HUMAN RELATIONS (ARTICLE 19-36)
was already a widow, her husband having died in 1998. 4 She admitted that
I. FREEDOM OF RELIGION
A.M. No. P-02-1651             June 22, 2006
(Formerly OCA I.P.I. No. 00-1021-P)
ALEJANDRO ESTRADA, Complainant,
vs.
SOLEDAD S. ESCRITOR, Respondent.
RESOLUTION
PUNO, J.:
While man is finite, he seeks and subscribes to the Infinite. Respondent
Soledad Escritor once again stands before the Court invoking her religious
freedom and her Jehovah God in a bid to save her family – united without the
benefit of legal marriage - and livelihood. The State, on the other hand, seeks
to wield its power to regulate her behavior and protect its interest in marriage
and family and the integrity of the courts where respondent is an employee.
How the Court will tilt the scales of justice in the case at bar will decide not
only the fate of respondent Escritor but of other believers coming to Court
bearing grievances on their free exercise of religion. This case comes to us
from our remand to the Office of the Court Administrator on August 4,
2003.1
I. THE PAST PROCEEDINGS
In a sworn-letter complaint dated July 27, 2000, complainant Alejandro
Estrada requested Judge Jose F. Caoibes, Jr., presiding judge of Branch 253,
Regional Trial Court of Las Piñas City, for an investigation of respondent
Soledad Escritor, court interpreter in said court, for living with a man not her
husband, and having borne a child within this live-in arrangement. Estrada
believes that Escritor is committing an immoral act that tarnishes the image
of the court, thus she should not be allowed to remain employed therein as it
might appear that the court condones her act.2 Consequently, respondent was
charged with committing "disgraceful and immoral conduct" under Book V,
Title I, Chapter VI, Sec. 46(b)(5) of the Revised Administrative Code. 3
Respondent Escritor testified that when she entered the judiciary in 1999, she
she started living with Luciano Quilapio, Jr. without the benefit of marriage
more than twenty years ago when her husband was still alive but living with
another woman. She also admitted that she and Quilapio have a son. 5 But as a
member of the religious sect known as the Jehovah’s Witnesses and the
Watch Tower and Bible Tract Society, respondent asserted that their conjugal
arrangement is in conformity with their religious beliefs and has the approval
of her congregation.6 In fact, after ten years of living together, she executed
on July 28, 1991, a "Declaration of Pledging Faithfulness."7
For Jehovah’s Witnesses, the Declaration allows members of the
congregation who have been abandoned by their spouses to enter into marital
relations. The Declaration thus makes the resulting union moral and binding
within the congregation all over the world except in countries where divorce
is allowed. As laid out by the tenets of their faith, the Jehovah’s congregation
requires that at the time the declarations are executed, the couple cannot
secure the civil authorities’ approval of the marital relationship because of
legal impediments. Only couples who have been baptized and in good
standing may execute the Declaration, which requires the approval of the
elders of the congregation. As a matter of practice, the marital status of the
declarants and their respective spouses’ commission of adultery are
investigated before the declarations are executed. 8 Escritor and Quilapio’s
declarations were executed in the usual and approved form prescribed by the
Jehovah’s Witnesses,9 approved by elders of the congregation where the
declarations were executed,10 and recorded in the Watch Tower Central
Office.11
Moreover, the Jehovah’s congregation believes that once all legal
impediments for the couple are lifted, the validity of the declarations ceases,
and the couple should legalize their union. In Escritor’s case, although she
was widowed in 1998, thereby lifting the legal impediment to marry on her
part, her mate was still not capacitated to remarry. Thus, their declarations
remained valid.12 In sum, therefore, insofar as the congregation is concerned,
there is nothing immoral about the conjugal arrangement between Escritor
and Quilapio and they remain members in good standing in the congregation.
By invoking the religious beliefs, practices and moral standards of her
congregation, in asserting that her conjugal arrangement does not constitute
disgraceful and immoral conduct for which she should be held
administratively liable,13 the Court had to determine the contours of religious
freedom under Article III, Section 5 of the Constitution, which provides, viz:
Sec. 5. No law shall be made respecting an establishment of religion, or
prohibiting the free exercise thereof. The free exercise and enjoyment of
religious profession and worship, without discrimination or preference, shall
forever be allowed. No religious test shall be required for the exercise of civil
or political rights.
A. Ruling
In our decision dated August 4, 2003, after a long and arduous scrutiny into
the origins and development of the religion clauses in the United States
(U.S.) and the Philippines, we held that in resolving claims involving
religious freedom (1) benevolent neutrality or accommodation, whether
mandatory or permissive, is the spirit, intent and framework underlying the
religion clauses in our Constitution; and (2) in deciding respondent’s plea of
exemption based on the Free Exercise Clause (from the law with which she is
administratively charged), it is the compelling state interest test, the strictest
test, which must be applied.14
Notwithstanding the above rulings, the Court could not, at that time, rule
definitively on the ultimate issue of whether respondent was to be held
administratively liable for there was need to give the State the opportunity to
adduce evidence that it has a more "compelling interest" to defeat the claim
of the respondent to religious freedom. Thus, in the decision dated August 4,
2003, we remanded the complaint to the Office of the Court Administrator
(OCA), and ordered the Office of the Solicitor General (OSG) to intervene in
the case so it can:
(a) examine the sincerity and centrality of respondent’s claimed
religious belief and practice;
(b) present evidence on the state’s "compelling interest" to override
respondent’s religious belief and practice; and
(c) show that the means the state adopts in pursuing its interest is the
least restrictive to respondent’s religious freedom. 15
It bears stressing, therefore, that the residual issues of the case pertained
NOT TO WHAT APPROACH THIS COURT SHOULD TAKE IN
CONSTRUING THE RELIGION CLAUSES, NOR TO THE PROPER
TEST APPLICABLE IN DETERMINING CLAIMS OF EXEMPTION
BASED ON FREEDOM OF RELIGION. These issues have already been
ruled upon prior to the remand, and constitute "the law of the case" insofar as
they resolved the issues of which framework and test are to be applied in this
case, and no motion for its reconsideration having been filed. 16 The only task
that the Court is left to do is to determine whether the evidence adduced by
the State proves its more compelling interest. This issue involves a pure
question of fact.
B. Law of the case
Mr. Justice Carpio’s insistence, in his dissent, in attacking the ruling of this
case interpreting the religious clauses of the Constitution, made more than
two years ago, is misplaced to say the least. Since neither the complainant,
respondent nor the government has filed a motion for reconsideration
assailing this ruling, the same has attained finality and constitutes the law of
the case. Any attempt to reopen this final ruling constitutes a crass
contravention of elementary rules of procedure. Worse, insofar as it would
overturn the parties’ right to rely upon our interpretation which has long
attained finality, it also runs counter to substantive due process.
Be that as it may, even assuming that there were no procedural and
substantive infirmities in Mr. Justice Carpio’s belated attempts to disturb
settled issues, and that he had timely presented his arguments, the results
would still be the same.
We review the highlights of our decision dated August 4, 2003.
1. Old World Antecedents
In our August 4, 2003 decision, we made a painstaking review of Old World
antecedents of the religion clauses, because "one cannot understand, much
less intelligently criticize the approaches of the courts and the political
branches to religious freedom in the recent past in the United States without a
deep appreciation of the roots of these controversies in the ancient and
medieval world and in the American experience." 17 We delved into the
conception of religion from primitive times, when it started out as the state
itself, when the authority and power of the state were ascribed to God. 18
Then, religion developed on its own and became superior to the state, 19 its
subordinate,20 and even becoming an engine of state policy.21
We ascertained two salient features in the review of religious history: First,
with minor exceptions, the history of church-state relationships was
characterized by persecution, oppression, hatred, bloodshed, and war, all in
the name of the God of Love and of the Prince of Peace. Second, likewise
with minor exceptions, this history witnessed the unscrupulous use of
religion by secular powers to promote secular purposes and policies, and the
willing acceptance of that role by the vanguards of religion in exchange for
the favors and mundane benefits conferred by ambitious princes and
emperors in exchange for religion’s invaluable service. This was the context
in which the unique experiment of the principle of religious freedom and
separation of church and state saw its birth in American constitutional
democracy and in human history. 22
Strictly speaking, the American experiment of freedom and separation was
not translated in the First Amendment. That experiment had been launched
four years earlier, when the founders of the republic carefully withheld from
the new national government any power to deal with religion. As James
Madison said, the national government had no "jurisdiction" over religion or
any "shadow of right to intermeddle" with it. 23
The omission of an express guaranty of religious freedom and other natural
rights, however, nearly prevented the ratification of the Constitution. The
restriction had to be made explicit with the adoption of the religion clauses in
the First Amendment as they are worded to this day. Thus, the First
Amendment did not take away or abridge any power of the national
government; its intent was to make express the absence of power. 24 It
commands, in two parts (with the first part usually referred to as the
Establishment Clause and the second part, the Free Exercise Clause), viz:
Congress shall make no law respecting an establishment of religion or
prohibiting the free exercise thereof. 25
The Establishment and Free Exercise Clauses, it should be noted, were not
designed to serve contradictory purposes. They have a single goal—to
promote freedom of individual religious beliefs and practices. In simplest
terms, the Free Exercise Clause prohibits government from inhibiting
religious beliefs with penalties for religious beliefs and practice, while the
Establishment Clause prohibits government from inhibiting religious belief
with rewards for religious beliefs and practices. In other words, the two
religion clauses were intended to deny government the power to use either
the carrot or the stick to influence individual religious beliefs and practices. 26
In sum, a review of the Old World antecedents of religion shows the
movement of establishment of religion as an engine to promote state
interests, to the principle of non-establishment to allow the free exercise of
religion.
2. Religion Clauses in the U.S. Context
The Court then turned to the religion clauses’ interpretation and construction
in the United States, not because we are bound by their interpretation, but
because the U.S. religion clauses are the precursors to the Philippine religion
clauses, although we have significantly departed from the U.S. interpretation
as will be discussed later on.
At the outset, it is worth noting that American jurisprudence in this area has
been volatile and fraught with inconsistencies whether within a Court
decision or across decisions. For while there is widespread agreement
regarding the value of the First Amendment religion clauses, there is an
equally broad disagreement as to what these clauses specifically require,
permit and forbid. No agreement has been reached by those who have studied
the religion clauses as regards its exact meaning and the paucity of records in
the U.S. Congress renders it difficult to ascertain its meaning. 27
U.S. history has produced two identifiably different, even opposing, strains
of jurisprudence on the religion clauses. First is the standard of separation,
which may take the form of either (a) strict separation or (b) the tamer
version of strict neutrality or separation, or what Mr. Justice Carpio refers to
as the second theory of governmental neutrality. Although the latter form is
not as hostile to religion as the former, both are anchored on the Jeffersonian
premise that a "wall of separation" must exist between the state and the
Church to protect the state from the church. 28 Both protect the principle of
church-state separation with a rigid reading of the principle. On the other
hand, the second standard, the benevolent neutrality or accommodation, is
buttressed by the view that the wall of separation is meant to protect the
church from the state. A brief review of each theory is in order.
a. Strict Separation and Strict Neutrality/Separation
The Strict Separationist believes that the Establishment Clause was meant to
protect the state from the church, and the state’s hostility towards religion
allows no interaction between the two. According to this Jeffersonian view,
an absolute barrier to formal interdependence of religion and state needs to
be erected. Religious institutions could not receive aid, whether direct or
indirect, from the state. Nor could the state adjust its secular programs to
alleviate burdens the programs placed on believers. 29 Only the complete
separation of religion from politics would eliminate the formal influence of
religious institutions and provide for a free choice among political views,
thus a strict "wall of separation" is necessary. 30
Strict separation faces difficulties, however, as it is deeply embedded in
American history and contemporary practice that enormous amounts of aid,
both direct and indirect, flow to religion from government in return for huge
amounts of mostly indirect aid from religion. 31 For example, less than
twenty-four hours after Congress adopted the First Amendment’s prohibition
on laws respecting an establishment of religion, Congress decided to express
its thanks to God Almighty for the many blessings enjoyed by the nation with
a resolution in favor of a presidential proclamation declaring a national day
of Thanksgiving and Prayer.32 Thus, strict separationists are caught in an
awkward position of claiming a constitutional principle that has never existed
and is never likely to.33
The tamer version of the strict separationist view, the strict neutrality or
separationist view, (or, the governmental neutrality theory) finds basis in
Everson v. Board of Education,34 where the Court declared that Jefferson’s
"wall of separation" encapsulated the meaning of the First Amendment.
However, unlike the strict separationists, the strict neutrality view believes
that the "wall of separation" does not require the state to be their adversary.
Rather, the state must be neutral in its relations with groups of religious
believers and non-believers. "State power is no more to be used so as to
handicap religions than it is to favor them." 35 The strict neutrality approach is
not hostile to religion, but it is strict in holding that religion may not be used
as a basis for classification for purposes of governmental action, whether the
action confers rights or privileges or imposes duties or obligations. Only
secular criteria may be the basis of government action. It does not permit,
much less require, accommodation of secular programs to religious belief. 36
The problem with the strict neutrality approach, however, is if applied in
interpreting the Establishment Clause, it could lead to a de facto voiding of
religious expression in the Free Exercise Clause. As pointed out by Justice
Goldberg in his concurring opinion in Abington School District v.
Schempp,37 strict neutrality could lead to "a brooding and pervasive devotion
to the secular and a passive, or even active, hostility to the religious" which is
prohibited by the Constitution.38 Professor Laurence Tribe commented in his
authoritative treatise, viz:
To most observers. . . strict neutrality has seemed incompatible with the very
idea of a free exercise clause. The Framers, whatever specific applications
they may have intended, clearly envisioned religion as something special;
they enacted that vision into law by guaranteeing the free exercise of religion
but not, say, of philosophy or science. The strict neutrality approach all but
erases this distinction. Thus it is not surprising that the [U.S.] Supreme Court
has rejected strict neutrality, permitting and sometimes mandating religious
classifications.39
Thus, the dilemma of the separationist approach, whether in the form of strict
separation or strict neutrality, is that while the Jeffersonian wall of separation
"captures the spirit of the American ideal of church-state separation," in real
life, church and state are not and cannot be totally separate. This is all the
more true in contemporary times when both the government and religion are
growing and expanding their spheres of involvement and activity, resulting in
the intersection of government and religion at many points. 40
b. Benevolent Neutrality/Accommodation
The theory of benevolent neutrality or accommodation is premised on a
different view of the "wall of separation," associated with Williams, founder
of the Rhode Island colony. Unlike the Jeffersonian wall that is meant to
protect the state from the church, the wall is meant to protect the church from
the state.41 This doctrine was expressed in Zorach v. Clauson, 42 which held,
viz:
The First Amendment, however, does not say that in every and all respects
there shall be a separation of Church and State. Rather, it studiously defines
the manner, the specific ways, in which there shall be no concert or union or
dependency one or the other. That is the common sense of the matter.
Otherwise, the state and religion would be aliens to each other - hostile,
suspicious, and even unfriendly. Churches could not be required to pay even
property taxes. Municipalities would not be permitted to render police or fire
protection to religious groups. Policemen who helped parishioners into their
places of worship would violate the Constitution. Prayers in our legislative
halls; the appeals to the Almighty in the messages of the Chief Executive; the
proclamations making Thanksgiving Day a holiday; "so help me God" in our
courtroom oaths- these and all other references to the Almighty that run
through our laws, our public rituals, our ceremonies would be flouting the
First Amendment. A fastidious atheist or agnostic could even object to the
supplication with which the Court opens each session: "God save the United
States and this Honorable Court."
xxx xxx
xxx
We are a religious people whose institutions presuppose a Supreme Being.
We guarantee the freedom to worship as one chooses. . . When the state
encourages religious instruction or cooperates with religious authorities by
adjusting the schedule of public events, it follows the best of our traditions.
For it then respects the religious nature of our people and accommodates the
public service to their spiritual needs. To hold that it may not would be to
find in the Constitution a requirement that the government show a callous
indifference to religious groups. . . But we find no constitutional requirement
which makes it necessary for government to be hostile to religion and to
throw its weight against efforts to widen their effective scope of religious
influence. 43
Benevolent neutrality recognizes that religion plays an important role in the
public life of the United States as shown by many traditional government
practices which, to strict neutrality, pose Establishment Clause questions.
Among these are the inscription of "In God We Trust" on American
currency; the recognition of America as "one nation under God" in the
official pledge of allegiance to the flag; the Supreme Court’s time-honored
practice of opening oral argument with the invocation "God save the United
States and this Honorable Court"; and the practice of Congress and every
state legislature of paying a chaplain, usually of a particular Protestant
denomination, to lead representatives in prayer. These practices clearly show
the preference for one theological viewpoint—the existence of and potential
for intervention by a god—over the contrary theological viewpoint of
atheism. Church and government agencies also cooperate in the building of
low-cost housing and in other forms of poor relief, in the treatment of
alcoholism and drug addiction, in foreign aid and other government activities
with strong moral dimension. 44
Examples of accommodations in American jurisprudence also abound,
including, but not limited to the U.S. Court declaring the following acts as
constitutional: a state hiring a Presbyterian minister to lead the legislature in
daily prayers,45 or requiring employers to pay workers compensation when
the resulting inconsistency between work and Sabbath leads to discharge; 46
for government to give money to religiously-affiliated organizations to teach
adolescents about proper sexual behavior; 47 or to provide religious school
pupils with books;48 or bus rides to religious schools; 49 or with cash to pay for
state-mandated standardized tests.50
(1) Legislative Acts and the Free Exercise Clause
As with the other rights under the Constitution, the rights embodied in the
Religion clauses are invoked in relation to governmental action, almost
invariably in the form of legislative acts.
Generally speaking, a legislative act that purposely aids or inhibits religion
will be challenged as unconstitutional, either because it violates the Free
Exercise Clause or the Establishment Clause or both. This is true whether
one subscribes to the separationist approach or the benevolent neutrality or
accommodationist approach.
But the more difficult religion cases involve legislative acts which have a
secular purpose and general applicability, but may incidentally or
inadvertently aid or burden religious exercise. Though the government action
is not religiously motivated, these laws have a "burdensome effect" on
religious exercise.
The benevolent neutrality theory believes that with respect to these
governmental actions, accommodation of religion may be allowed, not to
promote the government’s favored form of religion, but to allow individuals
and groups to exercise their religion without hindrance. The purpose of
accommodations is to remove a burden on, or facilitate the exercise of, a
person’s or institution’s religion. As Justice Brennan explained, the
"government [may] take religion into account…to exempt, when possible,
from generally applicable governmental regulation individuals whose
religious beliefs and practices would otherwise thereby be infringed, or to
create without state involvement an atmosphere in which voluntary religious
exercise may flourish."51 In the ideal world, the legislature would recognize
the religions and their practices and would consider them, when practical, in
enacting laws of general application. But when the legislature fails to do so,
religions that are threatened and burdened may turn to the courts for
protection.52
Thus, what is sought under the theory of accommodation is not a declaration
of unconstitutionality of a facially neutral law, but an exemption from its
application or its "burdensome effect," whether by the legislature or the
courts.53 Most of the free exercise claims brought to the U.S. Court are for
exemption, not invalidation of the facially neutral law that has a
"burdensome" effect.54
(2) Free Exercise Jurisprudence: Sherbert, Yoder and Smith
The pinnacle of free exercise protection and the theory of accommodation in
the U.S. blossomed in the case of Sherbert v. Verner, 55 which ruled that state
regulation that indirectly restrains or punishes religious belief or conduct
must be subjected to strict scrutiny under the Free Exercise Clause. 56
According to Sherbert, when a law of general application infringes religious
exercise, albeit incidentally, the state interest sought to be promoted must be
so paramount and compelling as to override the free exercise claim.
Otherwise, the Court itself will carve out the exemption.
In this case, Sherbert, a Seventh Day Adventist, claimed unemployment
compensation under the law as her employment was terminated for refusal to
work on Saturdays on religious grounds. Her claim was denied. She sought
recourse in the Supreme Court. In laying down the standard for determining
whether the denial of benefits could withstand constitutional scrutiny, the
Court ruled, viz:
Plainly enough, appellee’s conscientious objection to Saturday work
constitutes no conduct prompted by religious principles of a kind within the
reach of state legislation. If, therefore, the decision of the South Carolina
Supreme Court is to withstand appellant’s constitutional challenge, it must be
either because her disqualification as a beneficiary represents no
infringement by the State of her constitutional right of free exercise, or
because any incidental burden on the free exercise of appellant’s religion
may be justified by a "compelling state interest in the regulation of a subject
within the State’s constitutional power to regulate. . . ." 57 (emphasis supplied)
The Court stressed that in the area of religious liberty, it is basic that it is not
sufficient to merely show a rational relationship of the substantial
infringement to the religious right and a colorable state interest. "(I)n this
highly sensitive constitutional area, ‘[o]nly the gravest abuses, endangering
paramount interests, give occasion for permissible limitation.’" 58 The Court
found that there was no such compelling state interest to override Sherbert’s
religious liberty. It added that even if the state could show that Sherbert’s
exemption would pose serious detrimental effects to the unemployment
compensation fund and scheduling of work, it was incumbent upon the state
to show that no alternative means of regulations would address such
detrimental effects without infringing religious liberty. The state, however,
did not discharge this burden. The Court thus carved out for Sherbert an
exemption from the Saturday work requirement that caused her
disqualification from claiming the unemployment benefits. The Court
reasoned that upholding the denial of Sherbert’s benefits would force her to
choose between receiving benefits and following her religion. This choice
placed "the same kind of burden upon the free exercise of religion as would a
fine imposed against (her) for her Saturday worship." This germinal case of
Sherbert firmly established the exemption doctrine, 59 viz:
It is certain that not every conscience can be accommodated by all the laws
of the land; but when general laws conflict with scruples of conscience,
exemptions ought to be granted unless some "compelling state interest"
intervenes.
Thus, Sherbert and subsequent cases held that when government action
burdens, even inadvertently, a sincerely held religious belief or practice, the
state must justify the burden by demonstrating that the law embodies a
compelling interest, that no less restrictive alternative exists, and that a
religious exemption would impair the state’s ability to effectuate its
compelling interest. As in other instances of state action affecting
fundamental rights, negative impacts on those rights demand the highest
level of judicial scrutiny. After Sherbert, this strict scrutiny balancing test
resulted in court-mandated religious exemptions from facially-neutral laws of
general application whenever unjustified burdens were found. 60
Then, in the 1972 case of Wisconsin v. Yoder, 61 the U.S. Court again ruled
that religious exemption was in order, notwithstanding that the law of general
application had a criminal penalty. Using heightened scrutiny, the Court
overturned the conviction of Amish parents for violating Wisconsin
compulsory school-attendance laws. The Court, in effect, granted exemption
from a neutral, criminal statute that punished religiously motivated conduct.
Chief Justice Burger, writing for the majority, held, viz:
It follows that in order for Wisconsin to compel school attendance beyond
the eighth grade against a claim that such attendance interferes with the
practice of a legitimate religious belief, it must appear either that the State
does not deny the free exercise of religious belief by its requirement, or that
there is a state interest of sufficient magnitude to override the interest
claiming protection under the Free Exercise Clause. Long before there was
general acknowledgement of the need for universal education, the Religion
Clauses had specially and firmly fixed the right of free exercise of religious
beliefs, and buttressing this fundamental right was an equally firm, even if
less explicit, prohibition against the establishment of any religion. The values
underlying these two provisions relating to religion have been zealously
protected, sometimes even at the expense of other interests of admittedly
high social importance. . .
The essence of all that has been said and written on the subject is that only
those interests of the highest order and those not otherwise served can
overbalance legitimate claims to the free exercise of religion. . .
. . . our decisions have rejected the idea that religiously grounded conduct is
always outside the protection of the Free Exercise Clause. It is true that
activities of individuals, even when religiously based, are often subject to
regulation by the States in the exercise of their undoubted power to promote
the health, safety, and general welfare, or the Federal government in the
exercise of its delegated powers . . . But to agree that religiously grounded
conduct must often be subject to the broad police power of the State is not to
deny that there are areas of conduct protected by the Free Exercise Clause of
the First Amendment and thus beyond the power of the State to control, even
under regulations of general applicability. . . .This case, therefore, does not
become easier because respondents were convicted for their "actions" in
refusing to send their children to the public high school; in this context belief
and action cannot be neatly confined in logic-tight compartments. . . 62
The cases of Sherbert and Yoder laid out the following doctrines: (a) free
exercise clause claims were subject to heightened scrutiny or compelling
interest test if government substantially burdened the exercise of religion; (b)
heightened scrutiny or compelling interest test governed cases where the
burden was direct, i.e., the exercise of religion triggered a criminal or civil
penalty, as well as cases where the burden was indirect, i.e., the exercise of
religion resulted in the forfeiture of a government benefit; 63 and (c) the Court
could carve out accommodations or exemptions from a facially neutral law of
general application, whether general or criminal.
The Sherbert-Yoder doctrine had five main components. First, action was
protected—conduct beyond speech, press, or worship was included in the
shelter of freedom of religion. Neither Sherbert’s refusal to work on the
Sabbath nor the Amish parents’ refusal to let their children attend ninth and
tenth grades can be classified as conduct protected by the other clauses of the
First Amendment. Second, indirect impositions on religious conduct, such as
the denial of twenty-six weeks of unemployment insurance benefits to Adel
Sherbert, as well as direct restraints, such as the criminal prohibition at issue
in Yoder, were prohibited. Third, as the language in the two cases indicate,
the protection granted was extensive. Only extremely strong governmental
interests justified impingement on religious conduct, as the absolute language
of the test of the Free Exercise Clause suggests. 64
Fourth, the strong language was backed by a requirement that the
government provide proof of the important interest at stake and of the
dangers to that interest presented by the religious conduct at issue. Fifth, in
determining the injury to the government’s interest, a court was required to
focus on the effect that exempting religious claimants from the regulation
would have, rather than on the value of the regulation in general. Thus, injury
to governmental interest had to be measured at the margin: assuming the law
still applied to all others, what would be the effect of exempting the religious
claimant in this case and other similarly situated religious claimants in the
future? Together, the fourth and fifth elements required that facts, rather than
speculation, had to be presented concerning how the government’s interest
would be harmed by excepting religious conduct from the law being
challenged. 65
Sherbert and Yoder adopted a balancing test for free exercise jurisprudence
which would impose a discipline to prevent manipulation in the balancing of
interests. The fourth and the fifth elements prevented the likelihood of
exaggeration of the weight on the governmental interest side of the balance,
by not allowing speculation about the effects of a decision adverse to those
interests nor accepting that those interests would be defined at a higher level
of generality than the constitutional interests on the other side of the balance.
66
Thus, the strict scrutiny and compelling state interest test significantly
increased the degree of protection afforded to religiously motivated conduct.
While not affording absolute immunity to religious activity, a compelling
secular justification was necessary to uphold public policies that collided
with religious practices. Although the members of the U.S. Court often
disagreed over which governmental interests should be considered
compelling, thereby producing dissenting and separate opinions in religious
conduct cases, this general test established a strong presumption in favor of
the free exercise of religion.67 Most scholars and courts agreed that under
Sherbert and Yoder, the Free Exercise Clause provided individuals some
form of heightened scrutiny protection, if not always a compelling interest
one.68 The 1990 case of Employment Division, Oregon Department of
Human Resources v. Smith,69 drastically changed all that.
Smith involved a challenge by Native Americans to an Oregon law
prohibiting use of peyote, a hallucinogenic substance. Specifically,
individuals challenged the state’s determination that their religious use of
peyote, which resulted in their dismissal from employment, was misconduct
disqualifying them from receipt of unemployment compensation benefits. 70
Justice Scalia, writing for the majority, rejected the claim that free exercise
of religion required an exemption from an otherwise valid law. Scalia said
that "[w]e have never held that an individual’s religious beliefs excuse him
from compliance with an otherwise valid law prohibiting conduct that the
State is free to regulate. On the contrary, the record of more than a century of
our free exercise jurisprudence contradicts that proposition." 71 Scalia thus
declared "that the right of free exercise does not relieve an individual of the
obligation to comply with a ‘valid and neutral law of general applicability of
the ground that the law proscribes (or prescribes) conduct that his religion
prescribes (or proscribes).’" 72
Justice Scalia’s opinion then reviewed the cases where free exercise
challenges had been upheld—such as Cantwell, Murdock, Follet, Pierce, and
Yoder—and said that none involved the free exercise clause claims alone.
