C.R. No. 8894 January 11, 1993 [ ALEN80N ENTERPR|8E8 60RP.

, JE88E YAP, AN0 ENJAH|N

HEN0|0NA, pel|l|orers, vs. ThE 60URT 0F APPEAL8 AN0 EUCEN|0 8. ALTA0, resporderls. j |0|N,
FA6T8 lr 3epleroer, 0clooer, ard Noveroer 1980, pel|l|orer A|oersor Erlerpr|ses Corporal|or (A|oersor lor srorl)
de||vered lo 0uararleed lrduslr|es, lrc. (0uararleed lor srorl) |ocaled al 32Z v. Vapa 3lreel, 3la. Vesa, Var||a, lre r||d
slee| p|ales Wr|cr lre |aller ordered. As parl payrerl lrereol, A|oersor Was g|ver Pac|l|c 8ar||rg Corporal|or Crec| No.
1331 |r lre arourl ol P2,5Z5.00 ard draWr aga|rsl lre accourl ol E.L. woodWor|s.
wrer preserled lor payrerl, lre crec| Was d|srorored lor lre reasor Accourl C|osed. Trerealler, pel|l|orer A|oersor,
lrrougr course|, lraced lre or|g|r ol lre d|srorored crec|. Fror lre records ol lre 3ecur|l|es ard Excrarge Corr|ss|or
(3EC), A|oersor d|scovered lral lre pres|derl ol 0uararleed, lre rec|p|erl ol lre urpa|d r||d slee| p|ales, Was ore
Euger|o 3. 8a|lao. upor lurlrer |rqu|ry, A|oersor Was |rlorred oy lre V|r|slry ol Trade ard lrduslry lral E.L.
woodWor|s, a s|rg|e propr|elorsr|p ous|ress, Was reg|slered |r lre rare ol ore Euger|o 8a|lao. lr add|l|or, upor
ver|l|cal|or W|lr lre draWee oar|, Pac|l|c 8ar||rg Corporal|or, A|oersor Was adv|sed lral lre s|gralure appear|rg or lre
suojecl crec| oe|orged lo ore Euger|o 8a|lao.
Aller oola|r|rg lre lorego|rg |rlorral|or, A|oersor, lrrougr course|, rade ar exlrajud|c|a| derard upor pr|vale
resporderl Euger|o 3. 8a|lao, pres|derl ol 0uararleed, lo rep|ace ard/or ra|e good lre d|srorored crec|.
Resporderl 8a|lao, der|ed lral re |ssued lre crec|, or lral lre s|gralure appear|rg lrereor |s r|s. le lurlrer a||eged lral
0uararleed Was a delurcl erl|ly ard rerce, cou|d rol rave lrarsacled ous|ress W|lr A|oersor.
0r Feoruary 11, 1983, A|oersor l||ed W|lr lre 0ll|ce ol lre Prov|rc|a| F|sca| ol R|za| a corp|a|rl aga|rsl Euger|o 3. 8a|lao
lor v|o|al|or ol 8alas Paroarsa 8||arg 22. ll appears, roWever, lral pr|vale resporderl ras a raresa|e, r|s sor Euger|o
8a|lao lll, Wro rarages a ous|ress eslao||srrerl, E.L. woodWor|s, or lre grourd l|oor ol lre 8a|lao 8u||d|rg, 32Z v.
Vapa 3lreel, 3la. Vesa, Var||a, lre very sare ous|ress address ol 0uararleed.
Ass|slarl F|sca| R|cardo 3uraWay l||ed ar |rlorral|or aga|rsl Euger|o 3. 8a|lao lor v|o|al|or ol 8alas Paroarsa 8||arg
22. F|sca| 3uraWay c|a|red lral re rad g|ver Euger|o 3. 8a|lao opporlur|ly lo suor|l corlroverl|rg ev|derce, oul lre |aller
la||ed lo do so ard lrerelore, Was deered lo rave Wa|ved r|s r|grl.
Resporderl 8a|lao |rred|ale|y l||ed W|lr lre Prov|rc|a| F|sca| ol R|za| a rol|or lor re|rvesl|gal|or, a||eg|rg lral |l Was rol
lrue lral re rad oeer g|ver ar opporlur|ly lo oe reard |r lre pre||r|rary |rvesl|gal|or corducled oy F|sca| 3uraWay, ard
lral re rever rad ary dea||rgs W|lr A|oersor or 8erjar|r Verd|ora, corsequerl|y, lre crec| lor Wr|cr re ras oeer
accused ol rav|rg |ssued W|lroul lurds Was rol |ssued oy r|r ard lre s|gralure |r sa|d crec| Was rol r|s.
0r Jaruary 30, 1981, Prov|rc|a| F|sca| Vauro V. Caslro ol R|za| reversed lre l|rd|rg ol F|sca| 3uraWay ard exoreraled
resporderl 8a|lao. le a|so |rslrucled lre Tr|a| F|sca| lo rove lor d|sr|ssa| ol lre |rlorral|or l||ed aga|rsl Euger|o 3.
8a|lao. F|sca| Caslro lourd lral lre s|gralure |r P8C Crec| No. 1331 |s rol lre s|gralure ol Euger|o 3. 8a|lao. le a|so
lourd lral lrere |s ro sroW|rg |r lre records ol lre pre||r|rary |rvesl|gal|or lral Euger|o 3. 8a|lao aclua||y rece|ved rol|ce
ol lre sa|d |rvesl|gal|or. F|sca| Caslro lrer casl|galed F|sca| 3uraWay lor la|||rg lo exerc|se care ard pruderce |r lre
perlorrarce ol r|s dul|es, lrereoy caus|rg |rjusl|ce lo resporderl Wro Was rol proper|y rol|l|ed ol lre corp|a|rl aga|rsl
r|r ard ol lre requ|rererl lo suor|l r|s courler ev|derce.
8ecause ol lre a||eged urjusl l|||rg ol a cr|r|ra| case aga|rsl r|r lor a||eged|y |ssu|rg a crec| Wr|cr oourced |r v|o|al|or ol
8alas Paroarsa 8||arg 22 lor a reas|y arourl ol P2,5Z5.00, resporderl 8a|lao l||ed oelore lre Reg|ora| Tr|a| Courl ol
0uezor C|ly a corp|a|rl lor darages aga|rsl rere|r pel|l|orers A|oersor Erlerpr|ses, Jesse Yap, |ls oWrer, ard 8erjar|r
Verd|ora, |ls erp|oyee.
Tre |oWer courl ooserved lral lre crec| |s draWr aga|rsl lre accourl ol E.L. woodWor|s, rol ol 0uararleed lrduslr|es ol
Wr|cr p|a|rl|ll used lo oe Pres|derl. 0uararleed lrduslr|es rad oeer |racl|ve ard rad ceased lo ex|sl as a corporal|or s|rce
19Z5, judgrerl |s rereoy rerdered |r lavor ol p|a|rl|ll.
Pel|l|orers l||ed |rslarl pel|l|or W|lr lre appe||ale courl. Pel|l|orers corlerd lral lre c|v|| case l||ed |r lre |oWer courl Was
ore lor ra||c|ous prosecul|or. Arl|c|e 19, |roWr lo corla|r Wral |s corror|y relerred lo as lre pr|rc|p|e ol aouse ol r|grls,
sels cerla|r slardards Wr|cr ray oe ooserved rol or|y |r lre exerc|se ol ore's r|grls oul a|so |r lre perlorrarce ol ore's
dul|es.
|88UE w0N pel|l|orers acled ra||c|ous|y or |r oad la|lr |r lre l|||rg ol lre case aga|rsl pr|vale resporderl, ard are lrey
||ao|e lor darages?
hEL0 N0. Tre e|ererls ol ar aouse ol r|grl urder Arl|c|e 19 are lre lo||oW|rg (1) Trere |s a |ega| r|grl or duly; (2) Wr|cr
|s exerc|sed |r oao la|rn; (3) lor lre so|e |nrenr ol prejud|c|rg or |rjur|rg arolrer. Arl|c|e 20 spea|s ol lre gerera| sarcl|or lor
a|| olrer prov|s|ors ol |aW Wr|cr do rol espec|a||y prov|de lor lre|r oWr sarcl|or (To|erl|ro, supra, p. Z1). Trus, aryore
Wro, Wrelrer u|||lu||y or ne||enr|y, |r lre exerc|se ol r|s |ega| r|grl or duly, causes darage lo arolrer, sra|| |rderr|ly r|s
v|cl|r lor |rjur|es sullered lrereoy. Arl|c|e 21 dea|s W|lr acls oonrra oonus mores, ard ras lre lo||oW|rg e|ererls 1) Trere
|s ar acl Wr|cr |s |ega|; 2) oul Wr|cr |s corlrary lo rora|s, good cuslor, puo||c order, or puo||c po||cy; 3) ard |l |s dore
W|lr |nrenr lo |rjure.
Assur|rg, aruenoo, lral a|| lre lrree (3) arl|c|es, logelrer ard rol |rdeperderl|y ol eacr ore, cou|d oe va||d|y rade lre
oases lor ar aWard ol darages oased or lre pr|rc|p|e ol aouse ol r|grl, urder lre c|rcurslarces, we see ro cogerl
reasor lor sucr ar aWard ol darages lo oe rade |r lavor ol pr|vale resporderl.
Cerla|r|y, pel|l|orers cou|d rol oe sa|d lo rave v|o|aled lre aloreslaled pr|rc|p|e ol aouse ol r|grl. wral prorpled pel|l|orers
lo l||e lre case lor v|o|al|or ol 8alas Paroarsa 8||arg 22 aga|rsl pr|vale resporderl Was lre|r la||ure lo co||ecl lre arourl
ol P2,5Z5.00 due or a oourced crec| Wr|cr lrey roresl|y oe||eved Was |ssued lo lrer oy pr|vale resporderl.
To corsl|lule ra||c|ous prosecul|or, lrere rusl oe prool lral lre prosecul|or Was prorpled oy a s|r|sler des|gr lo vex ard
rur|||ale a persor, ard lral |l Was |r|l|aled de||oerale|y oy lre delerdarl |roW|rg lral r|s crarges Were la|se ard
grourd|ess. Corceded|y, lre rere acl ol suor|ll|rg a case lo lre aulror|l|es lor prosecul|or does rol ra|e ore ||ao|e lor
ra||c|ous prosecul|or. A parly |rjured oy lre l|||rg ol a courl case aga|rsl r|r, ever |l re |s |aler or aoso|ved, ray l||e a
case lor darages grourded e|lrer or lre pr|rc|p|e ol aouse ol r|grls, or or ra||c|ous prosecul|or.
lr lre case al oar, lrere |s ro prool ol a s|r|sler des|gr or lre parl ol pel|l|orers lo vex or rur|||ale pr|vale resporderl oy
|rsl|lul|rg lre cr|r|ra| case aga|rsl r|r. wr||e pel|l|orers ray rave oeer reg||gerl lo sore exlerl |r delerr|r|rg lre
||ao|||ly ol pr|vale resporderl lor lre d|srorored crec|, lre sare |s rol so gross or rec||ess as lo arourl lo oad la|lr
Warrarl|rg ar aWard ol darages.
Tre rool ol lre corlroversy |r lr|s case |s lourded or a case ol r|sla|er |derl|ly. ll |s poss|o|e lral W|lr a rore ass|duous
|rvesl|gal|or, pel|l|orers Wou|d rave everlua||y d|scovered lral pr|vale resporderl Euger|o 3. 8a|lao |s rol lre Euger|o
8a|lao respors|o|e lor lre d|srorored crec|. loWever, lre record sroWs lral pel|l|orers d|d exerl cors|derao|e ellorl |r
order lo delerr|re lre ||ao|||ly ol pr|vale resporderl. Furlrerrore, lre adverse resu|l ol ar acl|or does rol per se ra|e lre
acl Wrorglu| ard suojecl lre aclor lo lre payrerl ol rora| darages. Trus, ar aWard ol darages ard allorrey's lees |s
urWarrarled Wrere lre acl|or Was l||ed |r good la|lr. ll darage resu|ls lror a persor's exerc|s|rg r|s |ega| r|grls, |l
|s oamnum aosque |nur|a.
wrere lrere |s ro ev|derce ol lre olrer parly rav|rg acled |r Warlor, lraudu|erl or rec||ess, or oppress|ve rarrer, re|lrer
ray exerp|ary darages oe aWarded. Need|ess lo say, lre aWard ol allorrey's lees rusl oe d|sa||oWed Wrere lre aWard ol
exerp|ary darages |s e||r|raled. lr lre l|ra| ara|ys|s, lrere |s ro prool or sroW|rg lral pel|l|orers acled ra||c|ous|y or |r
oad la|lr |r lre l|||rg ol lre case aga|rsl pr|vale resporderl. Corsequerl|y, |r lre aoserce ol prool ol lraud ard oad la|lr
corr|lled oy pel|l|orers, lrey carrol oe re|d ||ao|e lor darages. No darages car oe aWarded |r lre |rslarl case, Wrelrer
oased or lre pr|rc|p|e ol aouse ol r|grls, or lor ra||c|ous prosecul|or. Tre quesl|ored judgrerl |r lre |rslarl case allesls
lo lre propers|ly ol lr|a| judges lo aWard darages W|lroul oas|s. LoWer courls are rereoy caul|ored areW aga|rsl aWard|rg
urcorsc|orao|e surs as darages W|lroul oases lrerelor. Tre pel|l|or |s grarled.
C.R. No. 132344. February 17, 2000 UN|VER8|TY 0F ThE EA8T, petitioner, vs. R0HE0 A. JA0ER, respondent. j
YNARE8-8ANT|AC0, .:

