (P1. 69113 affirmed the trial court (1) in allowing Cordero to present his evidence ex-parte after the unjustified failure of appellants (Go.09 or P1. Robinson and Landicho. on motion filed by Cordero through counsel. Felipe Landicho. purportedly to go abroad for the holiday season when in truth a Hold-Departure Order had been issued against them. as he had assumed that the said ex-parte hearing was being conducted only against Robinson who was earlier declared in default. On the First Cause of Action. 17 On May 31.522. and (3) in finding that Cordero is entitled to a commission per vessel sold for AFFA through his efforts in the amount equivalent to 22.R. there remained a balance of US$31. which is not limited to the sale of one (1) such catamaran to Go on August 7. Cordero’s motion for execution pending appeal was granted.352.90 (on the basis of US$1. they filed a notice of appeal. 2000 did not push through for the reason that Cordero was then allowed to present his evidence ex-parte.23 Meanwhile. On the Third Cause of Action. documentary evidence including photographs taken of the June 29. the sum total of SIXTEEN MILLION TWO HUNDRED NINETY ONE THOUSAND THREE HUNDRED FIFTY TWO AND FORTY THREE CENTAVOS (P16. plaintiff Cordero was allowed to present his evidence ex parte.09 still due to him. Moreover. and 4. this was merely requested by Robinson but which Cordero misinterpreted as indication that Go was buying a second vessel. was corroborated by his counsel who also took the witness stand. As to the inquiry for the Philippine price for a Wartsila ship engine for AFFA’s other on-going vessel construction. Tecson and Landicho. defendants are hereby ordered to pay Plaintiff jointly and solidarily.18 Go.00) as moral damages. 1998 meeting with Landicho.219. Cordero appealed the said judgment in a petition for review filed with this Court which was eventually denied under our Decision dated September 17. Further. Tecson and Landicho) to appear at the pre-trial conference despite due notice. 21 On August 8.26 On November 29. SO ORDERED.attend to the documents needed for shipment of the vessel to the Philippines. the trial court recalled and set aside its November 6. 60354 and setting aside the trial court’s orders of execution pending appeal. (2) Cordero spent considerable sums of money in pursuance of the contract with Go and ACG Express Liner.00) as exemplary damages. 2002.000. communications.00. photographs taken in Brisbane showing Cordero.91 having been made to Cordero.

.R. THE HONORABLE COURT OF APPEALS DISREGARDED THE RULES OF COURT AND PERTINENT JURISPRUDENCE AND ACTED WITH GRAVE ABUSE OF DISCRETION IN NOT RULING THAT THE RESPONDENT IS NOT THE REAL PARTY-IN-INTEREST AND IN NOT DISMISSING THE INSTANT CASE ON THE GROUND OF LACK OF CAUSE OF ACTION. the CA declared there was no basis for such award. phone bills.000. No. RESPONDENT GO’S POSITION PAPER AND COUNTER-AFFIDAVIT/POSITION PAPER THAT WERE FILED BEFORE THE BUREAU OF CUSTOMS. 2004.000. III. which said court found to be pro forma and did not raise any substantial matter as to warrant the conduct of another trial. the same being the logical and necessary consequences of the exclusive distributorship agreement which are normal in the field of sales and distribution. ATTORNEY’S FEES.interest at 6% per annum from the time of the filing of the complaint until the same is fully paid. the CA reduced the same to P500. II. 164703) and Cordero (G. food and lodging.00 and P50. No. THE HONORABLE COURT OF APPEALS IGNORED THE LAW AND JURISPRUDENCE AND ACTED WITH GRAVE ABUSE OF DISCRETION IN HOLDING HEREIN PETITIONER RESPONSIBLE FOR THE BREACH IN THE ALLEGED EXCLUSIVE DISTRIBUTORSHIP AGREEMENT WITH ALUMINIUM FAST FERRIES AUSTRALIA. 21 and 22 of the New Civil Code. ADMITS UNDER OATH THAT HE HAD INDEED PURCHASED A SECOND VESSEL FROM AFFA.000.R. THE MEMORANDUM OF AGREEMENT DATED 7 AUGUST 1997 PROVIDES THAT RESPONDENT GO WAS CONTRACTUALLY BOUND TO BUY TWO (2) VESSELS FROM AFFA. 20. Appellants were held solidarily liable pursuant to the provisions of Article 1207 in relation to Articles 19. THE COURT OF APPEALS ERRED IN NOT IMPOSING THE PROPER LEGAL INTEREST RATE ON RESPONDENTS’ UNPAID OBLIGATION WHICH SHOULD BE TWELVE PERCENT (12%) FROM THE TIME OF THE BREACH OF THE OBLIGATION. 164703 (Petitioner Go) I.00. DAMAGES.000.00 representing expenses incurred by Cordero for transportation. C. THE HONORABLE COURT OF APPEALS MISAPPLIED LAW AND JURISPRUDENCE AND GRAVELY ABUSED ITS DISCRETION WHEN IT FOUND PETITIONER LIABLE FOR UNPAID COMMISSIONS. On the amounts awarded by the trial court as moral and exemplary damages. THE COURT OF APPEALS ERRED IN RULING THAT PETITIONER IS NOT ENTITLED TO HIS COMMISSIONS FOR THE PURCHASE OF A SECOND VESSEL. and affirmed the Decision dated March 16. No. and V. RESPONDENTS ADMITTED IN THEIR PRE-TRIAL BRIEF THAT THEY HAD PURCHASED A SECOND VESSEL. and the expenditures having redounded to the benefit of the distributor (Cordero). P300. The CA further ruled that no error was committed by the trial court in denying their motion for new trial.R. THE HONORABLE APPELLATE COURT MISAPPLIED THE LAW AND ACTED WITH GRAVE ABUSE OF DISCRETION IN FINDING PETITIONER LIABLE IN SOLIDUM WITH THE CO-DEFENDANTS WITH RESPECT TO THE CLAIMS OF RESPONDENT. By Resolution dated July 22. respectively. 