All involved "the Free Exercise Clause in conjunction with other
constitutional protections, such as freedom of speech and of the press, or the
right of parents to direct the education of their children." 73 The Court said
that Smith was distinguishable because it did not involve such a "hybrid
situation," but was a free exercise claim "unconnected with any
communicative activity or parental right." 74
Moreover, the Court said that the Sherbert line of cases applied only in the
context of the denial of unemployment benefits; it did not create a basis for
an exemption from criminal laws. Scalia wrote that "[e]ven if we were
inclined to breathe into Sherbert some life beyond the unemployment
compensation field, we would not apply it to require exemptions from a
generally applicable criminal law." 75
The Court expressly rejected the use of strict scrutiny for challenges to
neutral laws of general applicability that burden religion. Justice Scalia said
that "[p]recisely because ‘we are a cosmopolitan nation made up of people of
almost conceivable religious preference,’ and precisely because we value and
protect that religious divergence, we cannot afford the luxury of deeming
presumptively invalid, as applied to the religious objector, every regulation
of conduct that does not protect an interest of the highest order." The Court
said that those seeking religious exemptions from laws should look to the
democratic process for protection, not the courts. 76
Smith thus changed the test for the free exercise clause. Strict or heightened
scrutiny and the compelling justification approach were abandoned for
evaluating laws burdening religion; neutral laws of general applicability only
have to meet the rational basis test, no matter how much they burden
religion. 77
Justice O’Connor wrote a concurring opinion sharply criticizing the rejection
of the compelling state interest test, asserting that "(t)he compelling state
interest test effectuates the First Amendment’s command that religious
liberty is an independent liberty, that it occupies a preferred position, and that
the Court will not permit encroachments upon this liberty, whether direct or
indirect, unless required by clear and compelling government interest ‘of the
highest order.’"78 She said that strict scrutiny is appropriate for free exercise
challenges because "[t]he compelling interest test reflects the First
Amendment’s mandate of preserving religious liberty to the fullest extent
possible in a pluralistic society." 79
Justice O’Connor also disagreed with the majority’s description of prior
cases and especially its leaving the protection of minority religions to the
political process. She said that, "First Amendment was enacted precisely to
protect the rights of those whose religious practice are not shared by the
majority and may be viewed with hostility." 80
Justice Blackmun wrote a dissenting opinion that was joined by Justices
Brennan and Marshall. The dissenting Justices agreed with Justice O’Connor
that the majority had mischaracterized precedents, such as in describing
Yoder as a "hybrid" case rather than as one under the free exercise clause.
The dissent also argued that strict scrutiny should be used in evaluating
government laws burdening religion. 81
Criticism of Smith was intense and widespread. 82 Academics, Justices, and a
bipartisan majority of Congress noisily denounced the decision. 83 Smith has
the rather unusual distinction of being one case that is almost universally
despised (and this is not too strong a word) by both the liberals and
conservatives.84 Liberals chasten the Court for its hostility to minority faiths
which, in light of Smith’s general applicability rule, will allegedly suffer at
the hands of the majority faith whether through outright hostility or neglect.
Conservatives bemoan the decision as an assault on religious belief leaving
religion, more than ever, subject to the caprice of an ever more secular nation
that is increasingly hostile to religious belief as an oppressive and archaic
anachronism. 85
The Smith doctrine is highly unsatisfactory in several respects and has been
criticized as exhibiting a shallow understanding of free exercise
jurisprudence.86 First, the First amendment was intended to protect minority
religions from the tyranny of the religious and political majority. 87 Critics of
Smith have worried about religious minorities, who can suffer
disproportionately from laws that enact majoritarian mores. 88 Smith, in effect
would allow discriminating in favor of mainstream religious groups against
smaller, more peripheral groups who lack legislative clout, 89 contrary to the
original theory of the First Amendment. 90 Undeniably, claims for judicial
exemption emanate almost invariably from relatively politically powerless
minority religions and Smith virtually wiped out their judicial recourse for
exemption.91 Second, Smith leaves too much leeway for pervasive welfare-
state regulation to burden religion while satisfying neutrality. After all, laws
not aimed at religion can hinder observance just as effectively as those that
target religion.92 Government impairment of religious liberty would most
often be of the inadvertent kind as in Smith considering the political culture
where direct and deliberate regulatory imposition of religious orthodoxy is
nearly inconceivable. If the Free Exercise Clause could not afford protection
to inadvertent interference, it would be left almost meaningless. 93 Third, the
Reynolds-Gobitis-Smith94 doctrine simply defies common sense. The state
should not be allowed to interfere with the most deeply held fundamental
religious convictions of an individual in order to pursue some trivial state
economic or bureaucratic objective. This is especially true when there are
alternative approaches for the state to effectively pursue its objective without
serious inadvertent impact on religion.95
At bottom, the Court’s ultimate concern in Smith appeared to be two-fold:
(1) the difficulty in defining and limiting the term "religion" in today’s
pluralistic society, and (2) the belief that courts have no business determining
the significance of an individual’s religious beliefs. For the Smith Court,
these two concerns appear to lead to the conclusion that the Free Exercise
Clause must protect everything or it must protect virtually nothing. As a
result, the Court perceives its only viable options are to leave free exercise
protection to the political process or to allow a "system in which each
conscience is a law unto itself." 96 The Court’s characterization of its choices
have been soundly rejected as false, viz:
If one accepts the Court’s assumption that these are the only two viable
options, then admittedly, the Court has a stronger argument. But the Free
Exercise Clause cannot be summarily dismissed as too difficult to apply and
this should not be applied at all. The Constitution does not give the judiciary
the option of simply refusing to interpret its provisions. The First
Amendment dictates that free exercise of "religion" must be protected.
Accordingly, the Constitution compels the Court to struggle with the
contours of what constitutes "religion." There is no constitutional opt-out
provision for constitutional words that are difficult to apply.
Nor does the Constitution give the Court the option of simply ignoring
constitutional mandates. A large area of middle ground exists between the
Court’s two opposing alternatives for free exercise jurisprudence.
Unfortunately, this middle ground requires the Court to tackle difficult issues
such as defining religion and possibly evaluating the significance of a
religious belief against the importance of a specific law. The Court describes
the results of this middle ground where "federal judges will regularly balance
against the importance of general laws the significance of religious practice,"
and then dismisses it as a "parade of horribles" that is too "horrible to
contemplate."
It is not clear whom the Court feels would be most hurt by this "parade of
horribles." Surely not religious individuals; they would undoubtedly prefer
their religious beliefs to be probed for sincerity and significance rather than
acquiesce to the Court’s approach of simply refusing to grant any
constitutional significance to their beliefs at all. If the Court is concerned
about requiring lawmakers at times constitutionally to exempt religious
individuals from statutory provisions, its concern is misplaced. It is the
lawmakers who have sought to prevent the Court from dismantling the Free
Exercise Clause through such legislation as the [Religious Freedom
Restoration Act of 1993], and in any case, the Court should not be overly
concerned about hurting legislature’s feelings by requiring their laws to
conform to constitutional dictates. Perhaps the Court is concerned about
putting such burden on judges. If so, it would truly be odd to say that
requiring the judiciary to perform its appointed role as constitutional
interpreters is a burden no judge should be expected to fulfill. 97
Parenthetically, Smith’s characterization that the U.S. Court has "never held
that an individual’s religious beliefs excuse him from compliance with an
otherwise valid law prohibiting conduct that the state is free to regulate"—an
assertion which Mr. Justice Carpio adopted unequivocally in his dissent—has
been sharply criticized even implicitly by its supporters, as blatantly untrue.
Scholars who supported Smith frequently did not do so by opposing the
arguments that the Court was wrong as a matter of original meaning [of the
religion clauses] or that the decision conflicted with precedent [i.e. the Smith
decision made shocking use of precedent]—those points were often
conceded. 98
To justify its perversion of precedent, the Smith Court attempted to
distinguish the exemption made in Yoder, by asserting that these were
premised on two constitutional rights combined—the right of parents to
direct the education of their children and the right of free exercise of religion.
Under the Court’s opinion in Smith, the right of free exercise of religion
standing alone would not allow Amish parents to disregard the compulsory
school attendance law, and under the Court’s opinion in Yoder, parents
whose objection to the law was not religious would also have to obey it. The
fatal flaw in this argument, however, is that if two constitutional claims will
fail on its own, how would it prevail if combined? 99 As for Sherbert, the
Smith Court attempted to limit its doctrine as applicable only to denials of
unemployment compensation benefits where the religiously-compelled
conduct that leads to job loss is not a violation of criminal law. And yet, this
is precisely why the rejection of Sherbert was so damaging in its effect: the
religious person was more likely to be entitled to constitutional protection
when forced to choose between religious conscience and going to jail than
when forced to choose between religious conscience and financial loss. 100
Thus, the Smith decision elicited much negative public reaction especially
from the religious community, and commentaries insisted that the Court was
allowing the Free Exercise Clause to disappear. 101 So much was the uproar
that a majority in Congress was convinced to enact the Religious Freedom
Restoration Act (RFRA) of 1993.102 The RFRA was adopted to negate the
Smith test and require strict scrutiny for free exercise claims. Indeed, the
findings section of the Act notes that Smith "virtually eliminated the
requirement that the government justify burdens on religious exercise
imposed by laws neutral toward religion." 103 The Act declares that its purpose
is to restore the compelling interest test as set forth in Sherbert v. Verner and
Wisconsin v. Yoder, and to guarantee its application in all cases where free
exercise of religion is substantially burdened; and to provide a claim of
defense to a person whose religious exercise is substantially burdened by
government.104 The RFRA thus sought to overrule Smith and make strict
scrutiny the test for all free exercise clause claims. 105
In the City of Boerne v. Flores, 106 the U.S. Supreme Court declared the
RFRA unconstitutional, ruling that Congress had exceeded its power under
the Fourteenth Amendment in enacting the law. The Court ruled that
Congress is empowered to enact laws "to enforce the amendment," but
Congress is not "enforcing" when it creates new constitutional rights or
expands the scope of rights. 107
City of Boerne also drew public backlash as the U.S. Supreme Court was
accused of lack of judicial respect for the constitutional decision-making by a
coordinate branch of government. In Smith, Justice Scalia wrote:
"Values that are protected against governmental interference through
enshrinement in the Bill of Rights are not thereby banished from the political
process. Just as society believes in the negative protection accorded to the
press by the First Amendment is likely to enact laws that affirmatively foster
the dissemination of the printed word, so also a society that believes in the
negative protection accorded to religious belief can be expected to be
solicitous of that value in its legislation as well."
By invalidating RFRA, the Court showed a marked disrespect of the
solicitude of a nearly unanimous Congress. Contrary to the Court’s
characterization of the RFRA as a kind of usurpation of the judicial power to
say what the Constitution means, the law offered no definition of Free
Exercise, and on its face appeared to be a procedural measure establishing a
standard of proof and allocating the duty of meeting it. In effect, the Court
ruled that Congress had no power in the area of religion. And yet, Free
Exercise exists in the First Amendment as a negative on Congress. The
power of Congress to act towards the states in matters of religion arises from
the Fourteenth Amendment. 108
From the foregoing, it can be seen that Smith, while expressly recognizing
the power of legislature to give accommodations, is in effect contrary to the
benevolent neutrality or accommodation approach. Moreover, if we consider
the history of the incorporation of the religion clauses in the U.S., the
decision in Smith is grossly inconsistent with the importance placed by the
framers on religious faith. Smith is dangerous precedent because it
subordinates fundamental rights of religious belief and practice to all neutral,
general legislation. Sherbert recognized the need to protect religious exercise
in light of the massive increase in the size of government, the concerns
within its reach, and the number of laws administered by it. However, Smith
abandons the protection of religious exercise at a time when the scope and
reach of government has never been greater. It has been pointed out that
Smith creates the legal framework for persecution: through general, neutral
laws, legislatures are now able to force conformity on religious minorities
whose practice irritate or frighten an intolerant majority. 109
The effect of Smith is to erase entirely the concept of mandatory
accommodations, thereby emasculating the Free Exercise Clause. Smith left
religious freedom for many in the hands of the political process, exactly
where it would be if the religion clauses did not exist in the Bill of Rights.
Like most protections found in the Bill of Rights, the religion clauses of the
First Amendment are most important to those who cannot prevail in the
political process. The Court in Smith ignores the fact that the protections
found in the Bill of Rights were deemed too important to leave to the
political process. Because mainstream religions generally have been
successful in protecting their interests through the political process, it is the
non-mainstream religions that are adversely affected by Smith. In short, the
U.S. Supreme Court has made it clear to such religions that they should not
look to the First Amendment for religious freedom. 110
(3) Accommodation under the Religion Clauses
A free exercise claim could result to three kinds of accommodation: (a) those
which are found to be constitutionally compelled, i.e., required by the Free
Exercise Clause; (b) those which are discretionary or legislative, i.e., not
required by the Free Exercise Clause but nonetheless permitted by the
Establishment Clause; and (c) those which the religion clauses prohibit. 111
Mandatory accommodation results when the Court finds that accommodation
is required by the Free Exercise Clause, i.e, when the Court itself carves out
an exemption. This accommodation occurs when all three conditions of the
compelling interest test are met, i.e, a statute or government action has
burdened claimant’s free exercise of religion, and there is no doubt as to the
sincerity of the religious belief; the state has failed to demonstrate a
particularly important or compelling governmental goal in preventing an
exemption; and that the state has failed to demonstrate that it used the least
restrictive means. In these cases, the Court finds that the injury to religious
conscience is so great and the advancement of public purposes is
incomparable that only indifference or hostility could explain a refusal to
make exemptions. Thus, if the state’s objective could be served as well or
almost as well by granting an exemption to those whose religious beliefs are
burdened by the regulation, the Court must grant the exemption. The Yoder
case is an example where the Court held that the state must accommodate the
religious beliefs of the Amish who objected to enrolling their children in high
school as required by law. The Sherbert case is another example where the
Court held that the state unemployment compensation plan must
accommodate the religious convictions of Sherbert. 112
In permissive accommodation, the Court finds that the State may, but is not
required to, accommodate religious interests. The U.S. Walz case illustrates
this situation where the U.S. Supreme Court upheld the constitutionality of
tax exemption given by New York to church properties, but did not rule that
the state was required to provide tax exemptions. The Court declared that
"(t)he limits of permissible state accommodation to religion are by no means
co-extensive with the noninterference mandated by the Free Exercise
Clause."113 Other examples are Zorach v. Clauson, 114 allowing released time
in public schools and Marsh v. Chambers, 115 allowing payment of legislative
chaplains from public funds. Parenthetically, the Court in Smith has ruled
that this is the only accommodation allowed by the Religion Clauses.
Finally, when the Court finds no basis for a mandatory accommodation, or it
determines that the legislative accommodation runs afoul of the
establishment or the free exercise clause, it results to a prohibited
accommodation. In this case, the Court finds that establishment concerns
prevail over potential accommodation interests. To say that there are valid
exemptions buttressed by the Free Exercise Clause does not mean that all
claims for free exercise exemptions are valid. 116 An example where
accommodation was prohibited is McCollum v. Board of Education, 117 where
the Court ruled against optional religious instruction in the public school
premises.118
Given that a free exercise claim could lead to three different results, the
question now remains as to how the Court should determine which action to
take. In this regard, it is the strict scrutiny-compelling state interest test
which is most in line with the benevolent neutrality-accommodation
approach.
Under the benevolent-neutrality theory, the principle underlying the First
Amendment is that freedom to carry out one’s duties to a Supreme Being is
an inalienable right, not one dependent on the grace of legislature. Religious
freedom is seen as a substantive right and not merely a privilege against
discriminatory legislation. With religion looked upon with benevolence and
not hostility, benevolent neutrality allows accommodation of religion under
certain circumstances.
Considering that laws nowadays are rarely enacted specifically to disable
religious belief or practice, free exercise disputes arise commonly when a
law that is religiously neutral and generally applicable on its face is argued to
prevent or burden what someone’s religious faith requires, or alternatively,
requires someone to undertake an act that faith would preclude. In essence,
then, free exercise arguments contemplate religious exemptions from
otherwise general laws.119
Strict scrutiny is appropriate for free exercise challenges because "[t]he
compelling interest test reflects the First Amendment’s mandate of
preserving religious liberty to the fullest extent possible in a pluralistic
society.120 Underlying the compelling state interest test is the notion that free
exercise is a fundamental right and that laws burdening it should be subject
to strict scrutiny.121
In its application, the compelling state interest test follows a three-step
process, summarized as follows:
If the plaintiff can show that a law or government practice inhibits the free
exercise of his religious beliefs, the burden shifts to the government to
demonstrate that the law or practice is necessary to the accomplishment of
some important (or ‘compelling’) secular objective and that it is the least
restrictive means of achieving that objective. If the plaintiff meets this
burden and the government does not, the plaintiff is entitled to exemption
from the law or practice at issue. In order to be protected, the claimant’s
beliefs must be ‘sincere’, but they need not necessarily be consistent,
coherent, clearly articulated, or congruent with those of the claimant’s
religious denomination. ‘Only beliefs rooted in religion are protected by the
Free Exercise Clause’; secular beliefs, however sincere and conscientious, do
not suffice.122
In sum, the U.S. Court has invariably decided claims based on the religion
clauses using either the separationist approach, or the benevolent neutrality
approach. The benevolent neutrality approach has also further been split by
the view that the First Amendment requires accommodation, or that it only
allows permissible legislative accommodations. The current prevailing view
as pronounced in Smith, however, is that that there are no required
accommodation under the First Amendment, although it permits of
legislative accommodations.
3. Religion Clauses in the Philippine Context: Constitution, Jurisprudence
and Practice
a. US Constitution and jurisprudence vis-à-vis Philippine Constitution
By juxtaposing the American Constitution and jurisprudence against that of
the Philippines, it is immediately clear that one cannot simply conclude that
we have adopted—lock, stock and barrel—the religion clauses as embodied
in the First Amendment, and therefore, the U.S. Court’s interpretation of the
same. Unlike in the U.S. where legislative exemptions of religion had to be
upheld by the U.S. Supreme Court as constituting permissive
accommodations, similar exemptions for religion are mandatory
accommodations under our own constitutions. Thus, our 1935, 1973 and
1987 Constitutions contain provisions on tax exemption of church
property,123 salary of religious officers in government institutions, 124 and
optional religious instruction. 125 Our own preamble also invokes the aid of a
divine being.126 These constitutional provisions are wholly ours and have no
counterpart in the U.S. Constitution or its amendments. They all reveal
without doubt that the Filipino people, in adopting these constitutions,
manifested their adherence to the benevolent neutrality approach that
requires accommodations in interpreting the religion clauses. 127
The argument of Mr. Justice Carpio that the August 4, 2003 ponencia was
erroneous insofar as it asserted that the 1935 Constitution incorporates the
Walz ruling as this case was decided subsequent to the 1935 Constitution is a
misreading of the ponencia. What the ponencia pointed out was that even as
early as 1935, or more than three decades before the U.S. Court could
validate the exemption in Walz as a form or permissible accommodation, we
have already incorporated the same in our Constitution, as a mandatory
accommodation.
There is no ambiguity with regard to the Philippine Constitution’s departure
from the U.S. Constitution, insofar as religious accommodations are
concerned. It is indubitable that benevolent neutrality-accommodation,
whether mandatory or permissive, is the spirit, intent and framework
underlying the Philippine Constitution.128 As stated in our Decision, dated
August 4, 2003:
The history of the religion clauses in the 1987 Constitution shows that these
clauses were largely adopted from the First Amendment of the U.S.
Constitution xxxx Philippine jurisprudence and commentaries on the
religious clauses also continued to borrow authorities from U.S.
jurisprudence without articulating the stark distinction between the two
streams of U.S. jurisprudence [i.e., separation and benevolent neutrality].
One might simply conclude that the Philippine Constitutions and
jurisprudence also inherited the disarray of U.S. religion clause jurisprudence
and the two identifiable streams; thus, when a religion clause case comes
before the Court, a separationist approach or a benevolent neutrality
approach might be adopted and each will have U.S. authorities to support it.
Or, one might conclude that as the history of the First Amendment as
narrated by the Court in Everson supports the separationist approach,
Philippine jurisprudence should also follow this approach in light of the
Philippine religion clauses’ history. As a result, in a case where the party
claims religious liberty in the face of a general law that inadvertently burdens
his religious exercise, he faces an almost insurmountable wall in convincing
the Court that the wall of separation would not be breached if the Court
grants him an exemption. These conclusions, however, are not and were
never warranted by the 1987, 1973 and 1935 Constitutions as shown by other
provisions on religion in all three constitutions. It is a cardinal rule in
constitutional construction that the constitution must be interpreted as a
whole and apparently conflicting provisions should be reconciled and
harmonized in a manner that will give to all of them full force and effect.
From this construction, it will be ascertained that the intent of the framers
was to adopt a benevolent neutrality approach in interpreting the religious
clauses in the Philippine constitutions, and the enforcement of this intent is
the goal of construing the constitution.129 [citations omitted]
We therefore reject Mr. Justice Carpio’s total adherence to the U.S. Court’s
interpretation of the religion clauses to effectively deny accommodations on
the sole basis that the law in question is neutral and of general application.
For even if it were true that "an unbroken line of U.S. Supreme Court
decisions" has never held that "an individual’s religious beliefs [do not]
excuse him from compliance with an otherwise valid law prohibiting conduct
that the State is free to regulate," our own Constitutions have made
significant changes to accommodate and exempt religion. Philippine
jurisprudence shows that the Court has allowed exemptions from a law of
general application, in effect, interpreting our religion clauses to cover both
mandatory and permissive accommodations.130
To illustrate, in American Bible Society v. City of Manila, 131 the Court
granted to plaintiff exemption from a law of general application based on the
Free Exercise Clause. In this case, plaintiff was required by an ordinance to
secure a mayor’s permit and a municipal license as ordinarily required of
those engaged in the business of general merchandise under the city’s
ordinances. Plaintiff argued that this amounted to "religious censorship and
restrained the free exercise and enjoyment of religious profession, to wit: the
distribution and sale of bibles and other religious literature to the people of
the Philippines." Although the Court categorically held that the questioned
ordinances were not applicable to plaintiff as it was not engaged in the
business or occupation of selling said "merchandise" for profit, it also ruled
that applying the ordinance to plaintiff and requiring it to secure a license and
pay a license fee or tax would impair its free exercise of religious profession
and worship and its right of dissemination of religious beliefs "as the power
to tax the exercise of a privilege is the power to control or suppress its
enjoyment." The decision states in part, viz:
The constitutional guaranty of the free exercise and enjoyment of religious
profession and worship carries with it the right to disseminate religious
information. Any restraint of such right can only be justified like other
restraints of freedom of expression on the grounds that there is a clear and
present danger of any substantive evil which the State has the right to
prevent. (citations omitted, emphasis supplied)
Another case involving mandatory accommodation is Ebralinag v. The
Division Superintendent of Schools. 132 The case involved several Jehovah’s
Witnesses who were expelled from school for refusing to salute the flag, sing
the national anthem and recite the patriotic pledge, in violation of the
Administrative Code of 1987. In resolving the religious freedom issue, a
unanimous Court overturned an earlier ruling denying such exemption, 133
using the "grave and imminent danger" test, viz:
The sole justification for a prior restraint or limitation on the exercise of
religious freedom (according to the late Chief Justice Claudio Teehankee in
his dissenting opinion in German v. Barangan, 135 SCRA 514, 517) is the
existence of a grave and present danger of a character both grave and
imminent, of a serious evil to public safety, public morals, public health or
any other legitimate public interest, that the State has a right (and duty) to
prevent. Absent such a threat to public safety, the expulsion of the petitioners
from the schools is not justified.134 (emphases supplied)
In these two cases, the Court itself carved out an exemption from a law of
general application, on the strength directly of the Free Exercise Clause.
We also have jurisprudence that supports permissive accommodation. The
case of Victoriano v. Elizalde Rope Workers Union 135 is an example of the
application of Mr. Justice Carpio’s theory of permissive accommodation,
where religious exemption is granted by a legislative act. In Victoriano, the
constitutionality of Republic Act No. 3350 was questioned. The said R.A.
exempt employees from the application and coverage of a closed shop
agreement—mandated in another law—based on religious objections. A
unanimous Court upheld the constitutionality of the law, holding that
"government is not precluded from pursuing valid objectives secular in
character even if the incidental result would be favorable to a religion or
sect." Interestingly, the secular purpose of the challenged law which the
Court upheld was the advancement of "the constitutional right to the free
exercise of religion."136
Having established that benevolent neutrality-accommodation is the
framework by which free exercise cases must be decided, the next question
then turned to the test that should be used in ascertaining the limits of the
exercise of religious freedom. In our Decision dated August 4, 2003, we
reviewed our jurisprudence, and ruled that in cases involving purely conduct
based on religious belief, as in the case at bar, the compelling state interest
test, is proper, viz:
Philippine jurisprudence articulates several tests to determine these limits.
Beginning with the first case on the Free Exercise Clause, American Bible
Society, the Court mentioned the "clear and present danger" test but did not
employ it. Nevertheless, this test continued to be cited in subsequent cases on
religious liberty. The Gerona case then pronounced that the test of
permissibility of religious freedom is whether it violates the established
institutions of society and law. The Victoriano case mentioned the
"immediate and grave danger" test as well as the doctrine that a law of
general applicability may burden religious exercise provided the law is the
least restrictive means to accomplish the goal of the law. The case also used,
albeit inappropriately, the "compelling state interest" test. After Victoriano,
German went back to the Gerona rule. Ebralinag then employed the "grave
and immediate danger" test and overruled the Gerona test. The fairly recent
case of Iglesia ni Cristo went back to the "clear and present danger" test in
the maiden case of American Bible Society. Not surprisingly, all the cases
which employed the "clear and present danger" or "grave and immediate
danger" test involved, in one form or another, religious speech as this test is
often used in cases on freedom of expression. On the other hand, the Gerona
and German cases set the rule that religious freedom will not prevail over
established institutions of society and law. Gerona, however, which was the
authority cited by German has been overruled by Ebralinag which employed
the "grave and immediate danger" test. Victoriano was the only case that
employed the "compelling state interest" test, but as explained previously,
the use of the test was inappropriate to the facts of the case.
The case at bar does not involve speech as in American Bible Society,
Ebralinag and Iglesia ni Cristo where the "clear and present danger" and
"grave and immediate danger" tests were appropriate as speech has easily
discernible or immediate effects. The Gerona and German doctrine, aside
from having been overruled, is not congruent with the benevolent neutrality
approach, thus not appropriate in this jurisdiction. Similar to Victoriano, the
present case involves purely conduct arising from religious belief. The
"compelling state interest" test is proper where conduct is involved for the
whole gamut of human conduct has different effects on the state’s interests:
some effects may be immediate and short-term while others delayed and far-
reaching. A test that would protect the interests of the state in preventing a
substantive evil, whether immediate or delayed, is therefore necessary.
However, not any interest of the state would suffice to prevail over the right
to religious freedom as this is a fundamental right that enjoys a preferred
position in the hierarchy of rights - "the most inalienable and sacred of all
human rights", in the words of Jefferson. This right is sacred for an
invocation of the Free Exercise Clause is an appeal to a higher sovereignty.
The entire constitutional order of limited government is premised upon an
acknowledgment of such higher sovereignty, thus the Filipinos implore the
"aid of Almighty God in order to build a just and humane society and
establish a government." As held in Sherbert, only the gravest abuses,
endangering paramount interests can limit this fundamental right. A mere
balancing of interests which balances a right with just a colorable state
interest is therefore not appropriate. Instead, only a compelling interest of the
state can prevail over the fundamental right to religious liberty. The test
requires the state to carry a heavy burden, a compelling one, for to do
otherwise would allow the state to batter religion, especially the less
powerful ones until they are destroyed. In determining which shall prevail
between the state’s interest and religious liberty, reasonableness shall be the
guide. The "compelling state interest" serves the purpose of revering
religious liberty while at the same time affording protection to the paramount
interests of the state. This was the test used in Sherbert which involved
conduct, i.e. refusal to work on Saturdays. In the end, the "compelling state
interest" test, by upholding the paramount interests of the state, seeks to
protect the very state, without which, religious liberty will not be preserved.
137
(citations omitted)
At this point, we take note of Mr. Justice Carpio’s dissent, which, while
loosely disputing the applicability of the benevolent neutrality framework
and compelling state interest test, states that "[i]t is true that a test needs to be
applied by the Court in determining the validity of a free exercise claim of
exemption as made here by Escritor." This assertion is inconsistent with the
position negating the benevolent neutrality or accommodation approach. If it
were true, indeed, that the religion clauses do not require accommodations
based on the free exercise of religion, then there would be no need for a test
to determine the validity of a free exercise claim, as any and all claims for
religious exemptions from a law of general application would fail.
Mr. Justice Carpio also asserts that "[m]aking a distinction between
permissive accommodation and mandatory accommodation is more critically
important in analyzing free exercise exemption claims because it forces the
Court to confront how far it can validly set the limits of religious liberty
under the Free Exercise Clause, rather than presenting the separation theory
and accommodation theory as opposite concepts, and then rejecting relevant
and instructive American jurisprudence (such as the Smith case) just because
it does not espouse the theory selected." He then asserts that the Smith
doctrine cannot be dismissed because it does not really espouse the strict
neutrality approach, but more of permissive accommodation.
Mr. Justice Carpio’s assertion misses the point. Precisely because the
doctrine in Smith is that only legislative accommodations are allowed under
the Free Exercise Clause, it cannot be used in determining a claim of religion
exemption directly anchored on the Free Exercise Clause. Thus, even
assuming that the Smith doctrine actually espouses the theory of
accommodation or benevolent neutrality, the accommodation is limited to the
permissive, or legislative exemptions. It, therefore, cannot be used as a test in
determining the claims of religious exemptions directly under the Free
Exercise Clause because Smith does not recognize such exemption.