FA6T8: Roreo Jader, a |aW sluderl erro||ed |r lre ur|vers|ly ol lre Easl, la||ed lo la|e lre regu|ar l|ra| exar|ral|or |r
Pracl|ce Courl l lor Wr|cr re Was g|ver ar |rcorp|ele grade |r lre 1sl seresler ol r|s |asl year (198Z-1988). Aller
corp|el|rg r|s 2rd seresler, Jader l||ed ar app||cal|or lor lre rerova| ol lre |rcorp|ele grade g|ver r|r oy Prolessor
Car|os 0rlega. Tr|s Was approved oy 0ear Ce|edor|o T|orgsor aller pay|rg lre requ|red lee. le loo| lre exar|ral|or, ard
or Vay 30, 1988, Prolessor Car|os 0rlega suor|lled r|s grade, Wr|cr |s a l|ve (5).
0e||oeral|ors Were re|d, W|lr Jader's rare appear|rg |r lre lerlal|ve ||sl ol card|dales lor gradual|or, oul arrolaled W|lr
r|s del|c|erc|es. lrv|lal|ors Were a|so rade, W|lr Jader's rare appear|rg as ore ol lre card|dales, a|oe|l arrolaled as lo
lre lerlal|ve ralure ol lre ||sl. Jader allerded lre sa|d gradual|or cererory, vesled W|lr a|| lre r|les syroo||c ol r|s
gradual|or lror |aW scroo|. 8e||ev|rg re rad successlu||y gradualed, re loo| a |eave ol aoserce W|lroul pay lo prepare lor
lre oar exar|ral|or. upor r|s erro||rerl |r lre pre-oar rev|eW ol lre Far Easlerr ur|vers|ly, roWever, Jader |earred ol r|s
del|c|ercy, dropped oul ol lre sare ard u|l|rale|y d|d rol la|e lre oar exar|ral|or.
Jader sued uE lor darages lor suller|rg rora| sroc|, rerla| argu|sr, ser|ous arx|ely, oesr|rcred repulal|or, Wourded
lee||rgs ard s|eep|ess r|grls ar|s|rg lror lre |aller's reg||gerce. AWards ol rora| ard exerp|ary darages, urrea||zed
|rcore, allorrey's lees, ard cosls ol su|l Were a|so prayed lor.
uE der|ed ||ao|||ly, argu|rg lral |l rever |ed Jader lo oe||eve lral re corp|eled lre requ|rererls lor a LaW degree Wrer r|s
rare Was |rc|uded |r lre lerlal|ve ||sl ol gradual|rg sluderls.
Tr|a| ersued, W|lr lre |oWer courl ru||rg |r lavor ol Jader, order|rg uE lo pay 35,1Z0 W|lr |ega| rale ol |rleresl, ard 5,000 lor
allorrey's lees ard cosl ol su|l. Tr|s Was rod|l|ed oy lre CA lo lre ellecl ol requ|r|rg uE lo pay Jader ar add|l|ora| 50,000
lor rora| darages.
|88UE: ls uE ||ao|e lo Roreo Jader, desp|le lre lorrer's a||egal|or lral lre prox|rale ard |rred|ale cause ol lre a||eged
darages |rcurred arose oul ol r|s oWr reg||gerce |r rol ver|ly|rg lre resu|l ol r|s rerova| exar?
hEL0: YE3. lr a corlracl ol educal|or, s|rce lre corlracl|rg parl|es are lre scroo| ard lre sluderl, lre |aller |s rol duly-
oourd lo dea| W|lr lre lorrers agerls, a|lrougr rolr|rg preverls e|lrer prolessors or sluderls lror srar|rg W|lr eacr olrer
sucr |rlorral|or. ll |s lre corlraclua| oo||gal|or ol lre scroo| lo l|re|y |rlorr ard lurr|sr sull|c|erl rol|ce ard |rlorral|or lo
eacr ard every sluderl as lo Wrelrer re or sre rad a|ready corp||ed W|lr a|| lre requ|rererls lor lre corlerrerl ol a
degree or Wrelrer lrey Wou|d oe |rc|uded arorg lrose Wro W||| graduale.
lr oe|aled|y |rlorr|rg Jader, uE carrol oe sa|d lo rave acled |r good la|lr. Aoserce ol good la|lr rusl oe sull|c|erl|y
eslao||sred lor a successlu| prosecul|or oy lre aggr|eved parly |r a su|l lor aouse ol r|grl urder Arl|c|e 19 ol lre C|v|| Code.
ll corroles ar roresl |rlerl|or lo aosla|r lror la||rg urdue advarlage ol arolrer, ever lrougr lre lorrs ard lecrr|ca||l|es
ol lre |aW, logelrer W|lr lre aoserce ol a|| |rlorral|or or oe||el ol lacls, Wou|d rerder lre lrarsacl|or urcorsc|erl|ous.