1998 until the finality of the decision. 164747) in which petitioners raised the following arguments: G. THE HONORABLE APPELLATE COURT ACTED CONTRARY TO LAW AND JURISPRUDENCE AND GRAVELY ABUSED ITS DISCRETION WHEN IT EFFECTIVELY DEPRIVED HEREIN PETITIONER OF HIS RIGHT TO DUE PROCESS BY AFFIRMING THE LOWER COURT’S DENIAL OF PETITIONER’S MOTION FOR NEW TRIAL.29 G. as well as attorney’s fees. III. B. SINCE IT WAS PETITIONER’S EFFORTS WHICH ACTUALLY FACILITATED AND SET-UP THE TRANSACTION FOR RESPONDENTS. the CA denied the motions for reconsideration respectively filed by the appellants and appellee. No. and the rate of 12% interest per annum shall apply once the decision becomes final and executory until the judgment has been satisfied. 2004 with the sole modification that the legal interest of 6% per annum shall start to run from June 24. II. IV.00. THE COURT OF APPEALS ERRED IN NOT SUSTAINING THE JUDGMENT OF THE TRIAL COURT AWARDING PETITIONER ACTUAL DAMAGES FOR HIS COMMISSION FOR THE SALE OF THE SECOND VESSEL. entertainment. SINCE THERE IS SUFFICIENT EVIDENCE ON RECORD WHICH PROVES THAT THERE WAS A SECOND SALE OF A VESSEL. 164747 (Petitioner Cordero) I. A. The case before us is a consolidation of the petitions for review under Rule 45 separately filed by Go (G. As to the P800.R. AND LITIGATION EXPENSES.

" it must be noted that he had earlier filed a Motion for Time to file an appropriate responsive pleading even beyond the time provided in the summons by publication. he effectively submitted voluntarily to the trial court’s jurisdiction.47 In the case at bar. Go simply let his lawyers led by Landicho and Tecson handle the matter and tried to settle it by promising to pay a certain amount and to purchase high-speed catamarans through Cordero. Rule 3 of the Rules of Court. although the Motion to Dismiss filed by Robinson specifically stated as one (1) of the grounds the lack of "personal jurisdiction. Real Party-in-Interest First. Landicho and Tecson about their acts prejudicial to his rights and demanded that they respect his exclusive distributorship. Said amounts were apart from the earlier expenses shouldered by Cordero for Landicho’s airline tickets. notwithstanding that he raised it in a special appearance specifically raising the issue of lack of jurisdiction over his person. In other words. the purchase of the first SEACAT 25 in August 1997.45 II. 1997 issued by Tony Robinson. which defines such party as the one (1) to be benefited or injured by the judgment in the suit. 37 Respondents Landicho and Tecson were only too aware of Cordero’s authority as the person who was appointed and acted as exclusive distributor of AFFA.31 A case is dismissible for lack of personality to sue upon proof that the plaintiff is not the real party-in-interest. and 4) to discourage litigation and keep it within certain bounds. which can be gleaned from their act of immediately furnishing him with copies of bank transmittals everytime Go remits payment to Robinson. hence grounded on failure to state a cause of action. Cordero had clearly been cut off from the transaction until the arrival of the first SEACAT 25 which was sold through his efforts. the stipulated commissions from each progress payments made by Go were directly paid by Robinson to Cordero. I. that is. Breach of Exclusive Distributorship. Contractual Interference and Respondents’ Liability for Damages In Yu v. Moreover.30 The controversy boils down to two (2) main issues: (1) whether petitioner Cordero has the legal personality to sue the respondents for breach of contract. Out of these partial payments of his commission. Landicho and Tecson never raised petitioner Cordero’s lack of personality to sue on behalf of Pamana. 3) to avoid a multiplicity of suits.IV. The purposes of this provision are: 1) to prevent the prosecution of actions by persons without any right. pursuant to sound public policy. 