Occena v. Icamina (G.R. No.

82146)
Facts:

Petitioner Eulogio Occena filed a criminal complaint for Grave Oral Defamation against private
respondent Cristina Vegafria alleging that the latter had openly, publicly and maliciously insulted
him by uttering that he is a “foolish Barangay Captain, traitor, tyrant and Judas” which caused
great and irreparable injury to his person and honor. After trial, Cristina was found guilty of
Slight Oral Defamation and was sentenced to pay the fine. However, the trial court did not
award damages to petitioner stating that the facts and circumstances did not warrant the
awarding of moral damages. Petitioner appealed the civil liability of Cristina but was denied.

Issue:

Whether or not petitioner is entitled to moral damages.

Ruling: YES.

Article 2219, par. (7) of the Civil Code allows the recovery of moral damages in case of libel,
slander or any other form of defamation This provision of law establishes the right of an
offended party in a case for oral defamation to recover from the guilty party damages for injury
to his feelings and reputation. The offended party is likewise allowed to recover punitive or
exemplary damages.

It must be remembered that every defamatory imputation is presumed to be malicious, even if it

be true, if no good intention and justifiable motive for making it is shown. And malice may be
inferred from the style and tone of publication subject to certain exceptions which are not
present in the case at bar. Calling petitioner who was a barangay captain an ignoramus, traitor,
tyrant and Judas is clearly an imputation of defects in petitioner’s character sufficient to cause
him embarrassment and social humiliation. Petitioner testified to the feelings of shame and
anguish he suffered as a result of the incident complained of.

From the evidence presented, we rule that for the injury to his feelings and reputation, being a
barangay captain, petitioner is entitled to moral damages in the sum of P5,000.00 and a further
sum of P5,000.00 as exemplary damages.
G.R. No. 156339             October 6, 2004

MS. VIOLETA YASOÑA, personally and as heir of deceased sister defendant PELAGIA YASOÑA and as
attorney–in–fact of her brothers ALEJANDRO and EUSTAQUIO, both YASOÑA and sisters: TERESITA
YASOÑA BALLESTERO and ERLINDA YASOÑA TUGADI, and mother AUREA VDA. DE YASOÑA, petitioners,
vs.
RODENCIO and JOVENCIO, both surnamed DE RAMOS, respondents.

Facts:

In August 1993, Aurea filed an estafa complaint against brothers Jovencio and Rodencio de
Ramos on the ground that she was deceived by them when she asked for their assistance in 1971
concerning her mortgaged property.
Aurea in her complaint alleged that Rodencio asked her to sign a blank paper on the pretext that
it would be used in the redemption of the mortgaged property. Aurea signed the blank paper without
further inquiry because she trusted her nephew, Rodencio. Thereafter, they heard nothing from Rodencio
and this prompted Nimpha Yasoña Bondoc to confront Rodencio but she was told that the title was still
with the Register of Deeds. However, when Nimpha inquired from the Register of Deeds, she was
shocked to find out that the lot had been divided into two, pursuant to a deed of sale apparently executed
by Aurea in favor of Jovencio.
Aurea averred that she never sold any portion of her property to Jovencio and never executed a
deed of sale. Aurea was thus forced to seek the advice of Judge Enrique Almario, another relative, who
suggested filing a complaint for estafa.
On February 21, 1994, Assistant Provincial Prosecutor Rodrigo B. Zayenis dismissed the criminal
complaint for estafa for lack of evidence.
Jovencio and Rodencio filed a complaint for damages on the ground of malicious prosecution
with the Regional Trial Court alleging that the filing of the estafa complaint against them was done with
malice and it caused irreparable injury to their reputation, as Aurea knew fully well that she had already
sold half of the property to Jovencio.
On October 5, 2000, the trial court rendered a decision in favor of Jovencio and Rodencio. Petitioner
Violeta Yasoña, personally and on behalf of her brothers and sisters and mother Aurea, filed a petition for
certiorari under Rule 65 with the Court of Appeals which dismissed the same on June 14, 2002 on the
ground that petitioners availed of the wrong remedy. Their subsequent motion for reconsideration was
likewise denied on December 12, 2000.

Issue:

Whether the filing of the criminal complaint for estafa by petitioners against respondents
constituted malicious prosecution.

Ruling:

The court held that "malicious prosecution is an action for damages brought by one against whom
a criminal prosecution, civil suit, or other legal proceeding has been instituted maliciously and without
probable cause, after the termination of such prosecution, suit, or other proceeding in favor of the
defendant therein." To constitute "malicious prosecution," there must be proof that the prosecution was
prompted by a sinister design to vex or humiliate a person, and that it was initiated deliberately by the
defendant knowing that his charges were false and groundless. 5 Concededly, the mere act of submitting a
case to the authorities for prosecution does not make one liable for malicious prosecution. 6

In this case, however, there is reason to believe that a malicious intent was behind the filing of the
complaint for estafa against respondents. The records show that the sale of the property was evidenced
by a deed of sale duly notarized and registered with the local Register of Deeds. After the execution of the
deed of sale, the property was surveyed and divided into two portions. Separate titles were then issued in
the names of Aurea Yasoña (TCT No. 73252) and Jovencio de Ramos (TCT No. 73251). Since 1973,
Jovencio had been paying the realty taxes of the portion registered in his name. In 1974, Aurea even
requested Jovencio to use his portion as bond for the temporary release of her son who was charged with
malicious mischief. Also, when Aurea borrowed money from the Rural Bank of Lumban in 1973 and the
PNB in 1979, only her portion covered by TCT No. 73252 was mortgaged.