Tre scroo| exerc|ses gerera| superv|s|or ard exc|us|ve corlro| over lre prolessors W|lr respecl lo lre suor|ss|or ol reporls
|rvo|v|rg lre sluderls slard|rg, W|lr 'exc|us|ve corlro| rear|rg lral ro olrer persor or erl|ly rad ary corlro| over lre
|rslrurerla||ly Wr|cr caused lre darage or |rjury.
8e|rg a ur|vers|ly ergaged |r |ega| educal|or, |l srou|d rave pracl|ced Wral |l |rcu|cales |r |ls sluderls, spec|l|ca||y lre
pr|rc|p|e ol good dea||rgs |r Arl|c|es 19 ard 20 ol lre C|v|| Code, lre lorrer prov|s|or |rlerded lo expard lre corcepl ol
lorls oy grarl|rg adequale |ega| reredy lor lre urlo|d ruroer ol rora| Wrorgs, |rposs|o|e lor rurar lores|grl lo prov|de
spec|l|ca||y |r slalulory |aW.
uE la||ed lo acl seasorao|y ard carrol le|gr |grorarce lral Jader W||| rol prepare r|rse|l lor lre oar exars, s|rce lral |s
prec|se|y lre |rred|ale corcerr aller gradual|or ol ar LL.8. graduale. L|ao|||ly arose lror |ls la||ure lo prorpl|y |rlorr r|r
ol lre exar resu|ls ard |r r|s|ead|rg lre |aller |rlo oe||ev|rg lral re rad sal|sl|ed a|| course requ|rererls.
wr||e uE Was gu||ly ol reg||gerce ard ||ao|e lo Jader lor aclua| darages, re srou|d rol rave oeer aWarded rora|
darages. Al lre very |easl, |l oerooved or Jader lo ver|ly Wrelrer re ras corp|eled a|| recessary requ|rererls lo oe
e||g|o|e lor lre oar exar|ral|ors. As a ser|or |aW sluderl, re srou|d rave oeer respors|o|e erougr lo ersure lral a|| r|s
alla|rs Were |r order. Tre Courl la||s lo see roW re cou|d rave sullered urlo|d eroarrassrerl |r allerd|rg lre gradual|or
r|les, erro|||rg |r lre oar rev|eW c|asses ard rol oe|rg ao|e lo la|e lre oar exars. ll Jader Was |rdeed rur|||aled, re
orougrl lr|s upor r|rse|l oy rol ver|ly|rg a|| lre requ|rererls |rc|ud|rg r|s scroo| records, oelore prepar|rg r|rse|l lor lre
oar exar|ral|or.
Ru||ng: Tre assa||ed dec|s|or ol lre Courl ol Appea|s |s AFFlRVE0 W|lr V00lFlCATl0N. Tre aWard ol rora| darages |s
0ELETE0.
C.R. No. L-7817. 0ctober 31, 195 [ ALFRE00 H. VELAY0, |n h|s capac|ty as Ass|gnee of the |nso|vent
60HHER6|AL A|R L|NE8, |N6. (6AL|}, !,intiff-Appe,nt, vs. 8hELL 60HPANY 0F ThE Ph|L|PP|NE |8LAN08,
LT0.,0efend,nt-Appeee, YEK hUA TRA0|NC 60RP0RAT|0N, PAUL 8Y6|P and HAA8A & 60., |ntervenors. j
FEL|X,

NATURE: Appea| lror a judgrerl ol CFl Var||a oe orougrl oy lre ollerded parly, sra|| proceed |rdeperderl|y ol lre
cr|r|ra| acl|or, ard sra|| requ|re or|y a preporderarce ol ev|derce.

FA6T8: 3|rce lre slarl ol Correrc|a| A|r L|re, lrc's (CALl) operal|ors, |ls lue| reeds Were a|| supp||ed oy 3re|| Corpary
ol lre P.l., Lld, (3re||). 0esrord F|lzgera|d, 3re||'s Cred|l Varager Was |r crarge ol co||ecl|rg payrerl. Ary exlers|ors ol
lerr ol payrerl, roWever, rad lo oe dec|ded oy 3leprer CraWlord ard |aler oy w||dred wood|rg. As ol Augusl 1918,
3re||'s ooo|s sroWed a oa|arce ol P1Z0,12.58 |r |ls lavor lor goods |l so|d ard de||vered
lo CALl. 3re|| rad reasors lo oe||eve lral lre l|rarc|a| cord|l|or ol 3re|| Was lar lror oe|rg sal|slaclory. A|lorso 3yc|p,
CALls Pres|derl ol 8oard ol 0|reclors, ollered lo F|lzgera|d CALl's 0oug|as C-51 p|are, Wr|cr Was lrer |r Ca||lorr|a. Tre
oller Was dec||red oy
CraWlord.

Aug 6, 1948, raragererl ol CALl |rlorra||ycorvered |ls pr|rc|pa| cred|lors |r a |urcreor, ard |rlorred lrer lral CALl
Was |r a slale ol |rso|vercy ard rad lo slop operal|or. A|exarder 3yc|p, 3ecrelary ol lre 8oard ol 0|reclors ol CALl,
exp|a|red lre rerorardur agreererl execuled oy CALl W|lr Pr|| A|r L|res lrc or Aug 1, regard|rg lre proposed sa|e lo
PAL ol lre av|al|or equ|prerl ol CALl. A|lredo ve|ayo, Aud|lor ol CALl, d|scussed lre oa|arce sreels ol CALl.
Tre oa|arce sreel rade rerl|or ol lre 0oug|as C-51 p|are.

Trere Was a gerera| urderslard|rg arorg a|| cred|lors preserl or lre des|rao|||ly ol corsurral|rg lre sa|e |r lavor ol PAL.
Trer lo||oWed a d|scuss|or or lre payrerl ol c|a|rs ol cred|lors ard lre prelererces c|a|red lor lre accourls due lo
erp|oyees, lre 0overrrerl, ard lre Nal|ora| A|rporls Corp. Tre olrer cred|lors d|spuled sucr corlerl|or ol prelererce. No
Was reacred or lre raller ol prelererce ol payrerl ard |l Was lrer gerera||y agreed lral lre raller oe lurlrer slud|ed oy
a Wor||rg corr|llee lo oe lorred. Vr. F|lzgera|d ol 3re||, Ally. Agcao||| ol Nal|ora| A|rporls Corp., ard Ally. A|exarder
3yc|p Were appo|rled lo lre Wor||rg corr|llee.

Trose preserl |r lre reel|rg Were ol lre urar|rous op|r|or lral |l Wou|d oe advarlageous rol lo preserl su|ls aga|rsl
CALl oul lo slr|ve lor a la|r pro-rala d|v|s|or ol |ls assels. Tre raragererl ol CALl arrourced lral |r case ol ror-
agreererl ol lre cred|lors, |l Wou|d l||e |rso|vercy proceed|rgs.

Aug 9, 1948, Wor||rg corr|llee d|scussed relrods ol acr|ev|rg oojecl|ves, Wr|cr Were lo preserve lre assels ol CALl ard
lo sludy lre Way ol ra||rg a la|r d|v|s|or ol a|| lre assels arorg lre cred|lors. loWever, regol|al|or or lre d|v|s|or ol
assels Was |ell perd|rg. 0r lre sare day (Aug 9), 3re|| aellecled a re|erapn|o lrarsler ol a|| |ls cred|l aga|rsl CALl lo lre
Arer|car
Corporal|or 3re|| 0|| Co., lrc., ass|gr|rg |ls cred|l arourl|rg lo SZ9,110. Tr|s Was lo||oWed or Aug 10 oy S85,081.29.

Aug 12, 1948 Arer|car 3re|| 0|| Co l||ed a corp|a|rl aga|rsl CALl |r lre 3uper|or Courl ol lre 3lale ol Ca||lorr|a, u3A, lor
lre co||ecl|or ol ass|gred cred|l ol SZ9,110, ard a Wr|l ol allacrrerl Was app||ed lor ard |ssued aga|rsl a C-51 p|are. 3ept
17, 1948 ar arerded corp|a|rl Was l||ed lo recover ass|gred cred|l ol S85,081.29 ard a supp|ererla| allacrrerl lor a
r|grer sur aga|rsl lre C-51 p|are, p|us r|sce||areous persora| properl|es. uraWare ol 3re||'s ass|grrerl ol cred|l, CALl
or Aug 12, 1948 approved lre rerorardur agreererl ol sa|e lo PAL, ard roled lral 'lre 8oard rad oeer lry|rg lo reacr
ar agreererl W|lr cred|lors. lo preverl |rso|vercy proceed|rgs, oul so lar ro del|r|le agreererl rad oeer reacred.

F|rsl Wee| ol 3ept 1948, Nal|ora| A|rporls Corp |earred ol 3re||'s acl|or |r lre u3 ard raslered lo l||e |ls oWr corp|a|rl
W|lr allacrrerl aga|rsl CALl |r lre CFl ol Var||a.

0ct 7, 1948 CALl l||ed a pel|l|or lor vo|urlary |rso|vercy. Ar order ol |rso|vercy Was |ssued oy lre courl or lre sare day.
Vr. A|lredo ve|ayo Was appo|rled Ass|gree |r lre proceed|rgs. ve|ayo |rsl|luled case aga|rsl 3re|| lor lre purpose ol
secur|rg Wr|l ol |rjurcl|or reslra|r|rg 3re|| lror prosecul|rg aga|rsl CALl, ard as ar a|lerral|ve, lral 3re|| oe ordered lo
pay darages douo|e lre va|ue ol lre p|are |l lre case |r lre u3 W||| deleal lre procurererl ol CALl ol |ls p|are.