40 It was Robinson who argued in support of his motion to dismiss that as far as said defendant is concerned."36 Such apparent inconsistency in naming AFFA’s exclusive distributor in the Philippines is of no moment.32 On this issue. However. He is now estopped from asserting otherwise. we agree with the CA in ruling that it was Cordero and not Pamana who is the exclusive distributor of AFFA in the Philippines as shown by the Certification dated June 1. AFFA. and (2) whether the respondents may be held liable for damages to Cordero for his unpaid commissions and termination of his exclusive distributorship appointment by the principal. at the expense of the sole authorized distributor. but an appearance submitting to the jurisdiction of the court by acknowledging the summons by publication issued by the court and praying for additional time to file a responsive pleading. Cordero" was actually the exclusive distributor: (1) letter dated 1 June 199734. who was appointed and acted as exclusive distributor for AFFA. From the time petitioner Go and respondent Landicho directly dealt with respondent Robinson in Brisbane.41 As already mentioned. Cordero would still give Landicho and Tecson their respective "commission.44 Such motion did not state that it was a conditional appearance entered to question the regularity of the service of summons. it was established that petitioner Cordero was not paid the balance of his commission by respondent Robinson. and ceased communicating through petitioner Cordero as the exclusive distributor of AFFA in the Philippines. the trial court denied the motion to dismiss filed by Robinson. Respondents Landicho and Tecson failed to refute the evidence submitted by Cordero consisting of receipts signed by them.38 Moreover. We held that the rights granted to the petitioner under the exclusive distributorship agreement may not be diminished nor rendered illusory by the expedient act of utilizing or interposing a person or firm to obtain goods for which the exclusive distributorship was conceptualized. Cordero was no longer informed of payments remitted to AFFA in Brisbane. and (3) letter dated 5 August 1997 addressed to petitioner Cordero concerning "commissions to be paid to Pamana Marketing Corporation. When Cordero complained to Go. Robinson and AFFA dealt only with Cordero who alone made decisions in the performance of the exclusive distributorship. Thus. 43 In this case. (2) certification dated 5 August 199735. the real party plaintiff appears to be Pamana. the former dealer of the same goods purchased the merchandise from the manufacturer in England through a trading firm in West Germany and sold these in the Philippines. Robinson having acknowledged the summons by publication and also having invoked the jurisdiction of the trial court to secure affirmative relief in his motion for additional time. Robinson.46 this Court ruled that the right to perform an exclusive distributorship agreement and to reap the profits resulting from such performance are proprietary rights which a party may protect. Consequently. transportation. petitioner Go. as with other clients to whom he had similarly offered AFFA’s fast ferry vessels. title or interest in the case.42 A party who makes a special appearance in court challenging the jurisdiction of said court based on the ground of invalid service of summons is not deemed to have submitted himself to the jurisdiction of the court. In that case. who in turn transfers a portion of funds received to the bank account of Cordero in the Philippines as his commission." or "cuts" from his own commission. Courts acquire jurisdiction over the plaintiffs upon the filing of the complaint. 39 and did so only before the CA when they contended that it is Pamana and not Cordero. 33Petitioner Go mentions the following documents also signed by respondent Robinson which state that "Pamana Marketing Corporation represented by Mr. AFFA through its lawyer in Australia even terminated his exclusive dealership insisting that his services were engaged for only one (1) transaction. For all intents and purposes. or the party entitled to the avails of the suit. injunction is the appropriate remedy to prevent a wrongful interference with contracts by strangers to such contracts where the legal remedy is insufficient and the resulting injury is irreparable. however. Cordero was not paid anything and worse. on the issue of whether the case had been filed by the real party-in-interest as required by Section 2. We find no error committed by the trial court in overruling Robinson’s objection over the improper resort to summons by publication upon a foreign national like him and in an action in personam. 2) to require that the actual party entitled to legal relief be the one to prosecute the action. against the real party defendant which is AFFA. Court of Appeals. THE COURT OF APPEALS ERRED IN NOT SUSTAINING THE ORIGINAL AMOUNT OF CONSEQUENTIAL DAMAGES AWARDED TO PETITIONER BY THE TRIAL COURT CONSIDERING THE BAD FAITH AND FRAUDULENT CONDUCT OF RESPONDENTS IN MISAPPROPRIATING THE MONEY OF PETITIONER. food and hotel accommodations for the trip to Australia. . while jurisdiction over the defendants in a civil case is acquired either through the service of summons upon them in the manner required by law or through their voluntary appearance in court and their submission to its authority. even before this Court. Mortimer F.

