Globe Mackay vs CA

Facts:
Private respondent Restituto M. Tobias was employed by petitioner Globe Mackay in dual
capacity as purchasing agent and administrative assistant to the engineering operations manager.
In 1972, the respondent discovered fraudulent anomalies and transactions in the said corporation
for which it lost several hundred thousands of pesos. The private respondent reported to his
superiors including Henry, the petitioner. However, he was confronted by Hendry stating that
Tobias was the number one suspect. He was ordered to take a one week forced leave. When he
returned to work, Hendry called him crook and swindler, and left a scornful remark to the
Filipinos. The petitioners also charged six criminal cases against the respondentfive cases of
estafa and one for violating Article 290 of the RPC (Discovering Secrets through Seizure of
Correspondence). The petitioner also sent a poison letter to RETELCO causing the respondent to
be unemployed.
Issue:
Whether or not the petitioners are liable for damages to the respondent.
Ruling:
Art. 19. Every person must, in the exercise of his rights and in the performance of
his duties, act with justice, give everyone his due, and observe honesty and good
faith.
This article, known to contain what is commonly referred to as the principle of abuse of rights,
sets certain standards which must be observed not only in the exercise of one's rights but also in
the performance of one's duties. These standards are the following: to act with justice; to give
everyone his due; and to observe honesty and good faith. The law, therefore, recognizes a
primordial limitation on all rights; that in their exercise, the norms of human conduct set forth in
Article 19 must be observed. A right, though by itself legal because recognized or granted by law
as such, may nevertheless become the source of some illegality. When a right is exercised in a
manner which does not conform with the norms enshrined in Article 19 and results in damage to
another, a legal wrong is thereby committed for which the wrongdoer must be held responsible.
But while Article 19 lays down a rule of conduct for the government of human relations and for
the maintenance of social order, it does not provide a remedy for its violation. Generally, an
action for damages under either Article 20 or Article 21 would be proper.

In determining whether or not the principle of abuse of rights may be invoked, there is no rigid
test which can be applied. While the Court has not hesitated to apply Article 19 whether the legal
and factual circumstances called for its application the question of whether or not the principle
of abuse of rights has been violated resulting in damages under Article 20 or Article 21 or other
applicable provision of law, depends on the circumstances of each case. And in the instant case,
the Court, after examining the record and considering certain significant circumstances, finds
that all petitioners have indeed abused the right that they invoke, causing damage to private
respondent and for which the latter must now be indemnified.
The trial court made a finding that notwithstanding the fact that it was private respondent Tobias
who reported the possible existence of anomalous transactions, petitioner Hendry "showed
belligerence and told plaintiff (private respondent herein) that he was the number one suspect
and to take a one week vacation leave, not to communicate with the office, to leave his table
drawers open, and to leave his keys to said defendant (petitioner Hendry)" [RTC Decision, p. 2;
Rollo, p. 232]. This, petitioners do not dispute. But regardless of whether or not it was private
respondent Tobias who reported the anomalies to petitioners, the latter's reaction towards the
former upon uncovering the anomalies was less than civil. An employer who harbors suspicions
that an employee has committed dishonesty might be justified in taking the appropriate action
such as ordering an investigation and directing the employee to go on a leave. Firmness and the
resolve to uncover the truth would also be expected from such employer. But the high-handed
treatment accorded Tobias by petitioners was certainly uncalled for. And this reprehensible
attitude of petitioners was to continue when private respondent returned to work on November
20, 1972 after his one week forced leave. Upon reporting for work, Tobias was confronted by
Hendry who said. "Tobby, you are the crook and swindler in this company." Considering that the
first report made by the police investigators was submitted only on December 10, 1972 [See Exh.
A] the statement made by petitioner Hendry was baseless. The imputation of guilt without basis
and the pattern of harassment during the investigations of Tobias transgress the standards of
human conduct set forth in Article 19 of the Civil Code. The Court has already ruled that the
right of the employer to dismiss an employee should not be confused with the manner in which
the right is exercised and the effects flowing therefrom. If the dismissal is done abusively, then
the employer is liable for damages to the employee Under the circumstances of the instant
case, the petitioners clearly failed to exercise in a legitimate manner their right to dismiss Tobias,
giving the latter the right to recover damages under Article 19 in relation to Article 21 of the
Civil Code.

