Professional Documents
Culture Documents
L-68385 May 12, 1989 Meanwhile, on January 18, 1977, the decedent's will had been admitted to
probate in the Circuit Court of Oregon 6Ward Graham, the designated
ILDEFONSO O. ELEGADO, as Ancillary Administrator of the Testate executor, then appointed Ildefonso Elegado, the herein petitioner, as his
Estate of the late WARREN TAYLOR GRAHAM, petitioner attorney-in-fact for the allowance of the will in the Philippines.7
vs.
HON. COURT OF TAX APPEALS and COMMISSIONER OF INTERNAL Pursuant to such authority, the petitioner commenced probate proceedings in
REVENUE respondents. the Court of First Instance of Rizal. 8The will was allowed on December 18,
1978, with the petitioner as ancillary administrator. 9 As such, he filed a second
Agrava, Lucero & Gineta for petitioners. estate tax return with the Bureau of Internal Revenue on June 4, 1980.10
The Office of the Solictor General for public respondents. On the basis of this second return, the Commissioner imposed an assessment
on the estate in the amount of P72,948.87.11 This was protested on behalf of
the estate by the Agrava, Lucero and Gineta Law Office on August 13, 1980. 12
While this protest was pending, the Commissioner filed in the probate
CRUZ, J.: proceedings a motion for the allowance of the basic estate tax of P96,509.35
as assessed on February 9, 1978.13 He said that this liability had not yet been
What the petitioner presents as a rather complicated problem is in reality a paid although the assessment had long become final and executory.
very simple question from the viewpoint of the Solicitor General. We agree with
the latter. There is actually only one issue to be resolved in this action. That The petitioner regarded this motion as an implied denial of the protest filed on
issue is whether or not the respondent Court of Tax Appeals erred in August 13, 1980, against the second assessment of P72,948.87. 14 On this
dismissing the petitioner's appeal on grounds of jurisdiction and lack of a cause understanding, he filed on September 15, 1981, a petition for review with the
of action. Court of Tax Appeals challenging the said assessment. 15
Appeal from what? That indeed is the question. The Commissioner did not immediately answer (in fact, as the petitioner
stressed, no answer was filed during a delay of 195 days) and in the end
But first the facts. instead cancelled the protested assessment in a letter to the decedent's estate
dated March 31, 1982.16 This cancellation was notified to the Court of Tax
On March 14, 1976, Warren Taylor Graham, an American national formerly Appeals in a motion to dismiss on the ground that the protest had become
resident in the Philippines, died in Oregon, U.S.A. 1 As he left certain shares of moot and academic.17
stock in the Philippines, his son, Ward Graham, filed an estate tax return on
September 16, 1976, with the Philippine Revenue Representative in San The motion was granted and the petition dismissed on April 25, 1984. 18 The
Francisco, U.S.A. 2 petitioner then came to this Court oncertiorari under Rule 45 of the Rules of
Court.
On the basis of this return, the respondent Commissioner of Internal Revenue
assessed the decedent's estate an estate tax in the amount of P96,509.35 on The petitioner raises three basic questions, to wit, (1) whether the shares of
February 9, 1978.3 This assessment was protested on March 7, 1978, by the stocks left by the decedent should be treated as his exclusive, and not
law firm of Bump, Young and Walker on behalf of the estate . 4 The protest was conjugal, property; (2) whether the said stocks should be assessed as of the
denied by the Commissioner on July 7, 1978.5 No further action was taken by time of the owner's death or six months thereafter; and (3) whether the appeal
the estate in pursuit of that protest. filed with the respondent court should be considered moot and academic.
Estate of WARREN T. GRAHAM c/o Mr. ILDEFENSO O. ELEGADO Ancillary The petitioner argues that the issuance of the second assessment on July 3,
Administrator Philex Building cor. Brixton & Fairlane Sts. Pasig, Metro Manila 1980, had the effect of canceling the first assessment of February 9, 1978, and
that the subsequent cancellation of the second assessment did not have the
Sir: effect of automatically reviving the first. Moreover, the first assessment is not
binding on him because it was based on a return filed by foreign lawyers who
had no knowledge of our tax laws or access to the Court of Tax Appeals.
This is with regard to the estate of the late WARREN
TAYLOR GRAHAM, who died a resident of Oregon, U.S.A.
on March 14, 1976. It appears that two (2) letters of demand The petitioner is clutching at straws.
were issued by this Bureau. One is for the amount of
P96,509.35 based on the first return filed, and the other in It is noted that in the letter of July 3, 1980, imposing the second assessment of
the amount of P72,948.87, based on the second return filed. P72,948.87, the Commissioner made it clear that "the aforesaid amount is
considered provisional only based on the estate tax return filed subject to
It appears that the first assessment of P96,509.35 was investigation by this Office for final determination of the correct estate tax due
issued on February 9, 1978 on the basis of the estate tax from the estate. Any amount that may be found due after said investigation will
return filed on September 16, 1976. The said assessment be assessed and collected later." 21 It is illogical to suggest that
was, however, protested in a letter dated March 7, 1978 but aprovisional assessment can supersede an earlier assessment which had
was denied on July 7, 1978. Since no appeal was made clearly become final and executory.
within the regulatory period, the same has become final.
The second contention is no less flimsy. The petitioner cannot be serious when
In view thereof, it is requested that you settle the aforesaid he argues that the first assessment was invalid because the foreign lawyers
assessment for P96,509.35 within fifteen (15) days upon who filed the return on which it was based were not familiar with our tax laws
receipt hereof to the Receivable Accounts Division, this and procedure. Is the petitioner suggesting that they are excused from
Bureau, BIR National Office Building, Diliman, Quezon City. compliance therewith because of their ignorance?
The assessment for P72,949.57 dated July 3, 1980, referred
to above is hereby cancelled. If our own lawyers and taxpayers cannot claim a similar preference because
they are not allowed to claim a like ignorance, it stands to reason that
Very truly yours, foreigners cannot be any less bound by our own laws in our own country. A
more obvious and shallow discrimination than that suggested by the petitioner
is indeed difficult to find.