in the letter dated August 5. Moreover. petitioner Go entered into the Memorandum of Agreement and Shipbuilding Contract No. the three elements of tort interference above-mentioned are present in the instant case.Petitioner Go argues that unlike in Yu v. and (3) interference of the third person is without legal justification. 7825 with Cordero in behalf of AFFA. The respondent appellate court correctly confirmed the permanent injunction and nullification of the lease contracts between DCCSI and Trendsetter Marketing. Cordero incurred losses as he was not paid the balance of his commission from the sale of the first vessel and his exclusive distributorship revoked by AFFA. But it does not relieve petitioner of the legal liability for entering into contracts and causing breach of existing ones. without awarding damages. which is the sole obligation of the principal AFFA. This may pertain to a situation where a third person induces a party to renege on or violate his undertaking under a contract. Clearly. 1314. petitioner’s Trendsetter Marketing asked DCCSI to execute lease contracts in its favor. some authorities believe that it is not necessary that the interferer’s interest outweigh that of the party whose rights are invaded. however. our ruling in the case of So Ping Bun v. we held that where there was no malice in the interference of a contract. Added to this. and such interest motivates his conduct. documentary or testimonial. In that capacity as exclusive distributor. The elements of tort interference are: (1) existence of a valid contract. 49 We find that contrary to the claims of petitioner Cordero. and the impulse behind one’s conduct lies in a proper business interest rather than in wrongful motives. respondents were clearly aware of the contract between Cordero and AFFA represented by Robinson. such that wrongful and malicious motives are negatived. Any third person who induces another to violate his contract shall be liable for damages to the other contracting party. evidence on record showed that respondents initially dealt with and recognized Cordero as such exclusive dealer of AFFA high-speed catamaran vessels in the Philippines. In the case before us." 50Petitioner Go further maintains that he had not in any way violated or caused the termination of the exclusive distributorship agreement between Cordero and AFFA. and as correctly viewed by the appellate court. Article 1314 of the Civil Code provides: Art. It was Robinson on behalf of AFFA who. (2) knowledge on the part of the third person of the existence of a contract.] . to wit: A duty which the law of torts is concerned with is respect for the property of others. It is sufficient if the impetus of his conduct lies in a proper business interest rather than in wrongful motives. But this circumstance will not absolve respondents from liability for invading Cordero’s rights under the exclusive distributorship. Such justification does not exist where his sole motive is to cause harm to the other. Respondents clearly acted in bad faith in bypassing Cordero as they completed the remaining payments to AFFA without advising him and furnishing him with copies of the bank transmittals as they previously did.54 [emphasis supplied. justification for protecting one’s financial position should not be made to depend on a comparison of his economic interest in the subject matter with that of others. there was indeed no sufficient evidence that respondents actually purchased a second SEACAT 25 directly from AFFA. it cannot be said that he is an officious or malicious intermeddler. As a result of respondents’ actuations. showing that they conspired to defeat the very purpose of the exclusive distributorship agreement. undertook to pay commission payments to Pamana on a staggered progress payment plan in the form of percentage of the commission per payment. and directly dealt with AFFA through Robinson regarding arrangements for the arrival of the first SEACAT 25 in Manila and negotiations for the purchase of the second vessel pursuant to the Memorandum of Agreement which Cordero signed in behalf of AFFA. relying on Articles 1207.51 While it is true that a third person cannot possibly be sued for breach of contract because only parties can breach contractual provisions. he contends that the CA gravely abused its discretion in holding them solidarily liable to Cordero. 1997 addressed to Cordero. Where the alleged interferer is financially interested. Though petitioner took interest in the property of respondent corporation and benefited from it. Cuddy. and as a result petitioner deprived respondent corporation of the latter’s property right. a contracting party may sue a third person not for breach but for inducing another to commit such breach. nothing on record imputes deliberate wrongful motives or malice in him. The business desire is there to make some gain to the detriment of the contracting parties. In fact. however. Further. justification for interfering with the business relations of another exists where the actor’s motive is to benefit himself. Through the letters issued by Robinson attesting that Cordero is the exclusive distributor of AFFA in the Philippines. pay to Pamana their full commission by telegraphic transfer to an account nominated by Pamana within one to two days of [AFFA] receiving such payments. xxx While we do not encourage tort interferers seeking their economic interest to intrude into existing contracts at the expense of others. 