Corporation Cases for November 22

8/9/2019 Corporation Cases for November 22

http://slidepdf.com/reader/full/corporation-cases-for-november-22 1/95



IN @IE OF A&& TBE FOREOIN, t$e Co%rt ren"er %"ment in #avor o# t$e plaintif an"

aaint t$e "e#en"ant t$e 9niverit5 P%bli$in Co!, In.!, or"erin t$e "e#en"ant to pa5

t$e a"minitrator 7%to R! Albert, t$e %m o# P2(,000!00 +it$ leal Drate o# interet #rom

t$e "ate o# t$e 3lin o# t$i .omplaint %ntil t$e +$ole amo%nt $all $ave been #%ll5 pai"!

T$e "e#en"ant $all alo pa5 t$e .ot! T$e .o%nter.laim o# t$e "e#en"ant i $ereb5

"imie" #or la.6 o# evi"en.e!

A a#oreai", +e re"%.e" t$e amo%nt o# "amae to P1*,000!00, to be ee.%te" in #%ll!

T$erea#ter, on 7%l5 22, 1'1, t$e .o%rt a 'uo or"ere" i%an.e o# an ee.%tion +rit aaint

9niverit5 P%bli$in Co!, In.! Plaintif, $o+ever, on A%%t 10, 1'1, petitione" #or a +rit

o# ee.%tion aaint (ose M. Aruego, as the real defendant , tatin, plaintif< .o%nel an"

t$e S$erif o# 8anila "i.overe" t$at there is no such entity as University Publishing Co.,nc. Plaintif annee" to $i petition a .erti3.ation #rom t$e e.%ritie an" E.$ane

Commiion "ate" 7%l5 (1, 1'1, attetinG T$e re.or" o# t$i Commiion "o not $o+

t$e reitration o# 9NI@ERSITH P9&ISBIN CO!, INC!, eit$er a a .orporation or

partner$ip! 9niverit5 P%bli$in Co!, In.! .o%ntere" b5 3lin, t$ro%$ .o%nel 7oe 8!

Ar%eo< o+n la+ 3rm/, a mani#etation tatin t$at 7oe 8! Ar%eo i not a part5 to t$i

.ae, an" t$at, t$ere#ore, plaintif< petition $o%l" be "enie"!

Parent$eti.all5, it i not $ar" to "e.ip$er +$5 9niverit5 P%bli$in Co!, In.!, t$ro%$

.o%nel, +o%l" not +ant 7oe 8! Ar%eo to be .oni"ere" a part5 to t$e preent .aeG

$o%l" a eparate a.tion be no+ intit%te" aaint 7oe 8! Ar%eo, t$e plaintif +ill $ave to

re.6on +it$ t$e tat%te o# limitation!

T$e .o%rt a 'uo "enie" t$e petition b5 or"er o# September ', 1'1, an" #rom t$i, plaintif

$a appeale"!

T$e #a.t o# non-registration o# 9niverit5 P%bli$in Co!, In.! in t$e Se.%ritie an"

E.$ane Commiion $a not been "ip%te"! >e#en"ant +o%l" onl5 raie t$e point t$at

9niverit5 P%bli$in Co!, In.!, an" not 7oe 8! Ar%eo, i t$e part5 "e#en"ant; t$ereb5

a%min t$at 9niverit5 P%bli$in Co!, In.! i an eitin .orporation +it$ an

in"epen"ent %ri"i.al peronalit5! Pre.iel5, $o+ever, on a..o%nt o# t$e non-reitration it

.annot be .oni"ere" a .orporation, not even a .orporation de facto Ball v! Pi..io, )

P$il! 0(/! It $a t$ere#ore no peronalit5 eparate #rom 7oe 8! Ar%eo; it .annot be %e"

in"epen"entl5!

T$e .orporation-b5-etoppel "o.trine $a not been invo6e"! At an5 rate, t$e ame i

inappli.able $ere! Ar%eo repreente" a non-eitent entit5 an" in"%.e" not onl5 t$e

plaintif b%t even t$e .o%rt to believe in %.$ repreentation! Be ine" t$e .ontra.t a

Prei"ent o# 9niverit5 P%bli$in Co!, In.!, tatin t$at t$i +a a .orporation "%l5

orani:e" an" eitin %n"er t$e la+ o# t$e P$ilippine, an" obvio%l5 mile" plaintif

8ariano A! Albert/ into believin t$e ame! One +$o $a in"%.e" anot$er to a.t %pon $i

+il#%l mirepreentation t$at a .orporation +a "%l5 orani:e" an" eitin %n"er t$e la+,

.annot t$erea#ter et %p aaint $i vi.tim t$e prin.iple o# .orporation b5 etoppel

Salvatiera v! arlito, * O!! (0'/!



9niverit5 P%bli$in Co!, In.! p%rporte" to .ome to .o%rt, an+erin t$e .omplaint an"

litiatin %pon t$e merit! %t a tate", 9niverit5 P%bli$in Co!, In.! $a no

in"epen"ent peronalit5; it i %t a name! 7oe 8! Ar%eo +a, in realit5, t$e one +$o

an+ere" an" litiate", t$ro%$ $i o+n la+ 3rm a .o%nel! Be +a in #a.t, i# not, in

name, t$e "e#en"ant!

Even +it$ rear" to .orporation "%l5 orani:e" an" eitin %n"er t$e la+, +e $ave in

man5 a .ae pier.e" t$e veil o# .orporate 3.tion to a"miniter t$e en" o# %ti.e! J An"

in )alvatiera vs. *arlitos, supra, p! (0(, +e r%le"G A peron a.tin or p%rportin to a.t on

be$al# o# a .orporation +$i.$ $a no vali" eiten.e assumes such privileges andobligations and becomes personally liable #or .ontra.t entere" into or #or ot$er a.t

per#orme" a %.$ aent! Ba" 7oe 8! Ar%eo been name" a part5 "e#en"ant intea" o#,

or toet$er +it$, 9niverit5 P%bli$in Co!, In.!, t$ere +o%l" be no room #or "ebate a to

$i peronal liabilit5! Sin.e $e +a not o name", t$e matter o# "a5 in .o%rt an" "%e

pro.e $ave arien!

In t$i .onne.tion, it m%t be reali:e" t$at partie to a %it are peron +$o $ave a ri$t

to .ontrol t$e pro.ee"in, to ma6e "e#ene, to a""%.e an" .ro-eamine +itnee, an"

to appeal #rom a "e.iion C!7!S! ))/ ? an" Ar%eo +a, in realit5, t$e peron +$o

$a" an" eer.ie" t$ee ri$t! Clearl5, t$en, Ar%eo $a" $i "a5 in .o%rt a t$e real

"e#en"ant; an" "%e pro.e o# la+ $a been %btantiall5 oberve"!

5 "%e pro.e o# la+ +e mean a la+ +$i.$ $ear be#ore it .on"emn; +$i.$ pro.ee"

%pon in=%ir5, an" ren"er %"ment onl5 a#ter trial! !!! ! 4 $eaton, 9!S! *1), *)1!/; or,

a t$i Co%rt $a ai", >%e pro.e o# la+ .ontemplate noti.e an" opport%nit5 to be

$ear" be#ore %"ment i ren"ere", afe.tin one< peron or propert5 &ope: v! >ire.tor

o# &an", 4 P$il! 2(, (2/! Si.at v! Re5e, &-1102(, >e.! 14, 1'*!/ An" it ma5 not be

ami to mention $ere alo t$at t$e "%e pro.e .la%e o# t$e Contit%tion i "eine" to

e.%re %ti.e a a livin realit5; not to a.ri3.e it b5 pa5in %n"%e $omae to #ormalit5!

For substance m%t prevail over form! It ma5 no+ be trite, b%t none t$e le apt, to =%ote

+$at lon ao +e ai" in Alonso vs. +illamor , 1 P$il! (1*, (21-(22G

A litiation i not a ame o# te.$ni.alitie in +$i.$ one, more "eepl5 .$oole" an" 6ille"

in t$e %btle art o# movement an" poition, entrap an" "etro5 t$e ot$er! It i, rat$er, a

.ontet in +$i.$ ea.$ .onten"in part5 #%ll5 an" #airl5 la5 be#ore t$e .o%rt t$e #a.t in

i%e an" t$en, br%$in i"e a +$oll5 trivial an" in"e.iive all imper#e.tion o# #orm an"

te.$ni.alitie o# pro.e"%re, a6 t$at 7%ti.e be "one %pon t$e merit! &a+%it, %nli6e

"%el, are not to be +on b5 a rapier< t$r%t! Te.$ni.alit5, +$en it "eert it proper oK.e

a an ai" to %ti.e an" be.ome it reat $in"ran.e an" .$ie# enem5, "eerve .ant

.oni"eration #rom .o%rt! T$ere $o%l" be no vete" ri$t in te.$ni.alitie!

T$e evi"en.e i patentl5 .lear t$at 7oe 8! Ar%eo, a.tin a repreentative o# a non-

eitent prin.ipal, +a t$e real part5 to t$e .ontra.t %e" %pon; t$at $e +a t$e one +$o

reape" t$e bene3t re%ltin #rom it, o m%.$ o t$at partial pa5ment o# t$e

.oni"eration +ere ma"e b5 $im; t$at $e violate" it term, t$ereb5 pre.ipitatin t$e %it



in =%etion; an" t$at in t$e litiation $e +a t$e real "e#en"ant! Per#or.e, in line +it$ t$e

en" o# %ti.e, reponibilit5 %n"er t$e %"ment #all on $im!

e nee" $ar"l5 tate t$at $o%l" t$ere be peron +$o %n"er t$e la+ are liable to Ar%eo

#or reimb%rement or .ontrib%tion +it$ repe.t to t$e pa5ment $e ma6e %n"er t$e

%"ment in =%etion, $e ma5, o# .o%re, pro.ee" aaint t$em t$ro%$ proper reme"ialmea%re!

PRE8ISES CONSI>ERE>, t$e or"er appeale" #rom i $ereb5 et ai"e an" t$e .ae

reman"e" or"erin t$e lo+er .o%rt to $ol" %pplementar5 pro.ee"in #or t$e p%rpoe o#

.arr5in t$e %"ment into efe.t aaint 9niverit5 P%bli$in Co!, In.! an"Lor 7oe 8!

Ar%eo! So or"ere"!

A&'. Ma(()r No. R-181-" Ju*y 31, 198+

AELIO $. $RU%, .omplainant,

v!UITERIO L. ALIA!, )u(y /)r, RT$, Man*a, repon"ent!

R E S O & 9 T I O N

2ERNAN, J.:

In a +orn .omplaint "ate" 7%l5 2(, 1')4, A"elio C! Cr%: .$are" M%iterio &! >alia5,

Senior >ep%t5 S$erif o# 8anila, +it$ mal#eaan.e in oK.e, .orr%pt pra.ti.e an" erio%

irre%laritie allee"l5 .ommitte" a #ollo+G

1! Repon"ent $erif atta.$e" an"Lor levie" t$e mone5 belonin to .omplainant Cr%:

+$en $e +a not $imel# t$e %"ment "ebtor in t$e 3nal %"ment o# N&RC NCR Cae No!

)-12()'-'1 o%$t to be en#or.e" b%t rat$er t$e .ompan5 6no+n a M%alitran

&imo%ine Servi.e, In.!, a "%l5 reitere" .orporation; an",

2! Repon"ent li6e+ie .a%e" t$e ervi.e o# t$e alia +rit o# ee.%tion %pon .omplainant

+$o i a rei"ent o# Paa5 Cit5, "epite 6no+le"e t$at $i territorial %ri"i.tion .over

8anila onl5 an" "oe not eten" to Paa5 Cit5!

In $i Comment, repon"ent >alia5 eplaine" t$at +$en $e arni$e" .omplainant<

.a$ "epoit at t$e P$iltr%t ban6, $e +a merel5 per#ormin a miniterial "%t5! $ile it i

tr%e t$at ai" +rit +a a""ree" to M%alitran &imo%ine Servi.e, In.!, 5et it i alo a #a.t

t$at .omplainant $a" ee.%te" an aK"avit be#ore t$e Paa5 Cit5 aitant 3.al tatin

t$at $e i t$e o+nerLprei"ent o# ai" .orporation an", be.a%e o# t$at "e.laration, t$e

.o%nel #or t$e plaintif in t$e labor .ae a"vie" $im to erve noti.e o# arni$ment on

t$e P$iltr%t ban6!



On November 12, 1')4, t$i .ae +a re#erre" to t$e Ee.%tive 7%"e o# t$e Reional Trial

Co%rt o# 8anila #or invetiation, report an" re.ommen"ation!

Prior to t$e termination o# t$e pro.ee"in, $o+ever, .omplainant ee.%te" an aK"avit o#

"eitan.e tatin t$at $e i no loner interete" in proe.%tin t$e .ae aaint

repon"ent >alia5 an" t$at it +a %t a mi%n"ertan"in bet+een t$em! 9ponrepon"ent< motion, t$e Ee.%tive 7%"e i%e" an or"er "ate" 8a5 2', 1')

re.ommen"in t$e "imial o# t$e .ae!

It $a been $el" t$at t$e "eitan.e o# .omplainant "oe not pre.l%"e t$e ta6in o#

"i.iplinar5 a.tion aaint repon"ent! Neit$er "oe it "i%a"e t$e Co%rt #rom impoin

t$e appropriate .orre.tive an.tion! One +$o $ol" a p%bli. poition, epe.iall5 an oK.e

"ire.tl5 .onne.te" +it$ t$e a"minitration o# %ti.e an" t$e ee.%tion o# %"ment, m%t

at all time be #ree #rom t$e appearan.e o# impropriet5!1

e $ol" t$at repon"ent< a.t%ation in en#or.in a %"ment aaint .omplainant +$o i

not t$e %"ment "ebtor in t$e .ae .all #or "i.iplinar5 a.tion! Coni"erin t$eminiterial nat%re o# $i "%t5 in en#or.in +rit o# ee.%tion, +$at i in.%mbent %pon $im

i to en%re t$at onl5 t$at portion o# a "e.iion or"aine" or "e.ree" in t$e "ipoitive part

$o%l" be t$e %be.t o# ee.%tion!2 No more, no le! T$at t$e title o# t$e .ae pe.i3.all5

name .omplainant a one o# t$e repon"ent i o# no moment a ee.%tion m%t .on#orm

to t$at "ire.te" in t$e "ipoitive portion an" not in t$e title o# t$e .ae!

