1. MANGILA VS. CAGR NO. 125027 AUG 12,

2002

Facts:

Petitioner Anita Mangila is an exporter of sea foods and doing business under the name and style of Seafoods Products. Private respondent Loreta Guina is the President and General Manager of Air Swift International, a single registered proprietorship engaged in the freight forwarding business.

Sometime in January 1988, petitioner contracted the freight forwarding services of private respondent for shipment of petitioner’s products, such as crabs, prawns and assorted fishes, to Guam where petitioner maintains an outlet. Petitioner agreed to pay private respondent cash on delivery. Private respondent’s invoice stipulates a charge of 18% interest per annum on all overdue accounts. In case of suit, the same invoice stipulates attorney’s fees equivalent to 25 percent of the amount due plus costs of suit. Petitioner failed to pay private respondent shipping charges amounting to P109, 376.95 despite several demands. A case for collection of sum of money was filed before the RTC of Pasay City but summons was not served on petitioner. Sheriff was told that petitioner transferred her residence to Sto. Niño, Guagua,

Pampanga, and found out further that petitioner had left the Philippines for Guam. Construing petitioner’s departure from the Philippines as done with intent to defraud her creditors, the trial court issued a Writ of Preliminary Attachment upon motion by private respondent.

Petitioner filed a Motion to Discharge Attachment without submitting herself to the jurisdiction of the trial court pointing out that up to then, she had not been served a copy of the complaint and the summons. Hence, petitioner claimed the court had not acquired jurisdiction over her person. Subsequently, summons was finally served on the petitioner.

Petitioner filed a Motion to Dismiss the complaint on the ground of improper venue. Private respondent’s invoice for the freight forwarding service stipulates that "if court litigation becomes necessary to enforce collection xxx the agreed venue for such action is Makati, Metro Manila." Private respondent filed an Opposition asserting that although "Makati" appears as the stipulated venue, the same was merely an inadvertence by the printing press whose general manager executed an affidavit admitting such inadvertence. Moreover, private respondent claimed that petitioner knew that private

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respondent was holding office in Pasay City and not in Makati. The lower court, finding credence in private respondent’s assertion, denied the Motion to Dismiss and gave petitioner 5 days to file her answer, which was later filed, and maintaining her contention that the venue was improperly laid, based on the said provision in private respondent’s invoice.

RTC ruled that petitioner is liable to private respondent. CA upheld the validity of the issuance of the writ of attachment and sustained the filing of the action in the RTC of Pasay.

Issue:Whether or not venue was improperly laid.

Held:

The Court resolved to dismiss the case on the ground of improper venue but not for the reason stated by petitioner.

The Rules of Court provide that parties to an action may agree in writing on the venue on which an action should be brought. However, a mere stipulation on the venue of an action is not enough to preclude parties from bringing a case in other venues. The parties must be able to show that such stipulation is exclusive. Thus, absent words that show the parties’ intention to restrict the filing of a suit in a

particular place, courts will allow the filing of a case in any venue, as long as jurisdictional requirements are followed. Venue stipulations in a contract, while considered valid and enforceable, do not as a rule supersede the general rule set forth in Rule 4 of the Revised Rules of Court. In the absence of qualifying or restrictive words, they should be considered merely as an agreement on additional forum, not as limiting venue to the specified place. Nevertheless, the Court held that Pasay is not the proper venue.

In this case it was established that petitioner resides in San Fernando, Pampanga while respondent resides in Parañaque City. The case was filed in Pasay City where the business is located. This would have been permissible had private respondent’s business been a corporation. However, as admitted by private respondent in her complaint in the lower court, her business is a sole proprietorship, and as such, does not have a separate juridical personality that could enable it to file a suit in court. In fact, there is no law authorizing sole proprietorships to file a suit in court.

A sole proprietorship does not possess a juridical personality separate and distinct from the personality of the owner of the enterprise. The law merely

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recognizes the existence of a sole proprietorship as a form of business organization conducted for profit by a single individual and requires its proprietor or owner to secure licenses and permits, register its business name, and pay taxes to the national government. The law does not vest a separate legal personality on the sole proprietorship or empower it to file or defend an action in court.

Thus, not being vested with legal personality to file this case, the sole proprietorship is not the plaintiff in this case but rather Loreta Guina in her personal capacity. In fact, the complaint in the lower court acknowledges in its caption that the plaintiff and defendant are Loreta Guina and Anita Mangila, respectively. The title of the petition before us does not state, and rightly so, Anita Mangila v. Air Swift International, but rather Anita Mangila v. Loreta Guina. Logically then, it is the residence of private respondent Guina, the proprietor with the juridical personality, which should be considered as one of the proper venues for this case.

All these considered, private respondent should have filed this case either in San Fernando, Pampanga (petitioner’s residence) or Parañaque (private respondent’s residence). Since private respondent filed this

case in Pasay, the Court held that the case should be dismissed on the ground of improper venue.

[A.M. No. 09-6-9-SC : August 19, 2009]

2. RE: Query of Mr. Roger C. Prioreschi Re Exemption from Legal and Filing Fees of the Good Shepherd Foundation, Inc.

Facts:

Mr. Prioreschi is the administrator of the Good Shepherd Foundation, Inc. (GSFI)

GSFI, according to its Article of Incorporation, is a foundation which reaches out to the poorest among the poor, to the newly born and abandoned babies, to children who never saw the smile of their mother, to old people who cannot afford a few pesos to pay for "common prescriptions", to broken families who returned to a normal life.

In other words, GSFI have been working hard for the every Filipino people that the Government and the society cannot reach to, or have rejected or abandoned them.

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One Court Administrator, Jose Perez, pointed out the need to comply with OCA Circular No. 42-2005 and Rule 141 - regarding exemption to pay legal fees by indigents and such “privilege” is reserved to indigent persons only.

On 22 May 2009, Mr. Prioreschi wrote to the Chief Justice asking the court to grant GSFI the same “privilege” of exemption from paying filing fees just like the exemption given to indigent persons.

Issue:

Whether or not GSFI, a foundation, can be granted the same “privilege” (exemption from paying filing fees) as that given to indigent persons.