19 and 21 of the Civil Code despite absence of evidence. and that an individual acts under an economic interest that is substantial. precludes damages. he had also paid in full the first and only vessel he purchased from AFFA. One view is that. In the instant case. The injunction saved the respondents from further damage or injury caused by petitioner’s interference. it is clear that petitioner So Ping Bun prevailed upon DCCSI to lease the warehouse to his enterprise at the expense of respondent corporation. a party cannot be a malicious interferer. Court of Appeals 48 there is no conclusive proof adduced by petitioner Cordero that they actually purchased a second SEACAT 25 directly from AFFA and hence there was no violation of the exclusive distributorship agreement. "upon receipt of progress payments. Petitioner Go contends that the trial and appellate courts erred in holding them solidarily liable for Cordero’s unpaid commission. and a cause of action ex delicto may be predicated upon an unlawful interference by one person of the enjoyment by the other of his private property. we find that the conduct herein complained of did not transcend the limits forbidding an obligatory award for damages in the absence of any malice. Lack of malice. Court of Appeals53 is instructive. for he acts in self-protection. 52 The presence of the first and second elements is not disputed. not merely de minimis. As to the third element. Authorities debate on whether interference may be justified where the defendant acts for the sole purpose of furthering his own financial or economic interest. AFFA explicitly committed that it will. as a general rule. As early as Gilchrist vs.

It implies an intention to do ulterior and unjustifiable harm. the defendant must have acted with malice or must have been driven by purely impure reasons to injure the plaintiff. the total remittances made by herein Importer to AFFA does not alone represent the purchase price for Seacat 25. Robinson. and (4) that the payment scheme formerly agreed upon as stipulated in the first contract shall still be the basis and used as the guiding factor in remitting money for the building of the first vessel. in other words. Cuddy (supra). They gave a different version of the events that transpired following the signing of Shipbuilding Contract No. Court of Appeals. Go. It was also during this time that Robinson’s request for inquiry on the Philippine price of a Wartsila engine for AFFA’s then on-going vessel construction. It includes advance payment for the acquisition of another vessel as part of the deal due to the discounted price.000. were able to locate him only to obtain unsatisfactory reports such that it was Go who would still call up Robinson regarding any progress status report. 1998. attended to their concerns and spent no measly sum for the trip to Australia with Go. But what is appalling is the fact that even as Go. 1998.59 We find these allegations unconvincing and a mere afterthought as these were the very same averments contained in the Position Paper for the Importer dated October 9. his act of interference cannot be justified. This led to the signing of another contract superseding the first one (1). Therefore. the fact was that he was unable to prove malice or bad faith on the part of petitioner in purchasing the property. Tecson and Landicho were without legal justification and intended solely to prejudice Cordero. We further explained that the word "induce" refers to situations where a person causes another to choose one course of conduct by persuasion or intimidation. While there was nothing objectionable in negotiating for a lower price in the second purchase of SEACAT 25. which is not prohibited by the Memorandum of Agreement.62 which even gives credence to the claim of Cordero that respondents negotiated for the sale of the second vessel and that the nonpayment of the remaining two (2) instalments of his commission for the sale of the first SEACAT 25 was a result of Go and Landicho’s directly dealing with Robinson.00. such knowledge alone was not sufficient to make him liable for tortuous interference. The records show that the decision of the heirs of the late Bai Tonina Sepi to sell the property was completely of their own volition and that petitioner did absolutely nothing to influence their judgment. Tecson and Landicho clearly connived not only in ensuring that Cordero would have no participation in the contract for sale of the second SEACAT 25. and speaks not in response to duty. 7825. Following our pronouncement in Gilchrist v.61 states in paragraph 8 under the Antecedent facts thereof. AFFA agreed to give them a discounted price under the following terms and conditions: (1) that the contract price be lowered. (2) that Go will obtain another vessel. 