T$e tenor o# t$e N&RC %"ment an" t$e implementin +rit i .lear eno%$! It "ire.te"

M%alitran &imo%ine Servi.e, In.! to reintate t$e "i.$are" emplo5ee an" pa5 t$em

#%ll ba.6+ae! Repon"ent, $o+ever, .$oe to pier.e t$e veil o# .orporate entit5

%%rpin a po+er belonin to t$e .o%rt an" a%me" improvi"entl5 t$at in.e t$e

.omplainant i t$e o+nerLprei"ent o# M%alitran &imo%ine Servi.e, In.!, t$e5 are one an"

t$e ame! It i a +ell-ettle" "o.trine bot$ in la+ an" in e=%it5 t$at a a leal entit5, a

.orporation $a a peronalit5 "itin.t an" eparate #rom it in"ivi"%al to.6$ol"er or

member! T$e mere #a.t t$at one i prei"ent o# a .orporation "oe not ren"er t$e

propert5 $e o+n or poee t$e propert5 o# t$e .orporation, in.e t$e prei"ent, a

in"ivi"%al, an" t$e .orporation are eparate entitie!(

Anent t$e .$are t$at repon"ent e.ee"e" $i territorial %ri"i.tion, %K.e it to a5 t$at

t$e +rit o# ee.%tion o%$t to be implemente" +a "ate" 7%l5 ', 1')4, or prior to t$e

i%an.e o# A"minitrative Cir.%lar No! 12 +$i.$ retrain a $erif #rom en#or.in a .o%rt

+rit o%ti"e $i territorial %ri"i.tion +it$o%t 3rt noti#5in in +ritin an" ee6in t$e

aitan.e o# t$e $erif o# t$e pla.e +$ere ee.%tion $all ta6e pla.e!

ACCOR>IN&H, +e 3n" Repon"ent >ep%t5 S$erif M%iterio &! >alia5 NE&IENT in t$e

en#or.ement o# t$e +rit o# ee.%tion in N&RC Cae-No! )-12()'-'1, an" a 3ne e=%ivalent

to t$ree D( mont$ alar5 i $ereb5 impoe" +it$ a tern +arnin t$at t$e .ommiion o#

t$e ame or imilar ofene in t$e #%t%re +ill merit a $eavier penalt5! &et a .op5 o# t$i

Reol%tion be 3le" in t$e peronal re.or" o# t$e repon"ent!

http://www.lawphil.net/judjuris/juri1987/jul1987/am_r-181-p_1987.html#fnt1








SO OR>ERE>!

G.R. No. L-6+66 Ar* 18, 1989

JOE REMO, JR., petitioner,

v!T#E #ON. INTERMEIATE A""ELLATE $OURT an& E.B. MAR$#A TRAN"ORT$OM"AN!, IN$., r)r)4)n()& y A"I2ANIO B. MAR$#A, repon"ent!

rbos, Cabusora, umlao & )ta. Ana for petitioner.

GAN$A!$O, J.:

A .orporation i an entit5 eparate an" "itin.t #rom it to.6$ol"er! $ile not in #a.t an"

in realit5 a peron, t$e la+ treat a .orporation a t$o%$ it +ere a peron b5 pro.e o#3.tion or b5 rear"in it a an arti3.ial peron "itin.t an" eparate #rom it in"ivi"%al

to.6$ol"er! 1

Bo+ever, t$e .orporate 3.tion or t$e notion o# leal entit5 ma5 be "irear"e" +$en it i

%e" to "e#eat p%bli. .onvenien.e, %ti#5 +ron, prote.t #ra%", or "e#en" .rime in +$i.$

intan.e t$e la+ +ill rear" t$e .orporation a an ao.iation o# peron, or in .ae o#

t+o .orporation, +ill mere t$em into one! T$e .orporate 3.tion ma5 alo be

"irear"e" +$en it i t$e mere alter eo or b%ine .on"%it o# a peron! T$ere are

man5 o..aion +$en t$i Co%rt pier.e" t$e .orporate veil be.a%e o# it %e to prote.t

#ra%" an" to %ti#5 +ron! 3 T$e $erein petition #or revie+ o# a! reol%tion o# t$e

Interme"iate Appellate Co%rt "ate" Febr%ar5 ), 1')4 ee6in t$e reveral t$ereo# an" t$e

reintatement o# it earlier "e.iion "ate" 7%ne (0, 1')( in AC-!R! No! )4'-R .all #or

t$e appli.ation o# t$e #oreoin prin.iple!

In t$e latter part o# >e.ember, 1' t$e boar" o# "ire.tor o# A6ron C%tom ro6erae

Corporation $ereina#ter re#erre" to a A6ron/, .ompoe" o# petitioner 7oe Remo, 7r!,

Erneto aare, Feli.iano Copra"a, 7emina Copra"a, an" >ario P%n:alan +it$ &%.ia

&a.ate a Se.retar5, a"opte" a reol%tion a%t$ori:in t$e p%r.$ae o# t$irteen 1(/ tr%.6

#or %e in it b%ine to be pai" o%t o# a loan t$e .orporation ma5 e.%re #rom an5

len"in intit%tion! 5

Feli.iano Copra"a, a Prei"ent an" C$airman o# A6ron, p%r.$ae" t$irteen tr%.6 #rom

private repon"ent on 7an%ar5 2*, 1') #or an" in .oni"eration o# P*2*,000!00 a

evi"en.e" b5 a "ee" o# abol%te ale! 6 In a i"e areement o# t$e ame "ate, t$e partie

aree" on a "o+npa5ment in t$e amo%nt o# P*0,000!00 an" t$at t$e balan.e o#

P4*,000!00 $all be pai" +it$in it5 0/ "a5 #rom t$e "ate o# t$e ee.%tion o# t$e

areement! T$e partie alo aree" t$at %ntil ai" balan.e i #%ll5 pai", t$e "o+n pa5ment

o# P*0,000!00 $all a..r%e a rental o# t$e 1( tr%.6; an" t$at i# A6ron #ail to pa5 t$e

balan.e +it$in t$e perio" o# 0 "a5, t$en t$e balan.e $all .ontit%te a a .$attel



mortae lien .overin ai" .aro tr%.6 an" t$e partie ma5 allo+ an etenion o# (0

"a5 an" t$erea#ter private repon"ent ma5 a6 #or a revo.ation o# t$e .ontra.t an" t$e

re.onve5an.e o# all ai" tr%.6! +

T$e obliation i #%rt$er e.%re" b5 a promior5 note ee.%te" b5 Copra"a in #avor o#

A6ron! It i tate" in t$e promior5 note t$at t$e balan.e $all be pai" #rom t$e pro.ee"o# a loan obtaine" #rom t$e >evelopment an6 o# t$e P$ilippine >P/ +it$in it5 0/

"a5! 8 A#ter t$e lape o# '0 "a5, private repon"ent trie" to .olle.t #rom Copra"a b%t t$e

latter promie" to pa5 onl5 %pon t$e releae o# t$e >P loan! Private repon"ent ent

Copra"a a letter o# "eman" "ate" 8a5 10, 1')! 9 In $i repl5 to t$e ai" letter, Copra"a

reiterate" t$at $e +a appl5in #or a loan #rom t$e >P #rom t$e pro.ee" o# +$i.$

pa5ment o# t$e obliation $all be ma"e! 10

8ean+$ile, t+o o# t$e tr%.6 +ere ol" %n"er a pacto de retro ale to a .ertain 8r! ai o#

t$e Perpet%al &oan an" Savin an6 at a.laran! T$e ale +a a%t$ori:e" b5 a boar"

reol%tion ma"e in a meetin $el" on 8ar.$ 1*, 1')! 11

9pon in=%ir5, private repon"ent #o%n" t$at no loan appli.ation +a ever 3le" b5 A6ron

+it$ >P! 1

In t$e meantime, A6ron pai" rental o# P*00!00 a "a5 p%r%ant to a %be=%ent

areement, #rom April 2, 1') t$e en" o# t$e '0-"a5 perio" to pa5 t$e balan.e/ to 8a5

(1, 1')! T$erea#ter, no more rental pa5ment +ere ma"e!

On 7%ne 1, 1'), Copra"a +rote private repon"ent bein #or a ra.e perio" o# %ntil

t$e en" o# t$e mont$ to pa5 t$e balan.e o# t$e p%r.$ae pri.e; t$at $e +ill %p"ate t$e

rental +it$in t$e +ee6; an" in .ae $e #ail, t$en $e +ill ret%rn t$e 1( %nit $o%l" private

repon"ent ele.t to et ba.6 t$e ame! 13 Private repon"ent, t$ro%$ .o%nel, +rote

A6ron on A%%t 1, 1') "eman"in t$e ret%rn o# t$e 1( tr%.6 an" t$e pa5ment o#

P2*,000!00 ba.6 rental .overin t$e perio" #rom 7%ne 1 to A%%t 1, 1')! 1

Aain, Copra"a +rote private repon"ent on A%%t ), 1') a6in #or anot$er ra.e

perio" o# %p to A%%t (1, 1') to pa5 t$e balan.e, tatin a +ell t$at $e i epe.tin t$e

approval o# $i loan appli.ation #rom a .ertain 3nan.in .ompan5, an" t$at ten 10/ tr%.6

$ave been ret%rne" to aba, Novali.$e! 15 On >e.ember ', 1'), Copra"a in#orme"

private repon"ent ane+ t$at $e $a" ret%rne" ten 10/ tr%.6 to aba an" t$at a

reol%tion +a pae" b5 t$e boar" o# "ire.tor .on3rmin t$e "ee" o# ainment to

private repon"ent o# P4*,000 #rom t$e pro.ee" o# a loan obtaine" b5 A6ron #rom t$e

State Invetment Bo%e, In.! 16

In "%e time, private repon"ent 3le" a .ompliant #or t$e re.over5 o# P*2*,000!00 or t$e

ret%rn o# t$e 1( tr%.6 +it$ "amae aaint A6ron an" it oK.er an" "ire.tor, Feli.iano

Copra"a, >ario >! P%n:alan, 7emina Copra"a, &%.ia &a.ate, il#re"o &a5%, Ar.a"io "e la

Cr%:, Fran.i.o Clave, @i.ente 8artine:, Pa.i3.o >ollario an" petitioner +it$ t$e t$en Co%rt

o# Firt Intan.e o# Ri:al! Onl5 petitioner an+ere" t$e .omplaint "en5in an5 parti.ipation



in t$e trana.tion an" allein t$at A6ron $a a "itin.t .orporate peronalit5! Be +a,

$o+ever, "e.lare" in "e#a%lt #or $i #ail%re to atten" t$e pre-trial!

In t$e mean+$ile, petitioner ol" all $i $are in A6ron to Copra"a! It alo appear t$at

A6ron amen"e" it arti.le o# in.orporation t$ereb5 .$anin it name to A6ron Tranport

International, In.! +$i.$ a%me" t$e liabilit5 o# A6ron to private repon"ent!

A#ter an e parte re.eption o# t$e evi"en.e o# t$e private repon"ent, a "e.iion +a

ren"ere" on O.tober 2), 1')0, t$e "ipoitive part o# +$i.$ rea" a #ollo+G

Fin"in t$e evi"en.e %K.ient to prove t$e .ae o# t$e plaintif, %"ment i $ereb5

ren"ere" in #avor o# t$e plaintif an" aaint t$e "e#en"ant, or"erin t$em ointl5 an"

everall5 to pa5;

a ? t$e p%r.$ae pri.e o# t$e tr%.6 in t$e amo%nt o# P*2*,000!00 +it$ !!! leal rate o#

interet/ #rom t$e 3lin o# t$e .omplaint %ntil t$e #%ll amo%nt i pai";

b ? rental o# aba propert5 at P1,000!00 a mont$ #rom A%%t 1') %ntil t$e premie

i .leare" o# t$e ai" tr%.6;

. ? attorne5 #ee o# P10,000!00, an"

" ? .ot o# %it!

T$e P*0,000!00 iven a "o+n pa5ment $all pertain a rental o# t$e tr%.6 #rom 7%ne 1

to A%%t 1, 1') +$i.$ i P2*,000!00 ee "eman" letter o# Att5! Aniano E$ibit T/ an"

t$e remainin P2*,000!00 $all be #rom A%%t 1, 1') %ntil t$e tr%.6 are remove"

totall5 #rom t$e pla.e! 1+A motion #or ne+ trial 3le" b5 petitioner +a "enie" o $e appeale" to t$e t$en

Interme"iate Appellate Co%rt IAC/ +$erein in "%e .o%re a "e.iion +a ren"ere" on 7%ne

(0, 1 ')( ettin ai"e t$e ai" "e.iion a #ar a petitioner i .on.eme"! Bo+ever, %pon

a motion #or re.oni"eration 3le" b5 private repon"ent "ent, t$e IAC, in a reol%tion

"ate" Febr%ar5 ),1')4, et ai"e t$e "e.iion "ate" 7%ne (0, 1')(! T$e appellate .o%rt

entere" anot$er "e.iion aKrmin t$e appeale" "e.iion o# t$e trial .o%rt, +it$ .ot

aaint petitioner!

Ben.e, t$i petition #or revie+ +$erein petitioner raie t$e #ollo+in i%eG

I! T$e Interme"iate Appellate Co%rt IAC/ erre" in "irear"in t$e .orporate 3.tion an" in

$ol"in t$e petitioner peronall5 liable #or t$e obliation o# t$e Corporation +$i.$ "e.iion

i patentl5 .ontrar5 to la+ an" t$e appli.able "e.iion t$ereon!

II! T$e Interme"iate Appellate Co%rt IAC/ .ommitte" rave error o# la+ in it "e.iion b5

an.tionin t$e merer o# t$e peronalit5 o# t$e .orporation +it$ t$at o# t$e petitioner

+$en t$e latter +a $el" liable #or t$e .orporate "ebt! 18



e revere!

T$e environmental #a.t o# t$i .ae $o+ t$at t$ere i no .oent bai to pier.e t$e

.orporate veil o# A6ron an" $ol" petitioner peronall5 liable #or it obliation to private

repon"ent! $ile it i tr%e t$at in >e.ember, 1' petitioner +a till a member o# t$e

boar" o# "ire.tor o# A6ron an" t$at $e parti.ipate" in t$e a"option o# a reol%tiona%t$ori:in t$e p%r.$ae o# 1( tr%.6 #or t$e %e in t$e bro6erae b%ine o# A6ron to be

pai" o%t o# a loan to be e.%re" #rom a len"in intit%tion, it "oe not appear t$at ai"

reol%tion +a inten"e" to "e#ra%" an5one an" more parti.%larl5 private repon"ent! It

+a Copra"a, Prei"ent an" C$airman o# A6ron, +$o neotiate" +it$ ai" repon"ent #or

t$e p%r.$ae o# 1( .aro tr%.6 on 7an%ar5 2*, 1')! It +a Copra"a +$o ine" a

promior5 note to %arantee t$e pa5ment o# t$e %npai" balan.e o# t$e p%r.$ae pri.e o%t

o# t$e pro.ee" o# a loan $e %ppoe"l5 o%$t #rom t$e >P! T$e +or" E< in t$e ai"

promior5 note m%t re#er to t$e .orporation +$i.$ Copra"a repreente" in t$e ee.%tion

o# t$e note an" not it to.6$ol"er or "ire.tor! Petitioner "i" not in t$e ai" promior5

note o $e .annot be peronall5 bo%n" t$ereb5!