All these pieces of evidence indicate that Aurea had long acknowledged Jovencio’s ownership of half of
the property. Furthermore, it was only in 1993 when petitioners decided to file the estafa complaint
against respondents. If petitioners had honestly believed that they still owned the entire property, it would
not have taken them 22 years to question Jovencio’s ownership of half of the property. The only
conclusion that can be drawn from the circumstances is that Aurea knew all along that she was no longer
the owner of Jovencio’s portion after having sold it to him way back in 1971. Likewise, other than
petitioners’ bare allegations, no other evidence was presented by them to substantiate their claim.

Malicious prosecution, both in criminal and civil cases, requires the elements of (1) malice and (2)
absence of probable cause.7 These two elements are present in the present controversy. Petitioners were
completely aware that Jovencio was the rightful owner of the lot covered by TCT No. 73251, clearly
signifying that they were impelled by malice and avarice in bringing the unfounded action. That there was
no probable cause at all for the filing of the estafa case against respondents led to the dismissal of the
charges filed by petitioners with the Provincial Prosecutor’s Office in Siniloan, Laguna.
BEATRIZ P. WASSMER, plaintiff-appellee,
vs.
FRANCISCO X. VELEZ, defendant-appellant.
G.R. No. L-20089 December 26, 1964
BENGZON, J.P., J.:

Facts:1289810-firmProfile

Francisco Velez and Beatriz Wassmer, following their mutual promise of love decided to get
married on September 4, 1954. Wassmer made the necessary preparations for the wedding
including making and sending wedding invitations, buying of wedding dress and other apparels,
and other wedding necessities.

On Sept. 2, 1954, Velez left this note for his bride-to-be advising her that he will not be able to
attend the wedding because his mom was opposed to said wedding.

And one day before the wedding, he sent another message to Wassmer advising her that
nothing has changed and that he will be returning soon. Therefore, Velez did not appear and
was not heard from again.

Wassmer sued Velez for damages and he failed to answer and was declared in default. On April
29, 1955, judgment was rendered ordering defendant to pay plaintiff P2,000.00 as actual
damages; P25,000.00 as moral and exemplary damages; P2,500.00 as attorney’s fees; and the
costs.

On appeal, Velez argued that his failure to attend the scheduled wedding was because of
fortuitous events. He further argued that he cannot be held civilly liable for breaching his
promise to marry Wassmer because there is no law upon which such an action may be
grounded. He also contested the award of exemplary and moral damages against him.

Issue:

Whether or not breach of promise to marry is an actionable wrong in this case.

Held:

This is not a case of mere breach of promise to marry. As stated, mere breach of promise to
marry is not an actionable wrong. But to formally set a wedding and go through all the
preparation and publicity, only to walk out of it when the matrimony is about to be solemnized, is
quite different. This is palpably and unjustifiably contrary to good customs for which defendant
must be held answerable in damages in accordance with Article 21 which provides in part “any
person who wilfully causes loss or injury to another in a manner that is contrary to morals, good
customs or public policy shall compensate the latter for the damage.”

And under the law, any violation of Article 21 entitles the injured party to receive an award for
moral damages as properly awarded by the lower court in this case. Further, the award of
exemplary damages is also proper. Here, the circumstances of this case show that Velez, in
breaching his promise to Wassmer, acted in wanton, reckless, and oppressive manner – this
warrants the imposition of exemplary damages against him.
Valenzuela v. Court of Appeals
G.R. No. 83122, 19 October 1990

FACTS:
Petitioner Arturo P. Valenzuela is a General Agent of private respondent Philippine American General
Insurance Company, Inc. since 1965. As such, he was authorized to solicit and sell in behalf of Philamgen
all kinds of non-life insurance, and in consideration of services rendered was entitled to receive the full
agent’s commission of 32.5% from Philamgen under the scheduled commission rates. From 1973 to
1975, Valenzuela solicited marine insurance from one of his clients, the Delta Motors, Inc. in the amount
of P4.4 Million from which he was entitled to a commission of 32% . However, Valenzuela did not receive
his full commission which amounted to P1.6 Million from the P4.4 Million insurance coverage of the Delta
Motors. During the period 1976 to 1978, premium payments amounting to P1,946,886.00 were paid
directly to Philamgen and Valenzuela’s commission to which he is entitled amounted to P632,737.00.