Held:

No. The exemption is based from

the Free Access Clause under Sec. 11 Art. 3 of the Constitution: “Free access to the courts and quasi judicial bodies and adequate legal assistance shall not be denied to any person by reason of poverty.”

This provision is very important. In fact, a move that it be removed because it was already covered by the equal protection clause was defeated.

To implement the Free Access Clause, SC promulgated Sec. 21, Rule 3 and Sec. 19 Rule 141 of the Rules of Court.

The clear intent and precise language of the provisions indicate that only a natural party litigant may be regarded as an indigent litigant.

Good Shepherd Foundation is a corporation with a separate and distinct juridical personality and as such cannot be exempted from legal and filing fees.

This is the ruling even if the foundation is working for indigent and underprivileged people.

The Consti premised the free access clause on a person’s poverty which only a natural person can suffer.

Another reason why the exemption cannot be granted to juridical persons even if they work for indigent and underprivileged people is because it may be prone to abuse.

Also, the scrutiny of compliance with the documentation requirements may prove too time consuming and wasteful for the courts.

In view of the foregoing, the Good Shepherd Foundation, Inc. cannot be extended the exemption from legal and filing fees despite its working for indigent and underprivileged people.

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3. ALFREDO CHING vs. THE SECRETARY OF JUSTICE, ASST. CITY PROSECUTOR ECILYN BURGOS-VILLAVERT, JUDGE EDGARDO SUDIAM of the Regional Trial Court, Manila, Branch 52; RIZAL COMMERCIAL BANKING CORP. and THE PEOPLE OF THE PHILIPPINESG. R. No. 164317; February 6, 2006

Facts: Petitioner was the Senior Vice-President of Philippine Blooming Mills, Inc. (PBMI). Sometime in September to October 1980, PBMI, through petitioner, applied with the Rizal Commercial Banking Corporation (respondent bank) for the issuance of commercial letters of credit to finance its importation of assorted goods. (synthetic graphite electrode, calorized lance pipes, refractory tundish bricks, high fired refractory nozzle etc)

Respondent bank approved the application, and irrevocable letters of credit were issued. The goods were purchased and delivered in trust to PBMI. Petitioner signed 13 trust receipts 4 as surety, acknowledging delivery of the goods.

Under the receipts, petitioner agreed to hold the goods in trust

for the said bank, with authority to sell but not by way of conditional sale, pledge or otherwise; and in case such goods were sold, to turn over the proceeds abd apply its payment of other indebtedness to respondent bank. In case the goods remained unsold within the specified period, the goods were to be returned to respondent bank without any need of demand. Thus, said "goods, manufactured products or proceeds thereof, whether in the form of money or bills, receivables, or accounts separate and capable of identification" were respondent bank’s property.

When the trust receipts matured, petitioner failed to return the goods or value to respondent bank despite demands. The bank filed a criminal complaint for estafa in the Office of the City Prosecutor -Manila.

1 st filing The City Prosecutor found probable cause of estafa under RPC, in relation to PD 115 (Trust Receipt Law). Petitioner Ching appealed to the Minister of Justice which granted the Motion to Quash the Informations filed by petitioner on the ground that the material allegations therein did not amount to estafa.

2 nd filing The bank refiled the criminal complaint but the City Prosecutor

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ruled that there was no probable cause to charge petitioner with violating P.D. No. 115, as petitioner’s liability was only civil, not criminal, having signed the trust receipts as surety.

The Secretary of Justice however reversed the resolution stating that respondent bound himself under the terms of the trust receipts not only as a corporate official of PBMI but also as its surety; hence, he could be proceeded against in two (2) ways: first, as surety as determined by the Supreme Court in its decision in Rizal Commercial Banking Corporation v. Court of Appeals; and second, as the corporate official responsible for the offense under P.D. No. 115, via criminal prosecution.

Petitioner filed a petition for certiorari, prohibition and mandamus with the CA which dismissed the same for lack of merit.

Issue: Whether or not Ching should be held liable for estafa in relation to Trust Receipts Law?

Held: Yes.

1.-There is no dispute that it was the respondent, who as senior vice-president of PBM, executed the thirteen (13) trust receipts. As such, PD 115 sec 13 points to him as the official responsible for the offense.

A.As provided under section 13 of PD 115 which states in part,

‘xxx If the violation or offense is committed by a corporation, partnership, association or other judicial entities, the penalty provided for in this Decree shall be imposed upon the directors, officers, employees or other officials or persons therein responsible for the offense, without prejudice to the civil liabilities arising from the criminal offense.’

Though he never receives the goods ,PD 115 specifically makes the officers, employees or other officers or persons responsible for the offense, without prejudice to the civil liabilities of such corporation and/or board of directors, officers, or other officials or employees responsible for the offense. The rationale is that such officers or employees are vested with the authority and responsibility to devise means necessary to ensure compliance with the law and, if they fail to do so, are held criminally accountable; thus, they have a responsible share in the violations of the law.

2.- More so, respondent is estopped to still contend that PD 115 covers only goods which are ultimately destined for sale and not goods, like those imported by PBM.

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This issue has already been settled in the Allied Banking Corporation case, where officer may be prosecuted for failure to turn over the proceeds of the sale of entrusted goods, or to return said goods if unsold or disposed of in accordance with the terms of the trust receipts. Such is also expressely provided in Sec 13 PD 115

Section 13. Penalty Clause. The failure of an entrustee to turn over the proceeds of the sale of the goods, documents or instruments covered by a trust receipt to the extent of the amount owing to the entruster or as appears in the trust receipt or to return said goods, documents or instruments if they were not sold or disposed of in accordance with the terms of the trust receipt shall constitute the crime of estafa, punishable under the provisions of Article Three hundred and fifteen, paragraph one (b) of Act Numbered Three thousand eight hundred and fifteen, as amended, otherwise known as the Revised Penal Code.