(SGD.) RUBEN B. ANCHETA Acting Commissioner 19
But the most compelling consideration in this case is the fact that the first
It is obvious from the express cancellation of the second assessment for assessment is already final and executory and can no longer be questioned at
P72,948.87 that the petitioner had been deprived of a cause of action as it was this late hour. The assessment was made on February 9, 1978. It was
precisely from this assessment that he was appealing. protested on March 7, 1978. The protest was denied on July 7, 1978. As no
further action was taken thereon by the decedent's estate, there is no question
In its decision, the Court of Tax Appeals said that the petition questioning the that the assessment has become final and executory.
assessment of July 3, 1980, was "premature" since the protest to the
assessment had not yet been resolved.20 As a matter of fact it had: the said In fact, the law firm that had lodged the protest appears to have accepted its
assessment had been cancelled by virtue of the above-quoted letter. The denial. In his motion with the probate court, the respondent Commissioner
respondent court was on surer ground, however, when it followed with the
stressed that "in a letter dated January 29, 1980, the Estate of Warren Taylor
Graham thru the aforesaid foreign law firm informed claimant that they have
paid said tax liability thru the Agrava, Velarde, Lucero and Puno, Philippine law
firm of 313 Buendia Avenue Ext., Makati, Metro Manila that initiated the instant
ancillary proceedings" although he added that such payment had not yet been
received.22 This letter was an acknowledgment by the estate of the validity and
finality of the first assessment. Significantly, it has not been denied by the
petitioner.
In view of the finality of the first assessment, the petitioner cannot now raise
the question of its validity before this Court any more than he could have done
so before the Court of Tax Appeals. What the estate of the decedent should
have done earlier, following the denial of its protest on July 7, 1978, was to
appeal to the Court of Tax Appeals within the reglementary period of 30 days
after it received notice of said denial. It was in such appeal that the petitioner
could then have raised the first two issues he now raises without basis in the
present petition.
The question of whether or not the shares of stock left by the decedent should
be considered conjugal property or belonging to him alone is immaterial in
these proceedings. So too is the time at which the assessment of these shares
of stock should have been made by the BIR. These questions were not
resolved by the Court of Tax Appeals because it had no jurisdiction to act on
the petitioner's appeal from an assessment that had already been cancelled.
The assessment being no longer controversial or reviewable, there was no
justification for the respondent court to rule on the petition except to dismiss it.
With regard to the P45,000 damages awarded to the defendants, Dr. Mamerto
Escaño and Mena Escaño, by the court below, we opine that the same are
excessive. While the filing of this unfounded suit must have wounded said
defendants' feelings and caused them anxiety, the same could in no way have
seriously injured their reputation, or otherwise prejudiced them, lawsuits having
become a common occurrence in present society. What is important, and has
been correctly established in the decision of the court below, is that said
defendants were not guilty of any improper conduct in the whole deplorable
affair. This Court, therefore, reduces the damages awarded to P5,000 only.
(1) That a foreign divorce between Filipino citizens, sought and decreed after
the effectivity of the present Civil Code (Rep. Act 386), is not entitled to
recognition as valid in this jurisdiction; and neither is the marriage contracted
with another party by the divorced consort, subsequently to the foreign decree
of divorce, entitled to validity in the country;
(2) That the remarriage of divorced wife and her co-habitation with a person
other than the lawful husband entitle the latter to a decree of legal separation
conformably to Philippine law;
G.R. No. 182894 April 22, 2014 Claiming that they were deprived of the chance to view the remains of Atty.
Adriano before he was buried and that his burial at the Manila Memorial Park
FE FLORO VALINO, Petitioner, was contrary to his wishes, respondents commenced suit against Valino
vs. praying that they be indemnified for actual, moral and exemplary damages and
ROSARIO D. ADRIANO, FLORANTE D. ADRIANO, RUBEN D. ADRIANO, attorney’s fees and that the remains of Atty. Adriano be exhumed and
MARIA TERESA ADRIANO ONGOCO, VICTORIA ADRIANO BAYONA, and transferred to the family plot at the Holy Cross Memorial Cemetery in
LEAH ANTONETTE D. ADRIANO, Respondents. Novaliches, Quezon City.
DECISION In her defense, Valino countered that Rosario and Atty. Adriano had been
separated for more than twenty (20) years before he courted her. Valino
claimed that throughout the time they were together, he had introduced her to
MENDOZA, J.: his friends and associates as his wife. Although they were living together,
Valino admitted that he never forgot his obligation to support the respondents.
Challenged in this petition is the October 2, 2006 Decision 1 and the May 9, She contended that, unlike Rosario, she took good care of Atty. Adriano and
2008 Resolution2 of the Court of Appeals (CA) in CA-G.R. CV No. 61613, paid for all his medical expenses when he got seriously ill. She also claimed
which reversed the October 1, 1998 Decision3 of the Regional Trial Court, that despite knowing that Atty. Adriano was in a coma and dying, Rosario still
Branch 77, Quezon City (RTC) which ruled that petitioner Fe Floro Valino left for the United States. According to Valino, it was Atty. Adriano’s last wish
(Valino) was entitled to the remains of the decedent. that his remains be interred in the Valino family mausoleum at the Manila
Memorial Park.
The Facts:
Valino further claimed that she had suffered damages as result of the suit
Atty. Adriano Adriano (Atty. Adriano), a partner in the Pelaez Adriano and brought by respondents. Thus, she prayed that she be awarded moral and
Gregorio Law Office, married respondent Rosario Adriano (Rosario) on exemplary damages and attorney’s fees.
November 15, 1955. The couple had two (2) sons, Florante and Ruben
Adriano; three (3) daughters, Rosario, Victoria and Maria Teresa; and one (1) Decision of the RTC
adopted daughter, Leah Antonette.
The RTC dismissed the complaint of respondents for lack of merit as well as
The marriage of Atty. Adriano and Rosario, however, turned sour and they the counterclaim of Valino after it found them to have not been sufficiently
were eventually separated-in-fact. Years later, Atty. Adriano courted Valino, proven.
one of his clients, until they decided to live together as husband and wife.