In 1977, Philamgen started to become interested in and expressed its intent to share in the commission
due Valenzuela on a fifty-fifty basis. Valenzuela refused.

On June 16,1978, Valenzuela firmly reiterated his objection to the proposals of respondents stating that:
“It is with great reluctance that I have to decline upon request to signify my conformity to your alternative
proposal regarding the payment of the commission due me. However, I have no choice for to do
otherwise would be violative of the Agency Agreement executed between our goodselves.”
Because of the refusal of Valenzuela, Philamgen and its officers took drastic action against Valenzuela.
They:
(a) reversed the commission due him by not crediting in his account the commission earned from the
Delta Motors, Inc. insurance;
(b) placed agency transactions on a cash and carry basis;
(c) threatened the cancellation of policies issued by his agency; and
(d) started to leak out news that Valenzuela has a substantial account with Philamgen. All of these acts
resulted in the decline of his business as insurance agent. Then on December 27, 1978, Philamgen
terminated the General Agency Agreement of Valenzuela.

The petitioners sought relief by filing the complaint against the private respondents in the court a quo.

ISSUE:

Whether or not Philamgen could continue to hold Valenzuela jointly and severally liable with the insured
for unpaid premiums.

RULING:

We agree with the court a quo that the principal cause of the termination of Valenzuela as General Agent
of Philamgen arose from his refusal to share his Delta commission. The records sustain the conclusions
of the trial court on the apparent bad faith of the private respondents in terminating the General Agency
Agreement of petitioners.

As to the issue of whether or not the petitioners are liable to Philamgen for the unpaid and uncollected
premiums which the respondent court ordered Valenzuela to pay Philamgen the amount of One Million
Nine Hundred Thirty-Two Thousand Five Hundred Thirty-Two and 17/100 Pesos (P1,932,532,17) with
legal interest thereon until fully paid, we rule that the respondent court erred in holding Valenzuela liable.
We find no factual and legal basis for the award. Under Section 77 of the Insurance Code, the remedy for
the non-payment of premiums is to put an end to and render the insurance policy not binding

Sec. 77 … [N]otwithstanding any agreement to the contrary, no policy or contract of insurance is valid and
binding unless and until the premiums thereof have been paid except in the case of a life or industrial life
policy whenever the grace period provision applies (P.D. 612, as amended otherwise known as the
Insurance Code of 1974)
Plaintiff-Appellant: Pastor B. Tenchavez
Defendants-Appellees: Vicenta F. Escaño, et al.
15 SCRA 355
G.R. No. L-19671
November 29, 1965
Ponente: J. J.B.L. Reyes

FACTS:
Pastor and Vicenta entered into a secret marriage before a Catholic chaplain. Upon discovery of
their daughter’s marriage, spouses Mamerto and Mena sought priestly advice where it was
suggested that the marriage be recelebrated. However, the recelebration did not take place and
the newlyweds eventually became estranged. Later, unknown to Pastor, Vicenta left for the
United States. There, she filed a complaint for divorce on the ground of extreme mental cruelty,
and an absolute divorce was granted by the Court of Nevada. She later sought for the
annulment of her marriage from the Archbishop of Cebu. Vicenta eventually married an
American in Nevada and acquired American citizenship.

Tenchavez filed a complaint in the Court of First Instance of Cebu against Vicenta and her
parents whom he charged with having dissuaded and discouraged their daughter from joining
him and alienating her affections, and against the Roman Catholic Church for having decreed
the annulment of the marriage. He asked for legal separation and one million pesos in
damages.

Vicenta claims a valid divorce from Tenchavez and an equally valid marriage to her American
husband; while her parents filed a counterclaim for moral damages, denying that they had in
any way influenced their daughter’s acts.

The trial court did not decree a legal separation but freed Tenchavez from supporting his wife
and to acquire property to her exclusion. It granted the counterclaim of the Españo spouses for
moral and exemplary damages and attorney’s fees against Tenchavez, to the extent of
P45,000.00. Thus, he filed a direct appeal to the Supreme Court.

2.) Whether or not Tenchavez is entitled to legal separation and to moral damages.

Yes. The Court ruled that it can be gleaned from the facts and considerations that Tenchavez is
entitled to a decree of legal separation on the basis of adultery as provided under Art. 333 of the
Revised Penal Code. Since our jurisdiction does not recognize Vicenta’s divorce and second
marriage as valid, her marriage and cohabitation with the American is technically “intercourse
with a person not her husband” from the standpoint of Philippine Law. Her refusal to perform her
wifely duties, and her denial of consortium and her desertion of her husband also constitute in
law a wrong for which the husband is entitled to the corresponding indemnity. Thus, the latter is
entitled to a decree of legal separation conformably to Philippine law.