3.- Other contention of petitioner (a) the transaction between entered is not a trust receipt transaction would not suffice as the transaction falls under the trust receipt law ( P.D. No. 115.) Respondent bank imported the goods and entrusted the same to PBMI under the trust receipts

SC reminders:

A crime is the doing of that which the penal code forbids to be done, or omitting to do what it commands. A necessary part of the definition of every crime is the designation of the author of the crime upon whom the penalty is to be inflicted. -When a criminal statute designates an act of a corporation or a crime and prescribes punishment t creates a criminal offense which, would not exist and such can be committed only by the corporation.- When a penal statute does not expressly apply to corporations, it does not create an offense for which a corporation may be punished. -if the State, by statute, defines a crime that may be committed by a corporation but prescribes the penalty against officers, directors, or employees of such corporation or other persons responsible for the offense, only such individuals will suffer such penalty.

If the crime is committed by a corporation or other juridical entity, the directors, officers, employees or other officers thereof responsible for the offense shall be charged and penalized for the crime, precisely because of the nature of the crime and the penalty therefor. A corporation cannot be arrested and imprisoned; hence, cannot be penalized for a crime punishable by imprisonment. However, a corporation may be charged and prosecuted for a crime if the imposable penalty is fine. Even if the statute prescribes both

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fine and imprisonment as penalty, a corporation may be prosecuted and, if found guilty, may be fined.

4. Crystal v. BPI

Facts:• 28 March 1978, spouses

Crystal obtained 300K loan in behalf of the Cebu Contractors Consortium (CCCC) from BPI-Butuan. The loan was secured by a chattel mortgage on heavy equipment and machinery of CCCC• On the same date, spouses

executed in favor of BPI continuing suretyship where they bound themselves as surety of CCCC in the aggregate principal sum of not exceeding 300K. Following day, Raymundo Crystal executed a promissory note of 300K in favor oF BPI• sometime in august 1979,

CCCC renewed a previous loan and this time BPI-Cebu. The renewal was evidence by a promissory note signed by their spouses in their personal capacities AND as managing partners of CCCC. The note states that the spouses are jointly and severally liable with CCCC. • Since BPI-Cebu required

CCCC to put up a security and CCCC had no real property, the spouses executed a real mortgage over their OWN property. Also, they used the

same property to secure an additional loan of 20K of CCCC. • CCCC failed to pay the loan

of both BPIs when the loan became due. CCCC as well as the spouses failed to pay their obligations despite demands. Thus, BPI resorted to the foreclosure of the chattel mortgage and the real mortgage. Foreclosure proceeds on the chattel mortgage amounted to 240K applied to the loan of BPI-Butuan which then had reached 707K. • Meanwhile, insular bank of

asia and america (IBAA) offered to buy the lot of the 2 real estate mortgages and to pay directly the debt of spouses in exchange for the release of the mortgages. BPI rejected• BPI filed a complaint for sum

of money against CCCC and spouses before the RTCfor recovery of the deficiency of the loan. RTC ruled in favor of BPI, thus led to an institution of extrajudicial foreclosure of the spouses' mortgaged property• Spouses filed an action for

Injunction with damages, with a prayer for a restraining order and/or writ of preliminary injunction on the ground that BPI should have exhausted CCCC's properties first, stressing that they are mere guarantors. RTC dismissed the complaint because the spouses agreed to bind themselves jointly and severally on the loan, and thus BPI can validly foreclose them mortgages. Additionally, RTC orded them to pay moral and exemplary

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damages. The appeal was also denied.

Issue: Whether the award on moral and exemplary damages to BPI, a corporation, is valid

Held:• A juridical person is generally

not entitled to moral damages because, unlike a natural person, it cannot experience physical suffering or sentiments as wounded feelings, serious anxiety, mental anguish or moral shock. • The court may only award a

juridical person moral damages when there is proof oft he existence of the factual basis of the damage and its causal relation to the defendant's acts. This is because moral damages are in the category of an award designed to compensate the claimant for actual injury suffered and not to impose penalty on the wrongdoer.• Moral damages, to be

recoverable, must be the proximate result of a wrongful act or omission the factual basis for which is satisfactorily established by the aggrieved party.• On the other hand, awards of

exemplary damages and attorney's fees are proper. Exemplary damages are imposed by way of example or correction for the public good, when the party to a contract acts in a wanton, fraudulent, oppressive or malevolent manner. Attorney's fees are awarded when

exemplary damages are awarded and when the party to a suit is compelled to incur expenses to protect his interest.

5. Filipinas Broadcasting Network, Inc. vs. Ago Medical and Eduacational Central-Bicol Christian college of Medicine (AMEC- BCCM)

Facts:

Exposé is a radio documentary program hosted by Carmelo Mel Rima (Rima) and Hermogenes Jun Alegre (Alegre). Exposé is aired every morning over DZRC-AM which is owned by Filipinas Broadcasting Network, Inc. (FBNI). „Exposé is heard over Legazpi City, the Albay municipalities and other Bicol areas.

In the morning of 14 and 15 December 1989, Rima and Alegre exposed various alleged complaints from students, teachers and parents against Ago Medical and Educational Center-Bicol Christian College of Medicine (AMEC) and its administrators. Claiming that the broadcasts were defamatory, AMEC and Angelita Ago (Ago), as Dean of AMEC’s College of Medicine, filed a complaint for damages against

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FBNI, Rima and Alegre on 27 February 1990.

The complaint further alleged that AMEC is a reputable learning institution. With the supposed expos’s, FBNI, Rima and Alegre transmitted malicious imputations, and as such, destroyed plaintiffs (AMEC and Ago) reputation. AMEC and Ago included FBNI as defendant for allegedly failing to exercise due diligence in the selection and supervision of its employees, particularly Rima and Alegre.

On 18 June 1990, FBNI, Rima and Alegre, through Atty. Rozil Lozares, filed an Answer alleging that the broadcasts against AMEC were fair and true. FBNI, Rima and Alegre claimed that they were plainly impelled by a sense of public duty to report the goings-on in AMEC, [which is] an institution imbued with public interest.

Issue:

WON FBNI AMEC is not entitled to moral damages because it is a corporation.

Ruling:

SC ruled in the negative. A juridical person is generally not entitled to moral damages because, unlike a natural person, it cannot experience physical suffering or such sentiments as wounded feelings, serious anxiety, mental anguish or moral shock.