Despite such arrangement, he continued to provide financial support to The RTC opined that because Valino lived with Atty. Adriano for a very long
Rosario and their children (respondents). time, she knew very well that it was his wish to be buried at the Manila
Memorial Park. Taking into consideration the fact that Rosario left for the
In 1992, Atty. Adriano died of acute emphysema. At that time, Rosario was in United States at the time that he was fighting his illness, the trial court
the United States spending Christmas with her children. As none of the family concluded that Rosario did not show love and care for him. Considering also
members was around, Valino took it upon herself to shoulder the funeral and that it was Valino who performed all the duties and responsibilities of a wife,
burial expenses for Atty. Adriano. When Rosario learned about the death of the RTC wrote that it could be reasonably presumed that he wished to be
her husband, she immediately called Valino and requested that she delay the buried in the Valino family mausoleum.4
interment for a few days but her request was not heeded. The remains of Atty.
Adriano were then interred at the mausoleum of the family of Valino at the In disposing of the case, the RTC noted that the exhumation and the transfer
Manila Memorial Park. Respondents were not able to attend the interment. of the body of Atty. Adriano to the Adriano family plot at the Holy Cross
Memorial Cemetery in Novaliches, Quezon City, would not serve any useful
purpose and so he should be spared and respected.5 Decision of the CA
On appeal, the CA reversed and set aside the RTC decision and directed (2) The descendants in the nearest degree;
Valino to have the remains of Atty. Adriano exhumed at the expense of
respondents. It likewise directed respondents, at their expense, to transfer, (3) The ascendants in the nearest degree; and
transport and inter the remains of the decedent in the family plot at the Holy
Cross Memorial Park in Novaliches, Quezon City.
(4) The brothers and sisters. (294a)
In reaching said determination, the CA explained that Rosario, being the legal
wife, was entitled to the custody of the remains of her deceased husband. [Emphasis supplied]
Citing Article 305 of the New Civil Code in relation to Article 199 of the Family
Code, it was the considered view of the appellate court that the law gave the Further, Article 308 of the Civil Code provides:
surviving spouse not only the duty but also the right to make arrangements for
the funeral of her husband. For the CA, Rosario was still entitled to such right Art. 308. No human remains shall be retained, interred, disposed of or
on the ground of her subsisting marriage with Atty. Adriano at the time of the exhumed without the consent of the persons mentioned in Articles 294 and
latter’s death, notwithstanding their 30-year separation in fact. 305. [Emphases supplied]
Like the RTC, however, the CA did not award damages in favor of respondents In this connection, Section 1103 of the Revised Administrative Code provides:
due to the good intentions shown by Valino in giving the deceased a decent
burial when the wife and the family were in the United States. All other claims
for damages were similarly dismissed. Section 1103. Persons charged with the duty of burial. – The immediate duty of
burying the body of a deceased person, regardless of the ultimate liability for
the expense thereof, shall devolve upon the persons herein below specified:
The Sole Issue
(a) If the deceased was a married man or woman, the duty of the burial shall
The lone legal issue in this petition is who between Rosario and Valino is devolve upon the surviving spouse if he or she possesses sufficient means to
entitled to the remains of Atty. Adriano. pay the necessary expenses;
Article 305 of the Civil Code, in relation to what is now Article 199 6 of the From the aforecited provisions, it is undeniable that the law simply confines the
Family Code, specifies the persons who have the right and duty to make right and duty to make funeral arrangements to the members of the family to
funeral arrangements for the deceased. Thus: the exclusion of one’s common law partner. In Tomas Eugenio, Sr. v. Velez, 7 a
petition for habeas corpus was filed by the brothers and sisters of the late
Art. 305. The duty and the right to make arrangements for the funeral of a Vitaliana Vargas against her lover, Tomas Eugenio, Sr., alleging that the latter
relative shall be in accordance with the order established for support, under forcibly took her and confined her in his residence. It appearing that she
Article 294. In case of descendants of the same degree, or of brothers and already died of heart failure due to toxemia of pregnancy, Tomas Eugenio, Sr.
sisters, the oldest shall be preferred. In case of ascendants, the paternal shall sought the dismissal of the petition for lack of jurisdiction and claimed the right
have a better right. [Emphases supplied] to bury the deceased, as the common-law husband.
Art. 199. Whenever two or more persons are obliged to give support, the In its decision, the Court resolved that the trial court continued to have
liability shall devolve upon the following persons in the order herein provided: jurisdiction over the case notwithstanding the death of Vitaliana Vargas. As to
the claim of Tomas Eugenio, Sr. that he should be considered a "spouse"
(1) The spouse; having the right and duty to make funeral arrangements for his common-law
wife, the Court ruled:
x x x Indeed, Philippine Law does not recognize common law marriages. A forgiveness once a family member joins his Creator. Notably, it is an
man and woman not legally married who cohabit for many years as husband undisputed fact that the respondents wasted no time in making frantic pleas to
and wife, who represent themselves to the public as husband and wife, and Valino for the delay of the interment for a few days so they could attend the
who are reputed to be husband and wife in the community where they live may service and view the remains of the deceased. As soon as they came to know
be considered legally married in common law jurisdictions but not in the about Atty. Adriano’s death in the morning of December 19, 1992 (December
Philippines. 20, 1992 in the Philippines), the respondents immediately contacted Valino
and the Arlington Memorial Chapel to express their request, but to no avail.
While it is true that our laws do not just brush aside the fact that such
relationships are present in our society, and that they produce a community of Valino insists that the expressed wishes of the deceased should nevertheless
properties and interests which is governed by law, authority exists in case law prevail pursuant to Article 307 of the Civil Code. Valino’s own testimony that it
to the effect that such form of co-ownership requires that the man and woman was Atty. Adriano’s wish to be buried in their family plot is being relied upon
living together must not in any way be incapacitated to contract marriage. In heavily. It should be noted, however, that other than Valino’s claim that Atty.
any case, herein petitioner has a subsisting marriage with another woman, a Adriano wished to be buried at the Manila Memorial Park, no other evidence
legal impediment which disqualified him from even legally marrying Vitaliana. was presented to corroborate such claim. Considering that Rosario equally
In Santero vs. CFI of Cavite, the Court, thru Mr. Justice Paras, interpreting Art. claims that Atty. Adriano wished to be buried in the Adriano family plot in
188 of the Civil Code (Support of Surviving Spouse and Children During Novaliches, it becomes apparent that the supposed burial wish of Atty. Adriano
Liquidation of Inventoried Property) stated: "Be it noted, however, that with was unclear and undefinite. Considering this ambiguity as to the true wishes of
respect to 'spouse,' the same must be the legitimate 'spouse' (not common-law the deceased, it is the law that supplies the presumption as to his intent. No
spouses)." presumption can be said to have been created in Valino’s favor, solely on
account of a long-time relationship with Atty. Adriano.