0ec 22, 1948, Courl der|ed pel|l|or oecause Wrelrer lre corveyarce ol 3re||'s cred|l Was lraudu|erl or rol, lre Pr|| courl
Wou|d rol oe |r a pos|l|or lo erlorce |ls orders as aga|rsl lre Arer|car corporal|or 3re|| 0|| Co., lrc., Wr|cr |s ouls|de lre
jur|sd|cl|or ol lre Pr||s. P|a|rl|ll corl|red r|s acl|or lo lre recovery ol darages aga|rsl 3re||. LoWer courl d|sr|ssed lre
case.

0efend,nt's Comments
Ass|grrerl ol cred|l |r lavor ol Arer|car 3re|| Was lor va|uao|e cors|deral|or ard rade |r accordarce W|lr eslao||sred
correrc|a| pracl|ces
ll ras ro |rleresl |r lre case |rsl|luled oy Arer|car 3re||, as lrey are separale ard d|sl|rcl corporal|ors.
F|lzgera|d Was rere|y |rv|led lo lre |urcreor reel|rg, W|lroul |roW|rg lre purpose lor Wr|cr |l Was ca||ed. F|lzgera|d
cou|d rol rave oll|c|a||y represerled 3re|| oecause aulror|ly res|des or CraWlord.

|88UE8:
1. w0N 3re|| Co., ol lre P.l. Lld, la||rg advarlage ol |ls |roW|edge ol lre ex|slerce ol CALl's a|rp|are C-51 al Ca||lorr|a,
u3A, acled |r oad la|lr ard oelrayed lre corl|derce ard lrusl ol olrer cred|lors ol CALl preserl |r sa|d reel|rg oy allecl|rg
a rasly le|egrapr|c lrarsler ol |ls cred|l lo lre Arer|car corporal|or 3re|| 0|| Corpary, lrc., lrus deleal|rg lre purpose ol
lre |rlorra| reel|rgs ol CALl's pr|rc|pa| cred|lors ard depr|v|rg lre p|a|rl|ll ol lre rears ol oola|r|rg lre p|are, or |ls va|ue,
lo lre delr|rerl ard prejud|ce ol olrer CALl cred|lors Wro Were corsequerl|y depr|ved ol lre|r srare |r lre d|slr|oul|or ol
sa|d va|ue
2. w0N oy reasor ol sa|d oelraya| ol corl|derce ard lrusl, 3re|| ray oe rade lo arsWer lor lre darages, ard |l so, lre
arourl ol sucr darages

hEL0:
1. YE3, 3re|| acled |r oad la|lr. ll |s ev|derl lral 3re||, upor |earr|rg lre precar|ous ecoror|c s|lual|or ol CALl ard lral W|||
a|| prooao|||ly, |l cou|d rol gel rucr ol |ls oulslard|rg cred|l oecause ol lre prelerred c|a|rs ol olrer cred|lors, erl|re|y
d|sregarded a|| rora| |rr|o|lory lerels. Tre le|egrapr|c lrarsler rade W|lroul |roW|edge ard al lre oac| ol olrer cred|lors
ol CALl ray oe a srreWd ard surpr|se rove lral erao|ed 3re|| lo co||ecl a|rosl a|| |l rol lre erl|re arourl ol |ls cred|l, oul
lre Courl ol Jusl|ce (3C) carrol courlerarce sucr all|lude al a||, ard rucr |ess lror a lore|gr corporal|or lo lre delr|rerl
ol Pr|||pp|re 0overrrerl ard |oca| ous|ress. 3re||'s lrarsler ol cred|l Wou|d rave oeer jusl|l|ed on|y |l F|lzgera|d rad
dec||red lo la|e parl |r lre Wor||rg corr|llee ard lrar||y ard roresl|y |rlorred lre olrer cred|lors preserl lral re rad ro
aulror|ly lo o|rd r|s pr|rc|pa| ard lral lre |aller Was lo oe |ell lree lo co||ecl |ls cred|l lror CALl oy Wralever rears r|s
pr|rc|pa| deered W|se ard Were ava||ao|e lo |l. 8ul lrer, sucr |rlorral|or Wou|d rave d|sso|ved a|| allerpls lo core lo ar
ar|cao|e corc|||al|or ard Wou|d rave prec|p|laled lre l|||rg ol CALl's vo|urlary |rso|vercy proceed|rgs ard ru|||l|ed lre
|rlerded lrarsler ol 3re||'s cred|l lo Arer|car 3re||.

2. YE3, 3re|| rusl arsWer lor darages. 3ecl|or 3Z ol lre lrso|vercy LaW slales 3ec 3Z. ll ary persor, oelore lre
ass|grrerl |s rade, rav|rg rol|ce ol lre corrercererl ol lre proceed|rgs |r |rso|vercy, or rav|rg reasor lo oe||eve lral
|rso|vercy proceed|rgs are aooul lo oe correrced, eroezz|es or d|sposes ol ary rorey, goods, cralle|s, or ellecls ol lre
|rso|verl, re |s crargeao|e lrereW|lr, ard ||ao|e lo ar acl|or oy lre ass|gree lor douo|e lre va|ue ol lre properly sougrl lo
oe eroezz|ed or d|sposed ol, lo oe rece|ved lor lre oerel|l ol lre |rso|verl eslale.

Trere are douols, roWever, as lo lre app||cao|||ly ol lr|s prov|s|or, as |l |s corlerled lral Wral 3re|| rea||y d|sposed ol Was
|ls oWr cred|l ard rol CALl's properly, a|lrougr lr|s Was pracl|ca||y lre ellecl ard resu|l ol lre screre. Tre sare resu|l,
roWever, ray oe acr|eved |r app|y|rg lre prov|s|ors ol lre C|v|| Code. Arl|c|e 19 ol lre C|v|| Code prov|des

Arl 19. Ary persor rusl, |r lre exerc|se ol r|s r|grls ard |r lre perlorrarce ol r|s dul|es, acl W|lr jusl|ce, g|ve everyore r|s
due ard ooserve roresly ard good la|lr.

wr||e Arl 19 corla|rs a rere dec|aral|or ol pr|rc|p|es, sucr dec|aral|or |s |rp|ererled oy Arl|c|e 21 ol lre C|v|| Code, Wr|cr
slales Arl 21. Ary persor Wro W|||lu||y causes |oss or |rjury lo arolrer |r a rarrer lral |s corlrary lo rora|s, good cuslors
or puo||c po||cy sra|| corpersale lre |aller lor lre darage. Code Corr|ss|or or Arl|c|e 21 (|l) Wou|d voucrsale adequale
|ega| reredy lor lral urlo|d ruroers ol rora| Wrorgs Wr|cr |s |rposs|o|e lor rurar lores|grl lo prov|de lor spec|l|ca||y |r
lre slalules. (ll) |s a pruderl earresl ol jusl|ce |r lre lace ol lre |rposs|o|||ly ol erureral|rg, ore oy ore, a|| Wrorgs Wr|cr
cause darage. ll Arl|c|e 23 ol C|v|| Code goes as lar as lo prov|de lral
'Ever |l ar acl or everl caus|rg darage lo arolrer's properly Was rol due lo lre lau|l or reg||gerce ol lre delerdarl, lre
|aller sra|| oe ||ao|e lor |rderr|ly |l lrrougr lre acl or everl re Was oerel|led., W|lr rucr rore reasor lral 3re|| srou|d oe
||ao|e lor |rderr|ly lor acls |l corr|lled |r oad la|lr ard W|lr oelraya| ol corl|derce.

Arerl lre argurerl lral C|v|| Code prov|s|ors carrol oe app||cao|e as lrey care |rlo ellecl or|y or Aug 30, 1950, Arl 2252
ol C|v|| Code prov|des oy |rp||cal|or lral Wrer reW prov|s|ors ol lre Code does rol prejud|ce or |rpa|r vesled or acqu|red
r|grls |r accordarce W|lr lre o|d |eg|s|al|or, lrey ray oe g|ver relroacl|ve ellecl. 3re|| d|d rol rave ary vesled or acqu|red
r|grl lo oelray corl|derce ol CALl or ol |ls cred|lors. Voreover, accord|rg lo Arl 2251 ol C|v||
Code, 'ro vesled or acqu|red r|grl car ar|se lror acls or or|ss|ors Wr|cr are aga|rsl lre |aW or Wr|cr |rlr|rge upor lre
r|grl ol olrers.