Nevertheless, AMEC’s claim for moral damages falls under item 7 of Article 2219 of the Civil Code. This provision expressly authorizes the recovery of moral damages in cases of libel, slander or any other form of defamation. Article 2219(7) does not qualify whether the plaintiff is a natural or juridical person. Therefore, a juridical person such as a corporation can validly complain for libel or any other form of defamation and claim for moral damages.

The Court of Appeals cites Mambulao Lumber Co. v. PNB, et al. to justify the award of moral damages. However, the Court’s statement in Mambulao that „a corporation may have a good reputation which, if besmirched, may also be a ground for the award of moral damages is an obiter dictum.

6. ABS-CBN BROADCASTING CORPORATION vs HONORABLE COURT OF APPEALS, REPUBLIC BROADCASTING CORP, VIVA PRODUCTION, INC., and VICENTE DEL ROSARIO

FACTS:

ABS CBN entered into a Film Exhibition Agreement with Viva Films sometime in 1990. Viva gave ABS-CBN an exclusive right to exhibit some Viva films. Sometime in December 1991, said agreement

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stated the following provision: 1.4 ABS-CBN shall have the right of first refusal to the next twenty-four (24) Viva films for TV telecast under such terms as may be agreed upon by the parties hereto, provided, however, that such right shall be exercised by ABS-CBN from the actual offer in writing. Viva, through defendant Del Rosario, offered ABS-CBN, through its vice-president Charo Santos-Concio, a list of three(3) film packages (36 title) from which ABS-CBN may exercise its right of first refusal under the afore-said agreement. However, Abs cbn through Ms Concio, wrote to Viva stating that it had difficulty in purchasing the said packages and that it can tick off only 10 titles and therefore did not accept the list. On February 27, 1992, defendant Del Rosario approached ABS-CBN's Ms. Concio, with a list consisting of 52 original movie titles (i.e. not yet aired on television) including the 14 titles subject of the present case, as well as 104 re-runs (previously aired on television) from which ABS-CBN may choose another 52 titles, as a total of 156 titles, proposing to sell to ABS-CBN airing rights over this package of 52 originals and 52 re-runs.

Sometime in April 1992, defendant del Rosario and abs cbns eugenio lopez met at tamarind grill in quezon city, to discuss the package proposal of viva. Mr. Lopez testified that he and Mr. Del Rosario allegedly agreed that ABS-CRN was granted exclusive film rights to fourteen (14) films for a

total consideration of P36 million; that he allegedly put this agreement as to the price and number of films in a "napkin'' and signed it and gave it to Mr. Del Rosario. The latter denied such allegations. Thereafter, del Rosario, through his secretary,received a draft contract from ms concio stating therein the list and such other counteroffers. A counterproposal was made by del Rosario which abs cbn did not accept. Thereafter, after negotiations and meetings, defendant Del Rosario and Viva's President Teresita Cruz, in consideration of P60 million, signed a letter of agreement dated April 24, 1992. granting RBS the exclusive right to air 104 Viva-produced and/or acquired films including the fourteen (14) films subject of the present case. ABS CBN then filed a case before the RTC a complaint for specific performance with a prayer for a writ of preliminary injunction and/or temporary restraining order against private respondents Republic Broadcasting Corporation Viva Production, and Vicente Del Rosario.

ISSUE:

(1) whether there was a perfected contract between VIVA and ABS-CBN (2) whether del rosario was authorized by the Board of the Corporation to accept ABS-CBN's counter-offer

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HELD:

1) No. The first issue should be resolved against ABS-CBN. A contract is a meeting of minds between two persons whereby one binds himself to give something or to render some service to another 37 for a consideration. there is no contract unless the following requisites concur: (1) consent of the contracting parties; (2) object certain which is the subject of the contract; and (3) cause of the obligation, which is established.

When Mr. Del Rosario of VIVA met with Mr. Lopez of ABS-CBN at the Tamarind Grill on 2 April 1992 to discuss the package of films, said package of 104 VIVA films was VIVA's offer to ABS-CBN to enter into a new Film Exhibition Agreement. But ABS-CBN, sent, through Ms. Concio, a counter-proposal in the form of a draft contract proposing exhibition of 53 films for a consideration of P35 million. This counter-proposal could be nothing less than the counter-offer of Mr. Lopez during his conference with Del Rosario at Tamarind Grill Restaurant. Clearly, there was no acceptance of VIVA's offer, for it was met by a counter-offer which substantially varied the terms of the offer.

2) Under Corporation Code, 46 unless otherwise provided by said Code, corporate powers, such as the power; to enter into

contracts; are exercised by the Board of Directors. However, the Board may delegate such powers to either an executive committee or officials or contracted managers. The delegation, except for the executive committee, must be for specific purposes, 47 Delegation to officers makes the latter agents of the corporation; accordingly, the general rules of agency as to the bindings effects of their acts would apply. 48 For such officers to be deemed fully clothed by the corporation to exercise a power of the Board, the latter must specially authorize them to do so. That Del Rosario did not have the authority to accept ABS-CBN's counter-offer was best evidenced by his submission of the draft contract to VIVA's Board of Directors for the latter's approval. In any event, there was between Del Rosario and Lopez III no meeting of minds.

7. JARDINE DAVIES INC., petitioner,

vs.

COURT OF APPEALS and FAR EAST MILLS SUPPLY CORPORATION, respondents.

FACTS:

To remedy and curtail further losses due to series of power failures, petitioner PUREFOODS decided to install 2 generators in its food processing plant in San Roque, Marikina City.

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A bidding for the supply and installation of the generators was held. Out of the prospective bidder, only FAR EAST MILLS SUPPLY CORPORATION (FEMSCO), MONARK and ADVANCE POWER submitted bid proposals and gave bid bonds as required.

Thereafter, PUREFOODS confirmed the award of the contract to FEMSCO. Immediately, FEMSCO submitted the required performance bond and contractor's all-risk insurance policy which PUREFOODS acknowledged. FEMSCO made arrangements with its principal and started the PUREFOODS project by purchasing the necessary materials. PUREFOODS on the other hand returned FEMSCO's Bidder's Bond as requested.

Later, however, PUREFOODS unilaterally canceled the award. FEMSCO protested the cancellation and sought a meeting with PUREFOODS. Before the matter could be resolved, PUREFOODS already awarded the project and entered into a contract with JARDINE NELL.

