ABS-CBN BROADCASTING CORPORATION, Petitioner, v.

HONORABLE COURT OF
APPEALS, REPUBLIC BROADCASTING CORP., VIVA PRODUCTIONS, INC., and VICENTE
DEL ROSARIO, Respondents
G.R. No. 128690. January 21, 1999
J DAVIDE, JR.

Topic: Rights and Obligations of Corporations

FACTS: VIVA, through Mr. Del Rosario, offered ABS-CBN a list of 3 film packages or 36 titles
from which the latter may exercise a right of first refusal. ABS-CBN, through Ms. Concio,
informed Mr. Del Rosario that they can only purchase 10 titles. During a meeting with Eugenio
Lopez, Del Rosario proposed a film package which will allow ABS-CBN to air 104 Viva films for
P60 million. Ms. Concio wrote a counter-proposal of 53 films which include the 14 films it initially
requested for P35, 000, 000. The VIVA Board of Directors rejected such, resulting to several
negotiations until VIVA made an agreement with Republic Broadcasting Corporation (RBS) on
April 29, 1992 which gave exclusive rights to the latter to air 104 Viva films including the 14 films
initially requested by ABS-CBN.

ABS-CBN now filed a complaint for specific performance against VIVA and Mr. Del Rosario with
a prayer for writ of preliminary injunction and/or TRO against RBS to air the said films, alleging
that there was already a perfected contract between VIVA and ABS-CBN “jotted down on a
napkin”. The injunction was granted, suspending the airing of the films. RBS then filed for a
countersuit with a prayer for moral damages claiming that its reputation was debased when they
failed to air the shows that they promised to their viewers (decision from People vs Manero and
Mambulao Lumber vs PNB stating that corporation may recover moral damages if it “has a good
reputation that is debased, resulting in social humiliation”).

ISSUES: Whether or not RBS is entitled to an award of moral damages upon grounds of
debased reputation.

HELD: NO. There is no adequate proof that ABS-CBN was inspired by malice or bad faith. It
was honestly convinced of the merits of its cause after it had undergone serious negotiations
culminating in its formal submission of a draft contract. It was settled that adverse result of an
action does not per se make the action wrongful and subject the actor to damages.

Also, the Court ruled that the award of moral damages cannot be granted in favor of RBS. A
corporation, being an artificial person and having existence only in legal contemplation, it has no
feelings, emotions, nor senses; thus cannot experience physical suffering and mental anguish
(obiter dictum).

NOTES:
Elements of abuse of rights:
ARTICLE 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.
ARTICLE 20. Every person who, contrary to law, wilfully or negligently causes damage to
another, shall indemnify the latter for the same.
ARTICLE 21. Any person who wilfully causes loss or inquiry to another in a moment in a
manner that is contrary to morals, good customs or public policy shall compensate the latter for
the damage.