T$%, i# t$ere +a an5 #ra%" or mirepreentation t$at +a #oite" on private repon"ent in

t$at t$ere +a a #ort$.omin loan #rom t$e >P +$en it #a.t t$ere +a none, it i Copra"a

+$o $o%l" a..o%nt #or t$e ame an" not petitioner!

A to t$e ale t$ro%$ pacto de retro o# t$e t+o %nit to a t$ir" peron b5 t$e .orporation

b5 virt%e o# a boar" reol%tion, petitioner aert t$at $e never ine" ai" reol%tion! e

t$at a it ma5, t$e ale i not in$erentl5 #ra%"%lent a t$e 1( %nit +ere ol" t$ro%$ a

"ee" o# abol%te ale to A6ron o t$at t$e .orporation i #ree to "ipoe o# t$e ame! O#

.o%re, it +a tip%late" t$at in .ae o# "e#a%lt in pa5ment to private repon"ent o# t$e

balan.e o# t$e .oni"eration, a .$attel mortae lien $a be .ontit%te" on t$e 1( %nit!

Nevert$ele, ai" mortae i a prior lien a aaint t$e pacto de retro ale o# t$e 2 %nit!

A to t$e amen"ment o# t$e arti.le o# in.orporation o# A6ron t$ereb5 .$anin it name

to A6ron Tranport International, In.!, petitioner allee t$at t$e .$ane o# .orporate name

+a in or"er to in.l%"e tr%.6in an" .ontainer 5ar" operation in it .%tom bro6erae o#

+$i.$ private repon"ent +a "%l5 in#orme" in a letter! 19In"ee", t$e ne+ .orporation

.on3rme" an" a%me" t$e obliation o# t$e ol" .orporation! T$ere i no in"i.ation o# an

attempt on t$e part o# A6ron to eva"e pa5ment o# it obliation to private repon"ent!

T$ere i t$e #a.t t$at petitioner ol" $i $are in A6ron to Copra"a "%rin t$e pen"en.5 o#

t$e .ae! Sin.e petitioner $a no peronal obliation to private repon"ent, it i $i

in$erent ri$t a a to.6$ol"er to "ipoe o# $i $are o# to.6 an5time $e o "eire!

8ention i alo ma"e o# t$e allee" "%mpin o# 10 %nit in t$e premie o# private

repon"ent at aba, Novali.$e +$i.$ to t$e min" o# t$e Co%rt "oe not prove #ra%"

an" intea" appear to be an attempt on t$e part o# A6ron to atten" to it obliation a

rear" t$e ai" tr%.6! Aain petitioner $a no part in t$i!



I# t$e private repon"ent i t$e vi.tim o# #ra%" in t$i trana.tion, it $a not been .learl5

$o+n t$at petitioner $a" an5 part or parti.ipation in t$e perpetration o# t$e ame! Fra%"

m%t be etabli$e" b5 .lear an" .onvin.in evi"en.e! I# at all, t$e prin.ipal .$ara.ter on

+$om #a%lt $o%l" be attrib%te" i Feli.iano Copra"a, t$e Prei"ent o# A6ron, +$om private

repon"ent "ealt +it$ peronall5 all t$ro%$ o%t! Fort%natel5, private repon"ent obtaine"

a %"ment aaint $im #rom t$e trial .o%rt an" t$e ai" %"ment $a lon been 3nal an"ee.%tor5!

BEREFORE, t$e petition i RANTE>! T$e =%etione" reol%tion o# t$e Interme"iate

Appellate Co%rt "ate" Febr%ar5 ),1')4 i $ereb5 et ai"e an" it "e.iion "ate" 7%ne

(0,1')( ettin ai"e t$e "e.iion o# t$e trial .o%rt "ate" O.tober 2), 1')0 ino#ar a

petitioner i .on.eme" i $ereb5 reintate" an" aKrme", +it$o%t .ot!

SO OR>ERE>!

G.R. No. 88013 Mar7/ 19, 1990

IME INTERNATIONAL MANILA:, IN$OR"ORATE, petitioner,

v!

T#E #ONORABLE $OURT O2 A""EAL an& TRAER RO!AL BAN;, repon"ent!

on P. Porcuincula for petitioner.

)an (uan, *on/ale/, )an Agustin & )inense for private respondent.

$RU%, J.:

e are .on.erne" in t$i .ae +it$ t$e =%etion o# "amae, pe.i3.all5 moral an"

eemplar5 "amae! T$e nelien.e o# t$e private repon"ent $a alrea"5 been

etabli$e"! All +e $ave to a.ertain i +$et$er t$e petitioner i entitle" to t$e ai"

"amae an", i# o, in +$at amo%nt!

T$e partie aree on t$e bai. #a.t! T$e petitioner i a private .orporation enae" in t$e

eportation o# #oo" pro"%.t! It b%5 t$ee pro"%.t #rom vario% lo.al %pplier an" t$en

ell t$em abroa", parti.%larl5 in t$e 9nite" State, Cana"a an" t$e 8i""le Eat! 8ot o#

it eport are p%r.$ae" b5 t$e petitioner on .re"it!

T$e petitioner +a a "epoitor o# t$e repon"ent ban6 an" maintaine" a .$e.6in a..o%nt

in it bran.$ at Rom%lo Aven%e, C%bao, M%e:on Cit5! On 8a5 2*, 1')1, t$e petitioner

"epoite" to it a..o%nt in t$e ai" ban6 t$e amo%nt o# P100,000!00, t$% in.reain it

balan.e a o# t$at "ate to P1'0,()0!4! 1 S%be=%entl5, t$e petitioner i%e" everal

.$e.6 aaint it "epoit b%t +a %prie" to learn later t$at t$e5 $a" been "i$onore"

#or in%K.ient #%n"!





A#ter trial, 7%"e 7o$ni.o ! Ser=%inia ren"ere" %"ment $ol"in t$at moral an"

eemplar5 "amae +ere not .alle" #or %n"er t$e .ir.%mtan.e! Bo+ever, obervin t$at

t$e plaintif< ri$t $a" been violate", $e or"ere" t$e "e#en"ant to pa5 nominal "amae

in t$e amo%nt o# P20,000!00 pl% P*,000!00 attorne5< #ee an" .ot! 5 T$i "e.iion +a

aKrme" in toto b5 t$e repon"ent .o%rt! 6

T$e repon"ent .o%rt #o%n" +it$ t$e trial .o%rt t$at t$e private repon"ent +a %ilt5 o#

nelien.e b%t aree" t$at t$e petitioner +a nevert$ele not entitle" to moral "amae!

It ai"G

T$e eential inre"ient o# moral "amae i proo# o# ba" #ait$ >e Apari.io v! Paro%ra,

1*0 SCRA 2)0/! In"ee", t$ere +a t$e omiion b5 t$e "e#en"ant-appellee ban6 to .re"it

appellant< "epoit o# P100,000!00 on 8a5 2*, 1')1! %t t$e ban6 re.ti3e" it re.or"! It

.re"ite" t$e ai" amo%nt in #avor o# plaintif-appellant in le t$an a mont$! T$e

"i$onore" .$e.6 +ere event%all5 pai"! T$ee .ir.%mtan.e neate an5 imp%tation or

inin%ation o# mali.io%, #ra%"%lent, +anton an" ro ba" #ait$ an" nelien.e on t$e

part o# t$e "e#en"ant-appellant!

It i t$i r%lin t$at i #a%lte" in t$e petition no+ be#ore %!

T$i Co%rt $a .are#%ll5 eamine" t$e #a.t o# t$i .ae an" 3n" t$at it .annot $are

ome o# t$e .on.l%ion o# t$e lo+er .o%rt! It eem to % t$at t$e nelien.e o# t$e

private repon"ent $a" been br%$e" of rat$er li$tl5 a i# it +ere a minor in#ra.tion

re=%irin no more t$an a lap on t$e +rit! e #eel it i not eno%$ to a5 t$at t$e private

repon"ent re.ti3e" it re.or" an" .re"ite" t$e "epoit in le t$an a mont$ a i# t$i

+ere %K.ient repentan.e! T$e error $o%l" not $ave been .ommitte" in t$e 3rt pla.e!

T$e repon"ent ban6 $a not even eplaine" +$5 it +a .ommitte" at all! It i tr%e t$at

t$e "i$onore" .$e.6 +ere, a t$e Co%rt o# Appeal p%t it, event%all5 pai"! Bo+ever,

t$i too6 almot a mont$ +$en, properl5, t$e .$e.6 $o%l" $ave been pai" imme"iatel5

%pon preentment!

A t$e Co%rt ee it, t$e initial .arelene o# t$e repon"ent ban6, aravate" b5 t$e

la.6 o# promptit%"e in repairin it error, %ti3e t$e rant o# moral "amae! T$i rat$er

la.6a"aii.al attit%"e to+ar" t$e .omplainin "epoitor .ontit%te" t$e ro nelien.e,

i# not +anton ba" #ait$, t$at t$e repon"ent .o%rt ai" $a" not been etabli$e" b5 t$e

petitioner!

e alo note t$at +$ile trein t$e re.ti3.ation ma"e b5 t$e repon"ent ban6, t$e

"e.iion pra.ti.all5 inore" t$e pre%"i.e %fere" b5 t$e petitioner! T$i +a impl5

loe" over i# not, in"ee", "ibelieve"! T$e #a.t i t$at t$e petitioner< .re"it line +a

.an.ele" an" it or"er +ere not a.te" %pon pen"in re.eipt o# a.t%al pa5ment b5 t$e

%pplier! It b%ine "e.line"! It rep%tation +a tarni$e"! It tan"in +a re"%.e" in

t$e b%ine .omm%nit5! All t$i +a "%e to t$e #a%lt o# t$e repon"ent ban6 +$i.$ +a

%n"eniabl5 remi in it "%t5 to t$e petitioner!



Arti.le 220* o# t$e Civil Co"e provi"e t$at a.t%al or .ompenator5 "amae ma5 be

re.eive" 2/ #or in%r5 to t$e plaintif b%ine tan"in or .ommer.ial .re"it! T$ere i

no =%etion t$at t$e petitioner "i" %tain a.t%al in%r5 a a re%lt o# t$e "i$onore"

.$e.6 an" t$at t$e eiten.e o# t$e lo $avin been etabli$e" abol%te .ertaint5 a to

it amo%nt i not re=%ire"! + S%.$ in%r5 $o%l" bolter all t$e more t$e "eman" o# t$e

petitioner #or moral "amae an" %ti3e t$e eamination b5 t$i Co%rt o# t$e vali"it5 an"reaonablene o# t$e ai" .laim!

e aree t$at moral "amae are not a+ar"e" to penali:e t$e "e#en"ant b%t to

.ompenate t$e plaintif #or t$e in%rie $e ma5 $ave %fere"! 8 In t$e .ae at bar, t$e

petitioner i ee6in %.$ "amae #or t$e pre%"i.e %taine" b5 it a a re%lt o# t$e

private repon"ent< #a%lt! T$e repon"ent .o%rt ai" t$at t$e .laime" loe are p%rel5

pe.%lative an" are not %pporte" b5 %btantial evi"en.e, b%t i# #aile" to .oni"er t$at

t$e amo%nt o# %.$ loe nee" not be etabli$e" +it$ ea.tit%"e pre.iel5 be.a%e o#

t$eir nat%re! 8oral "amae are not %.eptible o# pe.%niar5 etimation! Arti.le 221 o#

t$e Civil Co"e pe.i3.all5 provi"e t$at no proo# o# pe.%niar5 lo i ne.ear5 in or"er

t$at moral, nominal, temperate, li=%i"ate" or eemplar5 "amae ma5 be a"%"i.ate"!

T$at i +$5 t$e "etermination o# t$e amo%nt to be a+ar"e" e.ept li=%i"ate" "amae/

i le#t to t$e o%n" "i.retion o# t$e .o%rt, a..or"in to t$e .ir.%mtan.e o# ea.$ .ae!

From ever5 vie+point e.ept t$at o# t$e petitioner<, it .laim o# moral "amae in t$e

amo%nt o# P1,000,000!00 i not$in $ort o# prepotero%! It b%ine .ertainl5 i not t$at

bi, or it name t$at pretiio%, to %tain %.$ an etravaant pretene! 8oreover, a

.orporation i not a a r%le entitle" to moral "amae be.a%e, not bein a nat%ral

peron, it .annot eperien.e p$5i.al %ferin or %.$ entiment a +o%n"e" #eelin,

erio% aniet5, mental an%i$ an" moral $o.6! T$e onl5 e.eption to t$i r%le i +$ere

t$e .orporation $a a oo" rep%tation t$at i "ebae", re%ltin in it o.ial $%miliation! 9

e $all re.oni:e t$at t$e petitioner "i" %fer in%r5 be.a%e o# t$e private repon"ent<

nelien.e t$at .a%e" t$e "i$onor o# t$e .$e.6 i%e" b5 it! T$e imme"iate

.one=%en.e +a t$at it pretie +a impaire" be.a%e o# t$e bo%n.in .$e.6 an"

.on3"en.e in it a a reliable "ebtor +a "imini$e"! T$e private repon"ent ma6e m%.$

o# t$e one intan.e +$en t$e petitioner +a %e" in a .olle.tion .ae, b%t t$at "i" not

prove t$at it "i" not $ave a oo" rep%tation t$at .o%l" not be marre", more o in.e t$at

.ae +a %ltimatel5 ettle"! 10 It "oe not appear t$at, a t$e private repon"ent +o%l"

portra5 it, t$e petitioner i an %navor5 an" "irep%table entit5 t$at $a no oo" name to

prote.t!

Coni"erin all t$i, +e #eel t$at t$e a+ar" o# nominal "amae in t$e %m o# P20,000!00

+a not t$e proper relie# to +$i.$ t$e petitioner +a entitle"! 9n"er Arti.le 2221 o# t$e

Civil Co"e, nominal "amae are a"%"i.ate" in or"er t$at a ri$t o# t$e plaintif, +$i.$

$a been violate" or inva"e" b5 t$e "e#en"ant, ma5 be vin"i.ate" or re.oni:e", an" not

#or t$e p%rpoe o# in"emni#5in t$e plaintif #or an5 lo %fere" b5 $im! A +e $ave

#o%n" t$at t$e petitioner $a in"ee" in.%rre" lo t$ro%$ t$e #a%lt o# t$e private

repon"ent, t$e proper reme"5 i t$e a+ar" to it o# moral "amae, +$i.$ +e impoe, in

o%r "i.retion, in t$e ame amo%nt o# P20,000!00!



No+ #or t$e eemplar5 "amae!