FEMSCO thus wrote PUREFOODS to honor its contract and to JARDINE to cease and desist from delivering and installing the generators. Its demand letters unheeded, FEMSCO sued both PUREFOODS and JARDINE. After FEMSCO presented its evidence, JARDINE filed a Demurrer which was granted by the trial court.

The trial court rendered a decision ordering PUREFOODS to indemnify FEMSCO representing the value of engineering services it rendered; to pay FEMSCO its contractor's mark-up on installation work; to pay attorney's fees; and pay costs. Trial court dismissed the counterclaim filed by PUREFOODS.

Both FEMSCO and PUREFOODS appealed to the Court of Appeals. FEMSCO appealed the Resolution of the trial court which granted the Demurrer to Evidence filed by JARDINE resulting in the dismissal of the complaint against it, while PUREFOODS appealed the Decision of the same court which ordered it to pay FEMSCO.

The Court of Appeals affirmed in toto the Decision of the trial court. It also reversed the lower court and ordered JARDINE to pay FEMSCO damages for inducing PUREFOODS to violate the latter's contract with FEMSCO. PUREFOODS was also directed to pay FEMSCO moral and exemplary damages as well as attorney's fees. Court of Appeals denied separate motions for reconsideration filed by PUREFOODS and JARDINE.

PUREFOODS argues that its letter to FEMSCO was not an acceptance of the latter's bid proposal and award of the project but more of a qualified acceptance constituting a counter-offer. Since PUREFOODS never received FEMSCO's

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conforme, PUREFOODS was very well within reason to revoke its qualified acceptance or counter-offer. Hence, no contract was perfected between PUREFOODS and FEMSCO.

JARDINE asserts that the records are bereft of any showing that it had prior knowledge of the supposed contract between PUREFOODS and FEMSCO, and that it induced PUREFOODS to violate the latter's alleged contract with FEMSCO. Moreover, JARDINE reasons that FEMSCO, an artificial person, is not entitled to moral damages. But granting arguendo that the award of moral damages is proper, said award is extremely excessive.

ISSUES:

1. Whether there existed a perfected contract between PUREFOODS and FEMSCO and whether there was an acceptance of the offer, and if so, if it was communicated, thereby perfecting the contract.; and

2. Whether there is any showing that JARDINE induced or connived with PUREFOODS to violate the latter's contract with FEMSCO.

RULING:

1. Contracts are perfected by mere consent, upon the acceptance by the offeree of the offer made by the offeror.

From that moment, the parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences which, according to their nature, may be in keeping with good faith, usage and law. To produce a contract, the acceptance must not qualify the terms of the offer. However, the acceptance may be express or implied. For a contract to arise, the acceptance must be made known to the offeror. Accordingly, the acceptance can be withdrawn or revoked before it is made known to the offeror.

Since petitioner PUREFOODS started the process of entering into the contract by conducting a bidding, Art. 1326 of the Civil Code, which provides that "[a]dvertisements for bidders are simply invitations to make proposals," applies. Accordingly, the Terms and Conditions of the Bidding disseminated by petitioner PUREFOODS constitutes the "advertisement" to bid on the project. The bid proposals or quotations submitted by the prospective suppliers including respondent FEMSCO, are the offers. And, the reply of petitioner PUREFOODS, the acceptance or rejection of the respective offers.

Quite obviously, the letter of petitioner. PUREFOODS to FEMSCO constituted acceptance of respondent FEMSCO's offer as

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contemplated by law. The tenor of the letter, i.e., "This will confirm that Pure Foods has awarded to your firm (FEMSCO) the project," could not be more categorical. In fine, the enumerated "basic terms and conditions" were prescriptions on how the obligation was to be performed and implemented. They were far from being conditions imposed on the perfection of the contract.

As can be inferred from the actual phrase used in the first portion of the letter, the decision to award the contract has already been made. The letter only serves as a confirmation of such decision. Hence, to the Court's mind, there is already an acceptance made of the offer received by Purefoods.

This Court has awarded in the past moral damages to a corporation whose reputation has been besmirched. In the instant case, respondent FEMSCO has sufficiently shown that its reputation was tarnished after it immediately ordered equipment from its suppliers on account of the urgency of the project, only to be canceled later. We thus sustain respondent appellate court's award of moral damages. We however reduce the award from P2,000,000.00 to P1,000,000.00, as moral damages are never intended to enrich the recipient. Likewise, the award of exemplary

damages by way of example for the public good is excessive and should be reduced to P100,000.00.

2. While it may seem that petitioners PUREFOODS and JARDINE connived to deceive respondent FEMSCO, we find no specific evidence on record to support such perception. Likewise, there is no showing whatsoever that petitioner JARDINE induced petitioner PUREFOODS. The similarity in the design submitted to petitioner PUREFOODS by both petitioner JARDINE and respondent FEMSCO, and the tender of a lower quotation by petitioner JARDINE are insufficient to show that petitioner JARDINE indeed induced petitioner PUREFOODS to violate its contract with respondent FEMSCO.

Resolution of the trial court and ordering petitioner JARDINE DAVIES, INC., to pay private respondent moral damages is REVERSED and SET ASIDE for insufficiency of evidence; and the assailed Decision of the Court of Appeals ordering petitioner PUREFOODS CORPORATION to pay private respondent FAR EAST MILLS SUPPLY CORPORATION the sum representing the value of engineering services it rendered, contractor's mark-up on installation work, as well as attorney's fees is AFFIRMED plus

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moral damages and exemplary damages.

8. MAMBULAO LUMBER COMPANY v. PNB

G.R. No. L-22973January 30, 1968 FACTS:On May 5, 1956 the plaintiff applied for an industrial loan of P155,000 (approved for a loan of P100,000 only) with the Naga Branch of defendant PNB. To secure payment, the plaintiff mortgaged a parcel of land, together with the buildings and improvements existing thereon, situated in the poblacion of Jose Panganiban (formerly Mambulao), province of Camarines Norte. The PNB released from the approved loan the sum of P27, 500, and another release of P15,500 to which the plaintiff executed a promisory note wherein it promised to pay to the PNB the said sum in five equal yearly installments.