As to moral damages the Court assessed Tenchavez’s claim for a million pesos as
unreasonable, taking into account some considerations. First, the marriage was celebrated in
secret, and its failure was not characterized by publicity or undue humiliation on his part.
Second, the parties never lived together. Third, there is evidence that Tenchavez had originally
agreed to the annulment of the marriage, although such a promise was legally invalid, being
against public policy. Fourth, the fact that Tenchavez is unable to remarry under our law is a
consequence of the indissoluble character of the union that he entered into voluntarily and with
open eyes. Therefore, he should recover P25,000 only by way of moral damages and attorney’s
fees.
Pe v. Pe
G.R. No. L-17396, 30 May 1962

FACTS:

Defendant, Alfonso Pe was a married man and an agent of the La Perla Cigar and Cigarette
Factory, carried an illicit affair with Lolita Pe, who was unmarried. The defendant was adopted
by PeBeco, a collateral relative of Lolita’s father. Given that the defendant had the same last
name with Lolita made them close and frequented her house to teach her how to pray the
rosary. Eventually both of them fell in love and conducted the clandestine trysts which
eventually reached the ears of the Lolita’s parents. Defendant, a Chinese national was filed with
deportation by plaintiffs (Lolita’s parents and siblings) but the affair continued nonetheless.
Lolita disappeared but found a note with the defendant’s handwriting.

Plaintiffs filed damages for causing injury in a manner contrary to morals, good customs and
public policy. The trial court considered their complaint not actionable for the reason that they
failed to prove that defendant deliberately and in bad faith tried to win Lolita’s affection, thus was
dismissed. Plaintiffs then appealed.

ISSUE:

Whether or not defendant is liable to Lolita’s family on the ground of moral, good custom and
public policy due to their illicit affair?

RULING:

Yes, the defendant is liable. Alfonso committed an injury to Lolita’s family in a manner contrary
to morals, good customs and public policy contemplated in Article 21 of the Civil Code. The
defendant took advantage of the trust of Cecilio and even used the praying of rosary as a
reason to get close with Lolita. The wrong caused by Alfonso is immeasurable considering the
fact that he is a married man.

Art. 21. “Any person who willfully causes loss or injury to another in manner that is contrary to
morals, good customs or public policy shall compensate the latter for the damage.”

In the case at bar, 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. Thus, under any of these
three (3) provisions of law, an act which causes injury to another may be made the basis for an
award of damages. The decision appealed from is reversed. Defendant is hereby sentenced to
pay the plaintiffs the sum of P5,000.00 as damages and P2,000.00 as attorney’s fees and
expenses of litigations. Costs against appellee.
GLOBE MACKAY
G.R. No. 81262. August 25, 1989.*

CORTÉS, J.:

FACTS:
Restituto M. Tobias was employed by petitioner Globe Mackay who discovered the anomalies
and reported them to his immediate superior Eduardo T. Ferraren and to petitioner Herbert C.
Hendry who was then the Executive Vice-President and General Manager of GLOBE MACKAY.

A day after Tobias made the report, petitioner Hendry confronted him by stating that he was the
number one suspect, and ordered him to take a one week forced leave, not to communicate
with the office, to leave his table drawers open, and to leave the office keys.

When Tobias returned to work after the forced leave, Hendry went up to him and called him a
“crook” and a “swindler” and terminated him from his employment. He was instructed to submit
specimen of his handwriting, signature, and initials for examination by the police investigators to
determine his complicity in the anomalies.

Petitioners filed a complaint for estafa and five other criminal complaints despite the two police
reports exculpating Tobias from the anomalies. Whereupon, Tobias filed a complaint for illegal
dismissal which later entered into a compromise agreement regarding the latter’s complaint for
illegal dismissal.

Unemployed, Tobias sought employment with the Republic Telephone Company (RETELCO).
However, petitioner Hendry, without being asked by RETELCO, wrote a letter to the latter
stating that Tobias was dismissed by GLOBE MACKAY due to dishonesty. Private respondent
Tobias filed a civil case for damages anchored on alleged unlawful, malicious, oppressive, and
abusive acts of petitioners.

Petitioners claim that they did not violate any provision of law since they were merely exercising
their legal right to dismiss private respondent.

ISSUE:

Whether or not petitioners have abused the right and are liable for damages to private
respondent.

RULING:

YES. petitioners have indeed abused the right that they invoke, causing damage to private
respondent and for which the latter must now be indemnified. The imputation of guilt without
basis during the investigations of Tobias transgress the standards of human conduct set forth in
Article 19 of the Civil Code. 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. But
petitioners were not content with just dismissing Tobias. Hendry told him to just confess or else
the company would file a hundred more cases against him until he landed in jail. The scornful
remark about Filipinos as well as Hendry’s earlier statements about Tobias being a “crook” and
“swindler” are clear violations of Tobias’ personal dignity [See Article 26, Civil Code]. The next
tortious act committed by petitioners was the writing of a letter to RETELCO that causes failure
to gain employment.