Albenson vs CA
Facts:
Albenson Ent. delivered mild steel plates to Guaranteed Industries Inc. A Pacific Banking
Corporation Check was paid and drawn against the account of EL Woodworks. Check was later
dishonored for the reason Account Closed. Company traced source of check and later
discovered that the signature belonged to one Eugenio Baltao. Albenson made an extrajudical
demand upon Baltao but latter denied that he issued the check or that the signature was his.
Company filed a complaint against Baltao for violation of BP 22. It was later discovered that
private respondent had son: Eugene Baltao III, who manages the business establishment, EL
Woodworks. No effort from the father to inform Albenson of such information. Rather the father
filed complaint for damages against Albenson.
Issue:
Whether there is indeed cause for the damages against Albenson Enterprise.
Ruling:
Article 19, known to contain what is commonly referred to as the principle of abuse of rights,
sets certain standards which may be observed not only in the exercise of one's rights but also in
the performance of one's duties. These standards are the following: to act with justice; to give
everyone his due; and to observe honesty and good faith. The law, therefore, recognizes the
primordial limitation on all rights: that in their exercise, the norms of human conduct set forth in
Article 19 must be observed. A right, though by itself legal because recognized or granted by law
as such, may nevertheless become the source of some illegality. When a right is exercised in a
manner which does not conform with the norms enshrined in Article 19 and results in damage to
another, a legal wrong is thereby committed for which the wrongdoer must be held responsible.
Although the requirements of each provision is different, these three (3) articles are all related to
each other. As the eminent Civilist Senator Arturo Tolentino puts it: "With this article (Article
21), combined with articles 19 and 20, the scope of our law on civil wrongs has been very greatly
broadened; it has become much more supple and adaptable than the Anglo-American law on
torts. It is now difficult to conceive of any malevolent exercise of a right which could not be
checked by the application of these articles" (Tolentino, 1 Civil Code of the Philippines 72).
The elements of an abuse of right under Article 19 are the following: (1) There is a legal right or
duty; (2) which is exercised in bad faith; (3) for the sole intent of prejudicing or injuring another.

Article 20 speaks of the general sanction for all other provisions of law which do not especially
provide for their own sanction (Tolentino, supra, p. 71). Thus, anyone who,
whether willfully or negligently, in the exercise of his legal right or duty, causes damage to
another, shall indemnify his victim for injuries suffered thereby. Article 21 deals with acts contra
bonus mores, and has the following elements: 1) There is an act which is legal; 2) but which is
contrary to morals, good custom, public order, or public policy; 3) and it is done with intent to
injure.
Certainly, petitioners could not be said to have violated the aforestated principle of abuse of
right. What prompted petitioners to file the case for violation of Batas Pambansa Bilang 22
against private respondent was their failure to collect the amount of P2,575.00 due on a bounced
check which they honestly believed was issued to them by private respondent. Petitioners had
conducted inquiries regarding the origin of the check, and yielded the following results: from the
records of the Securities and Exchange Commission, it was discovered that the President of
Guaranteed (the recipient of the unpaid mild steel plates), was one "Eugenio S. Baltao"; an
inquiry with the Ministry of Trade and Industry revealed that E.L. Woodworks, against whose
account the check was drawn, was registered in the name of one "Eugenio Baltao"; verification
with the drawee bank, the Pacific Banking Corporation, revealed that the signature appearing on
the check belonged to one "Eugenio Baltao".
In a letter dated December 16, 1983, counsel for petitioners wrote private respondent demanding
that he make good the amount of the check. Counsel for private respondent wrote back and
denied, among others, that private respondent ever transacted business with Albenson Enterprises
Corporation; that he ever issued the check in question. Private respondent's counsel even went
further: he made a warning to defendants to check the veracity of their claim. It is pivotal to note
at this juncture that in this same letter, if indeed private respondent wanted to clear himself from
the baseless accusation made against his person, he should have made mention of the fact that
there are three (3) persons with the same name, i.e.: Eugenio Baltao, Sr., Eugenio S. Baltao, Jr.
(private respondent), and Eugenio Baltao III (private respondent's son, who as it turned out later,
was the issuer of the check). He, however, failed to do this. The last two Baltaos were doing
business in the same building Baltao Building located at 3267 V. Mapa Street, Sta. Mesa,
Manila. The mild steel plates were ordered in the name of Guaranteed of which respondent
Eugenio S. Baltao is the president and delivered to Guaranteed at Baltao building. Thus,
petitioners had every reason to believe that the Eugenio Baltao who issued the bouncing check is
respondent Eugenio S. Baltao when their counsel wrote respondent to make good the amount of
the check and upon refusal, filed the complaint for violation of BP Blg. 22.
In the final analysis, there is no proof or showing that petitioners acted maliciously or in bad
faith in the filing of the case against private respondent. Consequently, in the absence of proof of
fraud and bad faith committed by petitioners, they cannot be held liable for damages (Escritor, Jr.
vs. Intermediate Appellate Court, 155 SCRA 577 [1987]). No damages can be awarded in the

instant case, whether based on the principle of abuse of rights, or for malicious prosecution. The
questioned judgment in the instant case attests to the propensity of trial judges to award damages
without basis. Lower courts are hereby cautioned anew against awarding unconscionable sums as
damages without bases therefor.