Moreover, Mr. Justice Carpio’s advocacy of the Smith doctrine would
effectively render the Free Exercise protection—a fundamental right under
our Constitution—nugatory because he would deny its status as an
independent source of right.
b. The Compelling State Interest Test
As previously stated, the compelling state interest test involves a three-step
process. We explained this process in detail, by showing the questions which
must be answered in each step, viz:
…First, "[H]as the statute or government action created a burden on the free
exercise of religion?" The courts often look into the sincerity of the religious
belief, but without inquiring into the truth of the belief because the Free
Exercise Clause prohibits inquiring about its truth as held in Ballard and
Cantwell. The sincerity of the claimant’s belief is ascertained to avoid the
mere claim of religious beliefs to escape a mandatory regulation. xxx
xxx xxx xxx
Second, the court asks: "[I]s there a sufficiently compelling state interest to
justify this infringement of religious liberty?" In this step, the government
has to establish that its purposes are legitimate for the state and that they are
compelling. Government must do more than assert the objectives at risk if
exemption is given; it must precisely show how and to what extent those
objectives will be undermined if exemptions are granted. xxx
xxx xxx xxx
Third, the court asks: "[H]as the state in achieving its legitimate purposes
used the least intrusive means possible so that the free exercise is not
infringed any more than necessary to achieve the legitimate goal of the
state?" The analysis requires the state to show that the means in which it is
achieving its legitimate state objective is the least intrusive means, i.e., it has
chosen a way to achieve its legitimate state end that imposes as little as
possible on religious liberties xxx.138 [citations omitted]
Again, the application of the compelling state interest test could result to
three situations of accommodation: First, mandatory accommodation would
result if the Court finds that accommodation is required by the Free Exercise
Clause. Second, if the Court finds that the State may, but is not required to,
accommodate religious interests, permissive accommodation results. Finally,
if the Court finds that that establishment concerns prevail over potential
accommodation interests, then it must rule that the accommodation is
prohibited.
One of the central arguments in Mr. Justice Carpio’s dissent is that only
permissive accommodation can carve out an exemption from a law of general
application. He posits the view that the law should prevail in the absence of a
legislative exemption, and the Court cannot make the accommodation or
exemption.
Mr. Justice Carpio’s position is clearly not supported by Philippine
jurisprudence. The cases of American Bible Society, Ebralinag, and
Victoriano demonstrate that our application of the doctrine of benevolent
neutrality-accommodation covers not only the grant of permissive, or
legislative accommodations, but also mandatory accommodations. Thus, an
exemption from a law of general application is possible, even if anchored
directly on an invocation of the Free Exercise Clause alone, rather than a
legislative exemption.
Moreover, it should be noted that while there is no Philippine case as yet
wherein the Court granted an accommodation/exemption to a religious act
from the application of general penal laws, permissive accommodation based
on religious freedom has been granted with respect to one of the crimes
penalized under the Revised Penal Code, that of bigamy.
In the U.S. case of Reynolds v. United States, 139 the U.S. Court expressly
denied to Mormons an exemption from a general federal law criminalizing
polygamy, even if it was proven that the practice constituted a religious duty
under their faith.140 In contradistinction, Philippine law accommodates the
same practice among Moslems, through a legislative act. For while the act of
marrying more than one still constitutes bigamy under the Revised Penal
Code, Article 180 of P.D. No. 1083, otherwise known as the Code of Muslim
Personal Laws of the Philippines, provides that the penal laws relative to the
crime of bigamy "shall not apply to a person married…under Muslim law."
Thus, by legislative action, accommodation is granted of a Muslim practice
which would otherwise violate a valid and general criminal law. Mr. Justice
Carpio recognized this accommodation when, in his dissent in our Decision
dated August 4, 2003 and citing Sulu Islamic Association of Masjid
Lambayong v. Malik,141 he stated that a Muslim Judge "is not criminally
liable for bigamy because Shari’a law allows a Muslim to have more than
one wife."
From the foregoing, the weakness of Mr. Justice Carpio’s "permissive-
accommodation only" advocacy in this jurisdiction becomes manifest.
Having anchored his argument on the Smith doctrine that "the guaranty of
religious liberty as embodied in the Free Exercise Clause does not require the
grant of exemptions from generally applicable laws to individuals whose
religious practice conflict with those laws," his theory is infirmed by the
showing that the benevolent neutrality approach which allows for both
mandatory and permissive accommodations was unequivocally adopted by
our framers in the Philippine Constitution, our legislature, and our
jurisprudence.
Parenthetically, it should be pointed out that a "permissive accommodation-
only" stance is the antithesis to the notion that religion clauses, like the other
fundamental liberties found in the Bill or Rights, is a preferred right and an
independent source of right.
What Mr. Justice Carpio is left with is the argument, based on Smith, that the
test in Sherbert is not applicable when the law in question is a generally
applicable criminal law. Stated differently, even if Mr. Justice Carpio
conceded that there is no question that in the Philippine context,
accommodations are made, the question remains as to how far the
exemptions will be made and who would make these exemptions.
On this point, two things must be clarified: first, in relation to criminal
statutes, only the question of mandatory accommodation is uncertain, for
Philippine law and jurisprudence have, in fact, allowed legislative
accommodation. Second, the power of the Courts to grant exemptions in
general (i.e., finding that the Free Exercise Clause required the
accommodation, or mandatory accommodations) has already been decided,
not just once, but twice by the Court. Thus, the crux of the matter is whether
this Court can make exemptions as in Ebralinag and the American Bible
Society, in cases involving criminal laws of general application.
We hold that the Constitution itself mandates the Court to do so for the
following reasons.
First, as previously discussed, while the U.S. religion clauses are the
precursors to the Philippine religion clauses, the benevolent neutrality-
accommodation approach in Philippine jurisdiction is more pronounced and
given leeway than in the U.S.
Second, the whole purpose of the accommodation theory, including the
notion of mandatory accommodations, was to address the "inadvertent
burdensome effect" that an otherwise facially neutral law would have on
religious exercise. Just because the law is criminal in nature, therefore,
should not bring it out of the ambit of the Free Exercise Clause. As stated by
Justice O’Connor in her concurring opinion in Smith, "[t]here is nothing
talismanic about neutral laws of general applicability or general criminal
prohibitions, for laws neutral towards religion can coerce a person to violate
his religious conscience or intrude upon his religious duties just as effectively
as laws aimed at religion."142
Third, there is wisdom in accommodation made by the Court as this is the
recourse of minority religions who are likewise protected by the Free
Exercise Clause. Mandatory accommodations are particularly necessary to
protect adherents of minority religions from the inevitable effects of
majoritarianism, which include ignorance and indifference and overt hostility
to the minority. As stated in our Decision, dated August 4, 2003:
....In a democratic republic, laws are inevitably based on the presuppositions
of the majority, thus not infrequently, they come into conflict with the
religious scruples of those holding different world views, even in the absence
of a deliberate intent to interfere with religious practice. At times, this effect
is unavoidable as a practical matter because some laws are so necessary to
the common good that exceptions are intolerable. But in other instances, the
injury to religious conscience is so great and the advancement of public
purposes so small or incomparable that only indifference or hostility could
explain a refusal to make exemptions. Because of plural traditions, legislators
and executive officials are frequently willing to make such exemptions when
the need is brought to their attention, but this may not always be the case
when the religious practice is either unknown at the time of enactment or is
for some reason unpopular. In these cases, a constitutional interpretation that
allows accommodations prevents needless injury to the religious consciences
of those who can have an influence in the legislature; while a constitutional
interpretation that requires accommodations extends this treatment to
religious faiths that are less able to protect themselves in the political arena.
Fourth, exemption from penal laws on account of religion is not entirely an
alien concept, nor will it be applied for the first time, as an exemption of such
nature, albeit by legislative act, has already been granted to Moslem
polygamy and the criminal law of bigamy.
Finally, we must consider the language of the Religion Clauses vis-à-vis the
other fundamental rights in the Bill of Rights. It has been noted that unlike
other fundamental rights like the right to life, liberty or property, the Religion
Clauses are stated in absolute terms, unqualified by the requirement of "due
process," "unreasonableness," or "lawful order." Only the right to free speech
is comparable in its absolute grant. Given the unequivocal and unqualified
grant couched in the language, the Court cannot simply dismiss a claim of
exemption based on the Free Exercise Clause, solely on the premise that the
law in question is a general criminal law. 143 If the burden is great and the
sincerity of the religious belief is not in question, adherence to the benevolent
neutrality-accommodation approach require that the Court make an
individual determination and not dismiss the claim outright.
At this point, we must emphasize that the adoption of the benevolent
neutrality-accommodation approach does not mean that the Court ought to
grant exemptions every time a free exercise claim comes before it. This is an
erroneous reading of the framework which the dissent of Mr. Justice Carpio
seems to entertain. Although benevolent neutrality is the lens with which the
Court ought to view religion clause cases, the interest of the state should also
be afforded utmost protection. This is precisely the purpose of the test—to
draw the line between mandatory, permissible and forbidden religious
exercise. Thus, under the framework, the Court cannot simply dismiss a
claim under the Free Exercise Clause because the conduct in question
offends a law or the orthodox view, as proposed by Mr. Justice Carpio, for
this precisely is the protection afforded by the religion clauses of the
Constitution.144 As stated in the Decision:
xxx While the Court cannot adopt a doctrinal formulation that can eliminate
the difficult questions of judgment in determining the degree of burden on
religious practice or importance of the state interest or the sufficiency of the
means adopted by the state to pursue its interest, the Court can set a doctrine
on the ideal towards which religious clause jurisprudence should be directed.
We here lay down the doctrine that in Philippine jurisdiction, we adopt the
benevolent neutrality approach not only because of its merits as discussed
above, but more importantly, because our constitutional history and
interpretation indubitably show that benevolent neutrality is the launching
pad from which the Court should take off in interpreting religion clause
cases. The ideal towards which this approach is directed is the protection of
religious liberty "not only for a minority, however small- not only for a
majority, however large but for each of us" to the greatest extent possible
within flexible constitutional limits.145
II. THE CURRENT PROCEEDINGS
We now resume from where we ended in our August 4, 2003 Decision. As
mentioned, what remained to be resolved, upon which remand was
necessary, pertained to the final task of subjecting this case to the careful
application of the compelling state interest test, i.e., determining whether
respondent is entitled to exemption, an issue which is essentially factual or
evidentiary in nature.
After the termination of further proceedings with the OCA, and with the
transmittal of the Hearing Officer’s report, 146 along with the evidence
submitted by the OSG, this case is once again with us, to resolve the
penultimate question of whether respondent should be found guilty of the
administrative charge of "disgraceful and immoral conduct." It is at this point
then that we examine the report and documents submitted by the hearing
officer of this case, and apply the three-step process of the compelling state
interest test based on the evidence presented by the parties, especially the
government.
On the sincerity of religious belief, the Solicitor General categorically
concedes that the sincerity and centrality of respondent’s claimed religious
belief and practice are beyond serious doubt. 147 Thus, having previously
established the preliminary conditions required by the compelling state
interest test, i.e., that a law or government practice inhibits the free exercise
of respondent’s religious beliefs, and there being no doubt as to the sincerity
and centrality of her faith to claim the exemption based on the free exercise
clause, the burden shifted to the government to demonstrate that the law or
practice justifies a compelling secular objective and that it is the least
restrictive means of achieving that objective.
A look at the evidence that the OSG has presented fails to demonstrate "the
gravest abuses, endangering paramount interests" which could limit or
override respondent’s fundamental right to religious freedom. Neither did the
government exert any effort to show that the means it seeks to achieve its
legitimate state objective is the least intrusive means.
The OSG merely offered the following as exhibits and their purposes:
1. Exhibit "A-OSG" and submarking — The September 30, 2003 Letter to
the OSG of Bro. Raymond B. Leach, Legal Representative of the Watch
Tower Bible and Tract Society of the Philippines, Inc.
Purpose: To show that the OSG exerted efforts to examine the sincerity and
centrality of respondent’s claimed religious belief and practice.
2. Exhibit "B-OSG" and submarking — The duly notarized certification
dated September 30, 2003 issued and signed by Bro. Leach.
PURPOSES: (1) To substantiate the sincerity and centrality of respondent’s
claimed religious belief and practice; and (2) to prove that the Declaration of
Pledging Faithfulness, being a purely internal arrangement within the
congregation of the Jehovah’s Witnesses, cannot be a source of any legal
protection for respondent.
In its Memorandum-In-Intervention, the OSG contends that the State has a
compelling interest to override respondent’s claimed religious belief and
practice, in order to protect marriage and the family as basic social
institutions. The Solicitor General, quoting the Constitution 148 and the Family
Code,149 argues that marriage and the family are so crucial to the stability and
peace of the nation that the conjugal arrangement embraced in the
Declaration of Pledging Faithfulness should not be recognized or given
effect, as "it is utterly destructive of the avowed institutions of marriage and
the family for it reduces to a mockery these legally exalted and socially
significant institutions which in their purity demand respect and dignity." 150
Parenthetically, the dissenting opinion of Mr. Justice Carpio echoes the
Solicitor General in so far as he asserts that the State has a compelling
interest in the preservation of marriage and the family as basic social
institutions, which is ultimately the public policy underlying the criminal
sanctions against concubinage and bigamy. He also argues that in dismissing
the administrative complaint against respondent, "the majority opinion
effectively condones and accords a semblance of legitimacy to her patently
unlawful cohabitation..." and "facilitates the circumvention of the Revised
Penal Code." According to Mr. Justice Carpio, by choosing to turn a blind
eye to respondent’s criminal conduct, the majority is in fact recognizing a
practice, custom or agreement that subverts marriage. He argues in a similar
fashion as regards the state’s interest in the sound administration of justice.
There has never been any question that the state has an interest in protecting
the institutions of marriage and the family, or even in the sound
administration of justice. Indeed, the provisions by which respondent’s
relationship is said to have impinged, e.g., Book V, Title I, Chapter VI, Sec.
46(b)(5) of the Revised Administrative Code, Articles 334 and 349 of the
Revised Penal Code, and even the provisions on marriage and family in the
Civil Code and Family Code, all clearly demonstrate the State’s need to
protect these secular interests.
Be that as it may, the free exercise of religion is specifically articulated as
one of the fundamental rights in our Constitution. It is a fundamental right
that enjoys a preferred position in the hierarchy of rights — "the most
inalienable and sacred of human rights," in the words of Jefferson. Hence, it
is not enough to contend that the state’s interest is important, because our
Constitution itself holds the right to religious freedom sacred. The State must
articulate in specific terms the state interest involved in preventing the
exemption, which must be compelling, for only the gravest abuses,
endangering paramount interests can limit the fundamental right to religious
freedom. To rule otherwise would be to emasculate the Free Exercise Clause
as a source of right by itself.
Thus, it is not the State’s broad interest in "protecting the institutions of
marriage and the family," or even "in the sound administration of justice"
that must be weighed against respondent’s claim, but the State’s narrow
interest in refusing to make an exception for the cohabitation which
respondent’s faith finds moral. In other words, the government must do more
than assert the objectives at risk if exemption is given; it must precisely show
how and to what extent those objectives will be undermined if exemptions
are granted.151 This, the Solicitor General failed to do.
To paraphrase Justice Blackmun’s application of the compelling interest test,
the State’s interest in enforcing its prohibition, in order to be sufficiently
compelling to outweigh a free exercise claim, cannot be merely abstract or
symbolic. The State cannot plausibly assert that unbending application of a
criminal prohibition is essential to fulfill any compelling interest, if it does
not, in fact, attempt to enforce that prohibition. In the case at bar, the State
has not evinced any concrete interest in enforcing the concubinage or bigamy
charges against respondent or her partner. The State has never sought to
prosecute respondent nor her partner. The State’s asserted interest thus
amounts only to the symbolic preservation of an unenforced prohibition.
Incidentally, as echoes of the words of Messrs. J. Bellosillo and Vitug, in
their concurring opinions in our Decision, dated August 4, 2003, to deny the
exemption would effectively break up "an otherwise ideal union of two
individuals who have managed to stay together as husband and wife
[approximately twenty-five years]" and have the effect of defeating the very
substance of marriage and the family.
The Solicitor General also argued against respondent’s religious freedom on
the basis of morality, i.e., that "the conjugal arrangement of respondent and
her live-in partner should not be condoned because adulterous relationships
are constantly frowned upon by society";152 and "that State laws on marriage,
which are moral in nature, take clear precedence over the religious beliefs
and practices of any church, religious sect or denomination on marriage.
Verily, religious beliefs and practices should not be permitted to override
laws relating to public policy such as those of marriage." 153
The above arguments are mere reiterations of the arguments raised by Mme.
Justice Ynares-Santiago in her dissenting opinion to our Decision dated
August 4, 2003, which she offers again in toto. These arguments have
already been addressed in our decision dated August 4, 2003. 154 In said
Decision, we noted that Mme. Justice Ynares-Santiago’s dissenting opinion
dwelt more on the standards of morality, without categorically holding that
religious freedom is not in issue. 155 We, therefore, went into a discussion on
morality, in order to show that:
(a) The public morality expressed in the law is necessarily secular for
in our constitutional order, the religion clauses prohibit the state from
establishing a religion, including the morality it sanctions. 156 Thus,
when the law speaks of "immorality" in the Civil Service Law or
"immoral" in the Code of Professional Responsibility for lawyers, 157
or "public morals" in the Revised Penal Code, 158 or "morals" in the
New Civil Code,159 or "moral character" in the Constitution, 160 the
distinction between public and secular morality on the one hand, and
religious morality, on the other, should be kept in mind; 161
(b) Although the morality contemplated by laws is secular,
benevolent neutrality could allow for accommodation of morality
based on religion, provided it does not offend compelling state
interests;162
(c) The jurisdiction of the Court extends only to public and secular
morality. Whatever pronouncement the Court makes in the case at
bar should be understood only in this realm where it has authority. 163
(d) Having distinguished between public and secular morality and
religious morality, the more difficult task is determining which
immoral acts under this public and secular morality fall under the
phrase "disgraceful and immoral conduct" for which a government
employee may be held administratively liable. 164 Only one conduct is
in question before this Court, i.e., the conjugal arrangement of a
government employee whose partner is legally married to another
which Philippine law and jurisprudence consider both immoral and
illegal.165
(e) While there is no dispute that under settled jurisprudence,
respondent’s conduct constitutes "disgraceful and immoral conduct,"
the case at bar involves the defense of religious freedom, therefore
none of the cases cited by Mme. Justice Ynares-Santiago apply. 166
There is no jurisprudence in Philippine jurisdiction holding that the
defense of religious freedom of a member of the Jehovah’s
Witnesses under the same circumstances as respondent will not
prevail over the laws on adultery, concubinage or some other law.
We cannot summarily conclude therefore
that her conduct is likewise so "odious" and "barbaric" as to be immoral and
punishable by law.167
Again, we note the arguments raised by Mr. Justice Carpio with respect to
charging respondent with conduct prejudicial to the best interest of the
service, and we reiterate that the dissent offends due process as respondent
was not given an opportunity to defend herself against the charge of "conduct
prejudicial to the best interest of the service." Indeed, there is no evidence of
the alleged prejudice to the best interest of the service. 168
Mr. Justice Carpio’s slippery slope argument, on the other hand, is non-
sequitur. If the Court grants respondent exemption from the laws which
respondent Escritor has been charged to have violated, the exemption would
not apply to Catholics who have secured church annulment of their marriage
even without a final annulment from a civil court. First, unlike Jehovah’s
Witnesses, the Catholic faith considers cohabitation without marriage as
immoral. Second, but more important, the Jehovah’s Witnesses have
standards and procedures which must be followed before cohabitation
without marriage is given the blessing of the congregation. This includes an
investigative process whereby the elders of the congregation verify the
circumstances of the declarants. Also, the Declaration is not a blanket
authority to cohabit without marriage because once all legal impediments for
the couple are lifted, the validity of the Declaration ceases, and the
congregation requires that the couple legalize their union.
At bottom, the slippery slope argument of Mr. Justice Carpio is speculative.
Nevertheless, insofar as he raises the issue of equality among religions, we
look to the words of the Religion Clauses, which clearly single out religion
for both a benefit and a burden: "No law shall be made respecting an
establishment of religion, or prohibiting the free exercise thereof…" On its
face, the language grants a unique advantage to religious conduct, protecting
it from governmental imposition; and imposes a unique disadvantage,
preventing the government from supporting it. To understand this as a
provision which puts religion on an equal footing with other bases for action
seems to be a curious reading. There are no "free exercise" of
"establishment" provisions for science, sports, philosophy, or family
relations. The language itself thus seems to answer whether we have a
paradigm of equality or liberty; the language of the Clause is clearly in the
form of a grant of liberty. 169
In this case, the government’s conduct may appear innocent and
nondiscriminatory but in effect, it is oppressive to the minority. In the
interpretation of a document, such as the Bill of Rights, designed to protect
the minority from the majority, the question of which perspective is
appropriate would seem easy to answer. Moreover, the text, history, structure
and values implicated in the interpretation of the clauses, all point toward this
perspective. Thus, substantive equality—a reading of the religion clauses
which leaves both politically dominant and the politically weak religious
groups equal in their inability to use the government (law) to assist their own
religion or burden others—makes the most sense in the interpretation of the
Bill of Rights, a document designed to protect minorities and individuals
from mobocracy in a democracy (the majority or a coalition of minorities). 170
As previously discussed, our Constitution adheres to the benevolent
neutrality approach that gives room for accommodation of religious exercises
as required by the Free Exercise Clause. 171 Thus, in arguing that respondent
should be held administratively liable as the arrangement she had was
"illegal per se because, by universally recognized standards, it is inherently
or by its very nature bad, improper, immoral and contrary to good
conscience,"172 the Solicitor General failed to appreciate that benevolent
neutrality could allow for accommodation of morality based on religion,
provided it does not offend compelling state interests. 173
Finally, even assuming that the OSG has proved a compelling state interest,
it has to further demonstrate that the state has used the least intrusive means
possible so that the free exercise is not infringed any more than necessary to
achieve the legitimate goal of the state, i.e., it has chosen a way to achieve its
legitimate state end that imposes as little as possible on religious liberties. 174
Again, the Solicitor General utterly failed to prove this element of the test.
Other than the two documents offered as cited above which established the
sincerity of respondent’s religious belief and the fact that the agreement was
an internal arrangement within respondent’s congregation, no iota of
evidence was offered. In fact, the records are bereft of even a feeble attempt
to procure any such evidence to show that the means the state adopted in
pursuing this compelling interest is the least restrictive to respondent’s
religious freedom.
Thus, we find that in this particular case and under these distinct
circumstances, respondent Escritor’s conjugal arrangement cannot be
penalized as she has made out a case for exemption from the law based on
her fundamental right to freedom of religion. The Court recognizes that state
interests must be upheld in order that freedoms - including religious freedom
- may be enjoyed. In the area of religious exercise as a preferred freedom,
however, man stands accountable to an authority higher than the state, and so
the state interest sought to be upheld must be so compelling that its violation
will erode the very fabric of the state that will also protect the freedom. In the
absence of a showing that such state interest exists, man must be allowed to
subscribe to the Infinite.
IN VIEW WHEREOF, the instant administrative complaint is dismissed.
SO ORDERED.
II. MARRIAGE PROHIBITION
SECOND DIVISION
[G.R. No. 162994. September 17, 2004]
DUNCAN ASSOCIATION OF DETAILMAN-PTGWO and PEDRO A.
TECSON, petitioners, vs. GLAXO WELLCOME PHILIPPINES, INC.
respondent.
RESOLUTION
TINGA, J.:
Confronting the Court in this petition is a novel question, with constitutional
overtones, involving the validity of the policy of a pharmaceutical company
prohibiting its employees from marrying employees of any competitor
company.This is a Petition for Review on Certiorari assailing the
Decision1[1] dated May 19, 2003 and the Resolution dated March 26, 2004
of the Court of Appeals in CA-G.R. SP No. 62434.2[2]
Petitioner Pedro A. Tecson (Tecson) was hired by respondent Glaxo
Wellcome Philippines, Inc. (Glaxo) as medical representative on October 24,
1995, after Tecson had undergone training and orientation.
Thereafter, Tecson signed a contract of employment which stipulates, among
others, that he agrees to study and abide by existing company rules; to
disclose to management any existing or future relationship by consanguinity
or affinity with co-employees or employees of competing drug companies
and should management find that such relationship poses a possible conflict
of interest, to resign from the company.
The Employee Code of Conduct of Glaxo similarly provides that an
employee is expected to inform management of any existing or future
relationship by consanguinity or affinity with co-employees or employees of
competing drug companies. If management perceives a conflict of interest or
a potential conflict between such relationship and the employees employment
with the company, the management and the employee will explore the
possibility of a transfer to another department in a non-counterchecking
1 decision, but his request was denied.
2 3
position or preparation for employment outside the company after six
months.
Tecson was initially assigned to market Glaxos products in the Camarines
Sur-Camarines Norte sales area.
Subsequently, Tecson entered into a romantic relationship with Bettsy, an
employee of Astra Pharmaceuticals 3[3] (Astra), a competitor of Glaxo.
Bettsy was Astras Branch Coordinator in Albay. She supervised the district
managers and medical representatives of her company and prepared
marketing strategies for Astra in that area.
Even before they got married, Tecson received several reminders from his
District Manager regarding the conflict of interest which his relationship with
Bettsy might engender. Still, love prevailed, and Tecson married Bettsy in
September 1998.
In January 1999, Tecsons superiors informed him that his marriage to Bettsy
gave rise to a conflict of interest. Tecsons superiors reminded him that he and
Bettsy should decide which one of them would resign from their jobs,
although they told him that they wanted to retain him as much as possible
because he was performing his job well.
Tecson requested for time to comply with the company policy against
entering into a relationship with an employee of a competitor company. He
explained that Astra, Bettsys employer, was planning to merge with Zeneca,
another drug company; and Bettsy was planning to avail of the redundancy
package to be offered by Astra. With Bettsys separation from her company,
the potential conflict of interest would be eliminated. At the same time, they
would be able to avail of the attractive redundancy package from Astra.
In August 1999, Tecson again requested for more time resolve the problem.
In September 1999, Tecson applied for a transfer in Glaxos milk division,
thinking that since Astra did not have a milk division, the potential conflict
of interest would be eliminated. His application was denied in view of
Glaxos least-movement-possible policy.
In November 1999, Glaxo transferred Tecson to the Butuan City-Surigao
City-Agusan del Sur sales area. Tecson asked Glaxo to reconsider its
Tecson sought Glaxos reconsideration regarding his transfer and brought the
matter to Glaxos Grievance Committee. Glaxo, however, remained firm in its
decision and gave Tescon until February 7, 2000 to comply with the transfer
order. Tecson defied the transfer order and continued acting as medical
representative in the Camarines Sur-Camarines Norte sales area.
During the pendency of the grievance proceedings, Tecson was paid his
salary, but was not issued samples of products which were competing with
similar products manufactured by Astra. He was also not included in product
conferences regarding such products.
Because the parties failed to resolve the issue at the grievance machinery
level, they submitted the matter for voluntary arbitration. Glaxo offered
Tecson a separation pay of one-half () month pay for every year of service, or
a total of P50,000.00 but he declined the offer. On November 15, 2000, the
National Conciliation and Mediation Board (NCMB) rendered its Decision
declaring as valid Glaxos policy on relationships between its employees and
persons employed with competitor companies, and affirming Glaxos right to
transfer Tecson to another sales territory.
Aggrieved, Tecson filed a Petition for Review with the Court of Appeals
assailing the NCMB Decision.
On May 19, 2003, the Court of Appeals promulgated its Decision denying
the Petition for Review on the ground that the NCMB did not err in rendering
its Decision. The appellate court held that Glaxos policy prohibiting its
employees from having personal relationships with employees of competitor
companies is a valid exercise of its management prerogatives. 4[4]
Tecson filed a Motion for Reconsideration of the appellate courts Decision,
but the motion was denied by the appellate court in its Resolution dated
March 26, 2004.5[5]
Petitioners filed the instant petition, arguing therein that (i) the Court of
Appeals erred in affirming the NCMBs finding that the Glaxos policy
prohibiting its employees from marrying an employee of a competitor
company is valid; and (ii) the Court of Appeals also erred in not finding that
Tecson was constructively dismissed when he was transferred to a new sales
4 9
5 10
territory, and deprived of the opportunity to attend products seminars and
training sessions.6[6]
Petitioners contend that Glaxos policy against employees marrying
employees of competitor companies violates the equal protection clause of
the Constitution because it creates invalid distinctions among employees on
account only of marriage. They claim that the policy restricts the employees
right to marry.7[7]
They also argue that Tecson was constructively dismissed as shown by the
following circumstances: (1) he was transferred from the Camarines Sur-
Camarines Norte sales area to the Butuan-Surigao-Agusan sales area, (2) he
suffered a diminution in pay, (3) he was excluded from attending seminars
and training sessions for medical representatives, and (4) he was prohibited
from promoting respondents products which were competing with Astras
products.8[8]
In its Comment on the petition, Glaxo argues that the company policy
prohibiting its employees from having a relationship with and/or marrying an
employee of a competitor company is a valid exercise of its management
prerogatives and does not violate the equal protection clause; and that
Tecsons reassignment from the camarines Norte-Camarines Sur sales area to
the Butuan City-Surigao City and Agusan del Sur sales area does not amount
to constructive dismissal.9[9]
Glaxo insists that as a company engaged in the promotion and sale of
pharmaceutical products, it has a genuine interest in ensuring that its
employees avoid any activity, relationship or interest that may conflict with
their responsibilities to the company. Thus, it expects its employees to avoid
having personal or family interests in any competitor company which may
influence their actions and decisions and consequently deprive Glaxo of
legitimate profits. The policy is also aimed at preventing a competitor
company from gaining access to its secrets, procedures and policies. 10[10]
6
7
8
It likewise asserts that the policy does not prohibit marriage per se but only
proscribes existing or future relationships with employees of competitor
companies, and is therefore not violative of the equal protection clause. It
maintains that considering the nature of its business, the prohibition is based
on valid grounds.11[11]
According to Glaxo, Tecsons marriage to Bettsy, an employee of Astra,
posed a real and potential conflict of interest. Astras products were in direct
competition with 67% of the products sold by Glaxo. Hence, Glaxos
enforcement of the foregoing policy in Tecsons case was a valid exercise of
its management prerogatives.12[12] In any case, Tecson was given several
months to remedy the situation, and was even encouraged not to resign but to
ask his wife to resign from Astra instead. 13[13]
Glaxo also points out that Tecson can no longer question the assailed
company policy because when he signed his contract of employment, he was
aware that such policy was stipulated therein. In said contract, he also agreed
to resign from respondent if the management finds that his relationship with
an employee of a competitor company would be detrimental to the interests
of Glaxo.14[14]
Glaxo likewise insists that Tecsons reassignment to another sales area and his
exclusion from seminars regarding respondents new products did not amount
to constructive dismissal.