However, the plaintiff failed to pay the amortization on the amounts released to and received by it. Repeated demands were made upon the plaintiff to pay its obligation but it failed or otherwise refused to do so. It was found that the plaintiff had already stopped operation about the end of 1957 or early part of 1958.

The unpaid obligation of the plaintiff as of September 22,

1961, amounted to P57,646.59, excluding attorney's fees. A foreclosure sale of the parcel of land, together with the buildings and improvements thereon was, held on November 21, 1961, and the said property was sold to the PNB for the sum of P56,908.00, subject to the right of the plaintiff to redeem the same within a period of one year. The plaintiff sent a letter reiterating its request that the foreclosure sale of the mortgaged chattels be discontinued on the grounds that the mortgaged indebtedness had been fully paid and that it could not be legally effected at a place other than the City of Manila.

The trial court sentenced the Mambulao Lumber Company to pay to the defendant PNB the sum of P3,582.52 with interest thereon at the rate of 6% per annum. The plaintiff on appeal advanced that its total indebtedness to the PNB as of November 21, 1961, was only P56,485.87 and not P58,213.51 as concluded by the court a quo; hence, the proceeds of the foreclosure sale of its real property alone in the amount of P56,908.00 on that date, added to the sum of P738.59 it remitted to the PNB thereafter was more than sufficient to liquidate its obligation, thereby rendering the subsequent foreclosure sale of its chattels unlawful; That for the acts of the PNB in proceeding with the sale

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of the chattels, in utter disregard of plaintiff's vigorous opposition thereto, and in taking possession thereof after the sale thru force, intimidation, coercion, and by detaining its "man-in-charge" of said properties, the PNB is liable to plaintiff for damages and attorney's fees. ISSUE: Whether or not PNB may

be held liable to plaintiff Corporation for damages and attorney’s fees.

 HELD:Herein appellant's claim for moral damages seems to have no legal or factual basis. Obviously, an artificial person like herein appellant corporation cannot experience physical sufferings, mental anguish, fright, serious anxiety, wounded feelings, moral shock or social humiliation which are basis of moral damages. A corporation may have a good reputation which, if besmirched, may also be aground for the award of moral damages. The same cannot be considered under the facts of this case, however, not only because it is admitted that herein appellant had already ceased in its business operation at the time of the foreclosure sale of the chattels, but also for the reason that whatever adverse effects of the foreclosure sale of the chattels could have upon its reputation or business standing would undoubtedly be the same

whether the sale was conducted at Jose Panganiban, Camarines Norte, or in Manila which is the place agreed upon by the parties in the mortgage contract. But for the wrongful acts of herein appellee bank and the deputy sheriff of Camarines Norte in proceeding with the sale in utter disregard of the agreement to have the chattels sold in Manila as provided for in the mortgage contract, to which their attentions were timely called by herein appellant, and in disposing of the chattels in gross for the miserable amount of P4,200.00, herein appellant should be awarded exemplary damages in the sum of P10,000.00. The circumstances of the case also warrant the award of P3,000.00 as attorney's fees for herein appellant

9. People vs Manero

G.R. Nos. 86883-85 January 29, 1993

Facts:

On 11 April 1985, around 10:00 o'clock in the morning, the Manero brothers Norberto Jr., Edilberto and Elpidio, along with Rodrigo Espia, Severino Lines, Rudy Lines, Efren Pleñago and Roger Bedaño, were inside the eatery of one Reynaldo Diocades at Km. 125, La Esperanza, Tulunan, Cotabato.

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They were conferring with Arsenio Villamor, Jr., private secretary to the Municipal Mayor of Tulunan, Cotabato, and his two (2) unidentified bodyguards. Plans to liquidate a number of suspected communist sympathizers were discussed. Arsenio Villamor, Jr. scribbled on a cigarette wrapper the following "NPA v. NPA, starring Fr. Peter, Domingo Gomez, Bantil, Fred Gapate, Rene alias Tabagac and Villaning." "Fr. Peter" is Fr. Peter Geremias, an Italian priest suspected of having links with the communist movement; "Bantil" is Rufino Robles, a Catholic lay leader who is the complaining witness in the Attempted Murder; Domingo Gomez is another lay leader, while the others are simply "messengers". On the same occasion, the conspirators agreed to Edilberto Manero's proposal that should they fail to kill Fr. Peter Geremias, another Italian priest would be killed in his stead.

At about 1:00 o'clock that afternoon, Elpidio Manero with two (2) unidentified companions nailed a placard on a street-post beside the eatery of Deocades. The placard bore the same inscriptions as those found on the cigarette wrapper except for the additional phrase "versus Bucay, Edil and Palo." Some two (2) hours later, Elpidio also posted a wooden placard bearing the same message on a street cross-sign close to the eatery.

Later, at 4:00 o'clock, the Manero brothers, together with Espia and

the four (4) appellants, all with assorted firearms, proceeded to the house of "Bantil", their first intended victim, which was also in the vicinity of Deocades' carinderia. They were met by "Bantil" who confronted them why his name was included in the placards. Edilberto brushed aside the query; instead, he asked "Bantil" if he had any qualms about it, and without any provocation, Edilberto drew his revolver and fired at the forehead of "Bantil". "Bantil" was able to parry the gun, albeit his right finger and the lower portion of his right ear were hit. Then they grappled for its possession until "Bantil" was extricated by his wife from the fray. But, as he was running away, he was again fired upon by Edilberto. Only his trousers were hit. "Bantil" however managed to seek refuge in the house of a certain Domingo Gomez. Norberto, Jr., ordered his men to surround the house and not to allow any one to get out so that "Bantil" would die of hemorrhage. Then Edilberto went back to the restaurant of Deocades and pistol-whipped him on the face and accused him of being a communist coddler, while appellants and their cohorts relished the unfolding drama.

Moments later, while Deocades was feeding his swine, Edilberto strewed him with a burst of gunfire from his M-14 Armalite. Deocades cowered in fear as he knelt with both hands clenched at the back of his head. This again drew

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boisterous laughter and ridicule from the dreaded desperados.