There is a view that under Article 332 of the Revised Penal Code, the term
"spouse" embraces common law relation for purposes of exemption from Moreover, it cannot be surmised that just because Rosario was unavailable to
criminal liability in cases of theft, swindling and malicious mischief committed bury her husband when she died, she had already renounced her right to do
or caused mutually by spouses. The Penal Code article, it is said, makes no so. Verily, in the same vein that the right and duty to make funeral
distinction between a couple whose cohabitation is sanctioned by a sacrament arrangements will not be considered as having been waived or renounced, the
or legal tie and another who are husband and wife de facto. But this view right to deprive a legitimate spouse of her legal right to bury the remains of her
cannot even apply to the facts of the case at bar. We hold that the provisions deceased husband should not be readily presumed to have been exercised,
of the Civil Code, unless expressly providing to the contrary as in Article 144, except upon clear and satisfactory proof of conduct indicative of a free and
when referring to a "spouse" contemplate a lawfully wedded spouse. Petitioner voluntary intent of the deceased to that end. Should there be any doubt as to
vis-a-vis Vitaliana was not a lawfully-wedded spouse to her; in fact, he was not the true intent of the deceased, the law favors the legitimate family. Here,
legally capacitated to marry her in her lifetime.8 [Emphases supplied] Rosario’s keenness to exercise the rights and obligations accorded to the legal
wife was even bolstered by the fact that she was joined by the children in this
As applied to this case, it is clear that the law gives the right and duty to make case.
funeral arrangements to Rosario, she being the surviving legal wife of Atty.
Adriano. The fact that she was living separately from her husband and was in Even assuming, ex gratia argumenti, that Atty. Adriano truly wished to be
the United States when he died has no controlling significance. To say that buried in the Valino family plot at the Manila Memorial Park, the result remains
Rosario had, in effect, waived or renounced, expressly or impliedly, her right the same. Article 307 of the Civil Code provides:
and duty to make arrangements for the funeral of her deceased husband is
baseless. The right and duty to make funeral arrangements, like any other Art. 307. The funeral shall be in accordance with the expressed wishes of the
right, will not be considered as having been waived or renounced, except upon deceased. In the absence of such expression, his religious beliefs or affiliation
clear and satisfactory proof of conduct indicative of a free and voluntary intent shall determine the funeral rites. In case of doubt, the form of the funeral shall
to that end.9 While there was disaffection between Atty. Adriano and Rosario be decided upon by the person obliged to make arrangements for the same,
and their children when he was still alive, the Court also recognizes that after consulting the other members of the family.
human compassion, more often than not, opens the door to mercy and
From its terms, it is apparent that Article 307 simply seeks to prescribe the As for Valino’s contention that there is no point in exhuming and transferring
"form of the funeral rites" that should govern in the burial of the deceased. As the remains of Atty. Adriano, it should be said that the burial of his remains in a
thoroughly explained earlier, the right and duty to make funeral arrangements place other than the Adriano family plot in Novaliches runs counter to the
reside in the persons specified in Article 305 in relation to Article 199 of the wishes of his family. It does not only violate their right provided by law, but it
Family Code. Even if Article 307 were to be interpreted to include the place of also disrespects the family because the remains of the patriarch are buried in
burial among those on which the wishes of the deceased shall be followed, Dr. the family plot of his live-in partner.
Arturo M. Tolentino (Dr. Tolentino), an eminent authority on civil law,
commented that it is generally recognized that any inferences as to the wishes It is generally recognized that the corpse of an individual is outside the
of the deceased should be established by some form of testamentary commerce of man. However, the law recognizes that a certain right of
disposition.10 As Article 307 itself provides, the wishes of the deceased must possession over the corpse exists, for the purpose of a decent burial, and for
be expressly provided. It cannot be inferred lightly, such as from the the exclusion of the intrusion by third persons who have no legitimate interest
circumstance that Atty. Adriano spent his last remaining days with Valino. It in it. This quasi-property right, arising out of the duty of those obligated by law
bears stressing once more that other than Valino’s claim that Atty. Adriano to bury their dead, also authorizes them to take possession of the dead body
wished to be buried at the Valino family plot, no other evidence was presented for purposes of burial to have it remain in its final resting place, or to even
to corroborate it. transfer it to a proper place where the memory of the dead may receive the
respect of the living. This is a family right. There can be no doubt that persons
At any rate, it should be remembered that the wishes of the decedent with having this right may recover the corpse from third persons.13
respect to his funeral are not absolute. As Dr. Tolentino further wrote:
All this notwithstanding, the Court finds laudable the acts of Valino in taking
The dispositions or wishes of the deceased in relation to his funeral, must not care of Atty. Adriano during his final moments and giving him a proper burial.
be contrary to law. They must not violate the legal and reglamentary provisions For her sacrifices, it would indeed be unkind to assess actual or moral
concerning funerals and the disposition of the remains, whether as regards the damages against her. As aptly explained by the CA:
time and manner of disposition, or the place of burial, or the ceremony to be
observed.11 [Emphases supplied] The trial court found that there was good faith on the part of defendant-
appellee Fe Floro Valino, who, having lived with Atty. Adriano after he was
In this case, the wishes of the deceased with respect to his funeral are limited separated in fact from his wife, lovingly and caringly took care of the well-being
by Article 305 of the Civil Code in relation to Article 199 of the Family Code, of Atty. Adriano Adriano while he was alive and even took care of his remains
and subject the same to those charged with the right and duty to make the when he had died.
proper arrangements to bury the remains of their loved-one. As aptly explained
by the appellate court in its disquisition: On the issue of damages, plaintiffs-appellants are not entitled to actual
damages. Defendant-appellee Fe Floro Valino had all the good intentions in
The testimony of defendant-appellee Fe Floro Valino that it was the oral wish giving the remains of Atty. Adriano a decent burial when the wife and family
of Atty. Adriano Adriano that he be interred at the Floro family’s mausoleum at were all in the United States and could not attend to his burial. Actual damages
the Manila Memorial Park, must bend to the provisions of the law. Even are those awarded in satisfaction of, or in recompense for, loss or injury
assuming arguendo that it was the express wish of the deceased to be interred sustained. To be recoverable, they must not only be capable of proof but must
at the Manila Memorial Park, still, the law grants the duty and the right to actually be proven with a reasonable degree of certainty. In this case at bench,
decide what to do with the remains to the wife, in this case, plaintiff-appellant there was no iota of evidence presented to justify award of actual damages.