It claims that in view of Tecsons refusal to resign, he was relocated from the
Camarines Sur-Camarines Norte sales area to the Butuan City-Surigao City
and Agusan del Sur sales area. Glaxo asserts that in effecting the
reassignment, it also considered the welfare of Tecsons family. Since
Tecsons hometown was in Agusan del Sur and his wife traces her roots to
Butuan City, Glaxo assumed that his transfer from the Bicol region to the
Butuan City sales area would be favorable to him and his family as he would
be relocating to a familiar territory and minimizing his travel expenses. 15[15]
11
12
13
14
15
In addition, Glaxo avers that Tecsons exclusion from the seminar concerning
the new anti-asthma drug was due to the fact that said product was in direct
competition with a drug which was soon to be sold by Astra, and hence,
would pose a potential conflict of interest for him. Lastly, the delay in
Tecsons receipt of his sales paraphernalia was due to the mix-up created by
his refusal to transfer to the Butuan City sales area (his paraphernalia was
delivered to his new sales area instead of Naga City because the supplier
thought he already transferred to Butuan).16[16]
The Court is tasked to resolve the following issues: (1) Whether the Court of
Appeals erred in ruling that Glaxos policy against its employees marrying
employees from competitor companies is valid, and in not holding that said
policy violates the equal protection clause of the Constitution; (2) Whether
Tecson was constructively dismissed.
The Court finds no merit in the petition.
The stipulation in Tecsons contract of employment with Glaxo being
questioned by petitioners provides:
10. You agree to disclose to management any existing or future relationship
you may have, either by consanguinity or affinity with co-employees or
employees of competing drug companies. Should it pose a possible conflict
of interest in management discretion, you agree to resign voluntarily from the
Company as a matter of Company policy.
17
[17]
The same contract also stipulates that Tecson agrees to abide by the existing
company rules of Glaxo, and to study and become acquainted with such
policies.18[18] In this regard, the Employee Handbook of Glaxo expressly
informs its employees of its rules regarding conflict of interest:
1. Conflict of Interest
16
17
18
Employees should avoid any activity, investment relationship, or interest that
may run counter to the responsibilities which they owe Glaxo Wellcome.
Specifically, this means that employees are expected:
a. To avoid having personal or family interest, financial or otherwise, in
any competitor supplier or other businesses which may consciously
or unconsciously influence their actions or decisions and thus
deprive Glaxo Wellcome of legitimate profit.
b. To refrain from using their position in Glaxo Wellcome or
knowledge of Company plans to advance their outside personal
interests, that of their relatives, friends and other businesses.
c. To avoid outside employment or other interests for income which
would impair their effective job performance.
d. To consult with Management on such activities or relationships that
may lead to conflict of interest.
1.1. Employee Relationships
Employees with existing or future relationships either by consanguinity or
affinity with co-employees of competing drug companies are expected to
disclose such relationship to the Management. If management perceives a
conflict or potential conflict of interest, every effort shall be made, together
by management and the employee, to arrive at a solution within six (6)
months, either by transfer to another department in a non-counter checking
position, or by career preparation toward outside employment after Glaxo
Wellcome. Employees must be prepared for possible resignation within six
(6) months, if no other solution is feasible.19[19]
No reversible error can be ascribed to the Court of Appeals when it ruled that
Glaxos policy prohibiting an employee from having a relationship with an
employee of a competitor company is a valid exercise of management
prerogative.
Glaxo has a right to guard its trade secrets, manufacturing formulas,
marketing strategies and other confidential programs and information from
19
competitors, especially so that it and Astra are rival companies in the highly
competitive pharmaceutical industry.
The prohibition against personal or marital relationships with employees of
competitor companies upon Glaxos employees is reasonable under the
circumstances because relationships of that nature might compromise the
interests of the company. In laying down the assailed company policy, Glaxo
only aims to protect its interests against the possibility that a competitor
company will gain access to its secrets and procedures.
That Glaxo possesses the right to protect its economic interests cannot be
denied. No less than the Constitution recognizes the right of enterprises to
adopt and enforce such a policy to protect its right to reasonable returns on
investments and to expansion and growth. 20[20] Indeed, while our laws
endeavor to give life to the constitutional policy on social justice and the
protection of labor, it does not mean that every labor dispute will be decided
in favor of the workers. The law also recognizes that management has rights
which are also entitled to respect and enforcement in the interest of fair
play.21[21]
As held in a Georgia, U.S.A case,22[22] it is a legitimate business practice to
guard business confidentiality and protect a competitive position by even-
handedly disqualifying from jobs male and female applicants or employees
who are married to a competitor. Consequently, the court ruled than an
employer that discharged an employee who was married to an employee of
an active competitor did not violate Title VII of the Civil Rights Act of
1964.23[23] The Court pointed out that the policy was applied to men and
women equally, and noted that the employers business was highly
competitive and that gaining inside information would constitute a
competitive advantage.
The challenged company policy does not violate the equal protection clause
of the Constitution as petitioners erroneously suggest. It is a settled principle
that the commands of the equal protection clause are addressed only to the
20
21
22
23
state or those acting under color of its authority. 24[24] Corollarily, it has
been held in a long array of U.S. Supreme Court decisions that the equal
protection clause erects no shield against merely private conduct, however,
discriminatory or wrongful.25[25] The only exception occurs when the
state26[26] in any of its manifestations or actions has been found to have
become entwined or involved in the wrongful private conduct. 27[27]
Obviously, however, the exception is not present in this case. Significantly,
the company actually enforced the policy after repeated requests to the
employee to comply with the policy. Indeed, the application of the policy
was made in an impartial and even-handed manner, with due regard for the
lot of the employee.
In any event, from the wordings of the contractual provision and the policy in
its employee handbook, it is clear that Glaxo does not impose an absolute
prohibition against relationships between its employees and those of
competitor companies. Its employees are free to cultivate relationships with
and marry persons of their own choosing. What the company merely seeks to
avoid is a conflict of interest between the employee and the company that
may arise out of such relationships. As succinctly explained by the appellate
court, thus:
The policy being questioned is not a policy against marriage. An employee of
the company remains free to marry anyone of his or her choosing. The policy
is not aimed at restricting a personal prerogative that belongs only to the
individual. However, an employees personal decision does not detract the
employer from exercising management prerogatives to ensure maximum
profit and business success. . . 28[28]
The Court of Appeals also correctly noted that the assailed company policy
which forms part of respondents Employee Code of Conduct and of its
contracts with its employees, such as that signed by Tecson, was made
known to him prior to his employment. Tecson, therefore, was aware of that
restriction when he signed his employment contract and when he entered into
24
25
26
27
28
a relationship with Bettsy. Since Tecson knowingly and voluntarily entered
into a contract of employment with Glaxo, the stipulations therein have the
force of law between them and, thus, should be complied with in good
faith.29[29] He is therefore estopped from questioning said policy.
The Court finds no merit in petitioners contention that Tecson was
constructively dismissed when he was transferred from the Camarines Norte-
Camarines Sur sales area to the Butuan City-Surigao City-Agusan del Sur
sales area, and when he was excluded from attending the companys seminar
on new products which were directly competing with similar products
manufactured by Astra. Constructive dismissal is defined as a quitting, an
involuntary resignation resorted to when continued employment becomes
impossible, unreasonable, or unlikely; when there is a demotion in rank or
diminution in pay; or when a clear discrimination, insensibility or disdain by
an employer becomes unbearable to the employee. 30[30] None of these
conditions are present in the instant case. The record does not show that
Tecson was demoted or unduly discriminated upon by reason of such
transfer. As found by the appellate court, Glaxo properly exercised its
management prerogative in reassigning Tecson to the Butuan City sales area:
. . . In this case, petitioners transfer to another place of assignment was
merely in keeping with the policy of the company in avoidance of conflict of
interest, and thus validNote that [Tecsons] wife holds a sensitive supervisory
position as Branch Coordinator in her employer-company which requires her
to work in close coordination with District Managers and Medical
Representatives. Her duties include monitoring sales of Astra products,
conducting sales drives, establishing and furthering relationship with
customers, collection, monitoring and managing Astras inventoryshe
therefore takes an active participation in the market war characterized as it is
by stiff competition among pharmaceutical companies. Moreover, and this is
significant, petitioners sales territory covers Camarines Sur and Camarines
Norte while his wife is supervising a branch of her employer in Albay. The
proximity of their areas of responsibility, all in the same Bicol Region,
renders the conflict of interest not only possible, but actual, as learning by
one spouse of the others market strategies in the region would be inevitable.
[Managements] appreciation of a conflict of interest is therefore not merely
illusory and wanting in factual basis31[31]
29
30
31
In Abbott Laboratories (Phils.), Inc. v. National Labor Relations
Commission,32[32] which involved a complaint filed by a medical
representative against his employer drug company for illegal dismissal for
allegedly terminating his employment when he refused to accept his
reassignment to a new area, the Court upheld the right of the drug company
to transfer or reassign its employee in accordance with its operational
demands and requirements. The ruling of the Court therein, quoted
hereunder, also finds application in the instant case:
By the very nature of his employment, a drug salesman or medical
representative is expected to travel. He should anticipate reassignment
according to the demands of their business. It would be a poor drug
corporation which cannot even assign its representatives or detail men to new
markets calling for opening or expansion or to areas where the need for
pushing its products is great. More so if such reassignments are part of the
employment contract.33[33]
As noted earlier, the challenged policy has been implemented by Glaxo
impartially and disinterestedly for a long period of time. In the case at bar,
the record shows that Glaxo gave Tecson several chances to eliminate the
conflict of interest brought about by his relationship with Bettsy. When their
relationship was still in its initial stage, Tecsons supervisors at Glaxo
constantly reminded him about its effects on his employment with the
company and on the companys interests. After Tecson married Bettsy, Glaxo
gave him time to resolve the conflict by either resigning from the company or
asking his wife to resign from Astra. Glaxo even expressed its desire to retain
Tecson in its employ because of his satisfactory performance and suggested
that he ask Bettsy to resign from her company instead. Glaxo likewise
acceded to his repeated requests for more time to resolve the conflict of
interest. When the problem could not be resolved after several years of
waiting, Glaxo was constrained to reassign Tecson to a sales area different
from that handled by his wife for Astra. Notably, the Court did not terminate
Tecson from employment but only reassigned him to another area where his
home province, Agusan del Sur, was included. In effecting Tecsons transfer,
Glaxo even considered the welfare of Tecsons family. Clearly, the foregoing
dispels any suspicion of unfairness and bad faith on the part of Glaxo. 34[34]
32
33
34
WHEREFORE, the Petition is DENIED for lack of merit. Costs against
petitioners.
SO ORDERED
G.R. No. 164774             April 12, 2006
STAR PAPER CORPORATION, JOSEPHINE ONGSITCO &
SEBASTIAN CHUA, Petitioners,
vs.
RONALDO D. SIMBOL, WILFREDA N. COMIA & LORNA E.
ESTRELLA, Respondents.
DECISION
PUNO, J.:
We are called to decide an issue of first impression: whether the policy of the
employer banning spouses from working in the same company violates the
rights of the employee under the Constitution and the Labor Code or is a
valid exercise of management prerogative.
At bar is a Petition for Review on Certiorari of the Decision of the Court of
Appeals dated August 3, 2004 in CA-G.R. SP No. 73477 reversing the
decision of the National Labor Relations Commission (NLRC) which
affirmed the ruling of the Labor Arbiter.
Petitioner Star Paper Corporation (the company) is a corporation engaged in
trading – principally of paper products. Josephine Ongsitco is its Manager of
the Personnel and Administration Department while Sebastian Chua is its
Managing Director.
The evidence for the petitioners show that respondents Ronaldo D. Simbol
(Simbol), Wilfreda N. Comia (Comia) and Lorna E. Estrella (Estrella) were
all regular employees of the company.1
Simbol was employed by the company on October 27, 1993. He met Alma
Dayrit, also an employee of the company, whom he married on June 27,
1998. Prior to the marriage, Ongsitco advised the couple that should they
decide to get married, one of them should resign pursuant to a company
policy promulgated in 1995,2 viz.:
 1. New applicants will not be allowed to be hired if in case he/she
has [a] relative, up to [the] 3rd degree of relationship, already
employed by the company.
2. In case of two of our employees (both singles [sic], one male and
another female) developed a friendly relationship during the course
of their employment and then decided to get married, one of them
should resign to preserve the policy stated above. 3
Simbol resigned on June 20, 1998 pursuant to the company policy.4
Comia was hired by the company on February 5, 1997. She met Howard
Comia, a co-employee, whom she married on June 1, 2000. Ongsitco
likewise reminded them that pursuant to company policy, one must resign
should they decide to get married. Comia resigned on June 30, 2000. 5
Estrella was hired on July 29, 1994. She met Luisito Zuñiga (Zuñiga), also a
co-worker. Petitioners stated that Zuñiga, a married man, got Estrella
pregnant. The company allegedly could have terminated her services due to
immorality but she opted to resign on December 21, 1999.6
The respondents each signed a Release and Confirmation Agreement. They
stated therein that they have no money and property accountabilities in the
company and that they release the latter of any claim or demand of whatever
nature.7
Respondents offer a different version of their dismissal. Simbol and Comia
allege that they did not resign voluntarily; they were compelled to resign in
view of an illegal company policy. As to respondent Estrella, she alleges that
she had a relationship with co-worker Zuñiga who misrepresented himself as
a married but separated man. After he got her pregnant, she discovered that
he was not separated. Thus, she severed her relationship with him to avoid
dismissal due to the company policy. On November 30, 1999, she met an
accident and was advised by the doctor at the Orthopedic Hospital to
recuperate for twenty-one (21) days. She returned to work on December 21,
1999 but she found out that her name was on-hold at the gate. She was
denied entry. She was directed to proceed to the personnel office where one
of the staff handed her a memorandum. The memorandum stated that she was
being dismissed for immoral conduct. She refused to sign the memorandum
because she was on leave for twenty-one (21) days and has not been given a
chance to explain. The management asked her to write an explanation.
However, after submission of the explanation, she was nonetheless dismissed
by the company. Due to her urgent need for money, she later submitted a
letter of resignation in exchange for her thirteenth month pay. 8
Respondents later filed a complaint for unfair labor practice, constructive
dismissal, separation pay and attorney’s fees. They averred that the
aforementioned company policy is illegal and contravenes Article 136 of the
Labor Code. They also contended that they were dismissed due to their union
membership.
On May 31, 2001, Labor Arbiter Melquiades Sol del Rosario dismissed the
complaint for lack of merit, viz.:
[T]his company policy was decreed pursuant to what the respondent
corporation perceived as management prerogative. This management
prerogative is quite broad and encompassing for it covers hiring, work
assignment, working method, time, place and manner of work, tools to be
used, processes to be followed, supervision of workers, working regulations,
transfer of employees, work supervision, lay-off of workers and the
discipline, dismissal and recall of workers. Except as provided for or limited
by special law, an employer is free to regulate, according to his own
discretion and judgment all the aspects of employment. 9 (Citations omitted.)
On appeal to the NLRC, the Commission affirmed the decision of the Labor
Arbiter on January 11, 2002. 10
Respondents filed a Motion for Reconsideration but was denied by the
NLRC in a Resolution11 dated August 8, 2002. They appealed to respondent
court via Petition for Certiorari.
In its assailed Decision dated August 3, 2004, the Court of Appeals reversed
the NLRC decision, viz.:
WHEREFORE, premises considered, the May 31, 2002 (sic)12 Decision of
the National Labor Relations Commission is hereby REVERSED and SET
ASIDE and a new one is entered as follows:
(1) Declaring illegal, the petitioners’ dismissal from employment and
ordering private respondents to reinstate petitioners to their former
positions without loss of seniority rights with full backwages from
the time of their dismissal until actual reinstatement; and
 (2) Ordering private respondents to pay petitioners attorney’s fees
amounting to 10% of the award and the cost of this suit. 13
On appeal to this Court, petitioners contend that the Court of Appeals erred
in holding that:
1. x x x the subject 1995 policy/regulation is violative of the
constitutional rights towards marriage and the family of employees
and of Article 136 of the Labor Code; and
2. x x x respondents’ resignations were far from voluntary. 14
We affirm.
The 1987 Constitution states our policy towards the protection of labor
15
under the following provisions, viz.:
Article II, Section 18. The State affirms labor as a primary social economic
force. It shall protect the rights of workers and promote their welfare.
xxx
Article XIII, Sec. 3. The State shall afford full protection to labor, local and
overseas, organized and unorganized, and promote full employment and
equality of employment opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective
bargaining and negotiations, and peaceful concerted activities, including the
right to strike in accordance with law. They shall be entitled to security of
tenure, humane conditions of work, and a living wage. They shall also
participate in policy and decision-making processes affecting their rights and
benefits as may be provided by law.
The State shall promote the principle of shared responsibility between
workers and employers, recognizing the right of labor to its just share in the
fruits of production and the right of enterprises to reasonable returns on
investments, and to expansion and growth.
The Civil Code likewise protects labor with the following provisions:
Art. 1700. The relation between capital and labor are not merely contractual.
They are so impressed with public interest that labor contracts must yield to
the common good. Therefore, such contracts are subject to the special laws
on labor unions, collective bargaining, strikes and lockouts, closed shop,
wages, working conditions, hours of labor and similar subjects.
Art. 1702. In case of doubt, all labor legislation and all labor contracts shall
be construed in favor of the safety and decent living for the laborer.
The Labor Code is the most comprehensive piece of legislation protecting
labor. The case at bar involves Article 136 of the Labor Code which
provides:
Art. 136. It shall be unlawful for an employer to require as a condition of
employment or continuation of employment that a woman employee shall
not get married, or to stipulate expressly or tacitly that upon getting married a
woman employee shall be deemed resigned or separated, or to actually
dismiss, discharge, discriminate or otherwise prejudice a woman employee
merely by reason of her marriage.
Respondents submit that their dismissal violates the above provision.
Petitioners allege that its policy "may appear to be contrary to Article 136 of
the Labor Code" but it assumes a new meaning if read together with the first
paragraph of the rule. The rule does not require the woman employee to
resign. The employee spouses have the right to choose who between them
should resign. Further, they are free to marry persons other than co-
employees. Hence, it is not the marital status of the employee, per se, that is
being discriminated. It is only intended to carry out its no-employment-for-
relatives-within-the-third-degree-policy which is within the ambit of the
prerogatives of management.16
It is true that the policy of petitioners prohibiting close relatives from
working in the same company takes the nature of an anti-nepotism
employment policy. Companies adopt these policies to prevent the hiring of
unqualified persons based on their status as a relative, rather than upon their
ability.17 These policies focus upon the potential employment problems
arising from the perception of favoritism exhibited towards relatives.
With more women entering the workforce, employers are also enacting
employment policies specifically prohibiting spouses from working for the
same company. We note that two types of employment policies involve
spouses: policies banning only spouses from working in the same company
(no-spouse employment policies), and those banning all immediate family
members, including spouses, from working in the same company (anti-
nepotism employment policies).18
Unlike in our jurisdiction where there is no express prohibition on marital
discrimination,19 there are twenty state statutes20 in the United States
prohibiting marital discrimination. Some state courts 21 have been confronted
with the issue of whether no-spouse policies violate their laws prohibiting
both marital status and sex discrimination.
In challenging the anti-nepotism employment policies in the United States,
complainants utilize two theories of employment discrimination: the
disparate treatment and the disparate impact. Under the disparate
treatment analysis, the plaintiff must prove that an employment policy is
discriminatory on its face. No-spouse employment policies requiring an
employee of a particular sex to either quit, transfer, or be fired are facially
discriminatory. For example, an employment policy prohibiting the employer
from hiring wives of male employees, but not husbands of female employees,
is discriminatory on its face.22
On the other hand, to establish disparate impact, the complainants must
prove that a facially neutral policy has a disproportionate effect on a
particular class. For example, although most employment policies do not
expressly indicate which spouse will be required to transfer or leave the
company, the policy often disproportionately affects one sex. 23
The state courts’ rulings on the issue depend on their interpretation of the
scope of marital status discrimination within the meaning of their respective
civil rights acts. Though they agree that the term "marital status"
encompasses discrimination based on a person's status as either married,
single, divorced, or widowed, they are divided on whether the term has a
broader meaning. Thus, their decisions vary.24
The courts narrowly25 interpreting marital status to refer only to a person's
status as married, single, divorced, or widowed reason that if the legislature
intended a broader definition it would have either chosen different language
or specified its intent. They hold that the relevant inquiry is if one is married
rather than to whom one is married. They construe marital status
discrimination to include only whether a person is single, married, divorced,
or widowed and not the "identity, occupation, and place of employment of
one's spouse." These courts have upheld the questioned policies and ruled
that they did not violate the marital status discrimination provision of their
respective state statutes.
The courts that have broadly26 construed the term "marital status" rule that it
encompassed the identity, occupation and employment of one's spouse. They
strike down the no-spouse employment policies based on the broad
legislative intent of the state statute. They reason that the no-spouse
employment policy violate the marital status provision because it arbitrarily
discriminates against all spouses of present employees without regard to the
actual effect on the individual's qualifications or work performance. 27 These
courts also find the no-spouse employment policy invalid for failure of the
employer to present any evidence of business necessity other than the
general perception that spouses in the same workplace might adversely affect
the business.28 They hold that the absence of such a bona fide occupational
qualification29 invalidates a rule denying employment to one spouse due to
the current employment of the other spouse in the same office. 30 Thus, they
rule that unless the employer can prove that the reasonable demands of the
business require a distinction based on marital status and there is no better
available or acceptable policy which would better accomplish the business
purpose, an employer may not discriminate against an employee based on the
identity of the employee’s spouse. 31 This is known as the bona fide
occupational qualification exception.
We note that since the finding of a bona fide occupational qualification
justifies an employer’s no-spouse rule, the exception is interpreted strictly
and narrowly by these state courts. There must be a compelling business
necessity for which no alternative exists other than the discriminatory
practice.32 To justify a bona fide occupational qualification, the employer
must prove two factors: (1) that the employment qualification is reasonably
related to the essential operation of the job involved; and, (2) that there is a
factual basis for believing that all or substantially all persons meeting the
qualification would be unable to properly perform the duties of the job. 33
The concept of a bona fide occupational qualification is not foreign in our
jurisdiction. We employ the standard of reasonableness of the company
policy which is parallel to the bona fide occupational qualification
requirement. In the recent case of Duncan Association of Detailman-
PTGWO and Pedro Tecson v. Glaxo Wellcome Philippines, Inc.,34 we
passed on the validity of the policy of a pharmaceutical company prohibiting
its employees from marrying employees of any competitor company. We
held that Glaxo has a right to guard its trade secrets, manufacturing formulas,
marketing strategies and other confidential programs and information from
competitors. We considered the prohibition against personal or marital
relationships with employees of competitor companies upon Glaxo’s
employees reasonable under the circumstances because relationships of that
nature might compromise the interests of Glaxo. In laying down the assailed
company policy, we recognized that Glaxo only aims to protect its interests
against the possibility that a competitor company will gain access to its
secrets and procedures.35
The requirement that a company policy must be reasonable under the
circumstances to qualify as a valid exercise of management prerogative was
also at issue in the 1997 case of Philippine Telegraph and Telephone
Company v. NLRC.36 In said case, the employee was dismissed in violation
of petitioner’s policy of disqualifying from work any woman worker who
contracts marriage. We held that the company policy violates the right
against discrimination afforded all women workers under Article 136 of the
Labor Code, but established a permissible exception, viz.:
[A] requirement that a woman employee must remain unmarried could be
justified as a "bona fide occupational qualification," or BFOQ, where the
particular requirements of the job would justify the same, but not on the
ground of a general principle, such as the desirability of spreading work in
the workplace. A requirement of that nature would be valid provided it
reflects an inherent quality reasonably necessary for satisfactory job
performance.37 (Emphases supplied.)
The cases of Duncan and PT&T instruct us that the requirement of
reasonableness must be clearly established to uphold the questioned
employment policy. The employer has the burden to prove the existence of a
reasonable business necessity. The burden was successfully discharged in
Duncan but not in PT&T.
We do not find a reasonable business necessity in the case at bar.
Petitioners’ sole contention that "the company did not just want to have two
(2) or more of its employees related between the third degree by affinity
and/or consanguinity"38 is lame. That the second paragraph was meant to
give teeth to the first paragraph of the questioned rule 39 is evidently not the
valid reasonable business necessity required by the law.
It is significant to note that in the case at bar, respondents were hired after
they were found fit for the job, but were asked to resign when they married a
co-employee. Petitioners failed to show how the marriage of Simbol, then a
Sheeting Machine Operator, to Alma Dayrit, then an employee of the
Repacking Section, could be detrimental to its business operations. Neither
did petitioners explain how this detriment will happen in the case of Wilfreda
Comia, then a Production Helper in the Selecting Department, who married
Howard Comia, then a helper in the cutter-machine. The policy is premised
on the mere fear that employees married to each other will be less efficient. If
we uphold the questioned rule without valid justification, the employer can
create policies based on an unproven presumption of a perceived danger at
the expense of an employee’s right to security of tenure.
Petitioners contend that their policy will apply only when one employee
marries a co-employee, but they are free to marry persons other than co-
employees. The questioned policy may not facially violate Article 136 of the
Labor Code but it creates a disproportionate effect and under the disparate
impact theory, the only way it could pass judicial scrutiny is a showing that it
is reasonable despite the discriminatory, albeit disproportionate, effect. The
failure of petitioners to prove a legitimate business concern in imposing the
questioned policy cannot prejudice the employee’s right to be free from
arbitrary discrimination based upon stereotypes of married persons working
together in one company.40
Lastly, the absence of a statute expressly prohibiting marital discrimination
in our jurisdiction cannot benefit the petitioners. The protection given to
labor in our jurisdiction is vast and extensive that we cannot prudently draw
inferences from the legislature’s silence 41 that married persons are not
protected under our Constitution and declare valid a policy based on a
prejudice or stereotype. Thus, for failure of petitioners to present undisputed
proof of a reasonable business necessity, we rule that the questioned policy is
an invalid exercise of management prerogative. Corollarily, the issue as to
whether respondents Simbol and Comia resigned voluntarily has become
moot and academic.
As to respondent Estrella, the Labor Arbiter and the NLRC based their ruling
on the singular fact that her resignation letter was written in her own
handwriting. Both ruled that her resignation was voluntary and thus valid.
The respondent court failed to categorically rule whether Estrella voluntarily
resigned but ordered that she be reinstated along with Simbol and Comia.
Estrella claims that she was pressured to submit a resignation letter because
she was in dire need of money. We examined the records of the case and find
Estrella’s contention to be more in accord with the evidence. While findings
of fact by administrative tribunals like the NLRC are generally given not
only respect but, at times, finality, this rule admits of exceptions, 42 as in the
case at bar.
Estrella avers that she went back to work on December 21, 1999 but was
dismissed due to her alleged immoral conduct. At first, she did not want to
sign the termination papers but she was forced to tender her resignation letter
in exchange for her thirteenth month pay.
The contention of petitioners that Estrella was pressured to resign because
she got impregnated by a married man and she could not stand being looked
upon or talked about as immoral 43 is incredulous. If she really wanted to
avoid embarrassment and humiliation, she would not have gone back to work
at all. Nor would she have filed a suit for illegal dismissal and pleaded for
reinstatement. We have held that in voluntary resignation, the employee is
compelled by personal reason(s) to dissociate himself from employment. It is
done with the intention of relinquishing an office, accompanied by the act of
abandonment. 44 Thus, it is illogical for Estrella to resign and then file a
complaint for illegal dismissal. Given the lack of sufficient evidence on the
part of petitioners that the resignation was voluntary, Estrella’s dismissal is
declared illegal.
IN VIEW WHEREOF, the Decision of the Court of Appeals in CA-G.R. SP
No. 73477 dated August 3, 2004 is AFFIRMED.1avvphil.net
SO ORDERED.
II-ARTICLE 19-21: ABUSE OF RIGHT DOCTRINE
FIRST DIVISION
G.R. No. 88866             February 18, 1991
METROPOLITAN BANK & TRUST COMPANY, petitioner,
vs.
COURT OF APPEALS, GOLDEN SAVINGS & LOAN
ASSOCIATION, INC., LUCIA CASTILLO, MAGNO CASTILLO and
GLORIA CASTILLO, respondents.
Angara, Abello, Concepcion, Regala & Cruz for petitioner.
Bengzon, Zarraga, Narciso, Cudala, Pecson & Bengson for Magno and
Lucia Castillo.
Agapito S. Fajardo and Jaime M. Cabiles for respondent Golden Savings &
Loan Association, Inc.
CRUZ, J.:
This case, for all its seeming complexity, turns on a simple question of
negligence. The facts, pruned of all non-essentials, are easily told.
The Metropolitan Bank and Trust Co. is a commercial bank with branches
throughout the Philippines and even abroad. Golden Savings and Loan
Association was, at the time these events happened, operating in Calapan,
Mindoro, with the other private respondents as its principal officers.