1997.Malice connotes ill will or spite. (3) that to secure compliance of such conditions.000.55 In the case of Lagon v. Robinson. Landicho and Go’s family members. obviously to obtain a lower price for the second vessel at the expense of Cordero.512. was misinterpreted by Cordero as indicating that Go was buying a second vessel. respondents denied having anything to do with the unpaid balance of the commission due to Cordero and the eventual termination of his exclusive distributorship by AFFA. Cordero vehemently denied there was such modification of the contract and accused respondents of resorting to falsified documents.00) was only presented before the BOC to show that the vessel imported into the Philippines was not undervalued by almost US$500. and it was always Landicho and Tecson who. 57 In their Answer. As to the allegation of private respondent in said case that petitioner induced the heirs of the late Bai Tonina Sepi to sell the property to petitioner despite an alleged renewal of the original lease contract with the deceased landowner. Malice is bad faith or bad motive. still to be dated 07 August 1997. adding that the contract was to be effective on August 7. Tecson and Landicho suddenly ceased communicating with him.. Respondents furtively went directly to Robinson after Cordero had worked hard to close the deal for them to purchase from AFFA two (2) SEACAT 25. Hence. closely monitored the progress of building the first vessel sold. In short. the time when their funds was to become available. Go must make an advance payment for the building of the second vessel. several builder-competitors still entered the picture after the said contract for the purchase of one (1) SEACAT 25 was sent to Brisbane in July 1997 for authentication. even assuming that private respondent was able to prove the renewal of his lease contract with Bai Tonina Sepi.150. that -8. Private respondent himself did not proffer any evidence to support his claim. Attached to the answer were photocopies of the second contract stating a lower purchase price (US$1. including the facsimile transmission of AFFA supposedly confirming the said sale for only US$1.150. The attendant circumstances. The word "induce" refers to situations where a person causes another to choose one course of conduct by persuasion or intimidation. the CounterAffidavit/Position Paper for the Importer dated November 16. however. another document filed in said BOC case. Landicho and Tecson in inducing Robinson and AFFA to enter into another contract directly with ACG Express Liner to obtain a lower price for the second vessel resulted in AFFA’s breach of its contractual obligation to pay in full the commission due to Cordero and unceremonious termination of Cordero’s appointment as exclusive distributor.000. Go engaged the services of Landicho who went to Australia to see to it that all documents needed for the shipment of the vessel to the Philippines would be in order. after several attempts. but also that Cordero would not be paid the balance of his commission from the sale of the first SEACAT 25. we ruled as follows: Assuming ex gratia argumenti that petitioner knew of the contract.00 (not US$1. 60 It appears that the purported second contract superseding the original Shipbuilding Contract No. x xx Furthermore. which was submitted by Go on behalf of ACG Express Liner in connection with the complaint-affidavit filed by Cordero before the BOC-SGS Appeals Committee relative to the shipment valuation of the first SEACAT 25 purchased from AFFA. According to them. Incidentally. demonstrated that respondents transgressed the bounds of permissible financial interest to benefit themselves at the expense of Cordero. etc. As elsewhere stated. Landicho and Tecson continued to demand and receive from Cordero their "commission" or "cut" from Cordero’s earned commission from the sale of the first SEACAT 25. such act may not be deemed malicious if impelled by a proper business interest rather than in wrongful motives. Thus. and go to Australia for ocular inspection. This. 7825 and stating a lower price of US$1. Go admitted he called the attention of AFFA if it can compete with the prices of other builders. Cordero was practically excluded from the transaction when Go.150. in May 1998 on the scheduled launching of the ship in Australia. the records do not support the allegation of private respondent that petitioner induced the heirs of Bai Tonina Sepi to sell the property to him.465. and upon mutual agreement.00.00) and facsimile transmission of AFFA to Go confirming the transaction. lacking documents for MARINA. without giving him any explanation.000. Go averred it was Cordero who was nowhere to be contacted at the time the shipbuilding progress did not turn good as promised. Robinson. Landicho and Tecson secretly negotiated with Robinson for the purchase of a second vessel. the trial and appellate courts correctly ruled that the actuations of Go. . the claim of tortuous interference was never established.58 As to the cessation of communication with Cordero. The act of Go. despite their knowledge that it was commission already earned by and due to Cordero. 56 we held that to sustain a case for tortuous interference.