At 5:00 o'clock, Fr. Tulio Favali arrived at Km. 125 on board his motorcycle. He entered the house of Gomez. While inside, Norberto, Jr., and his co-accused Pleñago towed the motorcycle outside to the center of the highway. Norberto, Jr., opened the gasoline tank, spilled some fuel, lit a fire and burned the motorcycle. As the vehicle was ablaze, the felons raved and rejoiced.

Upon seeing his motorcycle on fire, Fr. Favali accosted Norberto, Jr. But the latter simply stepped backwards and executed a thumbs-down signal. At this point, Edilberto asked the priest: "Ano ang gusto mo, padre (What is it you want, Father)? Gusto mo, Father, bukon ko ang ulo mo (Do you want me, Father, to break your head)?" Thereafter, in a flash, Edilberto fired at the head of the priest. As Fr. Favali dropped to the ground, his hands clasped against his chest, Norberto, Jr., taunted Edilberto if that was the only way he knew to kill a priest. Slighted over the remark, Edilberto jumped over the prostrate body three (3) times, kicked it twice, and fired anew. The burst of gunfire virtually shattered the head of Fr. Favali, causing his brain to scatter on the road. As Norberto, Jr., flaunted the brain to the terrified onlookers, his brothers danced and sang "Mutya Ka Baleleng" to the delight of their comrades-in-arms who now took

guarded positions to isolate the victim from possible assistance

Issue: Is there conspiracy?

Held: Yes. Under the law, there is conspiracy when two or more persons come to an agreement to commit a crime and decide to commit it. It is not essential that all the accused commit together each and every act constitutive of the offense. It is enough that an accused participates in an act or deed where there is singularity of purpose, and unity in its execution is present.

In this case, The other six accused, all armed with high powered firearms, were positively identified with Norberto Manero, Jr. and Edilberto Manero in the carinderia of Reynaldo Deocades in La Esperanza, Tulunan, Cotabato at 10:00 o'clock in the morning of 11 April 1985 morning . . . they were outside of the carinderia by the window near the table where Edilberto Manero, Norberto Manero, Jr., Jun Villamor, Elpidio Manero and unidentified members of the airborne from Cotabato were grouped together. Later that morning, they all went to the cockhouse nearby to finish their plan and drink tuba. They were seen again with Edilberto Manero and Norberto Manero, Jr., at 4:00 o'clock in the afternoon of that day near the house of Rufino Robles (Bantil) when Edilberto Manero shot Robles. They surrounded the house of Domingo Gomez where Robles fled and hid, but later left

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when Edilberto Manero told them to leave as Robles would die of hemorrhage. They followed Fr. Favali to Domingo Gomez' house, witnessed and enjoyed the burning of the motorcycle of Fr. Favali and later stood guard with their firearms ready on the road when Edilberto Manero shot to death Fr. Favali. Finally, they joined Norberto Manero, Jr. and Edilberto Manero in their enjoyment and merriment on the death of the priest. 26

it is clear that appellants were not merely innocent bystanders but were in fact vital cogs in perpetrating the savage murder of Fr. Favali and the attempted murder of Rufino Robles by the Manero brothers and their militiamen. For sure, appellants all assumed a fighting stance to discourage if not prevent any attempt to provide assistance to the fallen priest. They surrounded the house of Domingo Gomez to stop Robles and the other occupants from leaving so that the wounded Robles may die of hemorrhage. Undoubtedly, these were overt acts to ensure success of the commission of the crimes and in furtherance of the aims of the conspiracy. The appellants acted in concert in the murder of Fr. Favali and in the attempted murder of Rufino Robles. While accused-appellants may not have delivered the fatal shots themselves, their collective action showed a common intent to commit the criminal acts.

10. RENATO REAL VS SANGU PHILIPPINES

Facts:Petitioner Renato Real was

the Manager of respondent corporation Sangu Philippines, Inc., a corporation engaged in the business of providing manpower for general services, like janitors, janitresses and other maintenance personnel, to various clients. Petitioner was removed from his position as Manager through Board Resolution 2001-03[3] adopted by respondent corporation’s Board of Directors.

The Labor Arbiter declared petitioner and his co-complainants as having been illegally dismissed. Respondent thus appealed to the National Labor Relations Commission (NLRC) and raised therein as one of the issues the lack of jurisdiction of the Labor Arbiter over petitioner’s complaint.  Respondents claimed that petitioner is both a stockholder and a corporate officer of respondent corporation, hence, his action against respondents is an intra-corporate controversy over which the Labor Arbiter has no jurisdiction. 

NLRC found Respondent’s contention meritorious. On appeal by Petitioner, CA affirmed NLRC’s decision. Hence this petition.

Issue:Whether or not Petitioner’s

complaint for illegal dismissal constitutes an intra-corporate controversy and thus, beyond the Labor Arbiter’s jurisdiction.

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Held:No. Petitioner’s complaint for

illegal dismissal against respondents is not intra-corporate. Rather, it is a termination dispute and, consequently, falls under the jurisdiction of the Labor Arbiter pursuant to Section 217[30] of the Labor Code.

‘To determine whether a case involves an intra-corporate controversy, and is to be heard and decided by the branches of the RTC specifically designated by the Court to try and decide such cases, two elements must concur: (a) the status or relationship of the parties, and (2) the nature of the question that is the subject of their controversy.

The first element requires that the controversy must arise out of intra-corporate or partnership relations between any or all of the parties and the corporation, partnership, or association of which they are not stockholders, members or associates, between any or all of them and the corporation, partnership or association of which they are stockholders, members or associates, respectively; and between such corporation, partnership, or association and the State insofar as it concerns the individual franchises.  The second element requires that the dispute among the parties be intrinsically connected with the regulation of the corporation.  If the nature of the controversy involves matters that are purely civil in character, necessarily, the case does not

involve an intra-corporate controversy.’