T$e pertinent proviion o# t$e Civil Co"e are t$e #ollo+inG

Art! 222'! Eemplar5 or .orre.tive "amae are impoe", b5 +a5 o# eample or .orre.tion

#or t$e p%bli. oo", in a""ition to t$e moral, temperate, li=%i"ate" or .ompenator5"amae!

Art! 22(2! In .ontra.t an" =%ai-.ontra.t, t$e .o%rt ma5 a+ar" eemplar5 "amae i#

t$e "e#en"ant a.te" in a +anton, #ra%"%lent, re.6le, oppreive, or malevolent manner!

T$e ban6in 5tem i an in"ipenable intit%tion in t$e mo"ern +orl" an" pla5 a vital

role in t$e e.onomi. li#e o# ever5 .ivili:e" nation! $et$er a mere paive entitie #or t$e

a#e6eepin an" avin o# mone5 or a a.tive intr%ment o# b%ine an" .ommer.e,

ban6 $ave be.ome an %bi=%ito% preen.e amon t$e people, +$o $ave .ome to rear"

t$em +it$ repe.t an" even ratit%"e an", mot o# all, .on3"en.e! T$%, even t$e $%mble

+ae-earner $a not $eitate" to entr%t $i li#e< avin to t$e ban6 o# $i .$oi.e,6no+in t$at t$e5 +ill be a#e in it .%to"5 an" +ill even earn ome interet #or $im! T$e

or"inar5 peron, +it$ e=%al #ait$, %%all5 maintain a mo"et .$e.6in a..o%nt #or

e.%rit5 an" .onvenien.e in t$e ettlin o# $i mont$l5 bill an" t$e pa5ment o# or"inar5

epene! A #or b%ine entitie li6e t$e petitioner, t$e ban6 i a tr%te" an" a.tive

ao.iate t$at .an $elp in t$e r%nnin o# t$eir afair, not onl5 in t$e #orm o# loan +$en

nee"e" b%t more o#ten in t$e .on"%.t o# t$eir "a5-to-"a5 trana.tion li6e t$e i%an.e or

en.a$ment o# .$e.6!

In ever5 .ae, t$e "epoitor epe.t t$e ban6 to treat $i a..o%nt +it$ t$e %tmot 3"elit5,

+$et$er %.$ a..o%nt .onit onl5 o# a #e+ $%n"re" peo or o# million! T$e ban6 m%t

re.or" ever5 inle trana.tion a..%ratel5, "o+n to t$e lat .entavo, an" a promptl5 a

poible! T$i $a to be "one i# t$e a..o%nt i to ree.t at an5 iven time t$e amo%nt o#

mone5 t$e "epoitor .an "ipoe o# a $e ee 3t, .on3"ent t$at t$e ban6 +ill "eliver it a

an" to +$omever $e "ire.t! A bl%n"er on t$e part o# t$e ban6, %.$ a t$e "i$onor o# a

.$e.6 +it$o%t oo" reaon, .an .a%e t$e "epoitor not a little embarrament i# not alo

3nan.ial lo an" per$ap even .ivil an" .riminal litiation!

T$e point i t$at a a b%ine afe.te" +it$ p%bli. interet an" be.a%e o# t$e nat%re o#

it #%n.tion, t$e ban6 i %n"er obliation to treat t$e a..o%nt o# it "epoitor +it$

meti.%lo% .are, al+a5 $avin in min" t$e 3"%.iar5 nat%re o# t$eir relation$ip! In t$e

.ae at bar, it i obvio% t$at t$e repon"ent ban6 +a remi in t$at "%t5 an" violate"

t$at relation$ip! $at i epe.iall5 "eplorable i t$at, $avin been in#orme" o# it error in

not .re"itin t$e "epoit in =%etion to t$e petitioner, t$e repon"ent ban6 "i" not

imme"iatel5 .orre.t it b%t "i" o onl5 one +ee6 later or t+ent5-t$ree "a5 a#ter t$e

"epoit +a ma"e! It bear repeatin t$at t$e re.or" "oe not .ontain an5 ati#a.tor5

eplanation o# +$5 t$e error +a ma"e in t$e 3rt pla.e an" +$5 it +a not .orre.te"

imme"iatel5 a#ter it "i.over5! S%.$ ineptne .ome %n"er t$e .on.ept o# t$e +anton

manner .ontemplate" in t$e Civil Co"e t$at .all #or t$e impoition o# eemplar5

"amae!



A#ter "eliberatin on t$i parti.%lar matter, t$e Co%rt, in t$e eer.ie o# it "i.retion,

$ereb5 impoe %pon t$e repon"ent ban6 eemplar5 "amae in t$e amo%nt o#

P*0,000!00, b5 +a5 o# eample or .orre.tion #or t$e p%bli. oo", in t$e +or" o# t$e la+!

It i epe.te" t$at t$i r%lin +ill erve a a +arnin an" "eterrent aaint t$e repetition o#

t$e ineptne an" in"eferen.e t$at $a been "ipla5e" $ere, let t$e .on3"en.e o# t$e

p%bli. in t$e ban6in 5tem be #%rt$er impaire"!

ACCOR>IN&H, t$e appeale" %"ment i $ereb5 8O>IFIE> an" t$e private repon"ent i

or"ere" to pa5 t$e petitioner, in lie% o# nominal "amae, moral "amae in t$e amo%nt

o# P20,000!00, an" eemplar5 "amae in t$e amo%nt o# P*0,000!00 pl% t$e oriinal

a+ar" o# attorne5< #ee in t$e amo%nt o# P*,000!00, an" .ot!

SO OR>ERE>!

G.R. No. 18066 Jun) 19, 000

JARINE AVIE IN$., petitioner,v!

$OURT O2 A""EAL an& 2AR EAT MILL U""L! $OR"ORATION, repon"ent!

- - - - - - - - - - - - - - - - - - - - - - -

G.R. No. 18069

"URE 2OO $OR"ORATION, petitioner,

v!

$OURT O2 A""EAL an& 2AR EAT MILL U""L! $OR"ORATION, repon"ent!

BELLOILLO, J.<

T$i i rat$er a imple .ae #or pe.i3. per#orman.e +it$ "amae +$i.$ .o%l" $ave been

reolve" t$ro%$ me"iation an" .on.iliation "%rin it in#an.5 tae $a" t$e partie been

earnet in epe"itin t$e "ipoal o# t$i .ae! T$e5 opte" $o+ever to reort to #%ll .o%rt

pro.ee"in an" "enie" t$emelve t$e bene3t o# alternative "ip%te reol%tion, t$%

ma6in t$e pro.e more ar"%o% an" lon-"ra+n!

T$e .ontrover5 tarte" in 1''2 at t$e $ei$t o# t$e po+er .rii +$i.$ t$e .o%ntr5 +a

t$en eperien.in! To reme"5 an" .%rtail #%rt$er loe "%e to t$e erie o# po+er #ail%re,

petitioner P9RE FOO>S CORPORATION $erea#ter P9REFOO>S/ "e.i"e" to intall t+o 2/

1*00 Q enerator in it #oo" pro.ein plant in San Ro=%e, 8ari6ina Cit5!

Sometime in November 1''2 a bi""in #or t$e %ppl5 an" intallation o# t$e enerator

+a $el"! Several %pplier an" "ealer +ere invite" to atten" a pre-bi""in .on#eren.e to

"i.% t$e .on"ition, propoe .$eme an" pe.i3.ation t$at +o%l" bet %it t$e nee"

o# P9REFOO>S! O%t o# t$e ei$t )/ prope.tive bi""er +$o atten"e" t$e pre-bi""in

.on#eren.e, onl5 t$ree (/ bi""er, namel5, repon"ent FAR EAST 8I&&S S9PP&H



CORPORATION $erea#ter FE8SCO/, 8ONARQ an" A>@ANCE POER %bmitte" bi"

propoal an" ave bi" bon" e=%ivalent to * o# t$eir repe.tive bi", a re=%ire"!

T$erea#ter, in a letter "ate" 12 >e.ember 1''2 a""ree" to FE8SCO Prei"ent Al#ono

Po, P9REFOO>S .on3rme" t$e a+ar" o# t$e .ontra.t to FE8SCO ?

entlemenG

T$i +ill .on3rm t$at P%re Foo" Corporation $a a+ar"e" to 5o%r 3rm t$e proe.tG S%ppl5

an" Intallation o# t+o 2/ %nit o# 1*00 QL%nit enerator Set at t$e Pro.ee" 8eat

Plant, o! San Ro=%e, 8ari6ina, bae" on 5o%r propoal n%mber PC 2)-'2 "ate" November

20, 1''2, %be.t to t$e #ollo+in bai. term an" .on"itionG

1! &%mp %m .ontra.t o# P,1(,2'(!00 @AT in.l%"e"/, #or t$e %ppl5 o# material an"

labor #or t$e lo.al portion an" t$e labor #or t$e importe" material, pa5able b5 prore

billin t+i.e a mont$, +it$ ten per.ent 10/ retention! T$e retaine" amo%nt $all be

releae" t$irt5 (0/ "a5 a#ter a..eptan.e o# t$e .omplete" proe.t an" %pon potin o#%arantee on" in an amo%nt e=%ivalent to t+ent5 per.ent 20/ o# t$e .ontra.t pri.e!

T$e %arantee on" $all be vali" #or one 1/ 5ear #rom .ompletion an" a..eptan.e o#

proe.t! T$e .ontra.t pri.e in.l%"e #%t%re in.reaeL in .ot o# material an" labor;

2! T$e proe.t $all be %n"erta6en p%r%ant to t$e atta.$e" pe.i3.ation! It i

%n"ertoo" t$at an5 item re=%ire" to .omplete t$e proe.t, an" t$oe not in.l%"e" in t$e

lit o# item $all be "eeme" in.l%"e" an" .overe" an" $all be per#orme";

(! All material $all be bran" ne+;

4! T$e proe.t $all .ommen.e imme"iatel5 an" m%t be .omplete" +it$in t+ent5 20/

+or6in "a5 a#ter t$e "eliver5 o# enerator Set to 8ari6ina Plant, penalt5 e=%ivalent to

1L10 o# 1 o# t$e p%r.$ae pri.e #or ever5 "a5 o# "ela5;

*! T$e Contra.tor $all p%t %p Per#orman.e on" e=%ivalent to t$irt5 (0/ o# t$e .ontra.t

pri.e, an" $all pro.%re All Ri6 In%ran.e e=%ivalent to t$e .ontra.t pri.e %pon

.ommen.ement o# t$e proe.t! T$e All Ri6 In%ran.e Poli.5 $all be en"ore" in #avor o#

an" $all be "elivere" to P%re Foo" Corporation;

! arrant5 o# one 1/ 5ear aaint "e#e.tive material an"Lor +or6man$ip!

On.e 3nali:e", +e $all a6 5o% to in t$e #ormal .ontra.t embo"5in t$e #oreoin

term an" .on"ition!

Imme"iatel5, FE8SCO %bmitte" t$e re=%ire" per#orman.e bon" in t$e amo%nt o#

P1,)41,1)!'0 an" .ontra.tor< all-ri6 in%ran.e poli.5 in t$e amo%nt o# P,1(,2'(!00

+$i.$ P9REFOO>S t$ro%$ it @i.e Prei"ent ene"i.to ! Tope a.6no+le"e" in a letter

"ate" 1) >e.ember 1''2! FE8SCO alo ma"e arranement +it$ it prin.ipal an" tarte"



t$e P9REFOO>S proe.t b5 p%r.$ain t$e ne.ear5 material! P9REFOO>S on t$e ot$er

$an" ret%rne" FE8SCO< i""er< on" in t$e amo%nt o# P1,000,000!00, a re=%ete"!

&ater, $o+ever, in a letter "ate" 22 >e.ember 1''2, P9REFOO>S t$ro%$ it Senior @i.e

Prei"ent Teo"oro &! >ima5%a %nilaterall5 .an.ele" t$e a+ar" a ini3.ant #a.tor +ere

%n.overe" an" bro%$t to t$eir/ attention +$i.$ "i.tate t$e/ .an.ellation an" +arrant atotal revie+ an" re-bi" o# t$e/ proe.t! Cone=%entl5, FE8SCO protete" t$e .an.ellation

o# t$e a+ar" an" o%$t a meetin +it$ P9REFOO>S! Bo+ever, on 2 8ar.$ 1''(, be#ore

t$e matter .o%l" be reolve", P9REFOO>S alrea"5 a+ar"e" t$e proe.t an" entere" into a

.ontra.t +it$ 7AR>INE NE&&, a "iviion o# 7ar"ine >avie, In.! $erea#ter 7AR>INE/, +$i.$

in.i"entall5 +a not one o# t$e bi""er!!0#phi!.n1t

FE8SCO t$% +rote P9REFOO>S to $onor it .ontra.t +it$ t$e #ormer, an" to 7AR>INE to

.eae an" "eit #rom "eliverin an" intallin t$e t+o 2/ enerator at P9REFOO>S! It

"eman" letter %n$ee"e", FE8SCO %e" bot$ P9REFOO>S an" 7AR>INEG P9REFOO>S #or

renein on it .ontra.t, an" 7AR>INE #or it %n+arrante" inter#eren.e an" in"%.ement!

Trial en%e"! A#ter FE8SCO preente" it evi"en.e, 7AR>INE 3le" a >em%rrer to Evi"en.e!

On 2 7%ne 1''4 t$e Reional Trial Co%rt o# Pai, r! ), 1 rante" 7AR>INE< >em%rrer to

Evi"en.e! T$e trial .o%rt .on.l%"e" t$at D+$ile it ma5 eem to t$e plaintif t$at b5 t$e

a.tion o# t$e t+o "e#en"ant t$ere i omet$in %n"er$an"e" oin on, t$i i all a

matter o# per.eption, an" %n%pporte" b5 $ar" evi"en.e, mere %pi.ion an"

%ppoition +o%l" not tan" %p ver5 +ell in a .o%rt o# la+! 2 8ean+$ile trial pro.ee"e"

a rear" t$e .ae aaint P9REFOO>S!