and that is. We have assiduously maintained this legal principle as early as 1912 in Worcester v. and all together are jointly liable for the whole damage.66 we held: [O]bligations arising from tort are. their determination depending upon the amount of compensatory damages that may be awarded to the claimant. to the prejudice of Cordero as the duly appointed exclusive distributor. Its antithesis. is to set certain standards which must be observed not only in the exercise of one’s rights but also in the performance of one’s duties. the responsibility of two or more persons who are liable for the quasi-delict is solidary. (2) which is exercised in bad faith. They are each liable as principals.The existence of malice. They are jointly and severally liable for the whole amount. is any act evincing bad faith or intent to injure. 1998 until the same is fully paid. advise. aid or abet the commission of a tort. Tecson and Landico to act with fairness. as well as attorney’s fees awarded to Cordero since no law or contract provided for solidary obligation in these cases. the act complained of must be intentional. or who approve of it after it is done. x x x Joint tort feasors are jointly and severally liable for the tort which they commit. an action for damages is proper under Articles 20 or 21 of the Civil Code. . (3) for the sole intent of prejudicing or injuring another. moral damages may be recovered under Article 2219 of the Civil Code. cooperate in. It is no defense for one sued alone. 67 [emphasis supplied. of course satisfies any claim which might exist against the others. in the amount of US$31. we explained that when "a right is exercised in a manner which does not conform with the norms enshrined in Article 19 and results in damage to another.63 We see no compelling reason to reverse the findings of the RTC and the CA that respondents acted in bad faith and in utter disregard of the rights of Cordero under the exclusive distributorship agreement. Each is liable for the whole damages caused by all. always solidary. A common theme runs through Articles 19 and 21. Article 21 refers to acts contra bonus mores and has the following elements: (1) There is an act which is legal. The release of one of the joint tort feasors by agreement generally operates to discharge all. 21. and (3) it is done with intent to injure. x x x Of course. but is also jointly liable with his tort feasors.522. Respondents having acted in bad faith.] The rule is that the defendant found guilty of interference with contractual relations cannot be held liable for more than the amount for which the party who was inducted to break the contract can be held liable. x x x Joint tort feasors are not liable pro rata. fraudulent. by one of the joint tort feasors. Its elements are the following: (1) There is a legal right or duty. is equally bereft of merit. by their nature. 65 In Lafarge Cement Philippines. moral and exemplary damages. Go. on the other hand. promote. good customs or public policy shall compensate the latter for the damage. in the exercise of his rights and in the performance of his duties.64 Petitioner Go’s argument that he. a legal wrong is thereby committed for which the wrongdoer must be responsible. Landicho and Tecson cannot be held liable solidarily with Robinson for actual. to the same extent and in the same manner as if they had performed the wrongful act themselves. honesty and good faith in securing better terms for the purchase of high-speed catamarans from AFFA. that the others who participated in the wrongful act are not joined with him as defendants. except among themselves. v. x x x A payment in full for the damage done. (2) but which is contrary to morals. They fail to recognize the universal doctrine that each joint tort feasor is not only individually liable for the tort in which he participates. countenance. As a rule. is further proscribed by Article 19 of the Civil Code: Art. As we have expounded in another case: Elsewhere. encourage. when affirmed by the appellate court. Any person who willfully causes loss or injury to another in a manner that is contrary to morals. public order. findings of fact of the trial court.69On the other hand. give everyone his due and observe honesty and good faith. The damages can not be apportioned among them. Article 20 pertains to damages arising from a violation of law x x x. (2) that they cannot be recovered as a matter of right. Continental Cement Corporation. in which we held: x x x The difficulty in the contention of the appellants is that they fail to recognize that the basis of the present action is tort. necessarily. nor is it any excuse for him that his participation in the tort was insignificant as compared to that of the others. and observe honesty and good faith. the court during trial may find that some of the alleged tort feasors are liable and that others are not liable. Ocampo. are conclusive on this Court. or public policy. for the purpose of each paying an aliquot part. 68 Respondents Go. Every person must. Article 21.1avvphi1 The persons injured may sue all of them or any number less than all." The object of this article. There can be but satisfaction. xxx It may be stated as a general rule that joint tort feasors are all the persons who command. And this is true even though they are charged jointly and severally. good custom. Inc. ill will or bad faith is a factual matter. states: Art.09 or its peso equivalent. give everyone his due. When Article 19 is violated. The failure of Robinson. which AFFA/Robinson did not pay in violation of the exclusive distributorship agreement. and only after the claimant’s right to them has been established. Conformably with Article 2194 of the Civil Code. They cannot insist upon an apportionment. act with justice. The courts may release some for lack of evidence while condemning others of the alleged tort feasors. These standards are the following: act with justice. Landicho and Tecson were therefore correctly held liable for the balance of petitioner Cordero’s commission from the sale of the first SEACAT 25. with interest at the rate of 6% per annum from June 24. 19. if done for their benefit. and (3) the act must be accompanied by bad faith or done in a wanton. the requirements of an award of exemplary damages are: (1) they may be imposed by way of example in addition to compensatory damages. instigate. therefore.