Rosario D. Adriano, as the surviving spouse, and not to defendant-appellee Fe
Floro Valino, who is not even in the list of those legally preferred, despite the Plaintiffs-appellants are not also entitled to moral and exemplary
fact that her intentions may have been very commendable. The law does not damages.1âwphi1 Moral damages may be recovered only if the plaintiff is able
even consider the emotional fact that husband and wife had, in this case at to satisfactorily prove the existence of the factual basis for the damages and its
bench, been separated-in-fact and had been living apart for more than 30 causal connection with the acts complained of because moral damages
years.12 although incapable of pecuniary estimation are designed not to impose a
penalty but to compensate for injury sustained and actual damages suffered.
No injury was caused to plaintiffs-appellants, nor was any intended by anyone
in this case. Exemplary damages, on the other hand, may only be awarded if
claimant is able to establish his right to moral, temperate, liquidated or
compensatory damages. Unfortunately, neither of the requirements to sustain
an award for either of these damages would appear to have been adequately
established by plaintiffs-appellants.
SO ORDERED.
G.R. No. 158907 February 12, 2007 On 24 December 1979, petitioner was arrested by the Marcos military by virtue
of an Arrest, Search and Seizure Order and detained for allegedly committing
EDUARDO B. OLAGUER, Petitioner, arson. During the petitioner’s detention, respondent Locsin ordered fellow
vs. respondent Purugganan to cancel the petitioner’s shares in the books of the
EMILIO PURUGGANAN, JR. AND RAUL LOCSIN, Respondents. corporation and to transfer them to respondent Locsin’s name. 7
DECISION As part of his scheme to defraud the petitioner, respondent Locsin sent
Rebecca Fernando, an employee of Businessday, to Camp Crame where the
petitioner was detained, to pretend to borrow Certificate of Stock No. 100 for
CHICO-NAZARIO, J.: the purpose of using it as additional collateral for Businessday’s then
outstanding loan with the National Investment and Development Corporation.
This is a Petition for Review on Certiorari, under Rule 45 of the Rules of Court, When Fernando returned the borrowed stock certificate, the word "cancelled"
assailing the Decision,1 dated 30 June 2003, promulgated by the Court of was already written therein. When the petitioner became upset, Fernando
Appeals, affirming the Decision of the Regional Trial Court, dated 26 July explained that this was merely a mistake committed by respondent Locsin’s
1995, dismissing the petitioner’s suit. secretary.8
The parties presented conflicting accounts of the facts. During the trial, petitioner also agreed to stipulate that from 1980 to 1982,
Businessday made regular deposits, each amounting to ₱10,000.00, to the
EDUARDO B. OLAGUER’S VERSION Metropolitan Bank and Trust Company accounts of Manuel and Genaro
Pantig, petitioner’s in-laws. The deposits were made on every 15th and 30th of
the month.9 Petitioner alleged that these funds consisted of his monthly salary,
Petitioner Eduardo B. Olaguer alleges that he was the owner of 60,000 shares which Businessday agreed to continue paying after his arrest for the financial
of stock of Businessday Corporation (Businessday) with a total par value of support of his family.10 After receiving a total of ₱600,000.00, the payments
₱600,000.00, with Certificates of Stock No. 005, No. 028, No. 034, No. 070, stopped. Thereafter, respondent Locsin and Fernando went to ask petitioner to
and No. 100.2 At the time he was employed with the corporation as Executive endorse and deliver the rest of his stock certificates to respondent Locsin, but
Vice-President of Businessday, and President of Businessday Information petitioner refused. 11
Systems and Services and of Businessday Marketing Corporation, petitioner,
together with respondent Raul Locsin (Locsin) and Enrique Joaquin (Joaquin),
was active in the political opposition against the Marcos On 16 January 1986, petitioner was finally released from detention. He then
dictatorship.3 Anticipating the possibility that petitioner would be arrested and discovered that he was no longer registered as stockholder of Businessday in
detained by the Marcos military, Locsin, Joaquin, and Hector Holifeña had an its corporate books. He also learned that Purugganan, as the Corporate
unwritten agreement that, in the event that petitioner was arrested, they would Secretary of Businessday, had already recorded the transfer of shares in favor
support the petitioner’s family by the continued payment of his of respondent Locsin, while petitioner was detained. When petitioner
salary.4 Petitioner also executed a Special Power of Attorney (SPA), on 26 demanded that respondents restore to him full ownership of his shares of
May 1979, appointing as his attorneys-in-fact Locsin, Joaquin and Hofileña for stock, they refused to do so. On 29 July 1986, petitioner filed a Complaint
the purpose of selling or transferring petitioner’s shares of stock with before the trial court against respondents Purugganan and Locsin to declare
Businessday. During the trial, petitioner testified that he agreed to execute the as illegal the sale of the shares of stock, to restore to the petitioner full
SPA in order to cancel his shares of stock, even before they are sold, for the ownership of the shares, and payment of damages. 12
purpose of concealing that he was a stockholder of Businessday, in the event
of a military crackdown against the opposition.5 The parties acknowledged the RESPONDENT RAUL LOCSIN’S VERSION
SPA before respondent Emilio Purugganan, Jr., who was then the Corporate
Secretary of Businessday, and at the same time, a notary public for Quezon In his version of the facts, respondent Locsin contended that petitioner
City.6 approached him and requested him to sell, and, if necessary, buy petitioner’s
shares of stock in Businessday, to assure support for petitioner’s family in the