On 2) 7%l5 1''4 t$e trial .o%rt ren"ere" a "e.iion or"erin P9REFOO>SG a/ to in"emni#5

FE8SCO t$e %m o# P2,(00,000!00 repreentin t$e val%e o# enineerin ervi.e it

ren"ere"; b/ to pa5 FE8SCO t$e %m o# 9S14,000!00 or it peo e=%ivalent, an"

P'00,000!00 repreentin .ontra.tor< mar6-%p on intallation +or6, .oni"erin t$at it

+o%l" be impoible to .ompel P9REFOO>S to $onor, per#orm an" #%l3ll it .ontra.t%al

obliation in vie+ o# P9REFOO>< .ontra.t +it$ 7AR>INE an" notin t$at .ontr%.tion $a"

alrea"5 tarte" t$ereon; ./ to pa5 attorne5< #ee in an amo%nt e=%ivalent to 20 o# t$e

total amo%nt "%e; an", "/ to pa5 t$e .ot! T$e trial .o%rt "imie" t$e .o%nter.laim

3le" b5 P9REFOO>S #or la.6 o# #a.t%al an" leal bai!

ot$ FE8SCO an" P9REFOO>S appeale" to t$e Co%rt o# Appeal! FE8SCO appeale" t$e 2

7%ne 1''4 Reol%tion o# t$e trial .o%rt +$i.$ rante" t$e >em%rrer to Evi"en.e 3le" b5

7AR>INE re%ltin in t$e "imial o# t$e .omplaint aaint it, +$ile P9REFOO>S appeale"

t$e 2) 7%l5 1''4 >e.iion o# t$e ame .o%rt +$i.$ or"ere" it to pa5 FE8SCO!

On 14 A%%t 1'' t$e Co%rt o# Appeal aKrme" in toto t$e 2) 7%l5 1''4 >e.iion o# t$e

trial .o%rt! ( It alo revere" t$e 2 7%ne 1''4 Reol%tion o# t$e lo+er .o%rt an" or"ere"

7AR>INE to pa5 FE8SCO "amae #or in"%.in P9REFOO>S to violate t$e latter< .ontra.t

+it$ FE8SCO! A %.$, 7AR>INE +a or"ere" to pa5 FE8SCO P2,000,000!00 #or moral

"amae! In a""ition, P9REFOO>S +a alo "ire.te" to pa5 FE8SCO P2,000,000!00 a

http://www.lawphil.net/judjuris/juri2000/jun2000/gr_128066_2000.html#fnt1










In t$e intant .ae, t$ere i no i%e a rear" t$e %be.t matter o# t$e .ontra.t an" t$e

.a%e o# t$e obliation! T$e .ontrover5 lie in t$e .onent ? +$et$er t$ere +a an

a..eptan.e o# t$e ofer, an" i# o, i# it +a .omm%ni.ate", t$ereb5 per#e.tin t$e .ontra.t!

To reolve t$e "ip%te, t$ere i a nee" to "etermine +$at .ontit%te" t$e ofer an" t$e

a..eptan.e! Sin.e petitioner P9REFOO>S tarte" t$e pro.e o# enterin into t$e .ontra.tb5 .on"%.tin a bi""in, Art! 1(2 o# t$e Civil Co"e, +$i.$ provi"e t$at Da"vertiement

#or bi""er are impl5 invitation to ma6e propoal, applie! A..or"inl5, t$e Term an"

Con"ition o# t$e i""in "ieminate" b5 petitioner P9REFOO>S .ontit%te t$e

a"vertiement to bi" on t$e proe.t! T$e bi" propoal or =%otation %bmitte" b5 t$e

prope.tive %pplier in.l%"in repon"ent FE8SCO, are t$e ofer! An", t$e repl5 o#

petitioner P9REFOO>S, t$e a..eptan.e or ree.tion o# t$e repe.tive ofer!

M%ite obvio%l5, t$e 12 >e.ember 1''2 letter o# petitioner! P9REFOO>S to FE8SCO

.ontit%te" a..eptan.e o# repon"ent FE8SCO< ofer a .ontemplate" b5 la+! T$e tenor

o# t$e letter, i!e!, T$i +ill .on3rm t$at P%re Foo" $a a+ar"e" to 5o%r 3rm FE8SCO/ t$e

proe.t, .o%l" not be more .ateori.al! $ile t$e ame letter en%merate" .ertain bai.

term an" .on"ition, t$ee .on"ition +ere impoe" on t$e per#orman.e o# t$e

obliation rat$er t$an on t$e per#e.tion o# t$e .ontra.t! T$%, t$e 3rt .on"ition +a

merel5 a reiteration o# t$e .ontra.t pri.e an" billin .$eme bae" on t$e Term an"

Con"ition o# i""in an" t$e bi" or previo% ofer o# repon"ent FE8SCO! T$e e.on" an"

t$ir" .on"ition +ere not$in more t$an eneral tatement t$at all item an" material

in.l%"in t$oe e.l%"e" in t$e lit b%t ne.ear5 to .omplete t$e proe.t $all be "eeme"

in.l%"e" an" $o%l" be bran" ne+! T$e #o%rt$ .on"ition .on.erne" t$e .ompletion o# t$e

+or6 to be "one, i!e!, +it$in t+ent5 20/ "a5 #rom t$e "eliver5 o# t$e enerator et, t$e

p%r.$ae o# +$i.$ +a part o# t$e .ontra.t! T$e 3#t$ .on"ition $a" to "o +it$ t$e p%ttin

%p o# a per#orman.e bon" an" an all-ri6 in%ran.e, bot$ o# +$i.$ $o%l" be iven %pon

.ommen.ement o# t$e proe.t! T$e it$ .on"ition relate" to t$e tan"ar" +arrant5 o#

one 1/ 5ear! In 3ne, t$e en%merate" bai. term an" .on"ition +ere pre.ription on

$o+ t$e obliation +a to be per#orme" an" implemente"! T$e5 +ere #ar #rom bein

.on"ition impoe" on t$e per#e.tion o# t$e .ontra.t!

In 2abasa v ! Court of Appeals ) +e "itin%i$e" bet+een a .on"ition impoe" on t$e

per#e.tion o# a .ontra.t an" a .on"ition impoe" merel5 on t$e per#orman.e o# an

obliation! $ile #ail%re to .ompl5 +it$ t$e 3rt .on"ition re%lt in t$e #ail%re o# a

.ontra.t, #ail%re to .ompl5 +it$ t$e e.on" merel5 ive t$e ot$er part5 option an"Lor

reme"ie to prote.t $i interet!

e t$% aree +it$ t$e .on.l%ion o# repon"ent appellate .o%rt +$i.$ aKrme" t$e trial

.o%rt ?

A .an be in#erre" #rom t$e a.t%al p$rae %e" in t$e 3rt portion o# t$e letter, t$e

"e.iion to a+ar" t$e .ontra.t $a alrea"5 been ma"e! T$e letter onl5 erve a a

.on3rmation o# %.$ "e.iion! Ben.e, to t$e Co%rt< min", t$ere i alrea"5 an a..eptan.e

ma"e o# t$e ofer re.eive" b5 P%re#oo"! Not+it$tan"in t$e term an" .on"ition

en%merate" t$erein, t$e ofer $a been a..epte" an"Lor ampli3e" t$e "etail o# t$e term





an" .on"ition .ontaine" in t$e Term an" Con"ition o# i""in iven o%t b5 P%re#oo" to

prope.tive bi""er! '

%t even rantin arguendo t$at t$e 12 >e.ember 1''2 letter o# petitioner P9REFOO>S

.ontit%te" a .on"itional .o%nter-ofer, repon"ent FE8CO< %bmiion o# t$e

per#orman.e bon" an" .ontra.tor< all-ri6 in%ran.e +a an implie" a..eptan.e, i# not a.lear in"i.ation o# it a.=%ie.en.e to, t$e .on"itional .o%nter-ofer, +$i.$ eprel5

tate" t$at t$e per#orman.e bon" an" t$e .ontra.tor< all-ri6 in%ran.e $o%l" be iven

%pon t$e .ommen.ement o# t$e .ontra.t! Corollaril5, t$e a.6no+le"ment t$ereo# b5

petitioner P9REFOO>S, not to mention it ret%rn o# FE8SCO< bi""er< bon", +a a

.on.rete mani#etation o# it 6no+le"e t$at repon"ent FE8SCO in"ee" .onente" to t$e

.on"itional .o%nter-ofer! A#ter all, a earlier a"verte" to, an a..eptan.e ma5 eit$er be

epre or implie", 10 an" t$i .an be in#erre" #rom t$e .ontemporaneo% an" %be=%ent

a.t o# t$e .ontra.tin partie!

A..or"inl5, #or all intent an" p%rpoe, t$e .ontra.t at t$at point $a been per#e.te",

an" repon"ent FE8SCO<conforme

+o%l" onl5 be a mere %rpl%ae! T$e "i.%ion o#

t$e pri.e o# t$e proe.t t+o 2/ mont$ a#ter t$e 12 >e.ember 1''2 letter .an be "eeme"

a not$in more t$an a pre%re bein eerte" b5 petitioner P9REFOO>S on repon"ent

FE8SCO to lo+er t$e pri.e even a#ter t$e .ontra.t $a" been per#e.te"! In"ee" #rom t$e

#a.t, it .an eail5 be %rmie" t$at petitioner P9REFOO>S +a $alin #or a lo+er pri.e

even a#ter areein to t$e earlier =%otation, an" +a t$reatenin to %nilaterall5 .an.el t$e

.ontra.t, +$i.$ it event%all5 "i"! Petitioner P9REFOO>S alo ma6e an i%e o%t o# t$e

aben.e o# a p%r.$ae or"er PO/! S%K.e it to a5 t$at p%r.$ae or"er or PO "o not

ma6e or brea6 a .ontra.t! T$%, even t$e tenor o# t$e %be=%ent letter o# petitioner

P9REFOO>S, i!e!, P%re Foo" Corporation i $ereb5 .an.elin t$e a+ar" to 5o%r .ompan5

o# t$e proe.t, pre%ppoe t$at t$e .ontra.t $a been per#e.te"! For, t$ere .an be no

.an.ellation i# t$e .ontra.t +a not per#e.te" in t$e 3rt pla.e!

Petitioner P9REFOO>S alo ar%e t$at it +a never in ba" #ait$!!avvphi! On t$e .ontrar5,

it believe" in oo" #ait$ t$at no %.$ .ontra.t +a per#e.te"! e are not .onvin.e"! e

%b.ribe to t$e #a.t%al 3n"in an" .on.l%ion o# t$e trial .o%rt +$i.$ +ere aKrme" b5

t$e appellate .o%rt ?

Ben.e, b5 t$e %nilateral .an.ellation o# t$e .ontra.t, t$e "e#en"ant petitioner P9RE

FOO>S/ $a a.te" +it$ ba" #ait$ an" t$i +a #%rt$er aravate" b5 t$e %be=%ent

in6in o# a .ontra.t bet+een "e#en"ant P%re#oo" an" ert+$ile .o-"e#en"ant 7ar"ine! It i

ver5 evi"ent t$at P%re#oo" t$o%$t t$at b5 t$e epe"ient mean o# merel5 +ritin a letter

+o%l" a%tomati.all5 .an.el or n%lli#5 t$e eitin .ontra.t entere" into b5 bot$ partie

a#ter a pro.e o# bi""in! T$i, to t$e Co%rt< min", i a arant violation o# t$e epre

proviion o# t$e la+ an" i .ontrar5 to #air an" %t "ealin to +$i.$ ever5 man i "%e! 11

T$i Co%rt $a a+ar"e" in t$e pat moral "amae to a .orporation +$oe rep%tation $a

been bemir.$e"! 12 In t$e intant .ae, repon"ent FE8SCO $a %K.ientl5 $o+n t$at it

rep%tation +a tarni$e" a#ter it imme"iatel5 or"ere" e=%ipment #rom it %pplier on

a..o%nt o# t$e %ren.5 o# t$e proe.t, onl5 to be .an.ele" later! e t$% %tain











repon"ent appellate .o%rt< a+ar" o# moral "amae! e $o+ever re"%.e t$e a+ar" #rom

P2,000,000!00 to P1,000,000!00, a moral "amae are never inten"e" to enri.$ t$e

re.ipient! &i6e+ie, t$e a+ar" o# eemplar5 "amae b5 +a5 o# eample #or t$e p%bli.

oo" i e.eive an" $o%l" be re"%.e" to P100,000!00!

Petitioner 7AR>INE maintain on t$e ot$er $an" t$at repon"ent appellate .o%rt erre" inor"erin it to pa5 moral "amae to repon"ent FE8SCO a it %ppoe"l5 in"%.e"

P9REFOO>S to violate t$e .ontra.t +it$ FE8SCO! e aree! $ile it ma5 eem t$at

petitioner P9REFOO>S an" 7AR>INE .onnive" to "e.eive repon"ent FE8SCO, +e 3n" no

pe.i3. evi"en.e on re.or" to %pport %.$ per.eption! &i6e+ie, t$ere i no $o+in

+$atoever t$at petitioner 7AR>INE in"%.e" petitioner P9REFOO>S! T$e imilarit5 in t$e

"ein %bmitte" to petitioner P9REFOO>S b5 bot$ petitioner 7AR>INE an" repon"ent

FE8SCO, an" t$e ten"er o# a lo+er =%otation b5 petitioner 7AR>INE are in%K.ient to $o+

t$at petitioner 7AR>INE in"ee" in"%.e" petitioner P9REFOO>S to violate it .ontra.t +it$

repon"ent FE8SCO!

BEREFORE, %"ment i $ereb5 ren"ere" a #ollo+G

a/ T$e petition in !R! No! 12)0 i RANTE>! T$e aaile" >e.iion o# t$e Co%rt o#

Appeal reverin t$e 2 7%ne 1''4 reol%tion o# t$e trial .o%rt an" or"erin petitioner

7AR>INE >A@IES, INC!, to pa5 private repon"ent FAR EAST 8I&&S S9PP&H CORPORATION

P2,000,000!00 a moral "amae i RE@ERSE> an" SET ASI>E #or in%K.ien.5 o#

evi"en.e; an"

b/ T$e petition in !R! No! 12)0' i >ENIE>! T$e aaile" >e.iion o# t$e Co%rt o#

Appeal or"erin petitioner P9REFOO>S CORPORATION to pa5 private repon"ent FAR

EAST 8I&&S S9PP&H CORPORATION t$e %m o# P2,(00,000!00 repreentin t$e val%e o#

enineerin ervi.e it ren"ere", 9S14,000!00 or it peo e=%ivalent, an" P'00,000!00

repreentin t$e .ontra.tor< mar6-%p on intallation +or6, a +ell a attorne5< #ee

e=%ivalent to t+ent5 per.ent 20/ o# t$e total amo%nt "%e, i AFFIR8E>! In a""ition,

petitioner P9RE FOO>S CORPORATION i or"ere" to pa5 private repon"ent FAR EAST

8I&&S S9PP&H CORPORATION moral "amae in t$e amo%nt o# P1,000,000!00 an"

eemplar5 "amae in t$e amo%nt o# P1,000,000!00! Cot aaint petitioner!

SO OR>ERE>!

G.R. No. 18690 January 1, 1999

AB-$BN BROA$ATING $OR"ORATION, petitioner,

v!

#ONORABLE $OURT O2 A""EAL, RE"UBLI$ BROA$ATING $OR", VIVA"ROU$TION, IN$., an& VI$ENTE EL ROARIO, repon"ent!