0isposition 3re|| |s ||ao|e lo pay p|a|rl|ll, lor lre oerel|l ol CALl ard |ls cred|lors, corpersalory darages a sur equ|va|erl
lo lre va|ue ol lre p|are al lre l|re 3re|| ass|gred |ls cred|l lo Arer|car 3re||, ard arolrer equa| sur as exerp|ary
darages.
C.R. No. L-48250 0ecember 28, 1979 [ CRAN0 UN|0N 8UPERHARKET, |N6. and NEL|A 8ANT08
FAN0|N0, pel|l|orers, vs. J08E J. E8P|N0 JR., and ThE h0N0RALE 60URT 0F APPEAL8, resporderls. [
CUERRER0,
FA6T8: Jose J. Esp|ro. Jr., a c|v|| erg|reer ard ar execul|ve ol Procler ard 0aro|e Pr|||pp|res, lrc, logelrer W|lr r|s W|le
ard lWo daugrlers Werl lo srop al 3oulr 3uperrar|el |r Va|al|. F|rd|rg a cy||rdr|ca| ral la|| l||e Wr|cr re reeded lor r|s
roooy, re p|c|ed |l up ard re|d |l lear|rg |l r|grl gel |osl oecause ol |ls l|ry s|ze.
wr||e sropp|rg, lrey saW lre ra|d ol Jose's aurl so as re la||ed, re p|aced lre ral la|| |r r|s oreasl poc|el parl|y exposed.
Al lre crec|-oul courler, re pa|d lor lre|r purcrases Worlr PZZ oul lorgol lo pay lre l||e. As re Was ex|l|rg lre superrar|el,
re Was approacred oy 0uard Eoreo regard|rg lre l||e |r r|s poc|el. le qu|c||y apo|og|zed say|rg l'r 3orry ard re lurred
loWards lre casr|er lo pay. 8ul, re Was slopped ard |rslead Was orougrl lo lre rear ol lre superrar|el Wrer re Was
as|ed lo l||| oul ar lrc|derl Reporl |aoe||rg r|r as 3rop||ller.
l|s W|le jo|red r|r s|rce re Was la||rg so |org ard lrey Were orougrl lo lre l|rsl crec|oul courler Wrere Vs. Ne||a 3arlos-
Fard|ro's des| Was. 3re rade a rerar|Aro, ra|aW ra rarar |lo. Jose lo|d Vs. Fard|ro lral re Was go|rg lo pay lor
lre l||e oecause re reeded |l oul sre rep||ed Tral |s a|| lrey say, lre peop|e Wror We cause rol pay|rg lor lre goods say...
Trey a|| |rlerded lo pay lor lre lr|rgs lral are lourd lo lrer. Jose oojecled slal|rg re |s a regu|ar cuslorer ol lre
superrar|el
le gave P5 lo pay lor lre P3.85 cosl ol lre l||e oul Vs. Fard|ro sa|d lre P5 Was r|s l|re Wr|cr W||| oe reWarded lo lre
guard. Peop|e Were slar|rg al lrer. le loo| lre l||e ard pa|d lre l||e al lre rearesl crec|oul courler W|lr P50 ard gol oul
as lasl as lrey cou|d. l|s l|rsl |rpu|se Was lo go oac| lo lre superrar|el lral r|grl lo lrroW roc|s al |ls g|ass W|rdoWs. 8ul
reasor preva||ed over pass|or ard re lrougrl lral jusl|ce srou|d la|e |ls due course.
le l||ed aga|rsl 0rard ur|or 3uperrar|el el a|. lourded or Arl|c|e 21 |r re|al|or lo Arl|c|e 2219 ol lre NeW C|v|| Code ard
prays lor rora| darages, exerp|ary darages, allorrey s lees ard 'experses ol ||l|gal|or, cosls ol lre su|l ard lre relurr ol
lre P5 l|re
CFl d|sr|ssed
CA reversed ard grarled darages ol PZ5,000 oy Way ol rora| darages, P25,000 as exerp|ary darages, ard P5,000 as
allorrey's lee
|88UE w/N 0rard ur|or 3uperrar|el srou|d oe ||ao|e lor puo||c rur|||al|or lourded or Arl|c|e 21 |r re|al|or lo Arl|c|e
2219 ol lre NeW C|v|| Code
hEL0 YE3. 0rard ur|or 3uperrar|el ordered lo pay, jo|rl|y ard severa||y rora| darages P5,000 ard P2,000 as ard lor
allorrey's lees; ard lo relurr lre P5 l|re
Jose d|d rol |rlerd lo slea| lre l||e ard lral |s acl ol p|c||rg up lre l||e lror lre oper sre|l Was re|lrer cr|r|ra| ror dore W|lr
ra||ce or cr|r|ra| |rlerl lor or lre corlrary, re loo| lre |ler W|lr lre |rlerl|or ol ouy|rg ard pay|rg lor |l.
l|s persora| c|rcurslarces
le gradualed Vecrar|ca| Erg|reer lror u.P. C|ass 1950, erp|oyed as ar execul|ve ol Proclor & 0aro|e Pr||s., lrc., a
corporale rarager |rcrarge ol rolor|rg ard Warerous|rg lrere|r; rororao|y d|scrarged lror lre Pr|||pp|re Arry |r 191;
a Pr|||pp|re goverrrerl pers|orado ol lre ur|led 3lales lor s|x rorlrs; reroer ol lre Pr|||pp|re velerars Leg|or; aulror
ol arl|c|es puo||sred |r lre Var||a 3urday T|res ard Pr|||pp|res Free Press; reroer ol lre Kr|grls ol Co|urous, Courc||
No. 3Z13; sor ol lre |ale Jose Var|a Esp|ro, rel|red V|r|sler, 0eparlrerl ol Fore|gr Alla|rs al lre Pr|||pp|re Eroassy
wasr|rglor.
Jose Was la|se|y accused ol srop||ll|rg |s ev|derl. F|re orard|rg r|r as a lr|el Wr|cr Was rol r|grl ror jusl|l|ed. Tre rode
ard rarrer |r Wr|cr re Was suojecled, sroul|rg al r|r, |rpos|rg upor r|r a l|re, lrrealer|rg lo ca|| lre po||ce ard |r lre
preserce ard rear|rg ol rary peop|e al lre 3uperrar|el Wr|cr orougrl ard caused r|r rur|||al|or ard eroarrassrerl,
sull|c|erl|y rerdered lre pel|l|orers ||ao|e lor darages urder Arl|c|es 19 ard 21 |r re|al|or lo Arl|c|e 2219 ol lre C|v|| Code.
ll |s aga|rsl rora|s, good cuslors ard puo||c po||cy lo rur|||ale, eroarrass ard degrade lre d|gr|ly ol a persor. Everyore
rusl respecl lre d|gr|ly, persora||ly, pr|vacy ard peace ol r|rd ol r|s re|groors ard olrer persors (Arl|c|e 2, C|v|| Code)
l|s lorgellu||ress |ed lo r|s eroarassrerl ard rur|||al|or lrereoy caus|rg r|r rerla| argu|sr, Wourded lee||rgs ard
ser|ous arx|ely. l|s acl ol or|ss|or corlr|ouled lo lre occurrerce ol r|s |rjury or |oss ard sucr corlr|oulory reg||gerce |s a
laclor Wr|cr ray reduce lre darages lral pr|vale resporderl ray recover (Arl. 2211, NeW C|v|| Code). Voreover, lral
rary peop|e Were preserl ard lrey saW ard reard lre ersu|rg |rlerrogal|or ard a|lercal|or appears lo oe s|rp|y a raller
ol co|rc|derce |r a superrar|el Wr|cr |s a puo||c p|ace ard lre croWd ol or|oo|ers, rearers or oyslarders Was rol
de||oerale|y sougrl or ca||ed oy raragererl lo W|lress pr|vale resporderl's pred|carerl.
0rard ur|or 3uperrar|el acled |r good la|lr |r lry|rg lo prolecl ard recover lre|r properly, a r|grl Wr|cr lre |aW accords lo
lrer. Tre grarl ol exerp|ary darages Was e||r|raled.
C.R. No. 8544 0ctober 3, 1991 0AV|0 P. LL0RENTE, pel|l|orer, vs. ThE 8AN0|CANAYAN (Th|R0 0|V|8|0N}, and
PE0PLE 0F ThE Ph|L|PP|NE8, resporderls.8AH|ENT0,
FA6T8 As a resu|l ol a rass|ve reorgar|zal|or |r 1981, rurdreds ol Pr|||pp|re Cocorul
Aulror|ly (PCA) erp|oyees res|gred ellecl|ve 0clooer 31, 1981. Arorg lrer Were Vr. Cur|o, Vrs. Perez, Vr. Azucera,
ard Vrs. Jav|er. 8y reasor ol Wr|cr lrey Were a|| requ|red lo app|y lor PCA c|eararces |r supporl ol lre|r gralu|ly oerel|ls,
ore ol lre cord|l|or ol Wr|cr
Tre c|eararce sra|| oe s|gred oy lre PCA oll|cers corcered or|y Wrer lrere |s ro |ler appear|rg urder PEN0lN0
ACC0uNTA8lLlTY or aller every |ler prev|ous|y erlered lrereurder |s lu||y sell|ed. 3ell|ererl lrereol sra|| oe Wr|ller |r
RE0 |r|.

Aller lre c|eararce Was s|gred oy lre PCA oll|cers corcerred, |l Was lo oe approved, l|rsl, oy Ally. L|orerle, |r lre case ol
a rar|-ard-l||e erp|oyee, or oy Co|. 0ueras, lre acl|rg adr|r|slralor, |r lre case ol ar oll|cer, ard lrer oy Ally. Rodr|guez,
lre corporale aud|lor. Tre c|eararce ol Vrs. Jav|er daled 0clooer 30, 1991 Was s|gred oy a|| PCA oll|cers corcerred,
|rc|ud|rg Vrs. 3ollo ever lrougr lre lorrer rad ursell|ed oo||gal|ors roled lrereor, v|z '3l3 |oar P5,38Z.00 ard uCP8
car |oar P19,Z05.00, or a lola| ol P25,092.00, ard |aler or approveed oy Co|. 0ueras, Vrs Jav|er oe|rg ar oll|cer, ard Ally.
Rodr|guez. 3|r||ar||v lre, voucrer ol Vrs. Jav|er lor rer gralu|ly oerel|ls |||eW|se rec|led rer accourlao|||l|es ol P25,092.00
p|us P92.000.00, Wr|cr Was rardWr|ller. 8olr accourls Were deducled lror rer gralu|ly oerel|ls, ard lre oa|arce re|eased
lo rer or Noveroer 1, 1981. Tre voucrer passed posl-aud|l oy Ally. Rodr|guez or 0eceroer 1, 1981.