event that something should happen to him, particularly if he was jailed, exiled respondent Locsin by his receipt of the purchase price, and his failure to raise
or forced to go underground.13 At the time petitioner was employed with any protest over the said sale.22 The Court of Appeals refused to credit the
Businessday, respondent Locsin was unaware that petitioner was part of a petitioner’s allegation that the money his wife received constituted his salary
group, Light-a-Fire Movement, which actively sought the overthrow of the from Businessday since the amount he received as his salary, ₱24,000.00 per
Marcos government through an armed struggle.14 He denied that he made any month, did not correspond to the amount he received during his detention,
arrangements to continue paying the petitioner’s salary in the event of the ₱20,000.00 per month (deposits of ₱10,000.00 on every 15th and 30th of each
latter’s imprisonment.15 month in the accounts of the petitioner’s in-laws). On the other hand, the total
amount received, ₱600,000.00, corresponds to the aggregate par value of
When petitioner was detained, respondent Locsin tried to sell petitioner’s petitioner’s shares in Businessday. Moreover, the financial condition of
shares, but nobody wanted to buy them. Petitioner’s reputation as an Businessday prevented it from granting any form of financial assistance in
oppositionist resulted in the poor financial condition of Businessday and favor of the petitioner, who was placed in an indefinite leave of absence, and,
discouraged any buyers for the shares of stock.16 In view of petitioner’s therefore, not entitled to any salary. 23
previous instructions, respondent Locsin decided to buy the shares
himself.1awphi1.net Although the capital deficiency suffered by Businessday The Court of Appeals also ruled that although the manner of the cancellation of
caused the book value of the shares to plummet below par value, respondent the petitioner’s certificates of stock and the subsequent issuance of the new
Locsin, nevertheless, bought the shares at par value. 17 However, he had to certificate of stock in favor of respondent Locsin was irregular, this irregularity
borrow from Businessday the funds he used in purchasing the shares from will not relieve petitioner of the consequences of a consummated sale. 24
petitioner, and had to pay the petitioner in installments of ₱10,000.00 every
15th and 30th of each month.18 Finally, the Court of Appeals affirmed the Decision of the trial court disallowing
respondent Locsin’s claims for moral and exemplary damages due to lack of
The trial court in its Decision, dated 26 July 1995, dismissed the Complaint supporting evidence.25
filed by the petitioner. It ruled that the sale of shares between petitioner and
respondent Locsin was valid. The trial court concluded that petitioner had Hence, the present petition, where the following issues were raised:
intended to sell the shares of stock to anyone, including respondent Locsin, in
order to provide for the needs of his family should he be jailed or forced to go
underground; and that the SPA drafted by the petitioner empowered I.
respondent Locsin, and two other agents, to sell the shares for such price and
under such terms and conditions that the agents may deem proper. It further THE APPELLATE COURT ERRED IN RULING THAT THERE WAS A
found that petitioner consented to have respondent Locsin buy the shares PERFECTED CONTRACT OF SALE BETWEEN PETITIONER AND MR.
himself. It also ruled that petitioner, through his wife, received from respondent LOCSIN OVER THE SHARES;
Locsin the amount of ₱600,000.00 as payment for the shares of stock.19 The
dispositive part of the trial court’s Decision reads: II.
WHEREFORE, for failure of the [herein petitioner] to prove by preponderance THE APPELLATE COURT ERRED IN RULING THAT PETITIONER
of evidence, his causes of action and of the facts alleged in his complaint, the CONSENTED TO THE ALLEGED SALE OF THE SHARES TO MR. LOCSIN;
instant suit is hereby ordered DISMISSED, without pronouncement as to costs.
III.
[Herein respondents’] counterclaims, however, are hereby DISMISSED,
likewise, for dearth of substantial evidentiary support. 20
THE APPELLATE COURT ERRED IN RULING THAT THE AMOUNTS
RECEIVED BY PETITIONER’S IN LAWS WERE NOT PETITIONER’S
On appeal, the Court of Appeals affirmed the Decision of the trial court that SALARY FROM THE CORPORATION BUT INSTALLMENT PAYMENTS FOR
there was a perfected contract of sale.21It further ruled that granting that there THE SHARES;
was no perfected contract of sale, petitioner, nevertheless, ratified the sale to
IV. ART. 38 Minority, insanity or imbecility, the state of being a deaf-mute,
prodigality and civil interdiction are mere restrictions on capacity to act, and do
THE APPELLATE COURT ERRED IN RULING THAT MR. LOCSIN WAS THE not exempt the incapacitated person, from certain obligations, as when the
PARTY TO THE ALLEGED SALE OF THE SHARES AND NOT THE latter arise from his acts or from property relations, such as easements.
CORPORATION; AND
Petitioner, thus, claims that his arrest and subsequent detention are not among
V. the instances covered by the terms "absence or incapacity," as provided under
the SPA he executed in favor of respondent Locsin.
THE APPELLATE COURT ERRED IN RULING THAT THE ALLEGED SALE
OF THE SHARES WAS VALID ALTHOUGH THE CANCELLATION OF THE Petitioner’s arguments are unpersuasive. It is a general rule that a power of
SHARES WAS IRREGULAR.26 attorney must be strictly construed; the instrument will be held to grant only
those powers that are specified, and the agent may neither go beyond nor
deviate from the power of attorney. However, the rule is not absolute and
The petition is without merit. should not be applied to the extent of destroying the very purpose of the
power. If the language will permit, the construction that should be adopted is
The first issue that the petitioner raised is that there was no valid sale since that which will carry out instead of defeat the purpose of the appointment.