Amonoy vs Gutierrez
Facts:
In 1965, Atty. Sergio Amonoy represented Alfonso Fornilda (Formida in some records) in a
partition case. Since Fornilda had no money to pay, he agreed to make use of whatever property
he acquires as a security for the payment of Amonoys attorneys fees which amounts to P27k. In
July 1969, Fornilda died. A month later, the property was finally adjudicated and Fornilda,
through his heirs, got his just share from the property in dispute. Fornilda was however unable to
pay Amonoy. Hence, Amonoy sought to foreclose the property in 1970. The heirs of Fornilda, the
spouses Jose Gutierrez and Angela Fornilda then sued Amonoy questioning the validity of his
mortgage agreement with Fornilda. It was their claim that the attorneys fees he was collecting
was unconscionable and that the same was based on an invalid mortgage due to the existing
att0rney-client relationship between him and Fornilda at the time the mortgage was executed.
The spouses lost in the trial court as well as in the Court of Appeals but they appealed to the
Supreme Court, docketed as G.R.No. L-72306. Meanwhile, in 1973, Amonoy was able to
foreclose the property. Amonoy was also the highest bidder in the public sale conducted in view
of the foreclosure. He was able to buy the property of Fornilda for P23k. But constructed on said
property was the house of the spouses Gutierrez.
Pending the spousess appeal with the Supreme Court, Amonoy was able to secure a demolition
order and so on May 30, 1986, Amonoy started demolishing the houses of the spouses. But on
June 2, 1986, the Supreme Court issued a Temporary Restraining Order (TRO) against the
demolition order. On June 4, 1986, Amonoy received a copy of the TRO. Finally, on June 24,
1989, the Supreme Court promulgated a decision on G.R.No. L-72306 where it ruled that the
mortgage between Amonoy and Fornilda is void, hence, Amonoy has no right over the property.
But by this time, the house of the spouses was already demolished because it appears that despite
the TRO, Amonoy continued demolishing the house until it was fully demolished in the middle
of 1987.
The spouses then sued Amonoy for damages. It is now the contention of Amonoy that he
incurred no liability because he was merely exercising his right to demolish (pursuant to the

demolition order) hence what happened was a case of damnum absque injuria (injury without
damage).
Issue:
Whether or not the Court of Appeals was correct in deciding that the petitioner [was] liable to the
respondents for damages
Ruling:
The Petition has no merit.
Damnum absque injuria. Under this principle, the legitimate exercise of a persons rights, even if
it causes loss to another, does not automatically result in an actionable injury. The law does not
prescribe a remedy for the loss. This principle does not, however, apply when there is an abuse
of a persons right, or when the exercise of this right is suspended or extinguished pursuant to a
court order. Indeed, in the availment of ones rights, one must act with justice, give others their
due, and observe honesty and good faith.
Well-settled is the maxim that damage resulting from the legitimate exercise of a persons
rights is a loss without injury -- damnum absque injuria -- for which the law gives no remedy.
[9]
In other words, one who merely exercises ones rights does no actionable injury and cannot be
held liable for damages.
Petitioner invokes this legal precept in arguing that he is not liable for the demolition of
respondents house. He maintains that he was merely acting in accordance with the Writ of
Demolition ordered by the RTC.
We reject this submission. Damnum absque injuria finds no application to this case.
True, petitioner commenced the demolition of respondents house on May 30, 1986 under the
authority of a Writ of Demolition issued by the RTC. But the records show that a Temporary
Restraining Order (TRO), enjoining the demolition of respondents house, was issued by the
Supreme Court on June 2, 1986. The CA also found, based on the Certificate of Service of the
Supreme Court process server, that a copy of the TRO was served on petitioner himself on June
4, 1986.
Petitioner, however, did not heed the TRO of this Court. We agree with the CA that he
unlawfully pursued the demolition of respondents house well until the middle of 1987.
Although the acts of petitioner may have been legally justified at the outset, their continuation
after the issuance of the TRO amounted to an insidious abuse of his right. Indubitably, his actions
were tainted with bad faith. Had he not insisted on completing the demolition, respondents would