Tre sa|d P92,000.00 Was lre d|sa||oWed porl|or ol lre casr advarces rece|ved oy Vr. Cur|o |r correcl|or W|lr r|s dul|es as
super cargo |r lre d|slr|oul|or ol seed ruls lrrougroul lre courlry. le rece|ved lrer lrrougr ard |r lre rare ol Vrs.
Jav|er lror lre uCP8. wrer lre arourl Was d|sa||oWed, lre uCP8 W|lrre|d lror lre PCA cerla|r rece|vao|es; lre |aller, |r
lurr, deducled lre sare arourl lror lre gralu|ly oerel|ls ol Vrs. Jav|er, sre oe|rg pr|rar||y ||ao|e lrerelor. Al lre l|re ol
lre deducl|or, lre add|l|ora| ||qu|dal|or papers rad a|ready oeer suor|lled ard Were |r process. Jusl |r case sre Wou|d rol
oe successlu| |r rav|rg lre erl|re arourl W|ped oul, sre requesled Vr. Cur|o, Wro adr|lled|y rece|ved |l, lo execule, as re
d|d, ar all|dav|l daled Noveroer 2, 1981, |r Wr|cr re assured Wralever porl|or lrereol r|grl rol oe a||oWed.

Tre c|eararce ol Vr. Cur|o daled Noveroer 1,1981, |||eW|se lavorao|y passed a|| oll|cers corcerred, |rc|ud|rg Vrs. 3ollo,
lre |aller s|gr|rg desp|le lre rolal|or rardWr|ller or 0eceroer 8, 1981, lral Vr. Cur|o rad perd|rg accourlao|||l|es,
rare|y 03l3 |oar 2,193.Z1, 201 accourls rece|vao|e P3,89Z.Z5, ard uCP8 |oar P3,23.19, or a lola| ol
P10,Z11.Z8. loWever, Wrer lre c|eararce Was suor|lled lo Ally. L|orerle lor approva|, re relused lo approve slal|rg as
cause lre lacl lral re Was a|ready aWare ol lre all|dav|l daled Noveroer 2, 1981, |r Wr|cr Vr. Cur|o assured lo pay ary
res|dua| ||ao|||ly lor lre d|sa||oWed casr advarces, Wr|cr al lre l|re, 0eceroer 8, 1981. Voreover, Vr. Cur|o rad olrer
perd|rg oo||gal|ors roled or r|s c|eararce lola|||rg P|0,Z11.98. For lr|s reasor, lre c|eararce Was re|d up |r r|s oll|ce ard
d|d rol reacr Ally. Rodr|guez.

ll appears lral Vr. Cur|o reav||y pursued lre pass|rg ol r|s c|eararce lo lre po|rl lral re l||ed a case |r lre Tarodoayar
aga|rsl Ally. L|orerle ard Co|. 0ueras. 3uosequerl|y, Vr. Cur|o Was ao|e lo l||e arolrer c|eararce Wr|cr d|d rol requ|re lre
aloresa|d cord|l|or. 8elWeer 0eceroer 1981 ard 0eceroer 198, Vr. Cur|o la||ed lo gel ga|rlu| erp|oyrerl; as a resu|l,
r|s lar||y ||lera||y Werl rurgry. lr 1981, re app||ed lor Wor| W|lr lre Pr|||pp|re Collor Aulror|ly, oul Was relused, oecause
re cou|d rol preserl r|s PCA c|eararce. Tre sare lr|rg rappered Wrer re sougrl erp|oyrerl W|lr lre Pr|||pp|re F|sr
Var|el|rg Adr|r|slral|or |r Jaruary 1982. lr oolr prospecl|ve erp|oyers, lre |ler app||ed lor Was P2,500.00 a rorlr. Al
lral l|re, re Was or|y aooul 15 years o|d ard sl||| corpel|l|ve |r lre joo rar|el. 8ul |r 198, oe|rg a|ready pasl 50 years, re
cou|d ro |orger oe r|red perrarerl|y, lrere oe|rg a regu|al|or lo lral ellecl. l|s preserl erp|oyrerl W|lr lre Pr|||pp|re
Porls Aulror|ly, Wr|cr slarled or Varcr 1, 198Z, Was casua| lor lral reasor. lad r|s gralu|ly oerel|ls oeer pa|d |r 1981,
re Wou|d rave rece|ved a o|gger arourl, cors|der|rg lral s|rce lrer |rleresl rad accrued ard lre lore|gr excrarge rale ol
lre peso lo lre do||ar rad gore up.

0r 0eceroer 10, 198, ar lrlorral|or lor v|o|al|or ol 3ecl|or 3(c) ol lre Arl|-
0rall ard Corrupl Pracl|ces Acl Was l||ed aga|rsl Ally. L|orerle lor Wr|cr re Was acqu|lled oul re|d c|v|||y ||ao|e lor darages
(P90,000) urder Arl|c|e 19 ol lre C|v|| Code.

|88UE8 w0N 3ard|garoayar erred |r ro|d|rg Ally. L|orerle c|v|||y ||ao|e desp|le r|s
acqu|lla|?

hEL0 N0. ll |s lre esserce ol Arl|c|e 19 ol lre C|v|| Code, urder Wr|cr lre pel|l|orer Was rade lo pay darages, logelrer
W|lr Arl|c|e 2Z, lral lre perlorrarce ol duly
oe dore W|lr jusl|ce ard good la|lr. Tre records sroW lral lre oll|ce pracl|ce |rdeed |r lre PCA Was lo c|ear lre erp|oyee
(rel|ree) ard deducl r|s accourlao|||l|es lror r|s gralu|ly oerel|ls. Trere seers lo oe ro deoale aooul lre ex|slerce ol lr|s
pracl|ce (lre pel|l|orer adr|lled |l |aler or) ard |r lacl, re c|eared lrree erp|oyees or lre cord|l|or lral lre|r oo||gal|ors
srou|d oe deducled lror lre|r oerel|ls.

Tre Courl quoles
Corlrorled W|lr lrese ev|derce (s|c), Ally. L|orerle corceded, a|oe|l grudg|rg|y, lre ex|slerce ol
lre pracl|ce oy lre accourl|rg d|v|s|or ol rol corp|y|rg W|lr Cord|l|or (a). le, roWever, c|a|red lral re |earred ol lre
pracl|ce or|y dur|rg lre lr|a| ol lre case ard lral re rusl rave |radverlerl|y approved lre c|eararces ol Vrs. Perez, Vr.
Azucera, ard poss|o|y olrers Wro Were s|r||ar|y s|lualed. Tr|s lre ev|derce oe||es. F|rsl, re r|rse|l lesl|l|ed lral Wrer lre
c|eararce ol Vr. Cur|o Was preserled lo r|r |r 0eceroer 1981, |l a|ready oore lre s|gralure ol Vrs. 3ollo ol lre accourl|rg
d|v|s|or ard lre rolal|or sel oppos|le rer rare aooul lre oulslard|rg accourlao|||l|es ol Vr. Cur|o; oul re (Ally. L|orerle)
s|gr|l|carl|y d|d rol as| rer Wry sre s|gred lre c|eararce. 3ecord, |r lral rorlr, Ally. L|orerle approved Vrs. Perez's ard
Vr. Azucera's voucrers sroW|rg lral rey ras perd|rg oo||gal|ors lo lre 03l3 ard lre uCP8, Wr|cr Were oe|rg deducled
lror lre|r gralu|ly oerel|ls (lrus are s|r||ar|y s|lualed W|lr Vr. Cur|o). Allacred lo lrose voucrers Were lre c|eararces as
supporl|rg docurerls. Ard lr|rd, |r lre sare rorlr, Ally. L|orerle Was a|ready aWare ol lre case ol Vrs. Jav|er Wrose
c|eararce ard voucrer Were, accord|rg lo r|r, prec|se|y W|lrre|d oecause ol rer ursell|ed accourlao|||ly lor lre casr
advarces ol P92,000.00, oul rere |aler or g|ver due course; ard rer gralu|ly oerel|ls re|eased or Noveroer 1, 1981,
r|rus lral arourl.

Tre casr advarces ol P92,000.00 Were lre pr|rary oo||gal|or ol Vrs. Jav|er, s|rce lrey Were secured lrrougr rer ard |r
rer rare lror lre uCP8. Tral Was Wry lrey Were crarged lo ard deducled lror, rer gralu|ly oerel|ls. Corsequerl|y, as
ear|y as lral dale ard |r so lar as lre
PCA ard lre uCP8 Were corcerred, lre accourlao|||ly Was a|ready lu||y pa|d. Tre assurpl|or ol res|dua| ||ao|||ly oy Vr.
Cur|o lor lre casr advarces or Noveroer 2, 1981, Was a raller oelWeer r|r ard Vrs. Jav|er.