respondent Locsin exceeded his authority under the SPA 27 issued in his, Clauses in a power of attorney that are repugnant to each other should be
Joaquin and Holifena’s favor. He alleged that the authority of the afore-named reconciled so as to give effect to the instrument in accordance with its general
agents to sell the shares of stock was limited to the following conditions: (1) in intent or predominant purpose. Furthermore, the instrument should always be
the event of the petitioner’s absence and incapacity; and (2) for the limited deemed to give such powers as essential or usual in effectuating the express
purpose of applying the proceeds of the sale to the satisfaction of petitioner’s powers.31
subsisting obligations with the companies adverted to in the SPA.28
In the present case, limiting the definitions of "absence" to that provided under
Petitioner sought to impose a strict construction of the SPA by limiting the Article 381 of the Civil Code and of "incapacity" under Article 38 of the same
definition of the word "absence" to a condition wherein "a person disappears Code negates the effect of the power of attorney by creating absurd, if not
from his domicile, his whereabouts being unknown, without leaving an agent to impossible, legal situations. Article 381 provides the necessarily stringent
administer his property,"29 citing Article 381 of the Civil Code, the entire standards that would justify the appointment of a representative by a judge.
provision hereunder quoted: Among the standards the said article enumerates is that no agent has been
appointed to administer the property. In the present case, petitioner himself
ART 381. When a person disappears from his domicile, his whereabouts being had already authorized agents to do specific acts of administration and thus,
unknown, and without leaving an agent to administer his property, the judge, at no longer necessitated the appointment of one by the court. Likewise, limiting
the instance of an interested party, a relative, or a friend, may appoint a person the construction of "incapacity" to "minority, insanity, imbecility, the state of
to represent him in all that may be necessary. being a deaf-mute, prodigality and civil interdiction," as provided under Article
38, would render the SPA ineffective. Article 1919(3) of the Civil Code provides
that the death, civil interdiction, insanity or insolvency of the principal or of the
This same rule shall be observed when under similar circumstances the power agent extinguishes the agency. It would be equally incongruous, if not outright
conferred by the absentee has expired. impossible, for the petitioner to require himself to qualify as a minor, an
imbecile, a deaf-mute, or a prodigal before the SPA becomes operative. In
Petitioner also puts forward that the word "incapacity" would be limited to mean such cases, not only would he be prevented from appointing an agent, he
"minority, insanity, imbecility, the state of being deaf-mute, prodigality and civil himself would be unable to administer his property.
interdiction."30 He cites Article 38 of the Civil Code, in support of this definition,
which is hereunder quoted: On the other hand, defining the terms "absence" and "incapacity" by their
everyday usage makes for a reasonable construction, that is, "the state of not
being present" and the "inability to act," given the context that the SPA In addition, petitioner made two inconsistent statements when he alleged that
authorizes the agents to attend stockholders’ meetings and vote in behalf of (1) respondent Locsin had not asked the petitioner to endorse and deliver the
petitioner, to sell the shares of stock, and other related acts. This construction shares of stock, and (2) when Rebecca Fernando asked the petitioner to
covers the situation wherein petitioner was arrested and detained. This much endorse and deliver the certificates of stock, but petitioner refused and even
is admitted by petitioner in his testimony.32 became upset.33 In either case, both statements only prove that petitioner
refused to honor his part as seller of the shares, even after receiving payments
Petitioner’s contention that the shares may only be sold for the sole purpose of from the buyer. Had the petitioner not known of or given his consent to the
applying the proceeds of the sale to the satisfaction of petitioner’s subsisting sale, he would have given back the payments as soon as Fernando asked him
obligations to the company is far-fetched. The construction, which will carry out to endorse and deliver the certificates of stock, an incident which unequivocally
the purpose, is that which should be applied. Petitioner had not submitted confirmed that the funds he received, through his wife and his in-laws, were
evidence that he was in debt with Businessday at the time he had executed the intended as payment for his shares of stocks. Instead, petitioner held on to the
SPA. Nor could he have considered incurring any debts since he admitted that, proceeds of the sale after it had been made clear to him that respondent
at the time of its execution, he was concerned about his possible arrest, death Locsin had considered the ₱600,000.00 as payment for the shares, and asked
and disappearance. The language of the SPA clearly enumerates, as among petitioner, through Fernando, to endorse and deliver the stock certificates for
those acts that the agents were authorized to do, the act of applying the cancellation.
proceeds of the sale of the shares to any obligations petitioner might have
against the Businessday group of companies. This interpretation is supported As regards the third issue, petitioner’s allegation that the installment payments
by the use of the word "and" in enumerating the authorized acts, instead of he was adjudged to have received for the shares were actually salaries which
phrases such as "only for," "for the purpose of," "in order to" or any similar Businessday promised to pay him during his detention is unsupported and
terms to indicate that the petitioner intended that the SPA be used only for a implausible. Petitioner received ₱20,000.00 per month through his in-laws; this
limited purpose, that of paying any liabilities with the Businessday group of amount does not correspond to his monthly salary at ₱24,000.00. 34 Nor does
companies. the amount received correspond to the amount which Businessday was
supposed to be obliged to pay petitioner, which was only ₱45,000.00 to
Secondly, petitioner argued that the records failed to show that he gave his ₱60,000.00 per annum.35 Secondly, the petitioner’s wife did not receive funds
consent to the sale of the shares to respondent Locsin for the price of from respondent Locsin or Businessday for the entire duration of petitioner’s
₱600,000.00. This argument is unsustainable. Petitioner received from detention. Instead, when the total amount received by the petitioner reached
respondent Locsin, through his wife and in-laws, the installment payments for a the aggregate amount of his shares at par value -- ₱600,000.00 -- the
total of ₱600,000.00 from 1980 to 1982, without any protest or complaint. It payments stopped. Petitioner even testified that when respondent Locsin
was only four years after 1982 when petitioner demanded the return of the denied knowing the petitioner soon after his arrest, he believed respondent
shares. The petitioner’s claim that he did not instruct respondent Locsin to Locsin’s commitment to pay his salaries during his detention to be nothing
deposit the money to the bank accounts of his in-laws fails to prove that more than lip-service.36
petitioner did not give his consent to the sale since respondent Locsin was
authorized, under the SPA, to negotiate the terms and conditions of the sale Granting that petitioner was able to prove his allegations, such an act of
including the manner of payment. Moreover, had respondent Locsin given the gratuity, on the part of Businessday in favor of petitioner, would be void. An
proceeds directly to the petitioner, as the latter suggested in this petition, the arrangement whereby petitioner will receive "salaries" for work he will not
proceeds were likely to have been included among petitioner’s properties perform, which is not a demandable debt since petitioner was on an extended
which were confiscated by the military. Instead, respondent Locsin deposited leave of absence, constitutes a donation under Article 726 37 of the Civil Code.
the money in the bank accounts of petitioner’s in-laws, and consequently, Under Article 748 of the Civil Code, if the value of the personal property
assured that the petitioner’s wife received these amounts. Article 1882 of the donated exceeds ₱5,000.00, the donation and the acceptance shall have to be
Civil Code provides that the limits of an agent’s authority shall not be made in writing. Otherwise, the donation will be void. In the present case,
considered exceeded should it have been performed in a manner more petitioner admitted in his testimony38 that such arrangement was not made in
advantageous to the principal than that specified by him. writing and, hence, is void.