In January 1979, a certain Eduardo Gomez opened an account with Golden
Savings and deposited over a period of two months 38 treasury warrants with
a total value of P1,755,228.37. They were all drawn by the Philippine Fish
Marketing Authority and purportedly signed by its General Manager and
countersigned by its Auditor. Six of these were directly payable to Gomez
while the others appeared to have been indorsed by their respective payees,
followed by Gomez as second indorser. 1
On various dates between June 25 and July 16, 1979, all these warrants were
subsequently indorsed by Gloria Castillo as Cashier of Golden Savings and
deposited to its Savings Account No. 2498 in the Metrobank branch in
Calapan, Mindoro. They were then sent for clearing by the branch office to
the principal office of Metrobank, which forwarded them to the Bureau of
Treasury for special clearing. 2
More than two weeks after the deposits, Gloria Castillo went to the Calapan
branch several times to ask whether the warrants had been cleared. She was
told to wait. Accordingly, Gomez was meanwhile not allowed to withdraw
from his account. Later, however, "exasperated" over Gloria's repeated
inquiries and also as an accommodation for a "valued client," the petitioner
says it finally decided to allow Golden Savings to withdraw from the
proceeds of the
warrants. 3
The first withdrawal was made on July 9, 1979, in the amount of
P508,000.00, the second on July 13, 1979, in the amount of P310,000.00, and
the third on July 16, 1979, in the amount of P150,000.00. The total
withdrawal was P968.000.00. 4
In turn, Golden Savings subsequently allowed Gomez to make withdrawals
from his own account, eventually collecting the total amount of
P1,167,500.00 from the proceeds of the apparently cleared warrants. The last
withdrawal was made on July 16, 1979.
On July 21, 1979, Metrobank informed Golden Savings that 32 of the
warrants had been dishonored by the Bureau of Treasury on July 19, 1979,
and demanded the refund by Golden Savings of the amount it had previously
withdrawn, to make up the deficit in its account.
The demand was rejected. Metrobank then sued Golden Savings in the
Regional Trial Court of Mindoro. 5 After trial, judgment was rendered in
favor of Golden Savings, which, however, filed a motion for reconsideration
even as Metrobank filed its notice of appeal. On November 4, 1986, the
lower court modified its decision thus:
ACCORDINGLY, judgment is hereby rendered:
1. Dismissing the complaint with costs against the plaintiff;
2. Dissolving and lifting the writ of attachment of the properties of defendant
Golden Savings and Loan Association, Inc. and defendant Spouses Magno
Castillo and Lucia Castillo;
3. Directing the plaintiff to reverse its action of debiting Savings Account
No. 2498 of the sum of P1,754,089.00 and to reinstate and credit to such
account such amount existing before the debit was made including the
amount of P812,033.37 in favor of defendant Golden Savings and Loan
Association, Inc. and thereafter, to allow defendant Golden Savings and Loan
Association, Inc. to withdraw the amount outstanding thereon before the
debit;
4. Ordering the plaintiff to pay the defendant Golden Savings and Loan
Association, Inc. attorney's fees and expenses of litigation in the amount of
P200,000.00.
5. Ordering the plaintiff to pay the defendant Spouses Magno Castillo and
Lucia Castillo attorney's fees and expenses of litigation in the amount of
P100,000.00.
SO ORDERED.
On appeal to the respondent court, 6 the decision was affirmed, prompting
Metrobank to file this petition for review on the following grounds:
1. Respondent Court of Appeals erred in disregarding and failing to apply the
clear contractual terms and conditions on the deposit slips allowing
Metrobank to charge back any amount erroneously credited.
(a) Metrobank's right to charge back is not limited to instances where the
checks or treasury warrants are forged or unauthorized.
(b) Until such time as Metrobank is actually paid, its obligation is that of a
mere collecting agent which cannot be held liable for its failure to collect on
the warrants.
2. Under the lower court's decision, affirmed by respondent Court of
Appeals, Metrobank is made to pay for warrants already dishonored, thereby
perpetuating the fraud committed by Eduardo Gomez.
3. Respondent Court of Appeals erred in not finding that as between
Metrobank and Golden Savings, the latter should bear the loss.
4. Respondent Court of Appeals erred in holding that the treasury warrants
involved in this case are not negotiable instruments.
The petition has no merit.
From the above undisputed facts, it would appear to the Court that
Metrobank was indeed negligent in giving Golden Savings the impression
that the treasury warrants had been cleared and that, consequently, it was safe
to allow Gomez to withdraw the proceeds thereof from his account with it.
Without such assurance, Golden Savings would not have allowed the
withdrawals; with such assurance, there was no reason not to allow the
withdrawal. Indeed, Golden Savings might even have incurred liability for its
refusal to return the money that to all appearances belonged to the depositor,
who could therefore withdraw it any time and for any reason he saw fit.
It was, in fact, to secure the clearance of the treasury warrants that Golden
Savings deposited them to its account with Metrobank. Golden Savings had
no clearing facilities of its own. It relied on Metrobank to determine the
validity of the warrants through its own services. The proceeds of the
warrants were withheld from Gomez until Metrobank allowed Golden
Savings itself to withdraw them from its own deposit. 7 It was only when
Metrobank gave the go-signal that Gomez was finally allowed by Golden
Savings to withdraw them from his own account.
The argument of Metrobank that Golden Savings should have exercised more
care in checking the personal circumstances of Gomez before accepting his
deposit does not hold water. It was Gomez who was entrusting the warrants,
not Golden Savings that was extending him a loan; and moreover, the
treasury warrants were subject to clearing, pending which the depositor could
not withdraw its proceeds. There was no question of Gomez's identity or of
the genuineness of his signature as checked by Golden Savings. In fact, the
treasury warrants were dishonored allegedly because of the forgery of the
signatures of the drawers, not of Gomez as payee or indorser. Under the
circumstances, it is clear that Golden Savings acted with due care and
diligence and cannot be faulted for the withdrawals it allowed Gomez to
make.
By contrast, Metrobank exhibited extraordinary carelessness. The amount
involved was not trifling — more than one and a half million pesos (and this
was 1979). There was no reason why it should not have waited until the
treasury warrants had been cleared; it would not have lost a single centavo by
waiting. Yet, despite the lack of such clearance — and notwithstanding that it
had not received a single centavo from the proceeds of the treasury warrants,
as it now repeatedly stresses — it allowed Golden Savings to withdraw —
not once, not twice, but thrice — from the uncleared treasury warrants in the
total amount of P968,000.00
Its reason? It was "exasperated" over the persistent inquiries of Gloria
Castillo about the clearance and it also wanted to "accommodate" a valued
client. It "presumed" that the warrants had been cleared simply because of
"the lapse of one week." 8 For a bank with its long experience, this
explanation is unbelievably naive.
And now, to gloss over its carelessness, Metrobank would invoke the
conditions printed on the dorsal side of the deposit slips through which the
treasury warrants were deposited by Golden Savings with its Calapan branch.
The conditions read as follows:
Kindly note that in receiving items on deposit, the bank obligates itself only
as the depositor's collecting agent, assuming no responsibility beyond care
in selecting correspondents, and until such time as actual payment shall have
come into possession of this bank, the right is reserved to charge back to the
depositor's account any amount previously credited, whether or not such
item is returned. This also applies to checks drawn on local banks and
bankers and their branches as well as on this bank, which are unpaid due to
insufficiency of funds, forgery, unauthorized overdraft or any other reason.
(Emphasis supplied.)
According to Metrobank, the said conditions clearly show that it was acting
only as a collecting agent for Golden Savings and give it the right to "charge
back to the depositor's account any amount previously credited, whether or
not such item is returned. This also applies to checks ". . . which are unpaid
due to insufficiency of funds, forgery, unauthorized overdraft of any other
reason." It is claimed that the said conditions are in the nature of contractual
stipulations and became binding on Golden Savings when Gloria Castillo, as
its Cashier, signed the deposit slips.
Doubt may be expressed about the binding force of the conditions,
considering that they have apparently been imposed by the bank unilaterally,
without the consent of the depositor. Indeed, it could be argued that the
depositor, in signing the deposit slip, does so only to identify himself and not
to agree to the conditions set forth in the given permit at the back of the
deposit slip. We do not have to rule on this matter at this time. At any rate,
the Court feels that even if the deposit slip were considered a contract, the
petitioner could still not validly disclaim responsibility thereunder in the light
of the circumstances of this case.
In stressing that it was acting only as a collecting agent for Golden Savings,
Metrobank seems to be suggesting that as a mere agent it cannot be liable to
the principal. This is not exactly true. On the contrary, Article 1909 of the
Civil Code clearly provides that —
Art. 1909. — The agent is responsible not only for fraud, but also for
negligence, which shall be judged 'with more or less rigor by the courts,
according to whether the agency was or was not for a compensation.
The negligence of Metrobank has been sufficiently established. To repeat for
emphasis, it was the clearance given by it that assured Golden Savings it was
already safe to allow Gomez to withdraw the proceeds of the treasury
warrants he had deposited Metrobank misled Golden Savings. There may
have been no express clearance, as Metrobank insists (although this is refuted
by Golden Savings) but in any case that clearance could be implied from its
allowing Golden Savings to withdraw from its account not only once or even
twice but three times. The total withdrawal was in excess of its original
balance before the treasury warrants were deposited, which only added to its
belief that the treasury warrants had indeed been cleared.
Metrobank's argument that it may recover the disputed amount if the
warrants are not paid for any reason is not acceptable. Any reason does not
mean no reason at all. Otherwise, there would have been no need at all for
Golden Savings to deposit the treasury warrants with it for clearance. There
would have been no need for it to wait until the warrants had been cleared
before paying the proceeds thereof to Gomez. Such a condition, if interpreted
in the way the petitioner suggests, is not binding for being arbitrary and
unconscionable. And it becomes more so in the case at bar when it is
considered that the supposed dishonor of the warrants was not communicated
to Golden Savings before it made its own payment to Gomez.
The belated notification aggravated the petitioner's earlier negligence in
giving express or at least implied clearance to the treasury warrants and
allowing payments therefrom to Golden Savings. But that is not all. On top
of this, the supposed reason for the dishonor, to wit, the forgery of the
signatures of the general manager and the auditor of the drawer corporation,
has not been established. 9 This was the finding of the lower courts which we
see no reason to disturb. And as we said in MWSS v. Court of Appeals: 10
Forgery cannot be presumed (Siasat, et al. v. IAC, et al., 139 SCRA 238). It
must be established by clear, positive and convincing evidence. This was not
done in the present case.
A no less important consideration is the circumstance that the treasury
warrants in question are not negotiable instruments. Clearly stamped on their
face is the word "non-negotiable." Moreover, and this is of equal
significance, it is indicated that they are payable from a particular fund, to
wit, Fund 501.
The following sections of the Negotiable Instruments Law, especially the
underscored parts, are pertinent:
Sec. 1. — Form of negotiable instruments. — An instrument to be negotiable
must conform to the following requirements:
(a) It must be in writing and signed by the maker or drawer;
(b) Must contain an unconditional promise or order to pay a sum certain in
money;
(c) Must be payable on demand, or at a fixed or determinable future time;
(d) Must be payable to order or to bearer; and
(e) Where the instrument is addressed to a drawee, he must be named or
otherwise indicated therein with reasonable certainty.
x x x           x x x          x x x
Sec. 3. When promise is unconditional. — An unqualified order or promise
to pay is unconditional within the meaning of this Act though coupled with
—
(a) An indication of a particular fund out of which reimbursement is to be
made or a particular account to be debited with the amount; or
(b) A statement of the transaction which gives rise to the instrument
judgment.
But an order or promise to pay out of a particular fund is not unconditional.
The indication of Fund 501 as the source of the payment to be made on the
treasury warrants makes the order or promise to pay "not unconditional" and
the warrants themselves non-negotiable. There should be no question that the
exception on Section 3 of the Negotiable Instruments Law is applicable in
the case at bar. This conclusion conforms to Abubakar vs. Auditor General
11 where the Court held:
The petitioner argues that he is a holder in good faith and for value of a
negotiable instrument and is entitled to the rights and privileges of a holder in
due course, free from defenses. But this treasury warrant is not within the
scope of the negotiable instrument law. For one thing, the document bearing
on its face the words "payable from the appropriation for food
administration, is actually an Order for payment out of "a particular fund,"
and is not unconditional and does not fulfill one of the essential requirements
of a negotiable instrument (Sec. 3 last sentence and section [1(b)] of the
Negotiable Instruments Law).
Metrobank cannot contend that by indorsing the warrants in general, Golden
Savings assumed that they were "genuine and in all respects what they
purport to be," in accordance with Section 66 of the Negotiable Instruments
Law. The simple reason is that this law is not applicable to the non-
negotiable treasury warrants. The indorsement was made by Gloria Castillo
not for the purpose of guaranteeing the genuineness of the warrants but
merely to deposit them with Metrobank for clearing. It was in fact Metrobank
that made the guarantee when it stamped on the back of the warrants: "All
prior indorsement and/or lack of endorsements guaranteed, Metropolitan
Bank & Trust Co., Calapan Branch."
The petitioner lays heavy stress on Jai Alai Corporation v. Bank of the
Philippine Islands, 12 but we feel this case is inapplicable to the present
controversy.1âwphi1 That case involved checks whereas this case involves
treasury warrants. Golden Savings never represented that the warrants were
negotiable but signed them only for the purpose of depositing them for
clearance. Also, the fact of forgery was proved in that case but not in the case
before us. Finally, the Court found the Jai Alai Corporation negligent in
accepting the checks without question from one Antonio Ramirez
notwithstanding that the payee was the Inter-Island Gas Services, Inc. and it
did not appear that he was authorized to indorse it. No similar negligence can
be imputed to Golden Savings.
We find the challenged decision to be basically correct. However, we will
have to amend it insofar as it directs the petitioner to credit Golden Savings
with the full amount of the treasury checks deposited to its account.
The total value of the 32 treasury warrants dishonored was P1,754,089.00,
from which Gomez was allowed to withdraw P1,167,500.00 before Golden
Savings was notified of the dishonor. The amount he has withdrawn must be
charged not to Golden Savings but to Metrobank, which must bear the
consequences of its own negligence. But the balance of P586,589.00 should
be debited to Golden Savings, as obviously Gomez can no longer be
permitted to withdraw this amount from his deposit because of the dishonor
of the warrants. Gomez has in fact disappeared. To also credit the balance to
Golden Savings would unduly enrich it at the expense of Metrobank, let
alone the fact that it has already been informed of the dishonor of the
treasury warrants.
WHEREFORE, the challenged decision is AFFIRMED, with the
modification that Paragraph 3 of the dispositive portion of the judgment of
the lower court shall be reworded as follows:
3. Debiting Savings Account No. 2498 in the sum of P586,589.00 only and
thereafter allowing defendant Golden Savings & Loan Association, Inc. to
withdraw the amount outstanding thereon, if any, after the debit.
SO ORDERED.
SECOND DIVISION
G.R. No. 146322             December 6, 2006
ERNESTO RAMAS UYPITCHING and RAMAS UYPITCHING SONS,
INC., petitioners,
vs.
ERNESTO QUIAMCO, respondent.
DECISION
CORONA, J.:
Honeste vivere, non alterum laedere et jus suum cuique tribuere. To live
virtuously, not to injure others and to give everyone his due. These supreme
norms of justice are the underlying principles of law and order in society. We
reaffirm them in this petition for review on certiorari assailing the July 26,
2000 decision1 and October 18, 2000 resolution of the Court of Appeals (CA)
in CA-G.R. CV No. 47571.
In 1982, respondent Ernesto C. Quiamco was approached by Juan Davalan, 2
Josefino Gabutero and Raul Generoso to amicably settle the civil aspect of a
criminal case for robbery3 filed by Quiamco against them. They surrendered
to him a red Honda XL-100 motorcycle and a photocopy of its certificate of
registration. Respondent asked for the original certificate of registration but
the three accused never came to see him again. Meanwhile, the motorcycle
was parked in an open space inside respondent’s business establishment,
Avesco-AVNE Enterprises, where it was visible and accessible to the public.
It turned out that, in October 1981, the motorcycle had been sold on
installment basis to Gabutero by petitioner Ramas Uypitching Sons, Inc., a
family-owned corporation managed by petitioner Atty. Ernesto Ramas
Uypitching. To secure its payment, the motorcycle was mortgaged to
petitioner corporation.4
When Gabutero could no longer pay the installments, Davalan assumed the
obligation and continued the payments. In September 1982, however,
Davalan stopped paying the remaining installments and told petitioner
corporation’s collector, Wilfredo Veraño, that the motorcycle had allegedly
been "taken by respondent’s men."
Nine years later, on January 26, 1991, petitioner Uypitching, accompanied by
policemen,5 went to Avesco-AVNE Enterprises to recover the motorcycle.
The leader of the police team, P/Lt. Arturo Vendiola, talked to the clerk in
charge and asked for respondent. While P/Lt. Vendiola and the clerk were
talking, petitioner Uypitching paced back and forth inside the establishment
uttering "Quiamco is a thief of a motorcycle."
On learning that respondent was not in Avesco-AVNE Enterprises, the
policemen left to look for respondent in his residence while petitioner
Uypitching stayed in the establishment to take photographs of the
motorcycle. Unable to find respondent, the policemen went back to Avesco-
AVNE Enterprises and, on petitioner Uypitching’s instruction and over the
clerk’s objection, took the motorcycle.
On February 18, 1991, petitioner Uypitching filed a criminal complaint for
qualified theft and/or violation of the Anti-Fencing Law 6 against respondent
in the Office of the City Prosecutor of Dumaguete City. 7 Respondent moved
for dismissal because the complaint did not charge an offense as he had
neither stolen nor bought the motorcycle. The Office of the City Prosecutor
dismissed the complaint8 and denied petitioner Uypitching’s subsequent
motion for reconsideration.
Respondent filed an action for damages against petitioners in the RTC of
Dumaguete City, Negros Oriental, Branch 37. 9 He sought to hold the
petitioners liable for the following: (1) unlawful taking of the motorcycle; (2)
utterance of a defamatory remark (that respondent was a thief) and (3)
precipitate filing of a baseless and malicious complaint. These acts
humiliated and embarrassed the respondent and injured his reputation and
integrity.
On July 30, 1994, the trial court rendered a decision 10 finding that petitioner
Uypitching was motivated with malice and ill will when he called respondent
a thief, took the motorcycle in an abusive manner and filed a baseless
complaint for qualified theft and/or violation of the Anti-Fencing Law.
Petitioners’ acts were found to be contrary to Articles 19 11 and 2012 of the
Civil Code. Hence, the trial court held petitioners liable to respondent for
P500,000 moral damages, P200,000 exemplary damages and P50,000
attorney’s fees plus costs.
Petitioners appealed the RTC decision but the CA affirmed the trial court’s
decision with modification, reducing the award of moral and exemplary
damages to P300,000 and P100,000, respectively. 13 Petitioners sought
reconsideration but it was denied. Thus, this petition.
In their petition and memorandum, petitioners submit that the sole (allegedly)
issue to be resolved here is whether the filing of a complaint for qualified
theft and/or violation of the Anti-Fencing Law in the Office of the City
Prosecutor warranted the award of moral damages, exemplary damages,
attorney’s fees and costs in favor of respondent.
Petitioners’ suggestion is misleading. They were held liable for damages not
only for instituting a groundless complaint against respondent but also for
making a slanderous remark and for taking the motorcycle from respondent’s
establishment in an abusive manner.
Correctness of the Findings of the RTC and CA
As they never questioned the findings of the RTC and CA that malice and ill
will attended not only the public imputation of a crime to respondent 14 but
also the taking of the motorcycle, petitioners were deemed to have accepted
the correctness of such findings. This alone was sufficient to hold petitioners
liable for damages to respondent.
Nevertheless, to address petitioners’ concern, we also find that the trial and
appellate courts correctly ruled that the filing of the complaint was tainted
with malice and bad faith. Petitioners themselves in fact described their
action as a "precipitate act." 15 Petitioners were bent on portraying respondent
as a thief. In this connection, we quote with approval the following findings
of the RTC, as adopted by the CA:
x x x There was malice or ill-will [in filing the complaint before the City
Prosecutor’s Office] because Atty. Ernesto Ramas Uypitching knew or ought
to have known as he is a lawyer, that there was no probable cause at all for
filing a criminal complaint for qualified theft and fencing activity against
[respondent]. Atty. Uypitching had no personal knowledge that [respondent]
stole the motorcycle in question. He was merely told by his bill collector
([i.e.] the bill collector of Ramas Uypitching Sons, Inc.)[,] Wilfredo
Veraño[,] that Juan Dabalan will [no longer] pay the remaining installment(s)
for the motorcycle because the motorcycle was taken by the men of
[respondent]. It must be noted that the term used by Wilfredo Veraño in
informing Atty. Ernesto Ramas Uypitching of the refusal of Juan Dabalan to
pay for the remaining installment was [‘]taken[’], not [‘]unlawfully taken[’]
or ‘stolen.’ Yet, despite the double hearsay, Atty. Ernesto Ramas Uypitching
not only executed the [complaint-affidavit] wherein he named [respondent]
as ‘the suspect’ of the stolen motorcycle but also charged [respondent] of
‘qualified theft and fencing activity’ before the City [Prosecutor’s] Office of
Dumaguete. The absence of probable cause necessarily signifies the presence
of malice. What is deplorable in all these is that Juan Dabalan, the owner of
the motorcycle, did not accuse [respondent] or the latter’s men of stealing the
motorcycle[,] much less bother[ed] to file a case for qualified theft before the
authorities. That Atty. Uypitching’s act in charging [respondent] with
qualified theft and fencing activity is tainted with malice is also shown by his
answer to the question of Cupid Gonzaga16 [during one of their
conversations] - "why should you still file a complaint? You have already
recovered the motorcycle…"[:] "Aron motagam ang kawatan ug motor."
("To teach a lesson to the thief of motorcycle.") 17
Moreover, the existence of malice, ill will or bad faith is a factual matter. As
a rule, findings of fact of the trial court, when affirmed by the appellate court,
are conclusive on this Court. We see no compelling reason to reverse the
findings of the RTC and the CA.
Petitioners Abused Their Right of Recovery as Mortgagee(s)
Petitioners claim that they should not be held liable for petitioner
corporation’s exercise of its right as seller-mortgagee to recover the
mortgaged vehicle preliminary to the enforcement of its right to foreclose on
the mortgage in case of default. They are clearly mistaken.
True, a mortgagee may take steps to recover the mortgaged property to
enable it to enforce or protect its foreclosure right thereon. There is, however,
a well-defined procedure for the recovery of possession of mortgaged
property: if a mortgagee is unable to obtain possession of a mortgaged
property for its sale on foreclosure, he must bring a civil action either to
recover such possession as a preliminary step to the sale, or to obtain
judicial foreclosure.18
Petitioner corporation failed to bring the proper civil action necessary to
acquire legal possession of the motorcycle. Instead, petitioner Uypitching
descended on respondent’s establishment with his policemen and ordered the
seizure of the motorcycle without a search warrant or court order. Worse, in
the course of the illegal seizure of the motorcycle, petitioner Uypitching even
mouthed a slanderous statement.
No doubt, petitioner corporation, acting through its co-petitioner Uypitching,
blatantly disregarded the lawful procedure for the enforcement of its right, to
the prejudice of respondent. Petitioners’ acts violated the law as well as
public morals, and transgressed the proper norms of human relations.
The basic principle of human relations, embodied in Article 19 of the Civil
Code, provides:
Art. 19. Every person must in the exercise of his rights and in the
performance of his duties, act with justice, give every one his due, and
observe honesty and good faith.
Article 19, also known as the "principle of abuse of right," prescribes that a
person should not use his right unjustly or contrary to honesty and good faith,
otherwise he opens himself to liability.19 It seeks to preclude the use of, or the
tendency to use, a legal right (or duty) as a means to unjust ends.
There is an abuse of right when it is exercised solely to prejudice or injure
another.20 The exercise of a right must be in accordance with the purpose for
which it was established and must not be excessive or unduly harsh; there
must be no intention to harm another. 21 Otherwise, liability for damages to
the injured party will attach.
In this case, the manner by which the motorcycle was taken at petitioners’
instance was not only attended by bad faith but also contrary to the procedure
laid down by law. Considered in conjunction with the defamatory statement,
petitioners’ exercise of the right to recover the mortgaged vehicle was utterly
prejudicial and injurious to respondent. On the other hand, the precipitate act
of filing an unfounded complaint could not in any way be considered to be in
accordance with the purpose for which the right to prosecute a crime was
established. Thus, the totality of petitioners’ actions showed a calculated
design to embarrass, humiliate and publicly ridicule respondent. Petitioners
acted in an excessively harsh fashion to the prejudice of respondent. Contrary
to law, petitioners willfully caused damage to respondent. Hence, they should
indemnify him.22
WHEREFORE, the petition is hereby DENIED. The July 26, 2000 decision
and October 18, 2000 resolution of the Court of Appeals in CA-G.R. CV No.
47571 are AFFIRMED.
Triple costs against petitioners, considering that petitioner Ernesto Ramas
Uypitching is a lawyer and an officer of the court, for his improper behavior.
SO ORDERED.
SECOND DIVISION
 
G.R. No. 110053 October 16, 1995
DEVELOPMENT BANK OF THE PHILIPPINES, petitioner,
vs.
COURT OF APPEALS, CELEBRADA MANGUBAT and ABNER
MANGUBAT, respondents.
 
REGALADO, J.:
This appeal by certiorari sprouted from the judgment of respondent Court of
Appeals promulgated on September 9, 1992 in CA-G.R. CV No. 28311, and
its resolution dated April 7, 1993 denying petitioner's motion for
reconsideration. 1 Said adjudgments, in turn, were rooted in the factual
groundwork of this case which is laid out hereunder.
On July 20, 1981, herein petitioner Development Bank of the Philippines
(DBP) executed a "Deed of Absolute Sale" in favor of respondent spouses
Celebrada and Abner Mangubat over a parcel of unregistered land identified
as Lot 1, PSU-142380, situated in the Barrio of Toytoy, Municipality of
Garchitorena, Province of Camarines Sur, containing an area of 55.5057
hectares, more or less.
The land, covered only by a tax declaration, is known to have been originally
owned by one Presentacion Cordovez, who, on February 4, 1937, donated it
to Luciano Sarmiento. On June 8, 1964, Luciano Sarmiento sold the land to
Pacifico Chica.
On April 27, 1965, Pacifico Chica mortgaged the land to DBP to secure a
loan of P6,000.00. However, he defaulted in the payment of the loan, hence
DBP caused the extrajudicial foreclosure of the mortgage. In the auction sale
held on September 9, 1970, DBP acquired the property as the highest bidder
and was issued a certificate of sale on September 17, 1970 by the sheriff. The
certificate of sale was entered in the Book of Unregistered Property on
September 23, 1970. Pacifico Chica failed to redeem the property, and DBP
consolidated its ownership over the same.
On October 14, 1980, respondent spouses offered to buy the property for
P18,599.99. DBP made a counter-offer of P25,500.00 which was accepted by
respondent spouses. The parties further agreed that payment was to be made
within six months thereafter for it to be considered as cash payment. On July
20, 1981, the deed of absolute sale, which is now being assailed herein, was
executed by DBP in favor of respondent spouses. Said document contained a
waiver of the seller's warranty against eviction. 2
Thereafter, respondent spouses applied for an industrial tree planting loan
with DBP. The latter required the former to submit a certification from the
Bureau of Forest Development that the land is alienable and disposable.
However, on October 29, 1981, said office issued a certificate attesting to the
fact that the said property was classified as timberland, hence not subject to
disposition. 3
The loan application of respondent spouses was nevertheless eventually
approved by DBP in the sum of P140,000.00, despite the aforesaid
certification of the bureau, on the understanding of the parties that DBP
would work for the release of the land by the former Ministry of Natural
Resources. To secure payment of the loan, respondent spouses executed a
real estate mortgage over the land on March 17, 1982, which document was
registered in the Registry of Deeds pursuant to Act No. 3344.
The loan was then released to respondent spouses on a staggered basis. After
a substantial sum of P118,540.00 had been received by private respondents,
they asked for the release of the remaining amount of the loan. It does not
appear that their request was acted upon by DBP, ostensibly because the
release of the land from the then Ministry of Natural Resources had not been
obtained.
On July 7, 1983, respondent spouses, as plaintiffs, filed a complaint against
DBP in the trial court 4 seeking the annulment of the subject deed of absolute
sale on the ground that the object thereof was verified to be timberland and,
therefore, is in law an inalienable part of the public domain. They also
alleged that petitioner, as defendant therein, acted fraudulently and in bad
faith by misrepresenting itself as the absolute owner of the land and in
incorporating the waiver of warranty against eviction in the deed of sale. 5
In its answer, DBP contended that it was actually the absolute owner of the
land, having purchased it for value at an auction sale pursuant to an
extrajudicial foreclosure of mortgage; that there was neither malice nor fraud
in the sale of the land under the terms mutually agreed upon by the parties;
that assuming arguendo that there was a flaw in its title, DBP can not be held
liable for anything inasmuch as respondent spouses had full knowledge of the
extent and nature of DBP's rights, title and interest over the land.
It further averred that the annulment of the sale and the return of the purchase
price to respondent spouses would redound to their benefit but would result
in petitioner's prejudice, since it had already released P118,540.00 to the
former while it would be left without any security for the P140,000.00 loan;
and that in the remote possibility that the land is reverted to the public
domain, respondent spouses should be made to immediately pay, jointly and
severally, the total amount of P118,540.00 with interest at 15% per annum,
plus charges and other expenses. 6
On May 25, 1990, the trial court rendered judgment annulling the subject
deed of absolute sale and ordering DBP to return the P25,500.00 purchase
price, plus interest; to reimburse to respondent spouses the taxes paid by
them, the cost of the relocation survey, incidental expenses and other
damages in the amount of P50,000.00; and to further pay them attorney's fees
and litigation expenses in the amount of P10,000.00, and the costs of suit. 7
In its recourse to the Court of Appeals, DBP raised the following assignment
of errors:
1. The trial court erred in declaring the deed of absolute sale executed
between the parties canceled and annulled on the ground that therein
defendant-appellant had no title over the property subject of the sale.