AVIE, JR., CJ.:



In t$i petition #or revie+ on certiorari, petitioner AS-CN roa".atin Corp! $erea#ter

AS-CN/ ee6 to revere an" et ai"e t$e "e.iion 1 o# (1 O.tober 1'' an" t$e

reol%tion o# 10 8ar.$ 1'' o# t$e Co%rt o# Appeal in CA-!R! C@ No! 4412*! T$e #ormer

aKrme" +it$ mo"i3.ation t$e "e.iion 3 o# 2) April 1''( o# t$e Reional Trial Co%rt RTC/

o# M%e:on Cit5, ran.$ )0, in Civil Cae No! M-'2-12(0'! T$e latter "enie" t$e motion to

re.oni"er t$e "e.iion o# (1 O.tober 1''!

T$e ante.e"ent, a #o%n" b5 t$e RTC an" a"opte" b5 t$e Co%rt o# Appeal, are a #ollo+G

In 1''0, AS-CN an" @iva ee.%te" a Film E$ibition Areement E$! A/ +$ereb5 @iva

ave AS-CN an e.l%ive ri$t to e$ibit ome @iva 3lm! Sometime in >e.ember 1''1,

in a..or"an.e +it$ pararap$ 2!4 Dsic o# ai" areement tatin t$at ?!

1!4 AS-CN $all $ave t$e ri$t o# 3rt re#%al to t$e net t+ent5-#o%r 24/ @iva 3lm #or

T@ tele.at %n"er %.$ term a ma5 be aree" %pon b5 t$e partie $ereto, provi"e",

$o+ever, t$at %.$ ri$t $all be eer.ie" b5 AS-CN #rom t$e a.t%al ofer in +ritin!

@iva, t$ro%$ "e#en"ant >el Roario, ofere" AS-CN, t$ro%$ it vi.e-prei"ent C$aro

Santo-Con.io, a lit o# t$ree(/ 3lm pa.6ae ( title/ #rom +$i.$ AS-CN ma5 eer.ie

it ri$t o# 3rt re#%al %n"er t$e a#ore-ai" areement E$! 1 par, 2, 2, 2-A<< an" 2-

-@iva/! AS-CN, $o+ever t$ro%$ 8r! Con.io, .an ti.6 of onl5 ten 10/ title #rom

t$e lit/ +e .an p%r.$ae E$! ( - @iva/ an" t$ere#ore "i" not a..ept ai" lit TSN,

7%ne ), 1''2, pp! '-10/! T$e title ti.6e" of b5 8r! Con.io are not t$e %be.t o# t$e .ae

at bar e.ept t$e 3lm <<8ain Sino Qa 8an!

For #%rt$er enli$tenment, t$i ree.tion letter "ate" 7an%ar5 0, 1''2 E$ ( - @iva/ i

$ereb5 =%ote"G

7an%ar5 1''2

>ear @i.,

T$i i not a ver5 #ormal b%ine letter I am +ritin to 5o% a I +o%l" li6e to epre m5

"iK.%lt5 in re.ommen"in t$e p%r.$ae o# t$e t$ree 3lm pa.6ae 5o% are oferin AS-

CN!

From amon t$e t$ree pa.6ae I .an onl5 ti.6 of 10 title +e .an p%r.$ae! Pleae ee

atta.$e"! I $ope 5o% +ill %n"ertan" m5 poition! 8ot o# t$e a.tion pi.t%re in t$e lit "o

not $ave bi a.tion tar in t$e .at! T$e5 are not #or primetime! In line +it$ t$i I +i$ to

mention t$at I $ave not .$e"%le" #or tele.at everal a.tion pi.t%re in o%t ver5 3rt

.ontra.t be.a%e o# t$e .$eap pro"%.tion val%e o# t$ee movie a +ell a t$e la.6 o# bi

a.tion tar! A a 3lm pro"%.er, I am %re 5o% %n"ertan" +$at I am tr5in to a5 a @iva

pro"%.e onl5 bi a.tion pi.t%re!

In #a.t, I +o%l" li6e to re=%et t+o 2/ a""itional r%n #or t$ee movie a I .an onl5

.$e"%le t$em in o%r non-primetime lot! e $ave to .over t$e amo%nt t$at +a pai" #or



t$ee movie be.a%e a 5o% ver5 +ell 6no+ t$at non-primetime a"vertiin rate are

ver5 lo+! T$ee are t$e %naire" title in t$e 3rt .ontra.t!

1! Qontra Pera Dsic!

2! Rai"er Platoon!

(! 9n"erro%n" %erilla

4! Tier Comman"

*! o5 "e Sabo

! &a"5 Comman"o

! atan 8ata"ero

)! Rebel5on

I $ope 5o% +ill .oni"er t$i re=%et o# mine!

T$e ot$er "ramati. 3lm $ave been ofere" to % be#ore an" $ave been ree.te" be.a%e

o# t$e r%lin o# 8TRC to $ave t$em aire" at 'G00 p!m! "%e to t$eir ver5 a"%lt t$eme!

A #or t$e 10 title I $ave .$ooen Dsic #rom t$e ( pa.6ae pleae .oni"er in.l%"in all

t$e ot$er @iva movie pro"%.e" lat 5ear! I $ave =%ite an attra.tive ofer to ma6e!

T$an6in 5o% an" +it$ m5 +armet rear"!

Sine"/

C$aro Santo-Con.io

On Febr%ar5 2, 1''2, "e#en"ant >el Roario approa.$e" AS-CN< 8! Con.io, +it$ a lit

.onitin o# *2 oriinal movie title i!e! not 5et aire" on televiion/ in.l%"in t$e 14 title

%be.t o# t$e preent .ae, a +ell a 104 re-r%n previo%l5 aire" on televiion/ #rom

+$i.$ AS-CN ma5 .$ooe anot$er *2 title, a a total o# 1* title, propoin to ell to

AS-CN airin ri$t over t$i pa.6ae o# *2 oriinal an" *2 re-r%n #or P0,000,000!00

o# +$i.$ P(0,000,000!00 +ill be in .a$ an" P(0,000,000!00 +ort$ o# televiion pot E$!4 to 4-C @iva; ' -@iva/!

On April 2, 1''2, "e#en"ant >el Roario an" AS-CN eneral manaer, E%enio &ope: III,

met at t$e Tamarin" rill Reta%rant in M%e:on Cit5 to "i.% t$e pa.6ae propoal o#

@iva! $at tranpire" in t$at l%n.$ meetin i t$e %be.t o# .oni.tin verion! 8r! &ope:

teti3e" t$at $e an" 8r! >el Roario allee"l5 aree" t$at AS-CRN +a rante" e.l%ive

3lm ri$t to #o%rteen 14/ 3lm #or a total .oni"eration o# P( million; t$at $e allee"l5



p%t t$i areement a to t$e pri.e an" n%mber o# 3lm in a nap6in<< an" ine" it an"

ave it to 8r! >el Roario E$! >; TSN, pp! 24-2, -), 7%ne ), 1''2/! On t$e ot$er $an",

>el Roario "enie" $avin ma"e an5 areement +it$ &ope: rear"in t$e 14 @iva 3lm;

"enie" t$e eiten.e o# a nap6in in +$i.$ &ope: +rote omet$in; an" inite" t$at +$at

$e an" &ope: "i.%e" at t$e l%n.$ meetin +a @iva< 3lm pa.6ae ofer o# 104 3lm

*2 oriinal an" *2 re-r%n/ #or a total pri.e o# P0 million! 8r! &ope: promiin Dsictoma6e a .o%nter propoal +$i.$ .ame in t$e #orm o# a propoal .ontra.t Anne C o# t$e

.omplaint E$! 1- @iva; E$! C - AS-CN/!

On April 0, 1''2, >el Roario an" 8r! ra.iano o:on o# RS Senior vi.e-prei"ent #or

Finan.e "i.%e" t$e term an" .on"ition o# @iva< ofer to ell t$e 104 3lm, a#ter t$e

ree.tion o# t$e ame pa.6ae b5 AS-CN!

On April 0, 1''2, "e#en"ant >el Roario re.eive" t$ro%$ $i e.retar5, a $an"+ritten

note #rom 8! Con.io, E$! * - @iva/, +$i.$ rea"G Bere< t$e "ra#t o# t$e .ontra.t! I

$ope 5o% 3n" ever5t$in in or"er, to +$i.$ +a atta.$e" a "ra#t e$ibition areement

E$! C<<- AS-CN; E$! ' - @iva, p! (/ a .o%nter-propoal .overin *( 3lm, *2 o# +$i.$

.ame #rom t$e lit ent b5 "e#en"ant >el Roario an" one 3lm +a a""e" b5 8! Con.io,

#or a .oni"eration o# P(* million! E$ibit C provi"e t$at AS-CN i rante" 3lm ri$t

to *( 3lm an" .ontain a ri$t o# 3rt re#%al to 1''2 @iva Film! T$e ai" .o%nter

propoal +a $o+ever ree.te" b5 @iva< oar" o# >ire.tor Din t$e evenin o# t$e ame

"a5, April , 1''2, a @iva +o%l" not ell an5t$in le t$an t$e pa.6ae o# 104 3lm #or

P0 million peo E$! ' - @iva/, an" %.$ ree.tion +a rela5e" to 8! Con.io!

On April 2', 1''2, a#ter t$e ree.tion o# AS-CN an" #ollo+in everal neotiation an"

meetin "e#en"ant >el Roario an" @iva< Prei"ent Tereita Cr%:, in .oni"eration o# P0

million, ine" a letter o# areement "ate" April 24, 1''2! rantin RS t$e e.l%ive ri$t

to air 104 @iva-pro"%.e" an"Lor a.=%ire" 3lm E$! -A - RS; E$! 4 - RS/ in.l%"in

t$e #o%rteen 14/ 3lm %be.t o# t$e preent .ae!

On 2 8a5 1''2, AS-CN 3le" be#ore t$e RTC a .omplaint #or pe.i3. per#orman.e +it$ a

pra5er #or a +rit o# preliminar5 in%n.tion an"Lor temporar5 retrainin or"er aaint

private repon"ent Rep%bli. roa".atin Corporation 5 $erea#ter RS /, @iva Pro"%.tion

$erea#ter @I@A/, an" @i.ente >el Roario! T$e .omplaint +a "o.6ete" a Civil Cae No! M-

'2-12(0'!

On 2 8a5 1''2, RTC i%e" a temporar5 retrainin or"er 6 enoinin private repon"ent

#rom pro.ee"in +it$ t$e airin, broa".atin, an" televiin o# t$e #o%rteen @I@A 3lm

%be.t o# t$e .ontrover5, tartin +it$ t$e 3lm Maging )ino 3a Man, +$i.$ +a

.$e"%le" to be $o+n on private repon"ent RS< .$annel at even o<.lo.6 in t$e

evenin o# ai" "ate!

On 1 7%ne 1''2, a#ter appropriate pro.ee"in, t$e RTC i%e" an or"er + "ire.tin t$e

i%an.e o# a +rit o# preliminar5 in%n.tion %pon AS-CN< potin o# P(* million bon"!

AS-CN move" #or t$e re"%.tion o# t$e bon", 8 +$ile private repon"ent move" #or

re.oni"eration o# t$e or"er an" ofere" to p%t %p a .o%nterbo%n"! 9



In t$e meantime, private repon"ent 3le" eparate an+er +it$ .o%nter.laim! 10 RS

alo et %p a .ro-.laim aaint @I@A!!

On ( A%%t 1''2, t$e RTC i%e" an or"er 11 "iolvin t$e +rit o# preliminar5 in%n.tion

%pon t$e potin b5 RS o# a P(0 million .o%nterbon" to an+er #or +$atever "amae

AS-CN mi$t %fer b5 virt%e o# %.$ "iol%tion! Bo+ever, it re"%.e" petitioner<in%n.tion bon" to P1* million a a .on"ition pre.e"ent #or t$e reintatement o# t$e +rit o#

preliminar5 in%n.tion $o%l" private repon"ent be %nable to pot a .o%nterbon"!

At t$e pre-trial 1 on A%%t 1''2, t$e partie, %pon %etion o# t$e .o%rt, aree" to

eplore t$e poibilit5 o# an ami.able ettlement! In t$e meantime, RS pra5e" #or an"

+a rante" reaonable time +it$in +$i.$ to p%t %p a P(0 million .o%nterbon" in t$e

event t$at no ettlement +o%l" be rea.$e"!

A t$e partie #aile" to enter into an ami.able ettlement RS pote" on 1 O.tober 1''2 a

.o%nterbon", +$i.$ t$e RTC approve" in it Or"er o# 1* O.tober 1''2! 13

On 1' O.tober 1''2, AS-CN 3le" a motion #or re.oni"eration 1 o# t$e ( A%%t an" 1*

O.tober 1''2 Or"er, +$i.$ RS oppoe"! 15

On 2' O.tober 1''2, t$e RTC .on"%.te" a pre-trial! 16

Pen"in reol%tion o# it motion #or re.oni"eration, AS-CN 3le" +it$ t$e Co%rt o#

Appeal a petition 1+.$allenin t$e RTC< Or"er o# ( A%%t an" 1* O.tober 1''2 an"

pra5in #or t$e i%an.e o# a +rit o# preliminar5 in%n.tion to enoin t$e RTC #rom en#or.in

ai" or"er! T$e .ae +a "o.6ete" a CA-!R! SP No! 2'(00!

On ( November 1''2, t$e Co%rt o# Appeal i%e" a temporar5 retrainin or"er 18

to

enoin t$e airin, broa".atin, an" televiin o# an5 or all o# t$e 3lm involve" in t$e

.ontrover5!

On 1) >e.ember 1''2, t$e Co%rt o# Appeal prom%late" a "e.iion 19 "imiin t$e

petition in CA -!R! No! 2'(00 #or bein premat%re! AS-CN .$allene" t$e "imial in a

petition #or revie+ 3le" +it$ t$i Co%rt on 1' 7an%ar5 1''(, +$i.$ +a "o.6ete" a !R!

No! 10)((!

In t$e meantime t$e RTC re.eive" t$e evi"en.e #or t$e partie in Civil Cae No! M-1'2-

120'! T$erea#ter, on 2) April 1''(, it ren"ere" a "e.iion 0 in #avor o# RS an" @I@A an"

aaint AS-CN "ipoin a #ollo+G

BEREFORE, %n"er .ool ree.tion an" pre.in"in #rom t$e #oreoin, %"ment i

ren"ere" in #avor o# "e#en"ant an" aaint t$e plaintif!

1/ T$e .omplaint i $ereb5 "imie";

2/ Plaintif AS-CN i or"ere" to pa5 "e#en"ant RS t$e #ollo+inG



a/ P10,2!00, t$e amo%nt o# premi%m pai" b5 RS to t$e %ret5 +$i.$ i%e" "e#en"ant

RS< bon" to li#t t$e in%n.tion;

b/ P1'1,)4(!00 #or t$e amo%nt o# print a"vertiement #or 8ain Sino Qa 8an in vario%

ne+paper;

./ Attorne5< #ee in t$e amo%nt o# P1 million;

"/ P* million a an" b5 +a5 o# moral "amae;

e/ P* million a an" b5 +a5 o# eemplar5 "amae;

(/ For "e#en"ant @I@A, plaintif AS-CN i or"ere" to pa5 P212,000!00 b5 +a5 o#

reaonable attorne5< #ee!