not have suffered the loss that engendered the suit before the RTC. Verily, his acts constituted not
only an abuse of a right, but an invalid exercise of a right that had been suspended when he
received the TRO from this Court on June 4, 1986. By then, he was no longer entitled to proceed
with the demolition.
Clearly then, the demolition of respondents house by petitioner, despite his receipt of the
TRO, was not only an abuse but also an unlawful exercise of such right. In insisting on his
alleged right, he wantonly violated this Courts Order and wittingly caused the destruction of
respondents house.
Obviously, petitioner cannot invoke damnum absque injuria, a principle premised on the
valid exercise of a right.[14] Anything less or beyond such exercise will not give rise to the legal
protection that the principle accords. And when damage or prejudice to another is occasioned
thereby, liability cannot be obscured, much less abated.

UE vs Jader
Facts:
Romeo Jader took his law proper at UE from 1984-88. During the first semester of his last year
in law school, he failed to take the examination for Practice Court I in which he obtained an
incomplete grade. He filed an application for removal of the incomplete grade given by Prof.
Carlos Ortega on February 1, 1988 which was approved by Dean Celedonio Tiongson after the
payment of required fees. He took the exam on March 28 and on May 30, the professor gave
him a grade of 5.
His name was still on the tentative list of candidates for graduation. Likewise, his named
appeared in the invitation for the commencement exercises which was held on April 16, 1988.
When he learnt of his deficiency, he dropped from his Bar Review classes thereby made him
ineligible to take the bar exam.
He filed a civil suit against UE for damages because he suffered moral shock, mental anguish,
serious anxiety, besmirched reputation, wounded feelings, and sleepless nights due to UEs
negligence. The petitioner denied liability arguing that it never led respondent to believe that he
completed the requirements for an LlB degree when his name was included in the tentative list of
graduating students. The court ruled in favor of the respondent.

Issue:
Whether or not an educational institution can be held liable for damages for misleading a student
into believing that the latter had satisfied all the requirements for graduation when such was not
the case.
Ruling:
The petition lacks merit.
When a student is enrolled in any educational or learning institution, a contract of education is
entered into between said institution and the student. The professors, teachers or instructors hired
by the school are considered merely as agents and administrators tasked to perform the school's
commitment under the contract. Since the contracting parties are the school and the student, the
latter is not duty-bound to deal with the former's agents, such as the professors with respect to
the status or result of his grades, although nothing prevents either professors or students from
sharing with each other such information. The Court takes judicial notice of the traditional
practice in educational institutions wherein the professor directly furnishes his/her students their
grades. It is the contractual obligation of the school to timely inform and furnish sufficient notice
and information to each and every student as to whether he or she had already complied with all
the requirements for the conferment of a degree or whether they would be included among those
who will graduate. Although commencement exercises are but a formal ceremony, it nonetheless
is not an ordinary occasion, since such ceremony is the educational institution's way of
announcing to the whole world that the students included in the list of those who will be
conferred a degree during the baccalaureate ceremony have satisfied all the requirements for
such degree. Prior or subsequent to the ceremony, the school has the obligation to promptly
inform the student of any problem involving the latter's grades and performance and also most
importantly, of the procedures for remedying the same.
Petitioner, in belatedly informing respondent of the result of the removal examination,
particularly at a time when he had already commenced preparing for the bar exams, cannot be
said to have acted in good faith. Absence of good faith must be sufficiently established for a
successful prosecution by the aggrieved party in a suit for abuse of right under Article 19 of the
Civil Code. Good faith connotes an honest intention to abstain from taking undue
advantage of another, even though the forms and technicalities of the law, together with the
absence of all information or belief of facts, would render the transaction unconscientious.
Students do not exercise control, much less influence, over the way an educational institution
should run its affairs, particularly in disciplining its professors and teachers and ensuring their
compliance with the school's rules and orders. Being the party that hired them, it is the school
that exercises general supervision and exclusive control over the professors with respect to the