2. The trial court erred in finding that defendant-appellant DBP acted
fraudulently and in bad faith or that it had misrepresented facts since it had
prior knowledge that subject property was part of the public domain at the
time of sale to therein plaintiffs-appellees.
3. The trial court erred in finding said plaintiffs-appellees' waiver of warranty
against eviction void.
4. The trial court erred awarding to therein plaintiffs-appellees damages
arising from an alleged breach of contract.
5. The trial court erred in not ordering said plaintiffs-appellees to pay their
loan obligation to defendant-appellant DBP in the amount of P118,540. 8
As substantially stated at the outset, respondent Court of Appeals rendered
judgment modifying the disposition of the court below by deleting the award
for damages, attorney's fees, litigation expenses and the costs, but affirming
the same in all its other aspects. 9 On April 7, 1993, said appellate court also
denied petitioner's motion for reconsideration. 10
Not satisfied therewith, DBP interposed the instant petition for review on
certiorari, raising the following issues:
1. Whether or not private respondent spouses Celebrada and Abner
Mangubat should be ordered to pay petitioner DBP their loan obligation due
under the mortgage contract executed between them and DBP; and
2. Whether or not petitioner should reimburse respondent spouses the
purchase price of the property and the amount of P11,980.00 for taxes and
expenses for the relocation Survey. 11
Considering that neither party questioned the legality and correctness of the
judgment of the court a quo, as affirmed by respondent court, ordering the
annulment of the deed of absolute sale, such decreed nullification of the
document has already achieved finality. We only need
The Court of Appeals, after an extensive discussion, found that there had
been no bad faith on the part of either party, and this r, therefore, to dwell on
the effects of that declaration of nullity.emains uncontroverted as a fact in the
case at bar. Correspondingly, respondent court correctly applied the rule that
if both parties have no fault or are not guilty, the restoration of what was
given by each of them to the other is consequently in order. 12 This is because
the declaration of nullity of a contract which is void ab initio operates to
restore things to the state and condition in which they were found before the
execution thereof. 13
We also find ample support for said propositions in American jurisprudence.
The effect of an application of the aforequoted rule with respect to the right
of a party to recover the amount given as consideration has been passed upon
in the case of Leather Manufacturers National Bank vs. Merchants National
Bank 14 where it was held that: "Whenever money is paid upon the
representation of the receiver that he has either a certain title in property
transferred in consideration of the payment or a certain authority to receive
the money paid, when in fact he has no such title or authority, then, although
there be no fraud or intentional misrepresentation on his part, yet there is no
consideration for the payment, the money remains, in equity and good
conscience, the property of the payer and may be recovered back by him."
Therefore, the purchaser is entitled to recover the money paid by him where
the contract is set aside by reason of the mutual material mistake of the
parties as to the identity or quantity of the land sold. 15 And where a
purchaser recovers the purchase money from a vendor who fails or refuses to
deliver the title, he is entitled as a general rule to interest on the money paid
from the time of payment. 16
A contract which the law denounces as void is necessarily no contract
whatever, and the acts of the parties in an effort to create one can in no wise
bring about a change of their legal status. The parties and the subject matter
of the contract remain in all particulars just as they did before any act was
performed in relation thereto. 17
An action for money had and received lies to recover back money paid on a
contract, the consideration of which has failed. 18 As a general rule, if one
buys the land of another, to which the latter is supposed to have a good title,
and, in consequence of facts unknown alike to both parties, he has no title at
all, equity will cancel the transaction and cause the purchase money to be
restored to the buyer, putting both parties in status quo. 19
Thus, on both local and foreign legal principles, the return by DBP to
respondent spouses of the purchase price, plus corresponding interest
thereon, is ineluctably called for.
Petitioner likewise contends that the trial court and respondent Court of
Appeals erred in ordering the reimbursement of taxes and the cost of the
relocation survey, there being no factual or legal basis therefor. It argues that
private respondents merely submitted a "list of damages" allegedly incurred
by them, and not official receipts of expenses for taxes and said survey.
Furthermore, the same list has allegedly not been identified or even presented
at any stage of the proceedings, since it was vigorously objected to by DBP.
Contrary to the claim of petitioner, the list of damages was presented in the
trial court and was correspondingly marked as "Exhibit P." 20 The said exhibit
was, thereafter, admitted by the trial court but only as part of the testimonial
evidence for private respondents, as stated in its Order dated August 16,
1988. 21
However, despite that admission of the said list of damages as evidence, we
agree with petitioner that the same cannot constitute sufficient legal basis for
an award of P4,000.00 and P7,980.00 as reimbursement for land taxes and
expenses for the relocation survey, respectively. The list of damages was
prepared extrajudicially by respondent spouses by themselves without any
supporting receipts as bases thereof or to substantiate the same. That list, per
se, is necessarily self-serving and, on that account, should have been declared
inadmissible in evidence as the factum probans.
In order that damages may be recovered, the best evidence obtainable by the
injured party must be presented. Actual or compensatory damages cannot be
presumed, but must be duly proved, and so proved with a reasonable degree
of certainty. A court cannot rely on speculation, conjecture or guesswork as
to the fact and amount of damages, but must depend upon competent proof
that they have been suffered and on evidence of the actual amount thereof. If
the proof is flimsy and unsubstantial, no damages will be awarded. 22
Turning now to the issue of whether or not private respondents should be
made to pay petitioner their loan obligation amounting to P118,540.00, we
answer in the affirmative.
In its legal context, the contract of loan executed between the parties is
entirely different and discrete from the deed of sale they entered into. The
annulment of the sale will not have an effect on the existence and
demandability of the loan. One who has received money as a loan is bound to
pay to the creditor an equal amount of the same kind and quality. 23
The fact that the annulment of the sale will also result in the invalidity of the
mortgage does not have an effect on the validity and efficacy of the principal
obligation, for even an obligation that is unsupported by any security of the
debtor may also be enforced by means of an ordinary action. Where a
mortgage is not valid, as where it is executed by one who is not the owner of
the
property, 24 or the consideration of the contract is simulated 25 or false, 26 the
principal obligation which it guarantees is not thereby rendered null and
void. That obligation matures and becomes demandable in accordance with
the stipulations pertaining to it.
Under the foregoing circumstances, what is lost is only the right to foreclose
the mortgage as a special remedy for satisfying or settling the indebtedness
which is the principal obligation. In case of nullity, the mortgage deed
remains as evidence or proof of a personal obligation of the debtor, and the
amount due to the creditor may be enforced in an ordinary personal action. 27
It was likewise incorrect for the Court of Appeals to deny the claim of
petitioner for payment of the loan on the ground that it failed to present the
promissory note therefor. While respondent court also made the concession
that its judgment was accordingly without prejudice to the filing by petitioner
of a separate action for the collection of that amount, this does not detract
from the adverse effects of that erroneous ruling on the proper course of
action in this case.
The fact is that a reading of the mortgage contract 28 executed by respondent
spouses in favor of petitioner, dated March 17, 1982, will readily show that it
embodies not only the mortgage but the complete terms and conditions of the
loan agreement as well. The provisions of said contract, specifically
paragraphs 16 and 28 thereof, are so precise and clear as to thereby render
unnecessary the introduction of the promissory note which would merely
serve the same purpose.
Furthermore, respondent Celebrada Mangubat expressly acknowledged in
her testimony that she and her husband are indebted to petitioner in the
amount of P118,000.00, more or less. 29 Admissions made by the parties in
the pleadings or in the course of the trial or other proceedings do not require
proof and can not be contradicted unless previously shown to have been
made through palpable mistake. 30
Thus, the mortgage contract which embodies the terms and conditions of the
loan obligation of respondent spouses, as well as respondent Celebrada
Mangubat's admission in open court, are more than adequate evidence to
sustain petitioner's claim for payment of private respondents' aforestated
indebtedness and for the adjudication of DBP's claim therefor in the very
same action now before us.
It is also worth noting that the adjustment and allowance of petitioner's
demand by counterclaim or set-off in the present action, rather than by
another independent action, is favored or encouraged by law. Such a practice
serves to avoid circuitry of action, multiplicity of suits, inconvenience,
expense, and unwarranted consumption of the time of the court. The trend of
judicial decisions is toward a liberal extension of the right to avail of
counterclaims or set-offs. 31
The rules on counterclaim are designed to achieve the disposition of a whole
controversy of the conflicting claims of interested parties at one time and in
one action, provided all parties can be brought before the court and the
matter decided without prejudicing the rights of any party. 32
WHEREFORE, the judgment appealed from is hereby MODIFIED, by
deleting the award of P11,980.00 as reimbursement for taxes and expenses
for the relocation survey, and ordering respondent spouses Celebrada and
Abner Mangubat to pay petitioner Development Bank of the Philippines the
amount of P118,540.00, representing the total amount of the loan released to
them, with interest of 15% per annum plus charges and other expenses in
accordance with their mortgage contract. In all other respects, the said
judgment of respondent Court of Appeals is AFFIRMED.
SO ORDERED.
G.R. No. 157314 July 29, 2005
FAR EAST BANK AND TRUST COMPANY, NOW BANK OF THE
PHILIPPINE ISLANDS, Petitioners,
vs.
THEMISTOCLES PACILAN, JR., Respondent.
DECISION
CALLEJO, SR., J.:
Before the Court is the petition for review on certiorari filed by Far East
Bank and Trust Company (now Bank of the Philippines Islands) seeking the
reversal of the Decision1 dated August 30, 2002 of the Court of Appeals
(CA) in CA-G.R. CV No. 36627 which ordered it, together with its branch
accountant, Roger Villadelgado, to pay respondent Themistocles Pacilan, Jr. 2
the total sum of P100,000.00 as moral and exemplary damages. The assailed
decision affirmed with modification that of the Regional Trial Court (RTC)
of Negros Occidental, Bacolod City, Branch 54, in Civil Case No. 4908.
Likewise sought to be reversed and set aside is the Resolution dated January
17, 2003 of the appellate court, denying petitioner bank’s motion for
reconsideration.
The case stemmed from the following undisputed facts:
Respondent Pacilan opened a current account with petitioner bank’s Bacolod
Branch on May 23, 1980. His account was denominated as Current Account
No. 53208 (0052-00407-4). The respondent had since then issued several
postdated checks to different payees drawn against the said account.
Sometime in March 1988, the respondent issued Check No. 2434886 in the
amount of P680.00 and the same was presented for payment to petitioner
bank on April 4, 1988.
Upon its presentment on the said date, Check No. 2434886 was dishonored
by petitioner bank. The next day, or on April 5, 1988, the respondent
deposited to his current account the amount of P800.00. The said amount was
accepted by petitioner bank; hence, increasing the balance of the
respondent’s deposit to P1,051.43.
Subsequently, when the respondent verified with petitioner bank about the
dishonor of Check No. 2434866, he discovered that his current account was
closed on the ground that it was "improperly handled." The records of
petitioner bank disclosed that between the period of March 30,
1988 and April 5, 1988, the respondent issued four checks, to wit: Check No.
2480416 for P6,000.00; Check No. 2480419 for P50.00; Check No. 2434880
for P680.00 and; Check No. 2434886 for P680.00, or a total amount of
P7,410.00. At the time, however, the respondent’s current account with
petitioner bank only had a deposit of P6,981.43. Thus, the total amount of the
checks presented for payment on April 4, 1988 exceeded the balance of the
respondent’s deposit in his account. For this reason, petitioner bank, through
its branch accountant, Villadelgado, closed the respondent’s current account
effective the evening of April 4, 1988 as it then had an overdraft of P428.57.
As a consequence of the overdraft, Check No. 2434886 was dishonored.
On April 18, 1988, the respondent wrote to petitioner bank complaining that
the closure of his account was unjustified. When he did not receive a reply
from petitioner bank, the respondent filed with the RTC of Negros
Occidental, Bacolod City, Branch 54, a complaint for damages against
petitioner bank and Villadelgado. The case was docketed as Civil Case No.
4908. The respondent, as complainant therein, alleged that the closure of his
current account by petitioner bank was unjustified because on the first
banking hour of April 5, 1988, he already deposited an amount sufficient to
fund his checks. The respondent pointed out that Check No. 2434886, in
particular, was delivered to petitioner bank at the close of banking hours on
April 4, 1988 and, following normal banking procedure, it
(petitioner bank) had until the last clearing hour of the following day, or on
April 5, 1988, to honor the check or return it, if not funded. In disregard of
this banking procedure and practice, however, petitioner bank hastily closed
the respondent’s current account and dishonored his Check No. 2434886.
The respondent further alleged that prior to the closure of his current account,
he had issued several other postdated checks. The petitioner bank’s act of
closing his current account allegedly preempted the deposits that he intended
to make to fund those checks. Further, the petitioner bank’s act exposed him
to criminal prosecution for violation of Batas Pambansa Blg. 22.
According to the respondent, the indecent haste that attended the closure of
his account was patently malicious and intended to embarrass him. He
claimed that he is a Cashier of Prudential Bank and Trust Company, whose
branch office is located just across that of petitioner bank, and a prominent
and respected leader both in the civic and banking communities. The alleged
malicious acts of petitioner bank besmirched the respondent’s reputation and
caused him "social humiliation, wounded feelings, insurmountable worries
and sleepless nights" entitling him to an award of damages.
In their answer, petitioner bank and Villadelgado maintained that the
respondent’s current account was subject to petitioner bank’s Rules and
Regulations Governing the Establishment and Operation of Regular Demand
Deposits which provide that "the Bank reserves the right to close an account
if the depositor frequently draws checks against insufficient funds and/or
uncollected deposits" and that "the Bank reserves the right at any time to
return checks of the depositor which are drawn against insufficient funds or
for any reason."3
They showed that the respondent had improperly and irregularly handled his
current account. For example, in 1986, the respondent’s account was
overdrawn 156 times, in 1987, 117 times and in 1988, 26 times. In all these
instances, the account was overdrawn due to the issuance of checks against
insufficient funds. The respondent had also signed several checks with a
different signature from the specimen on file for dubious reasons.
When the respondent made the deposit on April 5, 1988, it was obviously to
cover for issuances made the previous day against an insufficiently funded
account. When his Check No. 2434886 was presented for payment on April
4, 1988, he had already incurred an overdraft; hence, petitioner bank
rightfully dishonored the same for insufficiency of funds.
After due proceedings, the court a quo rendered judgment in favor of the
respondent as it ordered the petitioner bank and Villadelgado, jointly and
severally, to pay the respondent the amounts of P100,000.00 as moral
damages and P50,000.00 as exemplary damages and costs of suit. In so
ruling, the court a quo also cited petitioner bank’s rules and regulations
which state that "a charge of P10.00 shall be levied against the depositor for
any check that is taken up as a returned item due to ‘insufficiency of funds’
on the date of receipt from the clearing office even if said check is honored
and/or covered by sufficient deposit the following banking day." The same
rules and regulations also provide that "a check returned for insufficiency of
funds for any reason of similar import may be subsequently recleared for one
more time only, subject to the same charges."
According to the court a quo, following these rules and regulations, the
respondent, as depositor, had the right to put up sufficient funds for a check
that was taken as a returned item for insufficient funds the day following the
receipt of said check from the clearing office. In fact, the said check could
still be recleared for one more time. In previous instances, petitioner bank
notified the respondent when he incurred an overdraft and he would then
deposit sufficient funds the following day to cover the overdraft. Petitioner
bank thus acted unjustifiably when it immediately closed the respondent’s
account on April 4, 1988 and deprived him of the opportunity to reclear his
check or deposit sufficient funds therefor the following day.
As a result of the closure of his current account, several of the respondent’s
checks were subsequently dishonored and because of this, the respondent
was humiliated, embarrassed and lost his credit standing in the business
community. The court a quo further ratiocinated that even granting arguendo
that petitioner bank had the right to close the respondent’s account, the
manner which attended the closure constituted an abuse of the
said right. Citing Article 19 of the Civil Code of the Philippines which states
that "[e]very person must, in the exercise of his rights and in the performance
of his duties, act with justice, give everyone his due, and observe honesty and
good faith" and Article 20 thereof which states that "[e]very person who,
contrary to law, wilfully or negligently causes damage to another, shall
indemnify the latter for the same," the court a quo adjudged petitioner bank
of acting in bad faith. It held that, under the foregoing circumstances, the
respondent is entitled to an award of moral and exemplary damages.
The decretal portion of the court a quo’s decision reads:
WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered:
1. Ordering the defendants [petitioner bank and Villadelgado], jointly and
severally, to pay plaintiff [the respondent] the sum of P100,000.00 as moral
damages;
2. Ordering the defendants, jointly and severally, to pay plaintiff the sum of
P50,000.00 as exemplary damages plus costs and expenses of the suit; and
3. Dismissing [the] defendants’ counterclaim for lack of merit.
SO ORDERED.4
On appeal, the CA rendered the Decision dated August 30, 2002, affirming
with modification the decision of the court a quo.
The appellate court substantially affirmed the factual findings of the court a
quo as it held that petitioner bank unjustifiably closed the respondent’s
account notwithstanding that its own rules and regulations
allow that a check returned for insufficiency of funds or any reason of similar
import, may be subsequently recleared for one more time, subject to standard
charges. Like the court a quo, the appellate court observed that in several
instances in previous years, petitioner bank would inform the respondent
when he incurred an overdraft and allowed him to make a timely deposit to
fund the checks that were initially dishonored for insufficiency of funds.
However, on April 4, 1988, petitioner bank immediately closed the
respondent’s account without even notifying him that he had incurred an
overdraft. Even when they had already closed his account on April 4, 1988,
petitioner bank still accepted the deposit that the respondent made on April 5,
1988, supposedly to cover his checks.
Echoing the reasoning of the court a quo, the CA declared that even as it may
be conceded that petitioner bank had reserved the right to close an account
for repeated overdrafts by the respondent, the exercise of that right must
never be despotic or arbitrary. That petitioner bank chose to close the account
outright and return the check, even after accepting a deposit sufficient to
cover the said check, is contrary to its duty to handle the respondent’s
account with utmost fidelity. The exercise of the right is not absolute and
good faith, at least, is required. The manner by which petitioner bank closed
the account of the respondent runs afoul of Article 19 of the Civil Code
which enjoins every person, in the exercise of his rights, "to give every one
his due, and observe honesty and good faith."
The CA concluded that petitioner bank’s precipitate and imprudent closure of
the respondent’s account had caused him, a respected officer of several civic
and banking associations, serious anxiety and humiliation. It had, likewise,
tainted his credit standing. Consequently, the award of damages is warranted.
The CA, however, reduced the amount of damages awarded by the court a
quo as it found the same to be excessive:
We, however, find excessive the amount of damages awarded by the RTC. In
our view the reduced amount of P75,000.00 as moral damages and
P25,000.00 as exemplary damages are in order. Awards for damages are not
meant to enrich the plaintiff-appellee [the respondent] at the expense of
defendants-appellants [the petitioners], but to obviate the moral suffering he
has undergone. The award is aimed at the restoration, within limits possible,
of the status quo ante, and should be proportionate to the suffering inflicted. 5
The dispositive portion of the assailed CA decision reads:
WHEREFORE, the decision appealed from is hereby AFFIRMED, subject to
the MODIFICATION that the award of moral damages is reduced to
P75,000.00 and the award of exemplary damages reduced to P25,000.00.
SO ORDERED.6
Petitioner bank sought the reconsideration of the said decision but in the
assailed Resolution dated January 17, 2003, the appellate court denied its
motion. Hence, the recourse to this Court.
Petitioner bank maintains that, in closing the account of the respondent in the
evening of April 4, 1988, it acted in good faith and in accordance with the
rules and regulations governing the operation of a
regular demand deposit which reserves to the bank "the right to close an
account if the depositor frequently draws checks against insufficient funds
and/or uncollected deposits." The same rules and regulations also provide
that "the depositor is not entitled, as a matter of right, to overdraw on this
deposit and the bank reserves the right at any time to return checks of the
depositor which are drawn against insufficient funds or for any reason."
It cites the numerous instances that the respondent had overdrawn his
account and those instances where he deliberately signed checks using a
signature different from the specimen on file. Based on these facts, petitioner
bank was constrained to close the respondent’s account for improper and
irregular handling and returned his Check No. 2434886 which was presented
to the bank for payment on April 4, 1988.
Petitioner bank further posits that there is no law or rule which gives the
respondent a legal right to make good his check or to deposit the
corresponding amount to cover said check within 24 hours after the same is
dishonored or returned by the bank for having been drawn against
insufficient funds. It vigorously denies having violated Article 19 of the Civil
Code as it insists that it acted in good faith and in accordance with the
pertinent banking rules and regulations.
The petition is impressed with merit.
A perusal of the respective decisions of the court a quo and the appellate
court show that the award of damages in the respondent’s favor was
anchored mainly on Article 19 of the Civil Code which, quoted anew below,
reads:
Art. 19. Every person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due, and
observe honesty and good faith.
The elements of abuse of rights are the following: (a) the existence of a legal
right or duty; (b) which is exercised in bad faith; and (c) for the sole intent of
prejudicing or injuring another.7 Malice or bad faith is at the core of the said
provision.8 The law always presumes good faith and any person who seeks to
be awarded damages due to acts of another has the burden of proving that the
latter acted in bad faith or with ill-motive. 9 Good faith refers to the state of
the mind which is manifested by the acts of the individual concerned. It
consists of the intention to abstain from taking an unconscionable and
unscrupulous advantage of another.10 Bad faith does not simply connote bad
judgment or simple negligence, dishonest purpose or some moral obliquity
and conscious doing of a wrong, a breach of known duty due to some
motives or interest or ill-will that partakes of the nature of fraud. 11 Malice
connotes ill-will or spite and speaks not in response to duty. It implies an
intention to do ulterior and unjustifiable harm. Malice is bad faith or bad
motive.12
Undoubtedly, petitioner bank has the right to close the account of the
respondent based on the following provisions of its Rules and Regulations
Governing the Establishment and Operation of Regular Demand Deposits:
10) The Bank reserves the right to close an account if the depositor
frequently draws checks against insufficient funds and/or uncollected
deposits.
… Neither the fact that petitioner bank accepted the deposit made by the
12) …
However, it is clearly understood that the depositor is not entitled, as a matter
of right, to overdraw on this deposit and the bank reserves the right at any
time to return checks of the depositor which are drawn against insufficient
funds or for any other reason.
The facts, as found by the court a quo and the appellate court, do not
establish that, in the exercise of this right, petitioner bank committed an
abuse thereof. Specifically, the second and third elements for abuse of rights
are not attendant in the present case. The evidence presented by petitioner
bank negates the existence of bad faith or malice on its part in closing the
respondent’s account on April 4, 1988 because on the said date the same was
already overdrawn. The respondent issued four checks, all due on April 4,
1988, amounting to P7,410.00 when the balance of his current account
deposit was only P6,981.43. Thus, he incurred an overdraft of P428.57 which
resulted in the dishonor of his Check No. 2434886. Further, petitioner bank
showed that in 1986, the current account of the respondent was overdrawn
156 times due to his issuance of checks against insufficient funds. 13 In 1987,
the said account was overdrawn 117 times for the same
reason.14 Again, in 1988, 26 times. 15 There were also several instances when
the respondent issued checks deliberately using a signature different from his
specimen signature on file with petitioner bank. 16 All these circumstances
taken together justified the petitioner bank’s closure of the respondent’s
account on April 4, 1988 for "improper handling."
It is observed that nowhere under its rules and regulations is petitioner bank
required to notify the respondent, or any depositor for that matter, of the
closure of the account for frequently drawing checks against insufficient
funds. No malice or bad faith could be imputed on petitioner bank for so
acting since the records bear out that the respondent had indeed been
improperly and irregularly handling his account not just a few times but
hundreds of times. Under the circumstances, petitioner bank could not be
faulted for exercising its right in accordance with the express rules and
regulations governing the current accounts of its depositors. Upon the
opening of his account, the respondent had agreed to be bound by these terms
and conditions.
respondent the day following the closure of his account constitutes bad faith
or malice on the part of petitioner bank. The same could be characterized as
simple negligence by its personnel. Said act, by itself, is not constitutive of
bad faith.
The respondent had thus failed to discharge his burden of proving bad faith
on the part of petitioner bank or that it was motivated by ill-will or spite in
closing his account on April 4, 1988 and in inadvertently accepting his
deposit on April 5, 1988.
Further, it has not been shown that these acts were done by petitioner bank
with the sole intention of prejudicing and injuring the respondent. It is
conceded that the respondent may have suffered damages as a result of the
closure of his current account. However, there is a material distinction
between damages and injury. The Court had the occasion to explain the
distinction between damages and injury in this wise:
… Injury is the illegal invasion of a legal right; damage is the loss, hurt or
harm which results from the injury; and damages are the recompense or
compensation awarded for the damage suffered. Thus, there can be damage
without injury in those instances in which the loss or harm was not the result
of a violation of a legal duty. In such cases, the consequences must be borne
by the injured person alone, the law affords no remedy for damages resulting
from an act which does not amount to a legal injury or wrong. These
situations are often called damnum absque injuria.
In other words, in order that a plaintiff may maintain an action for the
injuries of which he complains, he must establish that such injuries resulted
from a breach of duty which the defendant owed to the plaintiff – a
concurrence of injury to the plaintiff and legal responsibility by the person
causing it. The underlying basis for the award of tort damages is the premise
that the individual was injured in contemplation of law. Thus, there must first
be a breach of some duty and the imposition of liability for that breach before
damages may be awarded; and the breach of such duty should be the
proximate cause of the injury.17
Whatever damages the respondent may have suffered as a consequence, e.g.,
dishonor of his other insufficiently funded checks, would have to be borne by
him alone. It was the respondent’s repeated improper
and irregular handling of his account which constrained petitioner bank to
close the same in accordance with the rules and regulations governing its
depositors’ current accounts. The respondent’s case is clearly one of
damnum absque injuria.
WHEREFORE, the petition is GRANTED. The Decision dated August 30,
2002 and Resolution dated January 17, 2003 of the Court of Appeals in CA-
G.R. CV No. 36627 are REVERSED AND SET ASIDE.
SO ORDERED.
SECOND DIVISION
G.R. No. 165842 November 29, 2005
EDUARDO P. MANUEL, Petitioner,
vs.
PEOPLE OF THE PHILIPPINES, Respondent.
DECISION
CALLEJO, SR., J.:
Before us is a petition for review on certiorari of the Decision1 of the Court
of Appeals (CA) in CA-G.R. CR No. 26877, affirming the Decision 2 of the
Regional Trial Court (RTC) of Baguio City, Branch 3, convicting Eduardo P.
Manuel of bigamy in Criminal Case No. 19562-R.
Eduardo was charged with bigamy in an Information filed on November 7,
2001, the accusatory portion of which reads:
That on or about the 22nd day of April, 1996, in the City of Baguio,
Philippines, and within the jurisdiction of this Honorable Court, the above-
named accused EDUARDO P. MANUEL, being then previously and legally
married to RUBYLUS [GAÑA] and without the said marriage having been
legally dissolved, did then and there willfully, unlawfully and feloniously
contract a second marriage with TINA GANDALERA-MANUEL, herein
complainant, who does not know the existence of the first marriage of said
EDUARDO P. MANUEL to Rubylus [Gaña].
CONTRARY TO LAW. 3
The prosecution adduced evidence that on July 28, 1975, Eduardo was
married to Rubylus Gaña before Msgr. Feliciano Santos in Makati, which
was then still a municipality of the Province of Rizal. 4 He met the private
complainant Tina B. Gandalera in Dagupan City sometime in January 1996.
She stayed in Bonuan, Dagupan City for two days looking for a friend. Tina
was then 21 years old, a Computer Secretarial student, while Eduardo was
39. Afterwards, Eduardo went to Baguio City to visit her. Eventually, as one
thing led to another, they went to a motel where, despite Tina’s resistance,
Eduardo succeeded in having his way with her. Eduardo proposed marriage
on several occasions, assuring her that he was single. Eduardo even brought
his parents to Baguio City to meet Tina’s parents, and was assured by them
that their son was still single.
Tina finally agreed to marry Eduardo sometime in the first week of March
1996. They were married on April 22, 1996 before Judge Antonio C. Reyes,
the Presiding Judge of the RTC of Baguio City, Branch 61. 5 It appeared in
their marriage contract that Eduardo was "single."
The couple was happy during the first three years of their married life.
Through their joint efforts, they were able to build their home in Cypress
Point, Irisan, Baguio City. However, starting 1999, Manuel started making
himself scarce and went to their house only twice or thrice a year. Tina was
jobless, and whenever she asked money from Eduardo, he would slap her. 6
Sometime in January 2001, Eduardo took all his clothes, left, and did not
return. Worse, he stopped giving financial support.
Sometime in August 2001, Tina became curious and made inquiries from the
National Statistics Office (NSO) in Manila where she learned that Eduardo
had been previously married. She secured an NSO-certified copy of the
marriage contract.7 She was so embarrassed and humiliated when she learned
that Eduardo was in fact already married when they exchanged their own
vows.8
For his part, Eduardo testified that he met Tina sometime in 1995 in a bar
where she worked as a Guest Relations Officer (GRO). He fell in love with
her and married her. He informed Tina of his previous marriage to Rubylus
Gaña, but she nevertheless agreed to marry him. Their marital relationship
was in order until this one time when he noticed that she had a "love-bite" on
her neck. He then abandoned her. Eduardo further testified that he declared
he was "single" in his marriage contract with Tina because he believed in
good faith that his first marriage was invalid. He did not know that he had to
go to court to seek for the nullification of his first marriage before marrying
Tina.