PILIPINAS BANK v. CA and FLORENCIO REYES

1994 / Puno / Petition for review of a CA decision
The cause > Different categories > Proximate

Florencio Reyes issued postdated checks to Winner Industrial Corporation (20k~) and Vincent
Tui (11k~) as payments for the purchased shoe materials and rubber shoes. To cover the face
value of the checks, Reyes requested PCIB Money Shop’s manager to effect the withdrawal of
32k from his savings account and have it deposited with his current account with Pilipinas Bank.
Roberto Santos was requested to make the deposit.
In depositing in the name of Reyes, Santos inquired from the teller Reyes’ current account
number to complete the deposit slip he was accomplishing. He was informed that it was “815”
so that was the number he placed on the slip. Noting that the account number coincided with
the name “Florencio,” Efren Alagasi [Pilipinas Bank Current Account Bookkeeper] thought it was
for Florencio Amador, so he posted the deposit in the account of Amador.
The check in favor of Winner was presented for payment. Since Reyes’ ledger indicated that his
account only had 4k~ balance, the check was dishonored. This check was redeposited 4 days
later but it was dishonored again. This also happened with the check issued in Tui’s favor. Tui
returned the check to Reyes and demanded a cash payment of its face value.
Furious over the incident, Reyes proceeded to Pilipinas Bank and urged an immediate
verification of his account. It was then that the bank noticed the error. The 32k posted in
Amador’s account was transferred to Reyes’ account upon being cleared by the former that he
did not effect a deposit of 32k. The bank then honored the check.
RTC ordered Pilipinas Bank to pay damages to Reyes, and the CA affirmed the RTC.

PROXIMATE CAUSE OF INJURY: ALAGASI’S NEGLIGENCE IN ERRONEOUSLY POSTING

REYES’ CASH DEPOSIT IN THE NAME OF ANOTHER DEPOSITOR HAVING THE SAME
FIRST NAME
For NCC 2179 to apply, it must be established that Reyes’ own negligence was the immediate
and proximate cause of his injury.
Proximate cause – any cause which, in natural and continuous sequence, unbroken by any
efficient intervening cause, produces the result complained of and without which would not have
occurred and from which it ought to have been foreseen or reasonably anticipated by a person
of ordinary case that the injury complained of or some similar injury, would result therefrom as a
natural and probable consequence.
Alagasi failed to exercise degree of care required in the performance of his duties
He posted the cash deposit in Amador’s account from the assumption that the name Florencio
appearing on the ledger without going through the full name, is the same Florencio stated in the
deposit slip
He should have continuously gone beyond mere assumption and proceeded with clear
certainty, considering the amount involved and the repercussions it would create --> checks
issued by Reyes were dishonored because his ledger indicated an insufficient balance
Simex International v. CA (G.R. No. 88013)
Facts:

Petitioner, a private corporation engaged in the exportation of food products, was a depositor
maintaining a checking account with respondent Traders Royal Bank. Petitioner deposited to its
account increasing its balance and subsequently, issued several checks but was surprised to
learn that it had been dishonored for insufficient funds. As a consequence, petitioner received
demand letters from its suppliers for the dishonored checks. Investigation disclosed that the
deposit was not credited to it. The error was rectified and the dishonored checks were
consequently paid. Petitioner demanded reparation from respondent bank for its gross and
wanton negligence but the later did not heed. Petitioner then filed before the RTC which later
held that respondent bank was guilty of negligence but petitioner nonetheless was not entitled to
moral damages. CA affirmed.

Issue:

Whether or not petitioner is entitled to damages due to respondent bank’s negligence.

Ruling: YES.

As the Court sees it, the initial carelessness of the respondent bank, aggravated by the lack of
promptitude in repairing its error, justifies the grant of moral damages. This rather lackadaisical
attitude toward the complaining depositor constituted the gross negligence, if not wanton bad
faith, that the respondent court said had not been established by the petitioner. We shall
recognize that the petitioner did suffer injury because of the private respondent’s negligence
that caused the dishonor of the checks issued by it. The immediate consequence was that its
prestige was impaired because of the bouncing checks and confidence in it as a reliable debtor
was diminished.

The point is that as a business affected with public interest and because of the nature of its
functions, the bank is under obligation to treat the accounts of its depositors with meticulous
care, always having in mind the fiduciary nature of their relationship. In the case at bar, it is
obvious that the respondent bank was remiss in that duty and violated that relationship. What is
especially deplorable is that, having been informed of its error in not crediting the deposit in
question to the petitioner, the respondent bank did not immediately correct it but did so only one
week later or twenty-three days after the deposit was made. It bears repeating that the record
does not contain any satisfactory explanation of why the error was made in the first place and
why it was not corrected immediately after its discovery. Such ineptness comes under the
concept of the wanton manner contemplated in the Civil Code that calls for the imposition of
exemplary damages.
Tan vs. CA GR 108555, 20 December 1994 First Division, Kapunan (J)
Facts: Ramon Tan, a businessman from Puerto Princesa, secured a Cashier’s Check from
Philippine Commercial Industrial Bank (PCIBank) to P30,000 payable to his order to avoid
carrying cash while enroute to Manila. He deposited the check in his account in Rizal
Commercial Banking Corporation (RCBC) in its Binondo Branch. RCBC sent the check for
clearing to the Central Bank which was returned for having been “missent” or “misrouted.”
RCBC debited Tan’s account without informing him. Relying on common knowledge that a
cashier’s check was as good as cash, and a month after depositing the check, he issued two
personal checks in the name of Go Lak and MS Development Trading Corporation. Both checks
bounced due to “insufficiency of funds.” Tan filed a suit for damages against RCBC.