The fact that some of the deposit slips and communications made to agent which might affect the transaction.40 The prohibition against agents
petitioner’s wife contain the phrase "household expenses" does not disprove purchasing property in their hands for sale or management is, however,
the sale of the shares. The money was being deposited to the bank accounts clearly, not absolute. It does not apply where the principal consents to the sale
of the petitioner’s in-laws, and not to the account of the petitioner or his wife, of the property in the hands of the agent or administrator.>41
precisely because some of his property had already been confiscated by the
military. Had they used the phrase "sale of shares," it would have defeated the In the present case, the parties have conflicting allegations. While respondent
purpose of not using their own bank accounts, which was to conceal from the Locsin averred that petitioner had permitted him to purchase petitioner’s
military any transaction involving the petitioner’s property. shares, petitioner vehemently denies having known of the transaction.
However, records show that petitioner’s position is less credible than that taken
Petitioner raised as his fourth issue that granting that there was a sale, by respondent Locsin given petitioner’s contemporaneous and subsequent
Businessday, and not respondent Locsin, was the party to the transaction. The acts.42 In 1980, when Fernando returned a stock certificate she borrowed from
curious facts that the payments were received on the 15th and 30th of each the petitioner, it was marked "cancelled." Although the petitioner alleged that
month and that the payor named in the checks was Businessday, were he was furious when he saw the word cancelled, he had not demanded the
adequately explained by respondent Locsin. Respondent Locsin had obtained issuance of a new certificate in his name. Instead of having been put on his
cash advances from the company, paid to him on the 15th and 30th of the guard, petitioner remained silent over this obvious red flag and continued
month, so that he can pay petitioner for the shares. To support his claim, he receiving, through his wife, payments which totalled to the aggregate amount
presented Businessday’s financial records and the testimony of Leo Atienza, of the shares of stock valued at par. When the payments stopped, no demand
the Company’s Accounting Manager. When asked why the term "shares of was made by either petitioner or his wife for further payments.
stock" was used for the entries, instead of "cash advances," Atienza explained
that the term "shares of stock" was more specific rather than the broader From the foregoing, it is clear that petitioner knew of the transaction, agreed to
phrase "cash advances."39 More to the point, had the entries been for "shares the purchase price of ₱600,000.00 for the shares of stock, and had in fact
of stock," the issuance of shares should have been reflected in the stock and facilitated the implementation of the terms of the payment by providing
transfer books of Businessday, which the petitioner presented as evidence. respondent Locsin, through petitioner’s wife, with the information on the bank
Instead the stock and transfer books reveal that the increase in respondent accounts of his in-laws. Petitioner’s wife and his son even provided receipts for
Locsin’s shares was a result of the cancellation and transfer of petitioner’s the payments that were made to them by respondent Locsin,43 a practice that
shares in favor of respondent Locsin. bespeaks of an onerous transaction and not an act of gratuity.
Petitioner alleges that the purported sale between himself and respondent Lastly, petitioner claims that the cancellation of the shares and the subsequent transfer thereof were fraudulent, and,
Locsin of the disputed shares of stock is void since it contravenes Article 1491 therefore, illegal. In the present case, the shares were transferred in the name of the buyer, respondent Locsin, without
of the Civil Code, which provides that: the petitioner delivering to the buyer his certificates of stock. Section 63 of the Corporation Code provides that:
ART. 1491. The following persons cannot acquire by purchase, even at a Sec.63. Certificate of stock and transfer of shares.— xxx Shares of stock so issued are personal property and may be
public or judicial auction, either in person or through the mediation of another: transferred by delivery of the certificate or certificates indorsed by the owner or his attorney-in-fact or other person
legally authorized to make the transfer. No transfer, however, shall be valid, except as between the parties, until the
xxxx transfer is recorded in the books of the corporation showing the names of the parties to the transaction, the date of the
transfer, the number of the certificate or certificates and the number of shares transferred. (Emphasis provided.)
(2) Agents, the property whose administration or sale may have been
entrusted to them, unless the consent of the principal has been given; x x x. The aforequoted provision furnishes the procedure for the transfer of shares – the delivery of the endorsed certificates,
in order to prevent the fraudulent transfer of shares of stock. However, this rule cannot be applied in the present case
without causing the injustice sought to be avoided. As had been amply demonstrated, there was a valid sale of stocks.
It is, indeed, a familiar and universally recognized doctrine that a person who Petitioner’s failure to deliver the shares to their rightful buyer is a breach of his duty as a seller, which he cannot use to
undertakes to act as agent for another cannot be permitted to deal in the unjustly profit himself by denying the validity of such sale. Thus, while the manner of the cancellation of petitioner’s
agency matter on his own account and for his own benefit without the consent certificates of stock and the issuance of the new certificates in favor of respondent Locsin was highly irregular, we
of his principal, freely given, with full knowledge of every detail known to the
must, nonetheless, declare the validity of the sale between the parties. Neither does this irregularity prove that the
transfer was fraudulent. In his testimony, petitioner admitted that they had intended to conceal his being a stockholder
of Businessday.44 The cancellation of his name from the stock and transfer book, even before the shares were
actually sold, had been done with his consent. As earlier explained, even the subsequent sale of the shares in favor of
Locsin had been done with his consent.
IN VIEW OF THE FOREGOING, the instant Petition is DENIED. This Court AFFIRMS the assailed Decision of the
Court of Appeals, promulgated on 30 June 2003, affirming the validity of the sale of the shares of stock in favor of
respondent Locsin. No costs.
SO ORDERED.