Eduardo further claimed that he was only forced to marry his first wife
because she threatened to commit suicide unless he did so. Rubylus was
charged with estafa in 1975 and thereafter imprisoned. He visited her in jail
after three months and never saw her again. He insisted that he married Tina
believing that his first marriage was no longer valid because he had not heard
from Rubylus for more than 20 years.
After trial, the court rendered judgment on July 2, 2002 finding Eduardo
guilty beyond reasonable doubt of bigamy. He was sentenced to an
indeterminate penalty of from six (6) years and ten (10) months, as
minimum, to ten (10) years, as maximum, and directed to indemnify the
private complainant Tina Gandalera the amount of P200,000.00 by way of
moral damages, plus costs of suit.9
The trial court ruled that the prosecution was able to prove beyond
reasonable doubt all the elements of bigamy under Article 349 of the Revised
Penal Code. It declared that Eduardo’s belief, that his first marriage had been
dissolved because of his first wife’s 20-year absence, even if true, did not
exculpate him from liability for bigamy. Citing the ruling of this Court in
People v. Bitdu,10 the trial court further ruled that even if the private
complainant had known that Eduardo had been previously married, the latter
would still be criminally liable for bigamy.
Eduardo appealed the decision to the CA. He alleged that he was not
criminally liable for bigamy because when he married the private
complainant, he did so in good faith and without any malicious intent. He
maintained that at the time that he married the private complainant, he was of
the honest belief that his first marriage no longer subsisted. He insisted that
conformably to Article 3 of the Revised Penal Code, there must be malice for
one to be criminally liable for a felony. He was not motivated by malice in
marrying the private complainant because he did so only out of his
overwhelming desire to have a fruitful marriage. He posited that the trial
court should have taken into account Article 390 of the New Civil Code. To
support his view, the appellant cited the rulings of this Court in United States
v. Peñalosa11 and Manahan, Jr. v. Court of Appeals.12
The Office of the Solicitor General (OSG) averred that Eduardo’s defense of
good faith and reliance on the Court’s ruling in United States v. Enriquez13
were misplaced; what is applicable is Article 41 of the Family Code, which
amended Article 390 of the Civil Code. Citing the ruling of this Court in
Republic v. Nolasco,14 the OSG further posited that as provided in Article 41
of the Family Code, there is a need for a judicial declaration of presumptive
death of the absent spouse to enable the present spouse to marry. Even
assuming that the first marriage was void, the parties thereto should not be
permitted to judge for themselves the nullity of the marriage;
the matter should be submitted to the proper court for resolution. Moreover,
the OSG maintained, the private complainant’s knowledge of the first
marriage would not afford any relief since bigamy is an offense against the
State and not just against the private complainant.
However, the OSG agreed with the appellant that the penalty imposed by the
trial court was erroneous and sought the affirmance of the decision appealed
from with modification.
On June 18, 2004, the CA rendered judgment affirming the decision of the
RTC with modification as to the penalty of the accused. It ruled that the
prosecution was able to prove all the elements of bigamy. Contrary to the
contention of the appellant, Article 41 of the Family Code should apply.
Before Manuel could lawfully marry the private complainant, there should
have been a judicial declaration of Gaña’s presumptive death as the absent
spouse. The appellate court cited the rulings of this Court in Mercado v.
Tan15 and Domingo v. Court of Appeals16 to support its ruling. The
dispositive portion of the decision reads:
WHEREFORE, in the light of the foregoing, the Decision promulgated on
July 31, 2002 is hereby MODIFIED to reflect, as it hereby reflects, that
accused-appellant is sentenced to an indeterminate penalty of two (2) years,
four (4) months and one (1) day of prision correccional, as minimum, to ten
(10) years of prision mayor as maximum. Said Decision is AFFIRMED in
all other respects.
SO ORDERED.17
Eduardo, now the petitioner, filed the instant petition for review on certiorari,
insisting that:
I on presumptive death would apply. He further asserts that contrary to the
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR OF
LAW WHEN IT RULED THAT PETITIONER’S FIRST WIFE CANNOT
BE LEGALLY PRESUMED DEAD UNDER ARTICLE 390 OF THE
CIVIL CODE AS THERE WAS NO JUDICIAL DECLARATION OF
PRESUMPTIVE DEATH AS PROVIDED FOR UNDER ARTICLE 41 OF
THE FAMILY CODE.
II
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR OF
LAW WHEN IT AFFIRMED THE AWARD OF PHP200,000.00 AS
MORAL DAMAGES AS IT HAS NO BASIS IN FACT AND IN LAW.18
The petitioner maintains that the prosecution failed to prove the second
element of the felony, i.e., that the marriage has not been legally dissolved
or, in case his/her spouse is absent, the absent spouse could not yet be
presumed dead under the Civil Code. He avers that when he married
Gandalera in 1996, Gaña had been "absent" for 21 years since 1975; under
Article 390 of the Civil Code, she was presumed dead as a matter of law. He
points out that, under the first paragraph of Article 390 of the Civil Code, one
who has been absent for seven years, whether or not he/she is still alive, shall
be presumed dead for all purposes except for succession, while the second
paragraph refers to the rule on legal presumption of death with respect to
succession.
The petitioner asserts that the presumptive death of the absent spouse arises
by operation of law upon the satisfaction of two requirements: the
specified period and the present spouse’s reasonable belief that the absentee
is dead. He insists that he was able to prove that he had not heard from his
first wife since 1975 and that he had no knowledge of her whereabouts or
whether she was still alive; hence, under Article 41 of the Family Code, the
presumptive death of Gaña had arisen by operation of law, as the two
requirements of Article 390 of the Civil Code are present. The petitioner
concludes that he should thus be acquitted of the crime of bigamy.
The petitioner insists that except for the period of absences provided for in
Article 390 of the Civil Code, the rule therein on legal presumptions remains
valid and effective. Nowhere under Article 390 of the Civil Code does it
require that there must first be a judicial declaration of death before the rule
rulings of the trial and appellate courts, the requirement of a judicial
declaration of presumptive death under Article 41 of the Family Code is only
a requirement for the validity of the subsequent or second marriage.
The petitioner, likewise, avers that the trial court and the CA erred in
awarding moral damages in favor of the private complainant. The private
complainant was a "GRO" before he married her, and even knew that he was
already married. He genuinely loved and took care of her and gave her
financial support. He also pointed out that she had an illicit relationship with
a lover whom she brought to their house.
In its comment on the petition, the OSG maintains that the decision of the
CA affirming the petitioner’s conviction is in accord with the law,
jurisprudence and the evidence on record. To bolster its claim, the OSG cited
the ruling of this Court in Republic v. Nolasco.19
The petition is denied for lack of merit.
Article 349 of the Revised Penal Code, which defines and penalizes bigamy,
reads:
Art. 349. Bigamy. – The penalty of prision mayor shall be imposed upon any
person who shall contract a second or subsequent marriage before the former
marriage has been legally dissolved, or before the absent spouse has been
declared presumptively dead by means of a judgment rendered in the proper
proceedings.
The provision was taken from Article 486 of the Spanish Penal Code, to wit:
El que contrajere Segundo o ulterior matrimonio sin hallarse legítimamente
disuelto el anterior, será castigado con la pena de prision mayor. xxx
The reason why bigamy is considered a felony is to preserve and ensure the
juridical tie of marriage established by law. 20 The phrase "or before the
absent spouse had been declared presumptively dead by means of a judgment
rendered in the proper proceedings" was incorporated in the Revised Penal
Code because the drafters of the law were of the impression that "in
consonance with the civil law which provides for the presumption of death
after an absence of a number of years, the judicial declaration of presumed
death like annulment of marriage should be a justification for bigamy."21
For the accused to be held guilty of bigamy, the prosecution is burdened to
prove the felony: (a) he/she has been legally married; and (b) he/she
contracts a subsequent marriage without the former marriage having been
lawfully dissolved. The felony is consummated on the celebration of the
second marriage or subsequent marriage. 22 It is essential in the prosecution
for bigamy that the alleged second marriage, having all the essential
requirements, would be valid were it not for the subsistence of the first
marriage.23 Viada avers that a third element of the crime is that the second
marriage must be entered into with fraudulent intent (intencion fraudulente)
which is an essential element of a felony by dolo.24 On the other hand, Cuello
Calon is of the view that there are only two elements of bigamy: (1) the
existence of a marriage that has not been lawfully dissolved; and (2) the
celebration of a second marriage. It does not matter whether the first
marriage is void or voidable because such marriages have juridical effects
until lawfully dissolved by a court of competent jurisdiction. 25 As the Court
ruled in Domingo v. Court of Appeals26 and Mercado v. Tan,27 under the
Family Code of the Philippines, the judicial declaration of nullity of a
previous marriage is a defense.
In his commentary on the Revised Penal Code, Albert is of the same view as
Viada and declared that there are three (3) elements of bigamy: (1) an
undissolved marriage; (2) a new marriage; and (3) fraudulent intention
constituting the felony of the act.28 He explained that:
… This last element is not stated in Article 349, because it is undoubtedly
incorporated in the principle antedating all codes, and, constituting one of the
landmarks of our Penal Code, that, where there is no willfulness there is no
crime. There is no willfulness if the subject
believes that the former marriage has been dissolved; and this must be
supported by very strong evidence, and if this be produced, the act shall be
deemed not to constitute a crime. Thus, a person who contracts a second
marriage in the reasonable and well-founded belief that his first wife is dead,
because of the many years that have elapsed since he has had any news of her
whereabouts, in spite of his endeavors to find her, cannot be deemed guilty of
the crime of bigamy, because there is no fraudulent intent which is one of the
essential elements of the crime.29
As gleaned from the Information in the RTC, the petitioner is charged with
bigamy, a felony by dolo (deceit). Article 3, paragraph 2 of the Revised
Penal Code provides that there is deceit when the act is performed with
deliberate intent. Indeed, a felony cannot exist without intent. Since a felony
by dolo is classified as an intentional felony, it is deemed voluntary. 30
Although the words "with malice" do not appear in Article 3 of the Revised
Penal Code, such phrase is included in the word "voluntary." 31
Malice is a mental state or condition prompting the doing of an overt act
without legal excuse or justification from which another suffers injury. 32
When the act or omission defined by law as a felony is proved to have been
done or committed by the accused, the law presumes it to have been
intentional.33 Indeed, it is a legal presumption of law that every man intends
the natural or probable consequence of his voluntary act in the absence of
proof to the contrary, and such presumption must prevail unless a reasonable
doubt exists from a consideration of the whole evidence. 34
For one to be criminally liable for a felony by dolo, there must be a
confluence of both an evil act and an evil intent. Actus non facit reum, nisi
mens sit rea.35
In the present case, the prosecution proved that the petitioner was married to
Gaña in 1975, and such marriage was not judicially declared a nullity; hence,
the marriage is presumed to subsist.36 The prosecution also proved that the
petitioner married the private complainant in 1996, long after the effectivity
of the Family Code.
The petitioner is presumed to have acted with malice or evil intent when he
married the private complainant. As a general rule, mistake of fact or good
faith of the accused is a valid defense in a prosecution for a felony by dolo;
such defense negates malice or criminal intent. However, ignorance of the
law is not an excuse because everyone is presumed to know the law.
Ignorantia legis neminem excusat.
It was the burden of the petitioner to prove his defense that when he married
the private complainant in 1996, he was of the well-grounded belief
that his first wife was already dead, as he had not heard from her for more
than 20 years since 1975. He should have adduced in evidence a decision of a
competent court declaring the presumptive death of his first wife as required
by Article 349 of the Revised Penal Code, in relation to Article 41 of the
Family Code. Such judicial declaration also constitutes proof that the
petitioner acted in good faith, and would negate criminal intent on his part
when he married the private complainant and, as a consequence, he could not
be held guilty of bigamy in such case. The petitioner, however, failed to
discharge his burden.
The phrase "or before the absent spouse has been declared presumptively
dead by means of a judgment rendered on the proceedings" in Article 349 of
the Revised Penal Code was not an aggroupment of empty or useless words.
The requirement for a judgment of the presumptive death of the absent
spouse is for the benefit of the spouse present, as protection from the pains
and the consequences of a second marriage, precisely because he/she could
be charged and convicted of bigamy if the defense of good faith based on
mere testimony is found incredible.
The requirement of judicial declaration is also for the benefit of the State.
Under Article II, Section 12 of the Constitution, the "State shall protect and
strengthen the family as a basic autonomous social institution." Marriage is a
social institution of the highest importance. Public policy, good morals and
the interest of society require that the marital relation should be surrounded
with every safeguard and its severance only in the manner prescribed and the
causes specified by law.37 The laws regulating civil marriages are necessary
to serve the interest, safety, good order, comfort or general welfare of the
community and the parties can waive nothing essential to the validity of the
proceedings. A civil marriage anchors an ordered society by encouraging
stable relationships over transient ones; it enhances the welfare of the
community.
In a real sense, there are three parties to every civil marriage; two willing
spouses and an approving State. On marriage, the parties assume new
relations to each other and the State touching nearly on every aspect of life
and death. The consequences of an invalid marriage to the parties, to
innocent parties and to society, are so serious that the law may well take
means calculated to ensure the procurement of the most positive evidence of
death of the first spouse or of the presumptive death of the absent spouse 38
after the lapse of the period provided for under the law. One such means is
the requirement of the declaration by a competent court of the presumptive
death of an absent spouse as proof that the present spouse contracts a
subsequent marriage on a well-grounded belief of the death of the first
spouse. Indeed, "men readily believe what they wish to be true," is a maxim
of the old jurists. To sustain a second marriage and to vacate a first because
one of the parties believed the other to be dead would make the existence of
the marital relation determinable, not by certain extrinsic facts, easily capable
of forensic ascertainment and proof, but by the subjective condition of
individuals.39 Only with such proof can marriage be treated as so dissolved as
to permit second marriages.40 Thus, Article 349 of the Revised Penal Code
has made the dissolution of marriage dependent not only upon the personal
belief of parties, but upon certain objective facts easily capable of accurate
judicial cognizance,41 namely, a judgment of the presumptive death of the
absent spouse.
The petitioner’s sole reliance on Article 390 of the Civil Code as basis for his
acquittal for bigamy is misplaced.
Articles 390 and 391 of the Civil Code provide –
Art. 390. After an absence of seven years, it being unknown whether or not,
the absentee still lives, he shall be presumed dead for all purposes, except for
those of succession.
The absentee shall not be presumed dead for the purpose of opening his
succession till after an absence of ten years. If he disappeared after the age of
seventy-five years, an absence of five years shall be sufficient in order that
his succession may be opened.
Art. 391. The following shall be presumed dead for all purposes, including
the division of the estate among the heirs:
(1) A person on board a vessel lost during a sea voyage, or an aeroplane
which is missing, who has not been heard of for four years since the loss of
the vessel or aeroplane;
(2) A person in the armed forces who has taken part in war, and has been
missing for four years;
(3) A person who has been in danger of death under other circumstances and
his existence has not been known for four years.
The presumption of death of the spouse who had been absent for seven years,
it being unknown whether or not the absentee still lives, is created by law and
arises without any necessity of judicial declaration. 42 However, Article 41 of
the Family Code, which amended the foregoing rules on presumptive death,
reads:
Art. 41. A marriage contracted by any person during the subsistence of a
previous marriage shall be null and void, unless before the celebration of the
subsequent marriage, the prior spouse had been absent for four consecutive
years and the spouse present had a well-founded belief that the absent spouse
was already dead. In case of disappearance where there is danger of death
under the circumstances set forth in the provisions of Article 391 of the Civil
Code, an absence of only two years shall be sufficient.
For the purpose of contracting the subsequent marriage under the preceding
paragraph, the spouse present must institute a summary proceeding as
provided in this Court for the declaration of presumptive death of the
absentee, without prejudice to the effect of reappearance of the absent
spouse.43
With the effectivity of the Family Code,44 the period of seven years under the
first paragraph of Article 390 of the Civil Code was reduced to four
consecutive years. Thus, before the spouse present may contract a subsequent
marriage, he or she must institute summary proceedings for the declaration of
the presumptive death of the absentee spouse, 45 without prejudice to the
effect of the reappearance of the absentee spouse. As explained by this Court
in Armas v. Calisterio:46
In contrast, under the 1988 Family Code, in order that a subsequent
bigamous marriage may exceptionally be considered valid, the following
conditions must concur, viz.: (a) The prior spouse of the contracting party
must have been absent for four consecutive years, or two years where there is
danger of death under the circumstances stated in Article 391 of the Civil
Code at the time of disappearance; (b) the spouse present has a well-founded
belief that the absent spouse is already dead; and (c) there is, unlike the old
rule, a judicial declaration of presumptive death of the absentee for which
purpose the spouse present can institute a summary proceeding in court to
ask for that declaration. The last condition is consistent and in consonance
with the requirement of judicial intervention in subsequent marriages as so
provided in Article 41, in relation to Article 40, of the Family Code.
The Court rejects petitioner’s contention that the requirement of instituting a
petition for declaration of presumptive death under Article 41 of the Family
Code is designed merely to enable the spouse present to contract a valid
second marriage and not for the acquittal of one charged with bigamy. Such
provision was designed to harmonize civil law and Article 349 of the
Revised Penal Code, and put to rest the confusion spawned by the rulings of
this Court and comments of eminent authorities on Criminal Law.
As early as March 6, 1937, this Court ruled in Jones v. Hortiguela47 that, for
purposes of the marriage law, it is not necessary to have the former spouse
judicially declared an absentee before the spouse present may contract a
subsequent marriage. It held that the declaration of absence made in
accordance with the provisions of the Civil Code has for its sole purpose the
taking of the necessary precautions for the administration of the estate of the
absentee. For the celebration of civil marriage, however, the law only
requires that the former spouse had been absent for seven consecutive years
at the time of the second marriage, that the spouse present does not know his
or her former spouse to be living, that such former spouse is generally
reputed to be dead and the spouse present so believes at the time of the
celebration of the marriage.48 In In Re Szatraw,49 the Court declared that a
judicial declaration that a person is presumptively dead, because he or she
had been unheard from in seven years, being a presumption juris tantum
only, subject to contrary proof, cannot reach the stage of finality or become
final; and that proof of actual death of the person presumed dead being
unheard from in seven years, would have to be made in another proceeding
to have such particular fact finally determined. The Court ruled that if a
judicial decree declaring a person presumptively dead because he or she had
not been heard from in seven years cannot become final and executory even
after the lapse of the reglementary period within which an appeal may be
taken, for such presumption is still disputable and remains subject to contrary
proof, then a petition for such a declaration is useless, unnecessary,
superfluous and of no benefit to the petitioner. The Court stated that it should
not waste its valuable time and be made to perform a superfluous and
meaningless act.50 The Court also took note that a petition for a declaration of
the presumptive death of an absent spouse may even be made in collusion
with the other spouse.
In Lukban v. Republic of the Philippines,51 the Court declared that the words
"proper proceedings" in Article 349 of the Revised Penal Code can only refer
to those authorized by law such as Articles 390 and 391 of the Civil Code
which refer to the administration or settlement of the estate of a deceased
person. In Gue v. Republic of the Philippines,52 the Court rejected the
contention of the petitioner therein that, under Article 390 of the Civil Code,
the courts are authorized to declare the presumptive death of a person after an
absence of seven years. The Court reiterated its rulings in Szatraw, Lukban
and Jones.
Former Chief Justice Ramon C. Aquino was of the view that "the provision
of Article 349 or "before the absent spouse has been declared presumptively
dead by means of a judgment reached in the proper proceedings" is erroneous
and should be considered as not written. He opined that such provision
presupposes that, if the prior marriage has not been legally dissolved and the
absent first spouse has not been declared presumptively dead in a proper
court proceedings, the subsequent marriage is bigamous. He maintains that
the supposition is not true.53 A second marriage is bigamous only when the
circumstances in paragraphs 1 and 2 of Article 83 of the Civil Code are not
present.54 Former Senator Ambrosio Padilla was, likewise, of the view that
Article 349 seems to require judicial decree of dissolution or judicial
declaration of absence but even with such decree, a second marriage in good
faith will not constitute bigamy. He posits that a second marriage, if not
illegal, even if it be annullable, should not give rise to bigamy. 55 Former
Justice Luis B. Reyes, on the other hand, was of the view that in the case of
an absent spouse who could not yet be presumed dead according to the Civil
Code, the spouse present cannot be charged and convicted of bigamy in case
he/she contracts a second marriage.56
The Committee tasked to prepare the Family Code proposed the amendments
of Articles 390 and 391 of the Civil Code to conform to Article 349 of the
Revised Penal Code, in that, in a case where a spouse is absent for the
requisite period, the present spouse may contract a subsequent marriage only
after securing a judgment declaring the presumptive death of the absent
spouse to avoid being charged and convicted of bigamy; the present spouse
will have to adduce evidence that he had a well-founded belief that the absent
spouse was already dead. 57 Such judgment is proof of the good faith of the
present spouse who contracted a subsequent marriage; thus, even if the
present spouse is later charged with bigamy if the absentee spouse reappears,
he cannot be convicted of the crime. As explained by former Justice Alicia
Sempio-Diy:
… Such rulings, however, conflict with Art. 349 of the Revised Penal Code
providing that the present spouse must first ask for a declaration of
presumptive death of the absent spouse in order not to be guilty of bigamy in
case he or she marries again.
The above Article of the Family Code now clearly provides that for the
purpose of the present spouse contracting a second marriage, he or she must
file a summary proceeding as provided in the Code for the declaration of the
presumptive death of the absentee, without prejudice to the latter’s
reappearance. This provision is intended to protect the present spouse from a
criminal prosecution for bigamy under Art. 349 of the Revised Penal Code
because with the judicial declaration that the missing spouses presumptively
dead, the good faith of the present spouse in contracting a second marriage is
already established.58
Of the same view is former Dean Ernesto L. Pineda (now Undersecretary of
Justice) who wrote that things are now clarified. He says judicial declaration
of presumptive death is now authorized for purposes of
remarriage. The present spouse must institute a summary proceeding for
declaration of presumptive death of the absentee, where the ordinary rules of
procedure in trial will not be followed. Affidavits will suffice, with possible
clarificatory examinations of affiants if the Judge finds it necessary for a full
grasp of the facts. The judgment declaring an absentee as presumptively dead
is without prejudice to the effect of reappearance of the said absentee.
Dean Pineda further states that before, the weight of authority is that the
clause "before the absent spouse has been declared presumptively dead x x x"
should be disregarded because of Article 83, paragraph 3 of the Civil Code.
With the new law, there is a need to institute a summary proceeding for the
declaration of the presumptive death of the absentee, otherwise, there is
bigamy.59
According to Retired Supreme Court Justice Florenz D. Regalado, an
eminent authority on Criminal Law, in some cases where an absentee spouse
is believed to be dead, there must be a judicial declaration of presumptive
death, which could then be made only in the proceedings for the settlement
of his estate.60 Before such declaration, it was held that the remarriage of the
other spouse is bigamous even if done in good faith. 61 Justice Regalado
opined that there were contrary views because of the ruling in Jones and the
provisions of Article 83(2) of the Civil Code, which, however, appears to
have been set to rest by Article 41 of the Family Code, "which requires a
summary hearing for the declaration of presumptive death of the absent
spouse before the other spouse can remarry."
Under Article 238 of the Family Code, a petition for a declaration of the
presumptive death of an absent spouse under Article 41 of the Family Code
may be filed under Articles 239 to 247 of the same Code. 62
On the second issue, the petitioner, likewise, faults the trial court and the CA
for awarding moral damages in favor of the private complainant. The
petitioner maintains that moral damages may be awarded only in any of the
cases provided in Article 2219 of the Civil Code, and bigamy is not one of
them. The petitioner asserts that the appellate court failed to apply its ruling
in People v. Bondoc,63 where an award of moral damages for bigamy was
disallowed. In any case, the petitioner maintains, the private complainant
failed to adduce evidence to prove moral damages.
The appellate court awarded moral damages to the private complainant on its
finding that she adduced evidence to prove the same. The appellate court
ruled that while bigamy is not included in those cases enumerated in Article
2219 of the Civil Code, it is not proscribed from awarding moral damages
against the petitioner. The appellate court ruled that it is not bound by the
following ruling in People v. Bondoc:
... Pero si en dichos asuntos se adjudicaron daños, ello se debió
indedublamente porque el articulo 2219 del Código Civil de Filipinas
autoriza la adjudicación de daños morales en los delitos de estupro, rapto,
violación, adulterio o concubinato, y otros actos lascivos, sin incluir en esta
enumeración el delito de bigamia. No existe, por consiguiente, base legal
para adjudicar aquí los daños de P5,000.00 arriba mencionados.64
The OSG posits that the findings and ruling of the CA are based on the
evidence and the law. The OSG, likewise, avers that the CA was not bound
by its ruling in People v. Rodeo.
The Court rules against the petitioner.
Moral damages include physical suffering, mental anguish, fright, serious
anxiety, besmirched reputation, wounded feelings, moral shock, social
humiliation, and similar injury. Though incapable of pecuniary computation,
moral damages may be recovered if they are the proximate result of the
defendant’s wrongful act or omission.65 An award for moral damages
requires the confluence of the following conditions: first, there must be an
injury, whether physical, mental or psychological, clearly sustained by the
claimant; second, there must be culpable act or omission factually
established; third, the wrongful act or omission of the defendant is the
proximate cause of the injury sustained by the claimant; and fourth, the
award of damages is predicated on any of the cases stated in Article 2219 or
Article 2220 of the Civil Code.66
Moral damages may be awarded in favor of the offended party only in
criminal cases enumerated in Article 2219, paragraphs 1, 3, 4, 5 and 7 of the
Civil Code and analogous cases, viz.:
Art. 2219. Moral damages may be recovered in the following and analogous
cases.
(1) A criminal offense resulting in physical injuries;
(2) Quasi-delicts causing physical injuries;
(3) Seduction, abduction, rape, or other lascivious acts;
(4) Adultery or concubinage;
(5) Illegal or arbitrary detention or arrest;
(6) Illegal search;
(7) Libel, slander or any other form of defamation;
(8) Malicious prosecution;
(9) Acts mentioned in article 309;
(10) Acts and actions referred to in articles 21, 26, 27, 28, 29, 30, 32, 34 and
35.
The parents of the female seduced, abducted, raped, or abused, referred to in
No. 3 of this article, may also recover moral damages.
The spouse, descendants, ascendants, and brothers and sisters may bring the
action mentioned in No. 9 of this article in the order named.
Thus, the law does not intend that moral damages should be awarded in all
cases where the aggrieved party has suffered mental anguish, fright, moral
anxieties, besmirched reputation, wounded feelings, moral shock, social
humiliation and similar injury arising out of an act or omission of another,
otherwise, there would not have been any reason for the inclusion of specific
acts in Article 221967 and analogous cases (which refer to those cases bearing
analogy or resemblance, corresponds to some others or resembling, in other
respects, as in form, proportion, relation, etc.) 68
Indeed, bigamy is not one of those specifically mentioned in Article 2219 of
the Civil Code in which the offender may be ordered to pay moral damages
to the private complainant/offended party. Nevertheless, the petitioner is
liable to the private complainant for moral damages under Article 2219 in
relation to Articles 19, 20 and 21 of the Civil Code.
According to Article 19, "every person must, in the exercise of his rights and
in the performance of his act with justice, give everyone his due, and observe
honesty and good faith." This provision contains what is commonly referred
to as the principle of abuse of rights, and sets certain standards which must
be observed not only in the exercise of one’s rights but also in the
performance of one’s duties. The standards are the following: act with
justice; give everyone his due; and observe honesty and good faith. The
elements for abuse of rights are: (a) there is a legal right or duty; (b)
exercised in bad faith; and (c) for the sole intent of prejudicing or injuring
another.69
Article 20 speaks of the general sanctions of all other provisions of law
which do not especially provide for its own sanction. When a right is
exercised in a manner which does not conform to the standards set forth in
the said provision and results in damage to another, a legal wrong is thereby
committed for which the wrongdoer must be responsible. 70 If the provision
does not provide a remedy for its violation, an action for damages under
either Article 20 or Article 21 of the Civil Code would be proper. Article 20
provides that "every person who, contrary to law, willfully or negligently
causes damage to another shall indemnify the latter for the same." On the
other hand, Article 21 provides that "any person who willfully causes loss or
injury to another in a manner that is contrary to morals, good customs or
public policy shall compensate the latter for damages." The latter provision
is adopted to remedy "the countless gaps in the statutes which leave so many
victims of moral wrongs helpless, even though they have actually suffered
material and moral injury should vouchsafe adequate legal remedy for that
untold number of moral wrongs which it is impossible for human foresight to
prove for specifically in the statutes." Whether or not the principle of abuse
of rights has been violated resulting in damages under Article 20 or Article
21 of the Civil Code or other applicable provisions of law depends upon the
circumstances of each case.71
In the present case, the petitioner courted the private complainant and
proposed to marry her. He assured her that he was single. He even brought
his parents to the house of the private complainant where he and his parents
made the same assurance – that he was single. Thus, the private complainant
agreed to marry the petitioner, who even stated in the certificate of marriage
that he was single. She lived with the petitioner and dutifully performed her
duties as his wife, believing all the while that he was her lawful husband. For
two years or so until the petitioner heartlessly abandoned her, the private
complainant had no inkling that he was already married to another before
they were married.