4/ T$e .ro-.laim o# "e#en"ant RS aaint "e#en"ant @I@A i "imie"!

*/ Plaintif to pa5 t$e .ot!

A..or"in to t$e RTC, t$ere +a no meetin o# min" on t$e pri.e an" term o# t$e ofer!

T$e allee" areement bet+een &ope: III an" >el Roario +a %be.t to t$e approval o#

t$e @I@A oar" o# >ire.tor, an" ai" areement +a "iapprove" "%rin t$e meetin o#

t$e oar" on April 1''2! Ben.e, t$ere +a no bai #or AS-CN< "eman" t$at @I@A

ine" t$e 1''2 Film E$ibition Areement! F%rt$ermore, t$e ri$t o# 3rt re#%al %n"er

t$e 1''0 Film E$ibition Areement $a" previo%l5 been eer.ie" per 8! Con.io< letter

to >el Roario ti.6in of ten title a..eptable to t$em, +$i.$ +o%l" $ave ma"e t$e 1''2

areement an entirel5 ne+ .ontra.t!

On 21 7%ne 1''(, t$i Co%rt "enie" 1 AS-CN< petition #or revie+ in !R! No! 10)((, a

no reverible error +a .ommitte" b5 t$e Co%rt o# Appeal in it .$allene" "e.iion an"

t$e .ae $a" be.ome moot an" a.a"emi. in vie+ o# t$e "imial o# t$e main a.tion b5

t$e .o%rt a 'uo in it "e.iion o# 2) April 1''(!

Arieve" b5 t$e RTC< "e.iion, AS-CN appeale" to t$e Co%rt o# Appeal .laimin t$at

t$ere +a a per#e.te" .ontra.t bet+een AS-CN an" @I@A rantin AS-CN t$e

e.l%ive ri$t to e$ibit t$e %be.t 3lm! Private repon"ent @I@A an" >el Roario alo

appeale" ee6in moral an" eemplar5 "amae an" a""itional attorne5< #ee!

In it "e.iion o# (1 O.tober 1'', t$e Co%rt o# Appeal aree" +it$ t$e RTC t$at t$e

.ontra.t bet+een AS-CN an" @I@A $a" not been per#e.te", abent t$e approval b5 t$e

@I@A oar" o# >ire.tor o# +$atever >el Roario, it< aent, mi$t $ave aree" +it$ &ope:

III! T$e appellate .o%rt "i" not even believe AS-CN< evi"en.e t$at &ope: III a.t%all5

+rote "o+n %.$ an areement on a nap6in, a t$e ame +a never pro"%.e" in .o%rt! It

li6e+ie ree.te" AS-CN< initen.e on it ri$t o# 3rt re#%al an" ratio.inate" a

#ollo+G





On t$e ot$er $an", repon"ent Co%rt o# Appeal "enie" @I@A an" >el Roario< appeal

be.a%e it +a RS an" not @I@A +$i.$ +a a.t%all5 pre%"i.e" +$en t$e .omplaint +a

3le" b5 AS-CN!

It motion #or re.oni"eration $avin been "enie", AS-CN 3le" t$e petition in t$i .ae,

.onten"in t$at t$e Co%rt o# Appeal ravel5 erre" in

I

! ! ! R9&IN TBAT TBERE AS NO PERFECTE> CONTRACT ETEEN PETITIONER AN>

PRI@ATE RESPON>ENT @I@A NOTITBSTAN>IN PREPON>ERANCE OF E@I>ENCE A>>9CE>

H PETITIONER TO TBE CONTRARH!

II

! ! ! IN AAR>IN ACT9A& AN> CO8PENSATORH >A8AES IN FA@OR OF PRI@ATE

RESPON>ENT RS!

III

! ! ! IN AAR>IN 8ORA& AN> EE8P&ARH >A8AES IN FA@OR OF PRI@ATE RESPON>ENT

RS!

I@

! ! ! IN AAR>IN ATTORNEH<S FEES IN FA@OR OF RS!

AS-CN .laim t$at it $a" 5et to #%ll5 eer.ie it ri$t o# 3rt re#%al over t+ent5-#o%rtitle %n"er t$e 1''0 Film E$ibition Areement, a it $a" .$oen onl5 ten title #rom t$e

3rt lit! It init t$at +e ive .re"en.e to &ope:< tetimon5 t$at $e an" >el Roario met

at t$e Tamarin" rill Reta%rant, "i.%e" t$e term an" .on"ition o# t$e e.on" lit t$e

1''2 Film E$ibition Areement/ an" %pon areement t$ereon, +rote t$e ame on a paper

nap6in! It alo aert t$at t$e .ontra.t $a alrea"5 been efe.tive, a t$e element

t$ereo#, namel5, .onent, obe.t, an" .oni"eration +ere etabli$e"! It t$en .on.l%"e

t$at t$e Co%rt o# Appeal< prono%n.ement +ere not %pporte" b5 la+ an" %ripr%"en.e,

a per o%r "e.iion o# 1 >e.ember 1''* in 4im5et5ai )ons Milling, nc. v. Court of Appeals,3 +$i.$ .ite" 6oyota )ha#, nc. v. Court of Appeals, Ang 7u Asuncion v. Court of Appeals, 5 an" +illonco 8ealty Company v. 2ormaheco. nc! 6

Anent t$e a.t%al "amae a+ar"e" to RS, AS-CN "iavo+ liabilit5 t$ere#or! RS pent

#or t$e premi%m on t$e .o%nterbon" o# it o+n volition in or"er to neate t$e in%n.tion

i%e" b5 t$e trial .o%rt a#ter t$e partie $a" ventilate" t$eir repe.tive poition "%rin

t$e $earin #or t$e p%rpoe! T$e 3lin o# t$e .o%nterbon" +a an option available to RS,

b%t it .an $ar"l5 be ar%e" t$at AS-CN .ompelle" RS to in.%r %.$ epene! ei"e,

RS $a" anot$er available option, i!e!, move #or t$e "iol%tion or t$e in%n.tion; or i# it

+a "etermine" to p%t %p a .o%nterbon", it .o%l" $ave preente" a .a$ bon"!



F%rt$ermore %n"er Arti.le 220( o# t$e Civil Co"e, t$e part5 %ferin lo or in%r5 i alo

re=%ire" to eer.ie t$e "ilien.e o# a oo" #at$er o# a #amil5 to minimi:e t$e "amae

re%ltin #rom t$e a.t or omiion! A rear" t$e .ot o# print a"vertiement, RS $a"

not .onvin.inl5 etabli$e" t$at t$i +a a lo attrib%table to t$e non $o+in 8ain

Sino Qa 8an; on t$e .ontrar5, it +a bro%$t o%t "%rin trial t$at +it$ or +it$o%t t$e .ae

or t$e in%n.tion, RS +o%l" $ave pent %.$ an amo%nt to enerate interet in t$e 3lm!

AS-CN #%rt$er .onten" t$at t$ere +a no .lear bai #or t$e a+ar" o# moral an"

eemplar5 "amae! T$e .ontrover5 involvin AS-CN an" RS "i" not in an5 +a5

oriinate #rom b%ine trana.tion bet+een t$em! T$e .laim #or %.$ "amae "i" not

arie #rom an5 .ontra.t%al "ealin or #rom pe.i3. a.t .ommitte" b5 AS-CN aaint

RS t$at ma5 be .$ara.teri:e" a +anton, #ra%"%lent, or re.6le; t$e5 aroe b5 virt%e

onl5 o# t$e 3lin o# t$e .omplaint, An a+ar" o# moral an" eemplar5 "amae i not

+arrante" +$ere t$e re.or" i bere#t o# an5 proo# t$at a part5 a.te" mali.io%l5 or in ba"

#ait$ in 3lin an a.tion! + In an5 .ae, #ree reort to .o%rt #or re"re o# +ron i a

matter o# p%bli. poli.5! T$e la+ re.oni:e t$e ri$t o# ever5 one to %e #or t$at +$i.$ $e

$onetl5 believe to be $i ri$t +it$o%t #ear o# tan"in trial #or "amae +$ere b5 la.6

o# %K.ient evi"en.e, leal te.$ni.alitie, or a "iferent interpretation o# t$e la+ on t$e

matter, t$e .ae +o%l" loe ro%n"! 8 One +$o ma6e %e o# $i o+n leal ri$t "oe no

in%r5! 9 I# "amae re%lt #ront t$e 3lin o# t$e .omplaint, it i damnum abs'uein9uria! 30 ei"e, moral "amae are enerall5 not a+ar"e" in #avor o# a %ri"i.al peron,

%nle it eno5 a oo" rep%tation t$at +a "ebae" b5 t$e ofen"in part5 re%ltin in

o.ial $%miliation! 31

A rear" t$e a+ar" o# attorne5< #ee, AS-CN maintain t$at t$e ame $a" no #a.t%al,

leal, or e=%itable %ti3.ation! In %tainin t$e trial .o%rt< a+ar", t$e Co%rt o# Appeal

a.te" in .lear "irear" o# t$e "o.trine lai" "o+n in 2uan v ! Camaganacan 3 t$at t$e tet

o# t$e "e.iion $o%l" tate t$e reaon +$5 attorne5< #ee are bein a+ar"e"; ot$er+ie,

t$e a+ar" $o%l" be "iallo+e"! ei"e, no ba" #ait$ $a been imp%te" on, m%.$ le

prove" a $avin been .ommitte" b5, AS-CN! It $a been $el" t$at +$ere no %K.ient

$o+in o# ba" #ait$ +o%l" be ree.te" in a part5< periten.e in a .ae ot$er t$an an

erroneo% .onvi.tion o# t$e ri$teo%ne o# $i .a%e, attorne5< #ee $all not be

re.overe" a .ot! 33

On t$e ot$er $an", RS aert t$at t$ere +a no per#e.te" .ontra.t bet+een AS-CN

an" @I@A abent an5 meetin o# min" bet+een t$em rear"in t$e obe.t an"

.oni"eration o# t$e allee" .ontra.t! It aKrm t$at t$e AS-CN< .laim o# a ri$t o# 3rt

re#%al +a .orre.tl5 ree.te" b5 t$e trial .o%rt! RS init t$e premi%m it $a" pai" #or t$e

.o%nterbon" .ontit%te" a pe.%niar5 lo %pon +$i.$ it ma5 re.over! It +a oblie" to p%t

%p t$e .o%nterbo%n" "%e to t$e in%n.tion pro.%re" b5 AS-CN! Sin.e t$e trial .o%rt

#o%n" t$at AS-CN $a" no .a%e o# a.tion or vali" .laim aaint RS an", t$ere#ore not

entitle" to t$e +rit o# in%n.tion, RS .o%l" re.over #rom AS-CN t$e premi%m pai" on

t$e .o%nterbon"! Contrar5 to t$e .laim o# AS-CN, t$e .a$ bon" +o%l" prove to be more

epenive, a t$e lo +o%l" be e=%ivalent to t$e .ot o# mone5 RS +o%l" #oreo in .ae

t$e P(0 million .ame #rom it #%n" or +a borro+e" #rom ban6!



RS li6e+ie aert t$at it +a entitle" to t$e .ot o# a"vertiement #or t$e .an.elle"

$o+in o# t$e 3lm 8ain Sino Qa 8an be.a%e t$e print a"vertiement +ere p%t o%t

to anno%n.e t$e $o+in on a parti.%lar "a5 an" $o%r on C$annel , i!e!, in it entiret5 at

one time, not a erie to be $o+n on a perio"i. bai! Ben.e, t$e print a"vertiement

+ere oo" an" relevant #or t$e parti.%lar "ate $o+in, an" in.e t$e 3lm .o%l" not be

$o+n on t$at parti.%lar "ate an" $o%r be.a%e o# t$e in%n.tion, t$e epene #or t$ea"vertiement $a" one to +ate!

A rear" moral an" eemplar5 "amae, RS aert t$at AS-CN 3le" t$e .ae an"

e.%re" in%n.tion p%rel5 #or t$e p%rpoe o# $arain an" pre%"i.in RS! P%r%ant t$en

to Arti.le 1' an" 21 o# t$e Civil Co"e, AS-CN m%t be $el" liable #or %.$

"amae! Citing Tolentino, 3 "amae ma5 be a+ar"e" in .ae o# ab%e o# ri$t even i#

t$e a.t "one i not illi.it an" t$ere i ab%e o# ri$t +ere plaintif intit%te an" a.tion

p%rel5 #or t$e p%rpoe o# $arain or pre%"i.in t$e "e#en"ant!

In %pport o# it tan" t$at a %ri"i.al entit5 .an re.over moral an" eemplar5 "amae,

private repon"ent RScited People v

! Manero

, 35 +$ere it +a tate" t$at %.$ entit5

ma5 re.over moral an" eemplar5 "amae i# it $a a oo" rep%tation t$at i "ebae"

re%ltin in o.ial $%miliation! it t$en ratio.inate; t$%G

T$ere .an be no "o%bt t$at RS< rep%tation $a been "ebae" b5 AS-CN< a.t in t$i

.ae! $en RS +a not able to #%l3ll it .ommitment to t$e vie+in p%bli. to $o+ t$e

3lm 8ain Sino Qa 8an on t$e .$e"%le" "ate an" time an" on t+o o..aion t$at

RS a"vertie"/, it %fere" erio% embarrament an" o.ial $%miliation! $en t$e

$o+in +a .an.ele", late vie+er .alle" %p RS< oK.e an" %be.te" RS to verbal

ab%e Anno%n.e 6a5o nan anno%n.e, $in"i nin5o naman ilalaba, nanlolo6o 5ata

6a5o/ E$! (-RS, par! (/! T$i alone +a not omet$in RS bro%$t %pon itel#! it +a

ea.tl5 +$at AS-CN $a" planne" to $appen!

T$e amo%nt o# moral an" eemplar5 "amae .annot be ai" to be e.eive! T+o reaon

%ti#5 t$e amo%nt o# t$e a+ar"!