In the case at bar, there is No intra-corporate relationship between the parties. In applying the relationship test, therefore, it is necessary to determine if petitioner is a corporate officer of Respondent Corporation so as to establish the intra-corporate relationship between the parties. ‘Corporate officers’ in the context of Presidential Decree No. 902-A are those officers of the corporation who are given that character by the Corporation Code or by the corporation’s by-laws.  Respondents failed to prove that petitioner was appointed by the board of directors.  Thus, we cannot subscribe to their claim that petitioner is a corporate officer.  Having said this, we find that there is no intra-corporate relationship between the parties insofar as petitioner’s complaint for illegal dismissal is concerned and that same does not satisfy the relationship test.

Further, going to the nature of controversy test, the present controversy does not relate to intra-corporate dispute. Respondents terminated the services of petitioner for the following reasons: (1) his continuous absences at his post at Ogino Philippines, Inc; (2) respondents’ loss of trust and confidence on petitioner; and, (3) to cut down operational expenses to reduce further losses being experienced by the corporation. From these, it is not difficult to see that the reasons

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given by respondents for dismissing petitioner have something to do with his being a Manager of Respondent Corporation and nothing with his being a director or stockholder. For one, petitioner’s continuous absences in his post in Ogino relates to his performance as Manager.  Second, respondents’ loss of trust and confidence in petitioner stemmed from his alleged acts  of establishing a company engaged in the same line of business as respondent corporation’s and submitting proposals to the latter’s clients while he was still serving as its Manager.  While we note that respondents also claim these acts as constituting acts of disloyalty of petitioner as director and stockholder, we, however, think that same is a mere afterthought on their part to make it appear that the present case involves an element of intra-corporate controversy.  This is because before the Labor Arbiter, respondents did not see such acts to be disloyal acts of a director and stockholder but rather, as constituting willful breach of the trust reposed upon petitioner as Manager.[28]  It was only after respondents invoked the Labor Arbiter’s lack of jurisdiction over petitioner’s complaint in the Supplemental Memorandum of Appeal[29] filed before the NLRC that respondents started considering said acts as such. Third, in saying that they were dismissing petitioner to cut operational expenses, respondents actually want to save on the

Manager.  Thus, when petitioner sought for reinstatement, he wanted to recover his position as Manager, a position which we have, however, earlier declared to be not a corporate position.  He is not trying to recover a seat in the board of directors or to any appointive or elective corporate position which has been declared vacant by the board.  Certainly, what we have here is a case of termination of employment which is a labor controversy and not an intra-corporate dispute.  In sum, we hold that petitioner’s complaint likewise does not satisfy the nature of controversy test. 

11. STRATEGIC ALLIANCE VS. STAR INFRASTRUCTURE

Facts:

 STRADEC is a domestic corporation primarily engaged in the business of a development company in all the elements and details thereof, with principal place of business at Poblacion Sur, Bayambang, Pangasinan. STRADEC incorporated respondent Star Infrastructure Development Corporation (SIDC) on 28 October 1997, for the purpose of engaging in the general construction business.

On 8 October 2004, respondents Aderito Z. Yujuico and Bonifacio C. Sumbilla, in their respective capacities as then President and Treasurer of STRADEC, executed a promissory note for and in

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consideration of a loan in the sum of P10,000,000.00 ostensibly extended in favor of said corporation by respondent Robert L. Wong, one of the incorporators of SIDC. In view of STRADEC’s repeated default on its obligations, however, the shares thus pledged were sold by way of the 26 April 2005 notarial sale conducted in Makati City by respondent Raymond M. Caraos.

STRADEC, commenced the instant suit with the filing of the petition with the Regional Trial Court (RTC) of Batangas City, sitting as a Special Commercial Court (SCC).   STRADEC alleged, among other matters, that respondents Yujuico and Sumbilla were not authorized to enter into any loan agreement with respondent Wong, much less pledge its SIDC shareholdings as security therefor; that it did not receive the proceeds of the supposed loan and  immediately apprised SIDC of the irregularity of the transaction upon discovering the same; that it was only able to ascertain the details of the transaction and transfer of the subject shares from a narration thereof in a Certification dated 3 September 2005 issued by respondent Tabalingcos; and, that respondent Wong subsequently sold the shares to respondent Cypress Tree Capital Investment, Inc. (CTCII), a corporation he formed with members of his own family on 5 July 2005.

STRADEC prayed for the grant of the following reliefs: (a) the nullification of the loan and pledge

respondents Yujuico and Sumbilla contracted with respondent Wong; (b) the avoidance of the notarial sale conducted by respondent Caraos; (c) the cancellation of the transfer of its shares in SIDC’s books; (d) the invalidation of the 30 July 2005 and 20 July 2006 SIDC stockholders’ meetings; and, (e) the grant of its claims for attorney’s fees and the costs.

RTC denied. CA upheld. Hence, this petition.

Issue:

Did the Court of Appeals grievously err in not characterizing the first and second causes of action in civil case no. 7956 as intra-corporate and place its venue and jurisdiction in RTC Batangas city?

Ruling:

Yes. We find merit in the petition. An intra-corporate dispute is understood as a suit arising from intra-corporate relations or between or among stockholders or between any or all of them and the corporation.  Applying what has come to be known as the relationship test, it has been held that the types of actions embraced by the foregoing definition include the following suits: (a) between the corporation, partnership or association and the public; (b) between the corporation, partnership or association and its stockholders, partners, members, or officers; (c) between the corporation,

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partnership or association and the State insofar as its franchise, permit or license to operate is concerned; and, (d) among the stockholders, partners or associates themselves.  As the definition is broad enough to cover all kinds of controversies between stockholders and corporations, the traditional interpretation was to the effect that the relationship test brooked no distinction, qualification or any exemption whatsoever.

 It was held that the better policy in determining which body has jurisdiction over a case would be to consider not only the status or relationship of the parties but also the nature of the question that is the subject of their controversy.  Under the nature of the controversy test, the dispute must not only be rooted in the existence of an intra-corporate relationship, but must also refer to the enforcement of the parties' correlative rights and obligations under the Corporation Code as well as the internal and intra-corporate regulatory rules of the corporation.   The combined application of the relationship test and the nature of the controversy test has, consequently, become the norm in determining whether a case is an intra-corporate controversy or is purely civil in character.

 Applying the relationship test, we find that STRADEC’s first and second causes of action qualify as intra-corporate disputes since said corporation and respondent Wong

are incorporators and/or stockholders of SIDC.

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