submission of reports involving the students' standing. Exclusive control means that no other
person or entity had any control over the instrumentality which caused the damage or injury.6
The college dean is the senior officer responsible for the operation of an academic program,
enforcement of rules and regulations, and the supervision of faculty and student services.7 He
must see to it that his own professors and teachers, regardless of their status or position outside
of the university, must comply with the rules set by the latter. The negligent act of a professor
who fails to observe the rules of the school, for instance by not promptly submitting a student's
grade, is not only imputable to the professor but is an act of the school, being his employer.
Schools and professors cannot just take students for granted and be indifferent to them, for
without the latter, the former are useless.
Educational institutions are duty-bound to inform the students of their academic status and
not wait for the latter to inquire from the former. The conscious indifference of a person to
the rights or welfare of the person/persons who may be affected by his act or omission can
support a claim for damages.10 Want of care to the conscious disregard of civil obligations
coupled with a conscious knowledge of the cause naturally calculated to produce them would
make the erring party liable.
Petitioner ought to have known that time was of the essence in the performance of its obligation
to inform respondent of his grade. It cannot feign ignorance that respondent will not prepare
himself for the bar exams since that is precisely the immediate concern after graduation of an
LL.B. graduate. It failed to act seasonably. Petitioner cannot just give out its student's grades at
any time because a student has to comply with certain deadlines set by the Supreme Court on the
submission of requirements for taking the bar. Petitioner's liability arose from its failure to
promptly inform respondent of the result of an examination and in misleading the latter into
believing that he had satisfied all requirements for the course.

Pantaleon vs American Express

Facts:
In October 1991, Pantaleon, together with his wife (Julialinda), daughter (Regina), and son
(Adrian Roberto), went on a guided European tour. On October 25, 1991, the tour group arrived
in Amsterdam. Due to their late arrival, they postponed the tour of the city for the following day.
The next day, the group began their sightseeing at around 8:50 a.m. with a trip to the Coster
Diamond House (Coster). To have enough time for take a guided city tour of Amsterdam before
their departure scheduled on that day, the tour group planned to leave Coster by 9:30 a.m. at the
latest.
While at Coster, Mrs. Pantaleon decided to purchase some diamond pieces worth a total of
US$13,826.00. Pantaleon presented his American Express credit card to the sales clerk to pay for
this purchase. He did this at around 9:15 a.m. The sales clerk swiped the credit card and asked
Pantaleon to sign the charge slip, which was then electronically referred to
AMEXs Amsterdam office at 9:20 a.m.

When the Pantaleons finally returned to the tour bus, they found their travel companions visibly
irritated. This irritation intensified when the tour guide announced that they would have to cancel
the tour because of lack of time as they all had to be in Calais, Belgium by 3 p.m. to catch the
ferry to London.[6]
From the records, it appears that after Pantaleons purchase was transmitted for approval to
AMEXs Amsterdam office at 9:20 a.m.; was referred to AMEXs Manila office at 9:33 a.m.; and
was approved by the Manila office at 10:19 a.m. At 10:38 a.m., AMEXs Manila office finally
transmitted the Approval Code to AMEXs Amsterdam office. In all, it took AMEX a total of 78
minutes to approve Pantaleons purchase and to transmit the approval to the jewelry store.[
After the trip to Europe, the Pantaleon family proceeded to the United States. Again, Pantaleon
experienced delay in securing approval for purchases using his American Express credit card on
two separate occasions. He experienced the first delay when he wanted to purchase golf
equipment in the amount of US$1,475.00 at the Richard Metz Golf Studio in New
York on October 30, 1991. Another delay occurred when he wanted to purchase childrens shoes
worth US$87.00 at the Quiency Market in Boston on November 3, 1991.
After the Amsterdam incident that happened involving the delay of American Express Card to
approve his credit card purchases worth US$13,826.00 at the Coster store, Pantaleon commenced
a complaint for moral and exemplary damages before the RTC against American Express. He
said that he and his family experienced inconvenience and humiliation due to the delays in credit
authorization. RTC rendered a decision in favor of Pantaleon. CA reversed the award of damages
in favor of Pantaleon, holding that AmEx had not breached its obligations to Pantaleon, as the
purchase at Coster deviated from Pantaleon's established charge purchase pattern.
Issue:
1. Whether or not AmEx had committed a breach of its obligations to Pantaleon.- Yes
2. Whether or not AmEx is liable for damages.- Yes
Ruling:
In the context of a credit card relationship, although there is neither a contractual stipulation nor
a specific law requiring the credit card issuer to act on the credit card holders offer within a
definite period of time, these principles provide the standard by which to judge AMEXs actions.
It is an elementary rule in our jurisdiction that good faith is presumed and that the burden of
proving bad faith rests upon the party alleging it.[40] Although it took AMEX some time before it
approved Pantaleons three charge requests, we find no evidence to suggest that it acted with
deliberate intent to cause Pantaleon any loss or injury, or acted in a manner that was contrary to
morals, good customs or public policy. We give credence to AMEXs claim that its review

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