Tre gerera| ru|e |s lral lr|s Courl |s oourd oy lre l|rd|rgs ol lacl ol lre 3ard|garoayar. Tre acls ol Ally, L|orerle Were
|ega| (lral |s, pursuarl lo procedures), as re |rs|sls |r lr|s pel|l|or, yel |l does rol lo||oW, as We sa|d, lral r|s acls Were dore
|r good la|lr. For erpras|s, re rad ro va||d reasor lo go |ega| a|| ol a sudder W|lr respecl lo Vr. Cur|o, s|rce re rad
c|eared lrree erp|oyees Wro, as lre 3ard|garoayar lourd, Were a|| s|r||ar|y c|rcurslarced |r lral lrey a|| rad perd|rg
oo||gal|ors Wrer, lre|r c|eararces Were l||ed lor cors|deral|or, Warrarl|rg s|r||ar oll|c|a| acl|or.

Tre Courl |s corv|rced lral lre pel|l|orer rad urjusl|y d|scr|r|raled aga|rsl Vr. Cur|o. ll |s ro delerse lral lre pel|l|orer
Was rol|valed oy ro |||-W||| (a grudge, accord|rg lo lre 3ard|garoayar), s|rce lre lacls spea| lor lrerse|ves. ll |s ro
delerse e|lrer lral re Was, aller a||, corp|y|rg rere|y W|lr |ega| procedures s|rce, as We |rd|caled, re Was rol as slr|cl W|lr
respecl lo lre lrree rel|r|rg olrer erp|oyees. Trere car oe ro olrer |og|ca| corc|us|or lral re Was acl|rg urla|r|y, ro rore,
ro |ess, lo Vr. Cur|o.

C.R. No. L-1739 [ Hay 30, 192 6E6|L|0 PE, ET AL., p|a|rl|lls-appe||arls,
vs. ALF0N80 PE, delerdarl-appe||ee. j AUT|8TA ANCEL0,
FA6T8 P|a|rl|lls orougrl lr|s acl|or oelore lre Courl ol F|rsl lrslarce ol Var||a lo recover rora|, corpersalory, exerp|ary
ard correcl|ve darages |r lre arourl ol P91,000.00 exc|us|ve ol allorrey's lees ard experses ol ||l|gal|or.
P|a|rl|lls are parerls, orolrers ard s|slers ol Lo||la PE, ar urrarr|ed Worar 21 years ol age. 0elerdarl, a rarr|ed rar,
lrequerl|y v|s|led Lo||la's rouse or lreprelexl lral re Warled rer lo leacr r|r lo pray lre rosary. Trey le|| |r |ove ard
corducled c|ardesl|re lrysls. wrer lre parerls |earred aooul lr|s, lrey pror|o|led delerdarl lror go|rg lo lre|r rouse. Tre
alla|r corl|rued jusl lre sare. 0r apr|| 11, 195Z, Lo||la d|sappeared lror rer orolrer's rouse Wrere sre Was ||v|rg. A role
|r lre rardWr|l|rg ol lre delerdarl Was lourd |rs|de Lo||la's aparador. Tre preserl acl|or Was |rsl|luled urder Arl|c|e 21 ol
lre C|v|| Code. Tre |oWer courl d|sr|ssed lre acl|or. lerce, lr|s appea| oy lre p|a|rl|lls

|88UE: w0N lre delerdarl car oe re|d ||ao|e urder Arl|c|e 21

hEL0: YE3. Tre c|rcurslarces urder Wr|cr lre delerdarl lr|ed lo W|r Lo||la's allecl|or carrol |ead lo ary olrer corc|us|or
lrar lral |l Was re Wro, lrrougr ar |rger|ous screre or lr|c|ery, seduced lre |aller lo lre exlerl ol ra||rg rer la|| |r |ove
W|lr r|r. Tr|s |s sroWr oy lre lacl lral delerdarl lrequerled lre rouse ol Lo||la or lre prelexl lral re Warled rer lo leacr
r|r roW lo pray lre rosary. 8ecause ol lre lrequercy ol r|s v|s|ls lo lre |aller's lar||y Wro a||oWed lree access oecause re
Was a co||alera| re|al|ve ard Was cors|dered as a reroer ol lre lar||y, lre lWo everlua||y le|| |r |ove W|lr eacr olrer ard
corducled c|ardesl|re |ove alla|rs. 0elerdarl corl|rued r|s |ove alla|rs W|lr Lo||la url|| sre d|sappeared lror lre parerla|
rore. lrdeed, ro olrer corc|us|or car oe draWr lror lr|s cra|r ol everls lrar lral lre delerdarl rol or|y de||oerale|y, oul
lrrougr a c|ever slralegy, succeeded |r W|rr|rg lre allecl|or ard |ove ol Lo||la lo lre exlerl ol rav|rg ||||c|l re|al|ors W|lr
rer.

Tre Wrorg re rad caused rer ard rer lar||y |s |rdeed |rreasurao|e cors|der|rg lre lacl lral re |s a rarr|ed rar. ver||y,
re ras corr|lled ar |rjury lo Lo||la's lar||y |r a rarrer corlrary lo rora|s, good cuslors ard puo||c po||cy as
corlerp|aled |r Arl|c|e 21 ol lre NeW C|v|| Code.

C.R. No. L-44190 0ctober 30, 1980 Han||a Cas 6orporat|on v 6ourt of Appea|s [ HAKA8|AR

FA6T8: 0r Vay 20, 191, resporderl 0rgs|p app||ed lor gas serv|ce correcl|or W|lr pel|l|orer Var||a 0as Corporal|or. A
ourrer gas Was |rsla||ed oy pel|l|orer's erp|oyees |r resporderl's ||lcrer al r|s res|derce. 0r Ju|y 2Z, 195, resporderl
0rgs|p requesled pel|l|orer lo |rsla|| add|l|ora| app||arces as We|| as add|l|ora| gas serv|ce correcl|ors |r r|s 1-door
Reyro Aparlrerl pel|l|orer |rsla||ed lWo 20-ga||or capac|ly Waler slorage realers ard lWo reavy-duly gas ourrers ard
rep|aced lre or|g|ra| gas reler W|lr a o|gger 50- ||grl capac|ly gas reler. Tre |rsla||al|ors ard correcl|ors Were a|| dore
so|e|y oy pel|l|orer's erp|oyees. Trere Was ro s|gr|l|carl crarge |r lre reler read|rg desp|le add|l|ora| |rsla||al|ors, ard
or Vay ard Jure 19, ro gas corsurpl|or Was reg|slered |r lre reler, prorpl|rg pel|l|orer lo |ssue a 'reler order' W|lr
|rslrucl|ors lo crarge lre gas reler |r resporderl's res|derce. 0r Augusl 1Z, 19, pel|l|orer's erp|oyees Werl lo
0rgs|p's p|ace.

w|lroul rol|ly|rg or |rlorr|rg resporderl 0rgs|p, lrey crarged lre gas reler ard |rsla||ed reW luoe correcl|ors. Pr|vale
resporderl Was lrer la||rg a rap, oul re Was |rlorred allerWards ol Wral rad la|er p|ace oy r|s rouseooy. 0r lral sare
allerroor, pel|l|orer's erp|oyees relurred W|lr a prolograprer Wro loo| p|clures ol lre prer|ses. 0rgs|p |rqu|red lror
Corore| Wry lrey Were la||rg p|clures oul lre |aller s|rp|y gave r|r a ca|||rg card W|lr |rslrucl|ors lo go lo r|s oll|ce.
Trere, re Was |rlorred aooul lre ex|slerce ol a oy-pass va|ve or jurper |r lre gas correcl|or ard lral ur|ess re gave
P3,000.00, re Wou|d oe deporled. Resporderl 0rgs|p relused lo g|ve lre rorey.

8y lre erd ol Augusl, a read|rg Was rade or lre reW reler ard expecled|y, |l reg|slered a sudder |rcrease |r gas
corsurpl|or. Trerealler, |r 0clooer, 19, a corp|a|rl lor qua||l|ed lrell Was l||ed oy pel|l|orer aga|rsl resporderl 0rgs|p.
0r Feoruary, 19Z, perd|rg |rvesl|gal|or ol lre cr|r|ra| corp|a|rl, pel|l|orer d|scorrecled resporderl's gas serv|ce lor
a||eged la||ure ard/or relusa| lo pay r|s gas corsurpl|ors lror Ju|y, 195 lo Jaruary, 19Z. 3uosequerl|y, lre corp|a|rl
Was d|sr|ssed

0r Ju|y 11, 19Z, lo||oW|rg lre d|sr|ssa| oy lre |rvesl|gal|rg l|sca| ol lre corp|a|rl lor qua||l|ed lrell ard lre d|scorrecl|or
oy pel|l|orer ol r|s gas serv|ce, resporderl 0rgs|p l||ed a corp|a|rl lor rora| ard exerp|ary darages aga|rsl pel|l|orer
Var||a 0as Corporal|or oased or lWo causes ol acl|or, l|rsl|y lre ra||c|ous, oppress|ve ard ra|evo|erl l|||rg ol lre cr|r|ra|
corp|a|rl; ard, secord|y lre |||ega| c|osure ol resporderl 0rgs|p's gas serv|ce correcl|or W|lroul courl order ard W|lroul
rol|ce ol Warr|rg. Pel|l|orer l||ed a rol|or lo d|sr|ss, oul |l Was der|ed