Moral damages are meant to compensate and alleviate the physical suffering. Moral damages are not punitive in nature and were never intended to enrich the claimant at the expense of the defendant. labeled or stenciled thereon. whose principal business is collecting used lubricating oil. attorney’s fees may also be awarded in consonance with Article 2208 (1). but before filling the empty drums we obliterate the markings of the drums)  In one transaction.000.  Defendant Insular Petroleum Refining Co.000.R.000. J. as a practice. B. Ltd.  In marketing these two types of oil. mental anguish. .000. Pecson Lozano that if his intention was to sell me Insoil for me to .70 The award of exemplary damages is thus in order. Although incapable of pecuniary estimation. I told Mr. There is no hard-and-fast rule in determining what would be a fair and reasonable amount of moral damages. However.  The essential difference between the two types lies in the fact that the high-grade oil contains an additive element which is not found in the other type. wounded feelings. of the Phil. would be sufficient and reasonable. Army or other drums may be belonging to the Caltex. 28 CC SHELL COMPANY OF THE PHILIPPINES. utilizes for the high grade oil containers. petitioner. is a corporation engaged in the sale of petroleum products." Indeed. INTERFERENCE WITH PROSPECTIVE ADVANTAGE C. Because exemplary damages are awarded. As a matter of fact. (used drums may be belonging to the U. respondent produces two types of lubricating oil one. he tried to show me a chemical analysis of Insoil which he claimed was very close to the analysis of Shell oil. fright. serious anxiety. 72 We affirm the appellate court’s award of attorney’s fees in the amount of P50.00. since each case must be governed by its own peculiar facts. .. the petitions are DENIED. 164703. a straight mineral oil classified as second grade or low-grade oil. however. ART.000.oppressive or malevolent manner. respectively.  In selling its low-grade oil. What did you reply? A. and similar injuries unjustly caused. when a certain F.. or the Stanvac we have some that belonged to the Union. respondent use miscellaneous containers.R. respectively. repaired at his station and "tried to convince me that Insoil is a good oil". F. which was consummated with Conrado Uichangco a dealer of petitioner's gasoline and lubricating oil.. Shell Co.  This single transaction between plaintiff and defendant was effected. social humiliation.00.00 as moral and exemplary damages. WHEREFORE.71 We believe that the amounts of P300. including lubricating oil. the amount must somehow be proportional to and in approximation of the suffering inflicted. respondent.. and another. Trial courts are given discretion in determining the amount. respondents.S. UNFAIR COMPETITION.:  Petitioner. in agent of the defendant. it must be commensurate to the loss or injury suffered. still excessive under the circumstances. No. the lowgrade oil that was sold to said operator was contained in a drum with the petitioner's mark or brand "Shell" still stenciled without having been erased. moral shock. 2004 as modified by the Resolution dated July 22.. With costs against the petitioner in G.. CV No. is a registered limited partnership. INSULAR PETROLEUM REFINING CO. a first grade or high-grade oil. Ltd. and who has been losing during the first eight and ten months of operation of his station. besmirched reputation.  From the used oil. but they are used drums. Pecson Lozano. with a special sealing device at its opening which cannot be removed unless the oil is used. according to Conrado Uichangco an operator of a Shell service station at the corner of San Andres and Tuason Privado Streets.00 andP200. PAREDES.. although he had money to back up his losses. The Decision dated March 16. and he also told me that he could sell this kind of oil (Insoil) to me at a much cheaper price so that I could make a bigger margin of profits Q.. miscellaneous drums of other companies.00 and P200. with the limitation that it "should not be palpably and scandalously excessive. SECURITIES-RELATED TORTS D. Manila. And some of those miscellaneous containers are the Shell containers.. 69113 are hereby AFFIRMED with MODIFICATION in that the awards of moral and exemplary damages are hereby reduced to P300.. painted black on the sides and yellow on top and on the bottom with its tradename stenciled thereon. LTD. 2004 of the Court of Appeals in CA-G. and COURT OF APPEALS. vs. SO ORDERED.  The packages and containers of its goods bear its trademark. LTD. we find the sums awarded by the trial court as moral and exemplary damages as reduced by the CA.

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

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

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