Issue: Ruling see page 485

TELEFAST:
1956, November 2
Consolacion Bravo-Castro, wife of plaintiff Ignacio Castro, Sr. and mother of the other plaintiffs,
passed away in Lingayen, Pangasinan
On the same day, her daughter Sofia C. Crouch, who was then vacationing in the Philippines,
addressed a telegram to plaintiff Ignacio Castro, Sr. at 685 Wanda, Scottsburg, Indiana, U.S.A.,
47170 announcing Consolacion’s death.
The telegram was accepted by the defendant in its Dagupan office, for transmission, after
payment of the required fees or charges.
The telegram never reached its addressee. Consolacion was interred with only her daughter
Sofia in attendance. Neither the husband nor any of the other children of the deceased, then all
residing in the United States, returned for the burial.
When Sofia returned to the United States, she discovered that the wire she had caused the
defendant to send, had not been received.

4.2. PROCEDURAL HISTORY

CFI Pangasinan
Plaintiffs filed for action for damages arising from defendant’s breach of contract.
The only defense of the defendant was that it was unable to transmit the telegram because of
“technical and atmospheric factors beyond its control.”
No evidence appears on record that defendant ever made any attempt to advise the plaintiff
Sofia C. Crouch as to why it could not transmit the telegram
The Court of First Instance of Pangasinan, after trial, ordered the defendant (now petitioner) to
pay the plaintiffs (now private respondents) damages
Intermediate Appellate Court
Affirmed CFI’s decision but eliminated compensatory damages and exemplary damages to
private respondents, while reducing moral damages.
Supreme Court
Petition appeals from IAC, contending that the award of moral damages should be eliminated as
defendant’s negligent act was not motivated by “fraud, malice or recklessness.”
In other words, under petitioner’s theory, it can only be held liable for P31.92, the fee or charges
paid by Sofia C. Crouch for the telegram that was never sent to the addressee thereof.
4.3. ISSUES
Whether the petitioner company is liable for damages?
Whether the petitioner company is liable for moral damages?
Whether the petitioner company is liable for compensatory damages?
Whether the petitioner company is liable for exemplary damages?
4.4. HELD
Whether the petitioner company is liable for damages?
Yes
Art. 1170 of the Civil Code provides that “those who in the performance of their obligations are
guilty of fraud, negligence or delay, and those who in any manner contravene the tenor thereof,
are liable for damages.”
Art. 2176 also provides that “whoever by act or omission causes damage to another, there
being fault or negligence, is obliged to pay for the damage done.”
In the case at bar, petitioner and private respondent Sofia C. Crouch entered into a contract
whereby, for a fee, petitioner undertook to send said private respondent’s message overseas by
telegram. This, petitioner did not do, despite performance by said private respondent of her
obligation by paying the required charges. Petitioner was therefore guilty of contravening its
obligation to said private respondent and is thus liable for damages.
This liability is not limited to actual or quantified damages. To sustain petitioner’s contrary
position in this regard would result in an inequitous situation where petitioner will only be held
liable for the actual cost of a telegram fixed thirty (30) years ago
Whether the petitioner company is liable for moral damages?
Yes
We find Art. 2217 of the Civil Code applicable to the case at bar. It states: “Moral damages
include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation,
wounded feelings, moral shock, social humiliation, and similar injury. Though incapable of
pecuniary computation, moral damages may be recovered if they are the proximate results of
the defendant’s wrongful act or omission.”
Whether the petitioner company is liable for compensatory damages?
Yes
We also sustain the trial court’s award of P16,000.00 as compensatory damages to Sofia C.
Crouch representing the expenses she incurred when she came to the Philippines from the
United States to testify before the trial court.
Had petitioner not been remiss in performing its obligation, there would have been no need for
this suit or for Mrs. Crouch’s testimony.
Whether the petitioner company is liable for exemplary damages?
Yes
The award of exemplary damages by the trial court is likewise justified and, therefore, sustained
in the amount of P1,000.00 for each of the private respondents, as a warning to all telegram
companies to observe due diligence in transmitting the messages of their customers.