0r Vay 2, 19Z2, lre lr|a| courl rerdered |ls dec|s|or order|rg delerdarl lo pay p|a|rl|ll(1) P50,000.00 as rora| darages |r
lre FlR3T CAu3E 0F ACTl0N; (2) P10,000.00 as exerp|ary darages |r lre FlR3T CAu3E 0F ACTl0N; (3) P30,000.00
as rora| darages |r lre 3EC0N0 CAu3E 0F ACTl0N; (1) P5,000.00 as exerp|ary darages |r lre 3EC0N0 CAu3E 0F
ACTl0N; (5) P10,000.00 as allorrey's lees; ard () lre cosls ol lre su|l. Pel|l|orer appea|ed lo lre Courl ol Appea|s

CA all|rred lre |oWer courl's dec|s|or |r lolo, rerce, lr|s pel|l|or

|88UE: w0N lre arourl ol rora| ard exerp|ary darage aWarded oy lre lr|a| courl ard all|rred oy lre Courl ol appea|s |s
excess|ve

hEL0: YE3. Arl|c|e 221Z ol lre C|v|| Code slales lral rora| darages |rc|ude prys|ca| suller|rg, rerla| argu|sr, lr|grl,
ser|ous arx|ely, oesr|rcred repulal|or, Wourded lee||rgs, rora| sroc|, soc|a| rur|||al|or, ard s|r||ar |rjury. Trougr
|rcapao|e ol pecur|ary corpulal|or, rora| darages ray oe recovered |l lrey are lre prox|rale resu|l ol lre delerdarl's
Wrorglu| acl or or|ss|or. 0r lre olrer rard, Arl|c|e 2229 prov|des lral exerp|ary or correcl|ve darages are |rposed, oy
Way ol exarp|e or correcl|or lor lre puo||c good, |n aoo|r|on, ro rne mora|, remperare, ||qu|oareo or oompensarory oamaes.
Tre l|rsl cause ol acl|or, lor Wr|cr resporderl 0rgs|p Was aWarded rora| ard exerp|ary darages |r lre arourl ol
P50,000.00 ard P10,000.00, respecl|ve|y, |s pred|caled or Arl|c|e 2219 ol lre C|v|| Code Wr|cr slales lral rora| darages
ray oe recovered |r lre lo||oW|rg ard ara|ogous cases .. . (8) ra||c|ous prosecul|or; .. .

To corsl|lule ra||c|ous prosecul|or, lrere rusl oe prool lral lre prosecul|or Was prorpled oy a s|r|sler des|gr lo vex ard
rur|||ale a persor lral |l Was |r|l|aled de||oerale|y oy lre delerdarl |roW|rg lral r|s crarges Were la|se ard grourd|ess.

Corceded|y, lre rere acl ol suor|ll|rg a case lo lre aulror|l|es lor prosecul|or does rol ra|e ore ||ao|e lor ra||c|ous
prosecul|or. lr lre |rslarl case, roWever, lrere |s reasor lo oe||eve lral lrere Was ra||c|ous |rlerl |r lre l|||rg ol lre
corp|a|rl lor qua||l|ed lrell. As correcl|y ooserved oy lre lr|a| courl |r |ls dec|s|or. A s|gr|l|carl lacl orougrl aooul oy lre
lesl|rory ol Corore| r|rse|l |s lre lola| aoserce ol |rred|ale accusal|or aga|rsl P|a|rl|ll r|grl al lre very rorerl Wrer
lre oy-pass va|ve Was a||eged|y d|scovered. R|grl lrer ard lrere Corore| srou|d rave lo|d P|a|rl|ll lral re Was us|rg a oy-
pass va|ve ard |r ellecl slea||rg gas lror 0elerdarl. Tre c|rcurslarce Was lar|||ar lo lral ol calcr|rg a lr|el |r l|aranre
oe||oro. 8ul lre lrulr |s lral Wrer Corore| ard r|s rer erlered P|a|rl|ll's corpourd ard rade crarges lrere|r, P|a|rl|ll Was
s|eep|rg. wrer P|a|rl|ll Wo|e up al lour o'c|oc| |r lre allerroor, Corore| ard r|s rer rad a|ready rade lre crarges ard
rad a|ready gore. Trey relurred roWever al l|ve o'c|oc|, lr|s l|re W|lr a prolograprer. Tr|s Was lre l|re Wrer P|a|rl|ll rel
Corore|. lere Was lrer lre opporlur|ly lor Corore| lo corlrorl P|a|rl|ll W|lr lre a||eged|y d|scovered 'oy-pass va|ve' ard
o|url|y, ever orula||y, le|| r|r lral lrere Was lr|every ol gas. Tr|s, Corore| d|d rol do. .. .. .

ll oears rol|rg lral Wrer re Was |rlorred as lo lre ex|slerce ol a 'jurper' |r r|s gas correcl|or, resporderl 0rgs|p d|d rol
sroW ary s|gr ol lear or rerorse ard d|d rol y|e|d lo lre lrrealer|rg derard ol Corore|lr|s |s lre all|lude ol soreore
Wro |roWs roW lo la|e a l|rr slard Wrere r|s pr|rc|p|es ard r|grls are corcerred. To prove r|s |rrocerce, re Was ever
W||||rg lo rave r|s p|ace excavaled oul pel|l|orer Wou|d rol dare la|e lre corsequerces. 8es|des, 0e|l|r Cuslod|o,
pel|l|orer's oWr recrar|ca| erg|reer, lesl|l|ed lral lre secord gas reler Was rep|aced as oe|rg delecl|ve oecause sore
ol |ls parls Were Worr oul ard lral |l Was rol proper|y reg|sler|rg.

Ev|derl|y, pel|l|orer Var||a 0as Corporal|or, |r la|||rg lo recover |ls |osl reverue caused oy lre gas reler's |rcorrecl
record|rg, sougrl lo v|rd|cale |ls l|rarc|a| |oss oy l|||rg lre corp|a|rl lor qua||l|ed lrell aga|rsl resporderl 0rgs|p |roW|rg |l
lo oe la|se. ll Was aclua||y |rlerded lo vex ard rur|||ale pr|vale resporderl ard lo o|ac|er r|s repulal|or rol or|y as a
ous|ressrar oul a|so as a persor. 0ua||l|ed lrell |s a ser|ous ollerse |rd|cal|rg rora| deprav|ly |r ar |rd|v|dua|. To oe
accused ol sucr cr|re W|lroul oas|s |s sroc||rg ard ||oe|ous. ll sl|gral|zed pr|vale resporderl caus|rg r|r erol|ora|
depress|or ard soc|a| degradal|or. Tre lacl lral lre corp|a|rl lor qua||l|ed lrell Was d|sr|ssed oy lre Pasay C|ly l|sca| |s
ro corso|al|or. Tre darage rad oeer dore. Necessar||y, |rderr|l|cal|or rad lo oe rade.

Tre Courl g|ves due cors|deral|or lo resporderl 0rgs|p's soc|a| ard l|rarc|a| slalus as a ous|ressrar ard lre rerla|
argu|sr re sullered as a resu|l ol lre la|se |rpulal|or. loWever, pel|l|orer's l|rarc|a| capao|||ly rusl a|so oe cors|dered.
Pel|l|orer |s a puo||c ul|||ly corporal|or Wrose pr|rary corcerr |s serv|ce lo lre peop|e, lre prol|l rol|ve oe|rg rere|y
secordary. urder lre c|rcurslarces, lre aWard ol rora| ard exerp|ary darages srou|d oe reduced lo P25,000.00 ard
P5,000.00, respecl|ve|y. Pel|l|orer's acl |r d|scorrecl|rg resporderl 0rgs|p's gas serv|ce W|lroul pr|or rol|ce corsl|lules
oreacr ol corlracl arourl|rg lo ar |rdeperderl lorl. Tre preralur|ly ol lre acl|or |s |rd|cal|ve ol ar |rlerl lo cause
add|l|ora| rerla| ard rora| suller|rg lo pr|vale resporderl. Tr|s |s a c|ear v|o|al|or ol Arl|c|e 21 ol lre C|v|| Code.

Tre aWard ol rora| darages |s sarcl|ored oy Arl|c|e 2220 Wr|cr prov|des lral W|||lu| |rjury lo properly ray oe a |ega|
grourd lor aWard|rg rora| darages |l lre courl srou|d l|rd lral, urder lre c|rcurslarces, sucr darages are jusl|y due.
Tne same ru|e app||es ro oreaones ol oonrraor unere rne oelenoanr aoreo lrauou|enr|y or |n oao la|rn"

Resporderl 0rgs|p's delau|l |r payrerl carrol oe ul|||zed oy pel|l|orer lo deleal or ru|||ly lre c|a|r lor darages. Al rosl,
lr|s c|rcurslarce car oe cors|dered as a r|l|gal|rg laclor |r ascerla|r|rg lre arourl ol darages lo Wr|cr resporderl
0rgs|p |s erl|l|ed. lr corsequerce lrereol, we reduce lre arourl ol rora| darages lo P15,000.00 Tre aWard ol
P5,000.00 as exerp|ary darages, or lre olrer rard, |s susla|red, oe|rg s|r||ar|y Warrarled oy Arl|c|e 2231 ol lre C|v||
Code as corp|ererled oy Arl|c|e 2220.
0isposition 0ec|s|or ol CA rod|l|ed as regards lre arourl ol darages.