Thus, the private complainant was an innocent victim of the petitioner’s
chicanery and heartless deception, the fraud consisting not of a single act
alone, but a continuous series of acts. Day by day, he maintained the
appearance of being a lawful husband to the private complainant, who
changed her status from a single woman to a married woman, lost the
consortium, attributes and support of a single man she could have married
lawfully and endured mental pain and humiliation, being bound to a man
who it turned out was not her lawful husband.72
The Court rules that the petitioner’s collective acts of fraud and deceit before,
during and after his marriage with the private complainant were willful,
deliberate and with malice and caused injury to the latter. That she did not
sustain any physical injuries is not a bar to an award for moral damages.
Indeed, in Morris v. Macnab,73 the New Jersey Supreme Court ruled:
xxx The defendant cites authorities which indicate that, absent physical
injuries, damages for shame, humiliation, and mental anguish are not
recoverable where the actor is simply negligent. See Prosser, supra, at p. 180;
2 Harper & James, Torts, 1031 (1956). But the authorities all recognize that
where the wrong is willful rather than negligent, recovery may be had for the
ordinary, natural, and proximate consequences though they consist of shame,
humiliation, and mental anguish. See Spiegel v. Evergreen Cemetery Co.,
117 NJL 90, 94, 186 A 585 (Sup. Ct. 1936); Kuzma v. Millinery Workers,
etc., Local 24, 27 N.J. Super, 579, 591, 99 A.2d 833 (App. Div. 1953);
Prosser, supra, at p. 38. Here the defendant’s conduct was not merely
negligent, but was willfully and maliciously wrongful. It was bound to result
in shame, humiliation, and mental anguish for the plaintiff, and when such
result did ensue the plaintiff became entitled not only to compensatory but
also to punitive damages. See Spiegel v. Evergreen Cemetery Co., supra;
Kuzma v Millinery Workers, etc., Local 24, supra. CF. Note, "Exemplary
Damages in the Law of Torts," 70 Harv. L. Rev. 517 (1957). The plaintiff
testified that because of the defendant’s bigamous marriage to her and the
attendant publicity she not only was embarrassed and "ashamed to go out"
but "couldn’t sleep" but "couldn’t eat," had terrific headaches" and "lost quite
a lot of weight." No just basis appears for judicial interference with the jury’s
reasonable allowance of $1,000 punitive damages on the first count. See
Cabakov v. Thatcher, 37 N.J. Super 249, 117 A.2d 298 (App. Div.74 1955).
The Court thus declares that the petitioner’s acts are against public policy as
they undermine and subvert the family as a social institution, good morals
and the interest and general welfare of society.
Because the private complainant was an innocent victim of the petitioner’s
perfidy, she is not barred from claiming moral damages. Besides, even
considerations of public policy would not prevent her from recovery. As held
in Jekshewitz v. Groswald:75
Where a person is induced by the fraudulent representation of another to do
an act which, in consequence of such misrepresentation, he believes to be
neither illegal nor immoral, but which is in fact a criminal offense, he has a
right of action against the person so inducing him for damages sustained by
him in consequence of his having done such act. Burrows v. Rhodes, [1899]
1 Q.B. 816. In Cooper v. Cooper, 147 Mass. 370, 17 N.E. 892, 9 Am. St.
Rep. 721, the court said that a false representation by the defendant that he
was divorced from his former wife, whereby the plaintiff was induced to
marry him, gave her a remedy in tort for deceit. It seems to have been
assumed that the fact that she had unintentionally violated the law or
innocently committed a crime by cohabiting with him would be no bar to the
action, but rather that it might be a ground for enhancing her damages. The
injury to the plaintiff was said to be in her being led by the promise to give
the fellowship and assistance of a wife to one who was not her husband and
to assume and act in a relation and condition that proved to be false and
ignominious. Damages for such an injury were held to be recoverable in
Sherman v. Rawson, 102 Mass. 395 and Kelley v. Riley, 106 Mass. 339, 343,
8 Am. Rep. 336.
Furthermore, in the case at bar the plaintiff does not base her cause of action
upon any transgression of the law by herself but upon the defendant’s
misrepresentation. The criminal relations which followed, innocently on her
part, were but one of the incidental results of the defendant’s fraud for which
damages may be assessed.
[7] Actions for deceit for fraudulently inducing a woman to enter into the
marriage relation have been maintained in other jurisdictions. Sears v.
Wegner, 150 Mich. 388, 114 N.W. 224, 17 L.R. A. (N.S.) 819; Larson v.
McMillan, 99 Wash. 626, 170 P. 324; Blossom v. Barrett, 37 N.Y. 434, 97
Am. Dec. 747; Morril v. Palmer, 68 Vt. 1, 33 A. 829, 33 L.R.A. 411.
Considerations of public policy would not prevent recovery where the
circumstances are such that the plaintiff was conscious of no moral turpitude,
that her illegal action was induced solely by the defendant’s
misrepresentation, and that she does not base her cause of action upon any
transgression of the law by herself. Such considerations
distinguish this case from cases in which the court has refused to lend its aid
to the enforcement of a contract illegal on its face or to one who has
consciously and voluntarily become a party to an illegal act upon which the
cause of action is founded. Szadiwicz v. Cantor, 257 Mass. 518, 520, 154
N.E. 251, 49 A. L. R. 958.76
Considering the attendant circumstances of the case, the Court finds the
award of P200,000.00 for moral damages to be just and reasonable.
IN LIGHT OF ALL THE FOREGOING, the petition is DENIED. The
assailed decision of the Court of Appeals is AFFIRMED. Costs against the
petitioner.
SO ORDERED.
G.R. No. 145291 September 21, 2005
Public Estates Authority, Petitioners,
vs.
Rosario Ganac CHU, Respondent.
DECISION
AUSTRIA-MARTINEZ, J.:
Petitioner Public Estates Authority seeks a review of the decision 1 of the
Court of Appeals (CA) in CA-G.R. CV No. 52944 dated June 4, 1999, which
affirmed in toto the trial court’s award of P2,000,000.00 as actual and
compensatory damages, P100,000.00 as attorney’s fees and costs of suit, in
favor of respondent in its Partial Decision dated July 3, 1995 in Civil Case
No. 781-93.2
Petitioner filed a motion for reconsideration but this was denied by the CA in
its Resolution dated September 26, 2000.3
This case originated from a complaint for damages with prayer for the
issuance of a writ of injunction and temporary restraining order filed by
respondent against petitioner and the National Housing Authority (NHA).
The complaint was lodged in the Regional Trial Court of Imus, Cavite
(Branch 20). In her complaint, respondent alleged that she is the owner of a
parcel of land situated in Paliparan, Dasmariñas, Cavite covered by Transfer
Certificate of Title (TCT) Nos. T-231966, T-231967, T-231968, T-231969,
and T-231970, measuring 70,410 square meters. According to respondent,
some time in June 1993, without notice and due process, petitioner entered
her property and bulldozed the land, destroying her black pepper plantation,
causing damage to her operations and depriving her of her means of
livelihood. Thus, she asked for the following amounts: (1) P5,000,000.00 as
actual damages; (2) P200,000.00 as moral damages; (3) P100,000.00 as
exemplary damages; (4) P50,000.00 as attorney’s fees; and (5) P30,000.00
for litigation expenses.4
Petitioner filed its Answer alleging lack of cause of action. It contended that:
it is the owner of a property covered by TCT Nos. 277070, 277071 and
277072, located in Paliparan, Dasmariñas, Cavite, and measuring 51
hectares; under a Memorandum of Agreement dated March 12, 1991,
petitioner and the NHA undertook to relocate the squatters of the reclaimed
land in the Financial Center District of Manila Bay, to the Paliparan site;
during the relocation and site development, respondent appeared claiming
that petitioner is encroaching upon her property; respondent failed to prove
her ownership thereof; way back in 1990, respondent had already sold 65,410
square meters out of the 70,410 square meters of her property to one Renato
Ignacio. Thus, petitioner prayed for the dismissal of the complaint. 5
In a Partial Decision rendered by the trial court on July 3, 1995, petitioner,
together with the NHA, was adjudged jointly and severally liable to pay
respondent actual and compensatory damages, attorney’s fees and the costs
of suit. The dispositive portion of the Partial Decision reads:
WHEREFORE, in view of the foregoing, partial judgment is hereby rendered
in favor of the plaintiff and against the defendants, ordering jointly and
severally to pay plaintiff the sum of P2 million by way of actual and
compensatory damages and the additional amount of P100,000.00 as
attorney’s fees, plus costs of suit.
SO ORDERED.6
Both petitioner and the NHA filed a motion for reconsideration with the trial
court but these were denied per Resolution dated January 22, 1996. 7
Aggrieved, petitioner appealed to the CA. The appellate court, however,
sustained the partial judgment of the trial court in the assailed Decision dated
June 4, 1999 and denied petitioner’s motion for reconsideration. Petitioner
then filed the present petition for review on certiorari under Rule 45 of the
Rules of Court, on the following grounds:
The Court of Appeals erred in:
I. AFFIRMING THE FINDINGS OF FACT BY THE LOWER COURT
WHICH HAVE NOT BEEN PROVEN WITH REASONABLE DEGREE
OF CERTAINTY.
II. AFFIRMING THE GRANT OF ACTUAL DAMAGES IN THE
AMOUNT OF P2 MILLION AND P100,000.00 AS ATTORNEY’S FEES
PLUS COSTS OF SUIT.8
The sole issue in this petition is whether there is a valid basis for the award
of damages in favor of respondent.
The trial court based its award of the sum of P2,000,000.00 as actual and
compensatory damages in favor of respondent on the following findings:
Admittedly, there were pepper trees on the property of plaintiff which were
bulldozed by the defendants, although the parties differ as to their exact
numbers. Defendants’ witness, Engr. de Gracia, admitted that he did not
make a physical counting. He merely estimated the number of pepper plants,
though admitting that there were 3,000 kakawati trees planted on the one (1)
hectare property of plaintiff upon which the pepper trees clung.
In the same manner, the other witness Engr. Fundabela also made a rough
estimate as to the number of pepper trees that were bulldozed (TSN, pp. 16-
17, 29, Sept. 2, 1994). But when queried, he retorted that the one (1) hectare
property of plaintiff is fully planted with black pepper trees whose distance
with each other is only one (1) meter.
… the Court of Appeals was based on a misapprehension of facts; (e) when the
As against their testimonies, this Court gives more credence to the
straightforward statement of plaintiff that she planted about 3,000 pepper
trees on her property with the help of 25 farmers. She bought the 3,000
seedlings at a cost of P350.00 each. Adding the labor cost and the cost of the
water system she installed to maintain the pepper plantation plus expenses
for insecticides, plaintiff invested a capital of P1.3 million, more or less.
Because the pepper trees were already about to be harvested, plaintiff
claimed that she lost an estimated income of P700,000.00 (TSN, pp. 6-8,
May 27, 1994).9
The appellate court sustained the factual findings of the trial court and
concluded that the same were based on the evidence presented by the
parties.10
Petitioner argues that the appellate court erred in affirming the findings of
fact of the trial court considering that respondent failed to prove her
ownership over the property on which the pepper trees stand, particularly that
covered by TCT No. T-231966. Petitioner also contends that respondent
failed to quantify or show any proof of the actual damage she allegedly
suffered; and that the amount of attorney’s fees awarded in favor of
respondent was double the amount than what was specifically prayed for in
her complaint.11
In her Comment, respondent stated that the Court can only entertain
questions of law in a petition for review on certiorari and cannot now
reassess the findings of facts of the trial court, especially since it was
affirmed by the CA.12
While respondent is correct in stating that only questions of law may be
raised in a petition for review on certiorari under Rule 45 of the Rules of
Court, as "the Supreme Court is not a trier of facts"; and that it is not the
Court’s function to review, examine and evaluate or weigh the probative
value of the evidence presented, 13 said rules, however, admit certain
exceptions such as:
(a) where there is grave abuse of discretion; (b) when the finding is grounded
entirely on speculations, surmises or conjectures; (c) when the inference
made is manifestly mistaken, absurd or impossible; (d) when the judgment of
factual findings are conflicting; (f) when the Court of Appeals, in making its
findings, went beyond the issues of the case and the same are contrary to the
admissions of both appellant and appellee; (g) when the Court of Appeals
manifestly overlooked certain relevant facts not disputed by the parties and
which, if properly considered, would justify a different conclusion; and, (h)
where the findings of fact of the Court of Appeals are contrary to those of the
trial court, or are mere conclusions without citation of specific evidence, or
where the facts set forth by the petitioner are not disputed by the respondent,
or where the findings of fact of the Court of Appeals are premised on the
absence of evidence and are contradicted by the evidence on record. 14
(Emphasis supplied).
In this case, the CA sustained the factual findings of the trial court as
follows:
…
Being aware of the existence of pepper trees on the lot under controversy and
knowing that plaintiff is the one in possession thereof, defendants should
have notified her before they bulldozed the same. Their claim that the area in
question belongs to PEA, even if true, is no excuse for defendants to bulldoze
it summarily knowing fully well that there were improvements or crops
standing thereon.
Defendants evidently took the law into their hands. They should have acted
with caution and prudence before trespassing on other’s property. Even
squatters are entitled to due process and cannot just be evicted by the owner
without resorting to the court of law.15
Such factual findings of the CA are conclusive on the parties and carry even
more weight when the CA affirmed the factual findings of the trial court. 16
Nevertheless, the Court finds that both the trial court and the CA seriously
erred in awarding in favor of respondent the colossal sum of P2,000,000.00
as actual and compensatory damages, and the amount of P100,000.00 as
attorney’s fees and costs of suit, as the evidence on record does not support
the award of such amount.
Chapter 2, Title XVIII, Book IV of the Civil Code governs the award
of actual or compensatory damages.17 Except as provided by law or by
stipulation, one is entitled to compensation for actual damages only for such
pecuniary loss suffered by him as he has duly proved. 18 The indemnification
shall comprehend not only the value of the loss suffered, but also that of the
profits that the obligee failed to obtain. 19 In contracts and quasi-contracts, the
damages which may be awarded are dependent on whether the obligor acted
with good faith or otherwise.20 In case of good faith, the damages recoverable
are those which are the natural and probable consequences of the breach of
the obligation and which the parties have foreseen or could have reasonably
foreseen at the time of the constitution of the obligation. If the obligor acted
with fraud, bad faith, malice, or wanton attitude, he shall be responsible for
all damages which may be reasonably attributed to the non-performance of
the obligation. In crimes and quasi-delicts, the defendants shall be liable for
all damages which are the natural and probable consequences of the act or
omission complained of, whether or not such damages have been foreseen or
could have reasonably been foreseen by the defendant. 21
There is no question that respondent is entitled to damages. However,
respondent’s cause of action before the trial court is not premised on any
contract, quasi-contract, delict or quasi-delict. At best, her demand for
damages can be anchored on the "abuse of rights" principle under Article 19
of the Civil Code, which provides:
Art. 19. Every person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due and observe
honesty and good faith.
The foregoing provision sets standards which must be observed in the
exercise of one’s rights as well as in the performance of its duties, to wit: to
act with justice; give everyone his due; and observe honesty and good faith. 22
When a right is exercised in a manner which discards these norms resulting
in damage to another, a legal wrong is committed for which the actor can be
held accountable.23
Respondent’s ownership of the property on which the pepper trees stand is
immaterial in this petition. There is no dispute that respondent owned the
pepper trees that were destroyed by petitioner. Even assuming that petitioner
owns the property or that it bulldozed the land within its boundaries, still, as
the trial court aptly reasoned, there was no excuse for petitioner to disregard
respondent’s rights over her trees. The exercise of one’s rights is not without
limitations. Having the right should not be confused with the manner by
which such right is to be exercised.24
Property rights must be considered, for many purposes, not as absolute,
unrestricted dominions but as an aggregation of qualified privileges, the
limits of which are prescribed by the equality of rights, and the correlation of
rights and obligations necessary for the highest enjoyment of property by the
entire community of proprietors.25 In Rellosa vs. Pellosis,26 the Court ruled
that:
Petitioner might verily be the owner of the land, with the right to enjoy and
to exclude any person from the enjoyment and disposal thereof, but the
exercise of these rights is not without limitations. The abuse of rights rule
established in Article 19 of the Civil Code requires every person to act with
justice, to give everyone his due; and to observe honesty and good faith.
When a right is exercised in a manner which discards these norms resulting
in damage to another, a legal wrong is committed for which the actor can be
held accountable. In this instance, the issue is not so much about the
existence of the right or validity of the order of demolition as the question of
whether or not petitioners have acted in conformity with, and not in disregard
of, the standard set by Article 19 of the Civil Code. 27
Actual or compensatory damages are those awarded in order to compensate a
party for an injury or loss he suffered. They arise out of a sense of natural
justice and are aimed at repairing the wrong done. 28 To be recoverable, actual
and compensatory damages must be duly proved with reasonable degree of
certainty. A court cannot rely on speculation, conjecture or guesswork as to
the fact and amount of damages, but must depend upon competent proof that
they have suffered and on evidence of the actual amount thereof. The party
alleging a fact has the burden of proving it and a mere allegation is not
evidence.29
There is nothing in the records of this case that will support the finding that
respondent suffered actual damages in the amount of P2,000,000.00. There
must be competent proof of the actual amount of loss, and credence can be
given only to claims that are duly supported by receipts. 30 Save for
respondent’s bare testimony and the pictures taken on the property, she did
not present any other competent and independent proof to corroborate her
claim. No receipt was ever proffered by respondent proving her claims for
compensation for the following items: (1) the 3,000 pepper seedlings, which
were allegedly bought at P350.00 each; (2) the cost of labor and water
system installed to maintain the farm; (3) her alleged capital investment of
P1,300,000.00; and (4) the supposed unrealized income of P700,000.00. 31
Given the dearth of evidence, respondent’s claim for actual and
compensatory damages should have been denied by the trial court and the
award thereof corrected by the CA.
In lieu of actual damages, temperate damages, which are more than nominal
but less than compensatory damages, should have been awarded by the trial
court considering that respondent, indeed, had suffered some pecuniary loss
but its amount cannot be proved with certainty. 32 The amount of P250,000.00
is sufficient and reasonable under the circumstances of this case.
With regard to the award of attorney’s fees and costs of suit, the same was
correctly awarded since petitioner has compelled respondent to incur
expenses to protect her interest. 33 The Court deems, however, that the award
cannot be more than what was prayed for in respondent’s complaint, 34 which
in this case is P50,000.00 for attorney’s fees and P30,000.00 for litigation
expenses.35 Thus, the award of attorney’s fees and costs of suit is reduced in
accord with respondent’s prayer in her Complaint.
WHEREFORE, the Decision dated June 4, 1999 and Resolution dated
September 26, 2000 rendered by the Court of Appeals in CA-G.R. CV
No. 52944 are hereby MODIFIED as follows:
1) The award of Two Million Pesos (P2,000,000.00) as actual and
compensatory damages is DELETED; and
2) Petitioner Public Estates Authority and the National Housing Authority
are held jointly and severally liable to pay respondent the following amounts:
(a) Two Hundred Fifty Thousand Pesos (P250,000.00) as temperate
damages;
(b) Fifty Thousand Pesos (P50,000.00) as attorney’s fees; and
(c) Thirty Thousand Pesos (P30,000.00) for costs of suit.
SO ORDERED.
III. ARTICLES 22-23 UNJUST ENRICHMENT
SECOND DIVISION
G.R. No. 165661 August 28, 2006
SPS. MARIO & CORAZON VILLALVA, Petitioners,
vs.
RCBC SAVINGS BANK, Respondent.
DECISION
PUNO, J.:
This case involves a petition for review on certiorari under Rule 45 of the
1997 Rules of Civil Procedure which seeks to reverse the decision of the
Seventh Division of the Court of Appeals in CA–G.R. SP No. 76574.
The facts.
In June 1993, petitioner spouses issued forty-eight (48) checks totaling
P547,392.00 to cover installment payments due on promissory notes
executed in favor of Toyota, Quezon Avenue (TQA) for the purchase of a
’93 Toyota Corolla. 1 The promissory notes were secured by a Chattel
Mortgage executed by the petitioner spouses on the vehicle in favor of TQA.
2
Under the Deed of Chattel Mortgage, petitioner spouses were to insure the
vehicle against loss or damage by accident, theft and fire, and endorse and
deliver the policies to the mortgagor, viz.:
The MORTGAGOR covenants and agrees that he/it will cause the
property(ies) hereinabove mortgaged to be insured against loss or damage by
accident, theft and fire for a period of one year from date hereof with an
insurance company or companies acceptable to the MORTGAGEE in an
amount not less than the outstanding balance of the mortgage obligations and
that he/it will make all loss, if any, under such policy or policies, payable to
the MORTGAGEE or its assigns as its interest may appear and deliver such
policy to the MORTGAGEE forthwith. The said MORTGAGOR further
covenants and agrees that in default of his/its effecting such insurance and
delivering the policies so endorsed to the MORTGAGEE on the day of the
execution of this mortgage, the MORTGAGEE may at its option, but without
any obligation to do so, effect such insurance for the account of the
MORTGAGOR and that any money so disbursed by the MORTGAGEE
shall be added to the principal indebtedness, hereby secured and shall
become due and payable at the time for the payment of the first installment to
be due under the note aforesaid after the date of such insurance and shall bear
interest and/or finance charge at the same rate as the principal indebtedness.
The MORTGAGOR hereby irrevocably authorizes the MORTGAGEE or its
assigns to procure for the account of the MORTGAGOR the insurance
coverage every year thereafter until the mortgage obligation is fully paid and
any money so disbursed shall be payable and shall bear interest and/or
finance charge in the same manner as stipulated in the next preceding
sentence. It is understood that MORTGAGEE has no obligation to carry out
aforementioned authority to procure insurance for the account of the
MORTGAGOR. 3
On June 22, 1993, the promissory notes and chattel mortgage were assigned
to Rizal Commercial Banking Corporation (RCBC). 4 They were later
assigned by RCBC to RCBC Savings Bank. 5 In time, all forty-eight (48)
checks issued by the petitioner spouses were encashed by respondent RCBC
Savings Bank. 6
The evidence shows that the petitioner spouses faithfully complied with the
obligation to insure the mortgaged vehicle from 1993 until 1996. 7 For the
period of August 14, 1996 to August 14, 1997, 8 petitioner spouses procured
the necessary insurance but did not deliver the same to the respondent until
January 17, 1997. 9 As a consequence, respondent had the mortgaged vehicle
insured for the period of October 21, 1996 to October 21, 1997 and paid a
P14,523.36 insurance premium. 10 The insurance policy obtained by
respondent was later cancelled due to the insurance policy secured by
petitioner spouses over the mortgaged vehicle, and respondent bank was
reimbursed P10,939.86 by Malayan Insurance Company. 11 The premium
paid by respondent bank exceeded the reimbursed amount paid by Malayan
Insurance Company by P3,583.50.
On February 10, 1999, respondent sent a letter of demand to the petitioners
for P12,361.02 allegedly representing unpaid obligations on the promissory
notes and mortgage as of January 31, 1999. In lieu thereof, respondent
demanded that petitioner spouses surrender the mortgaged vehicle within five
days from notice. 12 The petitioner spouses ignored the demand letter.
On April 5, 1999, respondent, in order to get the ’93 Toyota Corolla, filed a
complaint for Recovery of Possession with Replevin with the Metropolitan
Trial Court of Pasay City, which was raffled to Branch 45 thereof. 13 Two
weeks later, or on April 19, 1999, the respondent caused the enforcement of a
writ of replevin and recovered possession of the mortgaged vehicle. 14 On
June 18, 1999, petitioner spouses filed their Answer with Compulsory
Counterclaim for moral damages, exemplary damages and attorney’s fees. 15
Petitioners asserted that they insured the mortgaged vehicle in compliance
with the Deed of Chattel Mortgage.
On June 28, 2002, the Metropolitan Trial Court rendered a decision in favor
of petitioners and ordered respondent to pay petitioner spouses P100,000.00
in moral damages, P50,000.00 in exemplary damages, P25,000.00 in
attorney’s fees, and the costs and expenses of litigation. 16 Respondent’s
Motion for Reconsideration was denied on September 16, 2002. 17
Respondent appealed the decision to the Regional Trial Court of Pasay City
on October 3, 2002. 18 The case was raffled to Branch 114. On March 21,
2003, the Regional Trial Court affirmed the judgment of the Metropolitan
Trial Court in toto. 19
Undaunted, the respondent filed a petition for review with the Court of
Appeals, pursuant to Rule 42 of the 1997 Rules of Civil Procedure, assailing
the March 21, 2003 decision of the Regional Trial Court. 20 On July 8, 2004,
the Court of Appeals reversed the decision of the Regional Trial Court. It
ordered petitioner spouses to pay respondent P3,583.50 within thirty days of
finality of the decision, and issued a writ of replevin as regards the
mortgaged vehicle. 21 Petitioners’ Motion for Reconsideration was denied,
hence, the present petition for certiorari.
The petitioners alleged that in ruling against them, the Court of Appeals erred
when it failed to consider two pieces of evidence: (1) an Acknowledgment
Receipt dated January 17, 1997, which shows that the premium for the
second insurance policy had been refunded to the respondent bank; and (2)
an Endorsement by the Malayan Insurance Company dated June 11, 1997,
which shows that petitioners handed the required insurance policy to the
respondent. The petitioners also point out that the respondent was furnished a
copy of the insurance policy on January 17, 1997. 22
On the other hand, respondent contends that petitioners seek a review of
factual findings which the Supreme Court cannot do as it is not a trier of
facts. 23 It further argues that no reversible errors were made by the Court of
Appeals, and to set aside its decision would result in the unjust enrichment of
the petitioners. 24
We rule for the petitioners.
The key issue is whether petitioners failed to comply with their obligation to
insure the subject vehicle under the Deed of Chattel Mortgage. The Deed of
Chattel Mortgage requires that the petitioners (1) secure the necessary
insurance and (2) deliver the policies so endorsed to the respondent on the
day of the execution of this mortgage.
We hold that petitioners did not default in the performance of their
obligation. As a rule, demand is required before a party may be considered in
default. 25 However, demand by a creditor is not necessary in order that delay
may exist: (1) when the obligation or the law expressly so declares; (2) when
from the nature and the circumstances of the obligation it appears that the
designation of the time when the thing is to be delivered or the service is to
be rendered was a controlling motive for the establishment of the contract; or
(3) when demand would be useless, as when the obligor has rendered it
beyond his power to perform. None of the exceptions are present in this case.
It is clear from the records that the first and third exceptions are inapplicable.
The second exception cannot also be applied in light of our ruling in
Servicewide Specialists, Incorporated v. Court of Appeals. 26 In that case, this
Court observed that the Deed of Chattel Mortgage required that two
conditions should be met before the mortgagee could secure the required
insurance: (1) default by the mortgagors in effecting renewal of the
insurance, and (2) failure to deliver the policy with endorsement to
mortgagee. The mortgagee contended that notice was not required due to the
nature of the obligation, and that it was entitled to renew the insurance for the
account of the mortgagors without notice to the latter should the mortgagors
fail to renew the insurance coverage. To substantiate its claim, the mortgagee
relied on the Chattel Mortgage provision that the car be insured at all times.
This Court rebuffed the mortgagee’s arguments:
If petitioner was aware that the insurance coverage was inadequate, why did
it not inform private respondent about it? After all, since petitioner was under
no obligation to effect renewal thereof, it is but logical that it should relay to
private respondents any defect of the insurance coverage before itself
assuming the same. 27
Due to the mortgagee’s failure to notify the mortgagors prior to application
of the latter’s payments to the insurance premiums, this Court held that the
mortgagors had not defaulted on their obligation to secure insurance over the
mortgaged vehicle, and affirmed the Regional Trial Court’s decision
dismissing the mortgagee’s complaint for replevin.
In the case at bar, the respondent failed to demand that petitioners comply
with their obligation to secure insurance coverage for the mortgaged vehicle.
Following settled jurisprudence, we rule that the petitioners had not defaulted
on their obligation to insure the mortgaged vehicle and the condition sine qua
non for respondent to exercise its right to pay the insurance premiums over
the subject vehicle has not been established.
The respondent further contends that its payment of the insurance premiums
on behalf of the petitioners unjustly enriched the latter. Respondent adverts
to the provisions on quasi-contractual obligations in the New Civil Code. 28
Enrichment consists of every patrimonial, physical or moral advantage, so
long as it is appreciable in money. It may also take the form of avoidance of
expenses and other indispensable reductions in the patrimony of a person. It
may also include the prevention of a loss or injury. 29 In the case at bar,
petitioner spouses were not enriched when respondent obtained insurance
coverage for the mortgaged vehicle as the petitioner spouses had already
obtained the required insurance coverage for the vehicle from August 14,
1996 to August 14, 1997. 30
Finally, we are aware of the rule that findings of fact of the Court of Appeals
are given great weight by this Court. Nevertheless, it is this Court’s duty to
carefully review factual findings where the appreciation of the appellate
court and the trial court differ from each other. In the case at bar, the findings
of the appellate court are clearly not borne out by the evidence of the parties
and necessarily, we have to reject to them.
IN VIEW WHEREOF, the petition is GRANTED. The decision of the
Seventh Division of the Court of Appeals promulgated on July 8, 2004 and
its resolution promulgated on September 28, 2004 are REVERSED and SET
ASIDE. The June 28, 2002 decision and September 16, 2002 resolution of
the Metropolitan Trial Court, Pasay City, Branch 45, as well as the March 21,
2003 decision of the Regional Trial Court, Pasay City, Branch 114, are
REINSTATED.
No costs.
SO ORDERED.