Korean Airlines v. CA
Facts:

Juanito Lapuz was contracted for employment in Saudi Arabia through Pan Pacific Recruiting
Services, Inc. He was supposed to leave via Korean Airlines, but was initially listed as a “chance
passenger”. According to Lapuz, he was allowed to check in and was cleared for departure.
When he was on the stairs going to the airplane, a KAL officer pointed at him and shouted,
“Down! Down!” and he was barred from taking the flight. When he asked for another booking,
his ticket was cancelled. He was unable to report for work and so he lost his employment. KAL
alleged that the agent of Pan Pacific was informed that there are 2 seats possibly available. He
gave priority to Perico, while the other seat was won by Lapuz through lottery. But because only
1 seat became available, it was given to Perico. The trial court adjudged KAL liable for
damages. The decision was affirmed by the Court of Appeals, with modification on the damages
awarded

Issues:

(1) Whether there is already a contract of carriage between KAL and Lapuz to hold KAL liable
for breach of contract
(2) Whether moral and exemplary damages should be awarded, and to what extent

Held:
(1) The status of Lapuz as standby passenger was changed to that of a confirmed passenger
when his name was entered in the passenger manifest of KAL for its Flight No. KE 903. His
clearance through immigration and customs clearly shows that he had indeed been confirmed
as a passenger of KAL in that flight. KAL thus committed a breach of the contract of carriage
between them when it failed to bring Lapuz to his destination. A contract to transport
passengers is different in kind and degree from any other contractual relation. The business of
the carrier is mainly with the traveling public. It invites people to avail themselves of the comforts
and advantages it offers. The contract of air carriage generates a relation attended with a public
duty. Passengers have the right to be treated by the carrier's employees with kindness, respect,
courtesy and due consideration. They are entitled to be protected against personal misconduct,
injurious language, indignities and abuses from such employees. So it is that any discourteous
conduct on the part of these employees toward a passenger gives the latter an action for
damages against the carrier. The breach of contract was aggravated in this case when, instead
of courteously informing Lapuz of his being a "wait-listed" passenger, a KAL officer rudely
shouted "Down! Down!" while pointing at him, thus causing him embarrassment and public
humiliation. The evidence presented by Lapuz shows that he had indeed checked in at the
departure counter, passed through customs and immigration, boarded the shuttle bus and
proceeded to the ramp of KAL's aircraft. In fact, his baggage had already been loaded in KAL's
aircraft, to be flown with him to Jeddah. The contract of carriage between him and KAL had
already been perfected when he was summarily and insolently prevented from boarding the
aircraft.

(2) The Court of Appeals granted moral and exemplary damages because:

a. The findings of the court a quo that the defendant-appellant has committed breach of contract
of carriage in bad faith and in wanton, disregard of plaintiff-appellant's rights as passenger laid
the basis and justification of an award for moral damages.

b. In the instant case, we find that defendant-appellant Korean Air Lines acted in a wanton,
fraudulent, reckless, oppressive or malevolent manner when it "bumped off" plaintiff-appellant
on November 8, 1980, and in addition treated him rudely and arrogantly as a "patay gutom na
contract worker fighting Korean Air Lines," which clearly shows malice and bad faith, thus
entitling plaintiff-appellant to moral damages.

c. Considering that the plaintiff-appellant's entitlement to moral damages has been fully
established by oral and documentary evidence, exemplary damages may be awarded. In fact,
exemplary damages may be awarded, even though not so expressly pleaded in the complaint.
By the same token, to provide an example for the public good, an award of exemplary damages
is also proper.

A review of the record of this case shows that the injury suffered by Lapuz is not so serious or
extensive as to warrant an award of P1.5 million. The assessment of P100,000 as moral and
exemplary damages in his favor is, in our view, reasonable and realistic.

ABS-CBN vs. CA (1999)

Posted on 2020-10-25
ABS-CBN BROADCASTING CORP. v. CA, REPUBLIC BROADCASTING CORP., VIVA
PRODUCTIONS, INC., and VICENTE DEL ROSARIO

301 SCRA 589

January 21, 1999

Ponente: C.J. Davide, Jr.

Facts:
In 1990, ABS-CBN and VIVA executed a Film Exhibition Agreement whereby VIVA gave ABS-
CBN an exclusive right to exhibit some VIVA films. According to the agreement, ABS-CBN shall
have the right of first refusal to the next 24 VIVA films for TV telecast under such terms as may
be agreed upon by the parties, however, such right shall be exercised by ABS-CBN from the
actual offer in writing.

Sometime in December 1991, VIVA, through Vicente Del Rosario (Executive Producer), offered
ABS-CBN through VP Charo Santos-Concio, a list of 3 film packages from which ABS-CBN may
exercise its right of first refusal. ABS-CBN, however through Mrs. Concio, tick off only 10 titles
they can purchase among which is the film “Maging Sino Ka Man” which is one of the subjects
of the present case, therefore, it did not accept the said list as per the rejection letter authored
by Mrs. Concio sent to Del Rosario. Subsequently, Del Rosario approached Mrs. Concio with
another list consisting of 52 original movie titles and 104 re-runs, proposing to sell to ABS-CBN
airing rights for P60M (P30M in cash and P30M worth of television spots). Del Rosario and
ABS-CBN’s General Manager, Eugenio Lopez III, met at the Tamarind Grill Restaurant in QC to
discuss the package proposal but to no avail. Four days later, Del Rosario and Mr. Graciano
Gozon, Senior VP of Finance of Republic Broadcasting Corporation (RBS/Channel 7) discussed
the terms and conditions of VIVA’s offer. A day after that, Mrs. Concio sent the draft of the
contract between ABS-CBN and VIVA which contained a counter-proposal covering 53 films for
P35M. VIVA’s Board of Directors rejected the counter-proposal as it would not sell anything less
than the package of 104 films for P60M. After said rejection, ABS-CBN closed a deal with RBS
including the 14 films previously ticked off by ABS-CBN. Consequently, ABS-CBN filed a
complaint for specific performance with prayer for a writ of preliminary injunction and/or TRO
against RBS, VIVA and Del Rosario. RTC then enjoined the latter from airing the subject films.
RBS posted a P30M counterbond to dissolve the injunction. Later on, the trial court as well as
the CA dismissed the complaint holding that there was no meeting of minds between ABS-CBN
and VIVA, hence, there was no basis for ABS-CBN’s demand, furthermore, the right of first
refusal had previously been exercised. Hence, the present petition, ABS-CBN argued that an
agreement was made during the meeting of Mr. Lopez and Del Rosario jotted down on a
“napkin” (this was never produced in court). Moreover, it had yet to fully exercise its right of first
refusal since only 10 titles were chosen from the first list. As to actual, moral and exemplary
damages, there was no clear basis in awarding the same.

Issue:

WON a contract was perfected between ABS-CBN and VIVA

WON moral damages may be awarded to a corporation

Held:
Both NO.
Ratio:
Contracts that are consensual in nature are perfected upon mere meeting of the minds. Once
there is concurrence between the offer and the acceptance upon the subject matter,
consideration, and terms of payment a contract is produced. The offer must be certain. To
convert the offer into a contract, the acceptance must be absolute and must not qualify the
terms of the offer; it must be plain, unequivocal, unconditional, and without variance of any sort
from the proposal. A qualified acceptance, or one that involves a new proposal, constitutes a
counter-offer and is a rejection of the original offer. Consequently, when something is desired
which is not exactly what is proposed in the offer, such acceptance is not sufficient to generate
consent because any modification or variation from the terms of the offer annuls the offer.

After Mr. Del Rosario of Viva met Mr. Lopez of ABS-CBN to discuss the package of films, ABS-
CBN, sent through Ms. Concio, counter-proposal in the form a draft contract. This counter-
proposal could be nothing less than the counter-offer of Mr. Lopez during his conference with
Del Rosario. Clearly, there was no acceptance of VIVA’s offer, for it was met by a counter-offer
which substantially varied the terms of the offer.

In the case at bar, VIVA through its Board of Directors, rejected such counter-offer. Even if it be
conceded arguendo that Del Rosario had accepted the counter-offer, the acceptance did not
bind VIVA, as there was no proof whatsoever that Del Rosario had the specific authority to do
so.
Under the Corporation Code, unless otherwise provided by said Code, corporate powers, such
as the power to enter into contracts, are exercised by the Board of Directors. However, the
Board may delegate such powers to either an executive committee or officials or contracted
managers. The delegation, except for the executive committee, must be for specific purposes.
Delegation to officers makes the latter agents of the corporation; accordingly, the general rules
of agency as to the binding effects of their acts would apply. For such officers to be deemed
fully clothed by the corporation to exercise a power of the Board, the latter must specially
authorize them to do so. That Del Rosario did not have the authority to accept ABS-CBN’s
counter-offer was best evidenced by his submission of the draft contract to VIVA’s Board of
Directors for the latter’s approval. In any event, there was between Del Rosario and Lopez III no
meeting of minds.
The testimony of Mr. Lopez and the allegations in the complaint are clear admissions that what
was supposed to have been agreed upon at the Tamarind Grill between Mr. Lopez and Del
Rosario was not a binding agreement. It is as it should be because corporate power to enter into
a contract is lodged in the Board of Directors. (Sec. 23, Corporation Code). Without such board
approval by the Viva board, whatever agreement Lopez and Del Rosario arrived at could not
ripen into a valid contact binding upon Viva.

However, the Court finds for ABS-CBN on the issue of damages. Moral damages are in the
category of an award designed to compensate the claimant for actual injury suffered and not to
impose a penalty on the wrongdoer. The award of moral damages cannot be granted in favor of
a corporation because, being an artificial person and having existence only in legal
contemplation, it has no feelings, no emotions, no senses. It cannot, therefore, experience
physical suffering and mental anguish, which can be experienced only by one having a nervous
system. The statement that a corporation may recover moral damages if it “has a good
reputation that is debased, resulting in social humiliation” is an obiter dictum. On this score
alone the award for damages must be set aside, since RBS is a corporation.