T$e 3rt i t$at t$e $%miliation %fere" b5 RS i national etent! RS operation a a

broa".atin .ompan5 i Dsic nation+i"e! It .lientele, li6e t$at o# AS-CN, .onit o#

t$oe +$o o+n an" +at.$ televiion! It i not an eaeration to tate, an" it i a matter

o# %"i.ial noti.e t$at almot ever5 ot$er peron in t$e .o%ntr5 +at.$e televiion! T$e

$%miliation %fere" b5 RS i m%ltiplie" b5 t$e n%mber o# televie+er +$o $a"

anti.ipate" t$e $o+in o# t$e 3lm 8ain Sino Qa 8an on 8a5 2) an" November (,

1''2 b%t "i" not ee it o+in to t$e .an.ellation! A""e" to t$i are t$e a"vertier +$o

$a" pla.e" .ommer.ial pot #or t$e tele.at an" to +$om RS $a" a .ommitment in

.oni"eration o# t$e pla.ement to $o+ t$e 3lm in t$e "ate an" time pe.i3e"!

T$e e.on" i t$at it i a .ompetitor t$at .a%e" RS to %fer t$e $%miliation! T$e

$%miliation an" in%r5 are #ar reater in "eree +$en .a%e" b5 an entit5 +$oe %ltimate

b%ine obe.tive i to l%re .%tomer vie+er in t$i .ae/ a+a5 #rom t$e .ompetition! 36



For t$eir part, @I@A an" @i.ente "el Roario .onten" t$at t$e 3n"in o# #a.t o# t$e trial

.o%rt an" t$e Co%rt o# Appeal "o not %pport AS-CN< .laim t$at t$ere +a a per#e.te"

.ontra.t! S%.$ #a.t%al 3n"in .an no loner be "it%rbe" in t$i petition #or revie+ %n"er

R%le 4*, a onl5 =%etion o# la+ .an be raie", not =%etion o# #a.t! On t$e i%e o#

"amae an" attorne5 #ee, t$e5 a"opte" t$e ar%ment o# RS!

T$e 6e5 i%e #or o%r .oni"eration are 1/ +$et$er t$ere +a a per#e.te" .ontra.t

bet+een @I@A an" AS-CN, an" 2/ +$et$er RS i entitle" to "amae an" attorne5<

#ee! It ma5 be note" t$at t$e a+ar" o# attorne5< #ee o# P212,000 in #avor o# @I@A i not

aine" a anot$er error!

I!

T$e 3rt i%e $o%l" be reolve" aaint AS-CN! A .ontra.t i a meetin o# min"

bet+een t+o peron +$ereb5 one bin" $imel# to ive omet$in or to ren"er ome

ervi.e to anot$er 3+ #or a .oni"eration! t$ere i no .ontra.t %nle t$e #ollo+in

re=%iite .on.%rG 1/ .onent o# t$e .ontra.tin partie; 2/ obe.t .ertain +$i.$ i t$e%be.t o# t$e .ontra.t; an" (/ .a%e o# t$e obliation, +$i.$ i etabli$e"! 38 A .ontra.t

%n"eroe t$ree taeG

a/ preparation, .on.eption, or eneration, +$i.$ i t$e perio" o# neotiation an"

barainin, en"in at t$e moment o# areement o# t$e partie;

b/ per#e.tion or birt$ o# t$e .ontra.t, +$i.$ i t$e moment +$en t$e partie .ome to

aree on t$e term o# t$e .ontra.t; an"

./ .on%mmation or "eat$, +$i.$ i t$e #%l3llment or per#orman.e o# t$e term aree"

%pon in t$e .ontra.t! 39

Contra.t t$at are .onen%al in nat%re are per#e.te" %pon mere meetin o# t$e min",

On.e t$ere i .on.%rren.e bet+een t$e ofer an" t$e a..eptan.e %pon t$e %be.t matter,

.oni"eration, an" term o# pa5ment a .ontra.t i pro"%.e"! T$e ofer m%t be .ertain! To

.onvert t$e ofer into a .ontra.t, t$e a..eptan.e m%t be abol%te an" m%t not =%ali#5

t$e term o# t$e ofer; it m%t be plain, %ne=%ivo.al, %n.on"itional, an" +it$o%t varian.e

o# an5 ort #rom t$e propoal! A =%ali3e" a..eptan.e, or one t$at involve a ne+ propoal,

.ontit%te a .o%nter-ofer an" i a ree.tion o# t$e oriinal ofer! Cone=%entl5, +$en

omet$in i "eire" +$i.$ i not ea.tl5 +$at i propoe" in t$e ofer, %.$ a..eptan.e i

not %K.ient to enerate .onent be.a%e an5 mo"i3.ation or variation #rom t$e term o#

t$e ofer ann%l t$e ofer! 0

$en 8r! >el Roario o# @I@A met +it$ 8r! &ope: o# AS-CN at t$e Tamarin" rill on 2

April 1''2 to "i.% t$e pa.6ae o# 3lm, ai" pa.6ae o# 104 @I@A 3lm +a @I@A< ofer

to AS-CN to enter into a ne+ Film E$ibition Areement! %t AS-CN, ent, t$ro%$ 8!

Con.io, a .o%nter-propoal in t$e #orm o# a "ra#t .ontra.t propoin e$ibition o# *( 3lm

#or a .oni"eration o# P(* million! T$i .o%nter-propoal .o%l" be not$in le t$an t$e

.o%nter-ofer o# 8r! &ope: "%rin $i .on#eren.e +it$ >el Roario at Tamarin" rill



Reta%rant! Clearl5, t$ere +a no a..eptan.e o# @I@A< ofer, #or it +a met b5 a .o%nter-

ofer +$i.$ %btantiall5 varie" t$e term o# t$e ofer!

AS-CN< relian.e in 4im5et5ai )ons Milling, nc. v ! Court of Appeals 1 an" +illonco 8ealty Company v ! 2ormaheco, nc!, i mipla.e"! In t$ee

.ae, it +a $el" t$at an a..eptan.e ma5 .ontain a re=%et #or .ertain .$ane in t$eterm o# t$e ofer an" 5et be a bin"in a..eptan.e a lon a it i .lear t$at t$e meanin

o# t$e a..eptan.e i poitivel5 an" %ne=%ivo.all5 to a..ept t$e ofer, +$et$er %.$

re=%et i rante" or not! T$i r%lin +a, $o+ever, revere" in t$e reol%tion o# 2' 8ar.$

1'', 3 +$i.$ r%le" t$at t$e a..eptan.e o# all ofer m%t be %n=%ali3e" an" abol%te, i!e!,

it m%t be i"enti.al in all repe.t +it$ t$at o# t$e ofer o a to pro"%.e .onent or

meetin o# t$e min"!

On t$e ot$er $an", in @illon.o, cited in &im6et6ai, t$e allee" .$ane in t$e revie"

.o%nter-ofer +ere not material b%t merel5 .lari3.ator5 o# +$at $a" previo%l5 been

aree" %pon! It cited t$e tatement in )tuart v ! :ran5lin 4ife nsurance Co! t$at a

ven"or< .$ane in a p$rae o# t$e ofer to p%r.$ae, +$i.$ .$ane "oe not eentiall5

.$ane t$e term o# t$e ofer, "oe not amo%nt to a ree.tion o# t$e ofer an" t$e ten"er o#

a .o%nter-ofer! 5 Bo+ever, +$en an5 o# t$e element o# t$e .ontra.t i mo"i3e" %pon

a..eptan.e, %.$ alteration amo%nt to a .o%nter-ofer!

In t$e .ae at bar, AS-CN ma"e no %n=%ali3e" a..eptan.e o# @I@A< ofer! Ben.e, t$e5

%n"er+ent a perio" o# barainin! AS-CN t$en #ormali:e" it .o%nter-propoal or

.o%nter-ofer in a "ra#t .ontra.t, @I@A t$ro%$ it oar" o# >ire.tor, ree.te" %.$ .o%nter-

ofer, Even i# it be .on.e"e" arguendo t$at >el Roario $a" a..epte" t$e .o%nter-ofer, t$e

a..eptan.e "i" not bin" @I@A, a t$ere +a no proo# +$atoever t$at >el Roario $a" t$e

pe.i3. a%t$orit5 to "o o!

9n"er Corporation Co"e, 6 %nle ot$er+ie provi"e" b5 ai" Co"e, .orporate po+er,

%.$ a t$e po+er; to enter into .ontra.t; are eer.ie" b5 t$e oar" o# >ire.tor!

Bo+ever, t$e oar" ma5 "eleate %.$ po+er to eit$er an ee.%tive .ommittee or

oK.ial or .ontra.te" manaer! T$e "eleation, e.ept #or t$e ee.%tive .ommittee,

m%t be #or pe.i3. p%rpoe, + >eleation to oK.er ma6e t$e latter aent o# t$e

.orporation; a..or"inl5, t$e eneral r%le o# aen.5 a to t$e bin"in efe.t o# t$eir

a.t +o%l" appl5! 8 For %.$ oK.er to be "eeme" #%ll5 .lot$e" b5 t$e .orporation to

eer.ie a po+er o# t$e oar", t$e latter m%t pe.iall5 a%t$ori:e t$em to "o o! T$at >el

Roario "i" not $ave t$e a%t$orit5 to a..ept AS-CN< .o%nter-ofer +a bet evi"en.e"

b5 $i %bmiion o# t$e "ra#t .ontra.t to @I@A< oar" o# >ire.tor #or t$e latter<

approval! In an5 event, t$ere +a bet+een >el Roario an" &ope: III no meetin o# min"!

T$e #ollo+in 3n"in o# t$e trial .o%rt are intr%.tiveG

A n%mber o# .oni"eration militate aaint AS-CN< .laim t$at a .ontra.t +a per#e.te"

at t$at l%n.$ meetin on April 02, 1''2 at t$e Tamarin" rill!

FIRST, 8r! &ope: .laime" t$at +$at +a aree" %pon at t$e Tamarin" rill re#erre" to t$e

pri.e an" t$e n%mber o# 3lm, +$i.$ $e +rote on a nap6in! Bo+ever, E$ibit C



.ontain numerous provisions #hich, #ere not discussed at the 6amarind *rill, i# &ope:

tetimon5 +a to be believe" nor .o%l" t$e5 $ave been p$5i.all5 +ritten on a nap6in!

T$ere +a even "o%bt a to +$et$er it +a a paper nap6in or a .lot$ nap6in! In $ort +$at

+ere +ritten in E$ibit C<< +ere not "i.%e", an" t$ere#ore .o%l" not $ave been aree"

%pon, b5 t$e partie! Bo+ t$en .o%l" t$i .o%rt .ompel t$e partie to in E$ibit C +$en

t$e proviion t$ereo# +ere not previo%l5 aree" %ponU

SECON>, 8r! &ope: .laime" t$at +$at +a aree" %pon a t$e %be.t matter o# t$e

.ontra.t +a 14 3lm! T$e .omplaint in #a.t pra5 #or "eliver5 o# 14 3lm! %t E$ibit C

mention *( 3lm a it %be.t matter! $i.$ i +$i.$ I# E$ibit C ree.te" t$e tr%e

intent o# t$e partie, t$en AS-CN< .laim #or 14 3lm in it .omplaint i #ale or i# +$at it

allee" in t$e .omplaint i tr%e, t$en E$ibit C "i" not ree.t +$at +a aree" %pon b5

t$e partie! T$i %n"er.ore t$e #a.t t$at t$ere +a no meetin o# t$e min" a to t$e

%be.t matter o# t$e .ontra.t, o a to pre.l%"e per#e.tion t$ereo#! For ettle" i t$e r%le

t$at t$ere .an be no .ontra.t +$ere t$ere i no obe.t +$i.$ i it %be.t matter Art!

1(1), NCC/!

TBIR>, 8r! &ope: Dsic an+er to =%etion 2' o# $i aK"avit tetimon5 E$! >/ tateG

e +ere able to rea.$ an areement! @I@A ave % t$e e.l%ive li.ene to $o+ t$ee

#o%rteen 14/ 3lm, an" +e aree" to pa5 @iva t$e amo%nt o# P1,0*0,000!00 a +ell a

rant @iva .ommer.ial lot +ort$ P1','*0,000!00! e $a" alrea"5 earmar6e" t$i P1,

0*0,000!00!

+$i.$ ive a total .oni"eration o# P( million P1','*0,000!00 pl% P1,0*0,000!00!

e=%al P(,000,000!00/!

On .ro-eamination 8r! &ope: teti3e"G

M! $at +a +ritten in t$i nap6inU

A! T$e total pri.e, t$e brea6"o+n t$e 6no+n @iva movie, t$e blo.6b%ter movie an"

t$e ot$er @iva movie be.a%e t$e pri.e +a bro6en "o+n a..or"inl5! T$e none Dsic

@iva an" t$e even ot$er @iva movie an" t$e $arin bet+een t$e .a$ portion an" t$e

.on.erne" pot portion in t$e total amo%nt o# P(* million peo!

No+, +$i.$ i +$i.$U P( million or P(* millionU T$i +ea6en AS-CN< .laim!

FO9RTB! 8r! Con.io, teti#5in #or AS-CN tate" t$at $e tranmitte" E$ibit C to 8r!

>el Roario +it$ a $an"+ritten note, "e.ribin ai" E$ibit C a a "ra#t! E$! * -

@iva; tn pp! 2(-24 7%ne 0), 1''2/! T$e ai" "ra#t $a a +ell "e3ne" meanin!

Sin.e E$ibit C i onl5 a "ra#t, or a tentative, proviional or preparator5 +ritin prepare"

#or "i.%ion, t$e term an" .on"ition t$ereo# .o%l" not $ave been previo%l5 aree"

%pon b5 AS-CN an" @iva E$ibit C<< .o%l" not t$ere#ore leall5 bin" @iva, not $avin

aree" t$ereto! In #a.t, 8! Con.io a"mitte" t$at t$e term an" .on"ition embo"ie" in



E$ibit C +ere prepare" b5 AS-CN< la+5er an" t$ere +a no "i.%ion on ai"

term an" .on"ition! ! ! !

A t$e partie $a" not 5et "i.%e" t$e propoe" term an" .on"ition in E$ibit C, an"

t$ere +a no evi"en.e +$atoever t$at @iva aree" to t$e term an" .on"ition t$ereo#,

ai" "o.%ment .annot be a bin"in .ontra.t! T$e #a.t t$at @iva re#%e" to in E$ibit Creveal onl5 t+o Dsic +ell t$at it "i" not aree on it term an" .on"ition, an" t$i .o%rt

$a no a%t$orit5 to .ompel @iva to aree t$ereto!

FIFTB! 8r! &ope: %n"ertan" Dsic t$at +$at $e an" 8r! >el Roario aree" %pon at t$e

Tamarin" rill +a onl5 proviional, in t$e ene t$at it +a %be.t to approval b5 t$e

oar" o# >ire.tor o# @iva! Be teti3e"G

M! No+, 8r! itne, an" a#ter t$at Tamarin" meetin !!! t$e e.on" meetin +$erein 5o%

.laime" t$at 5o% $ave t$e meetin o# t$e min" bet+een 5o% an" 8r! @i. "el Roario,

+$at $appene"U

A! @i. >el Roario +a %ppoe" to .all % %p an" tell % pe.i3.all5 t$e re%lt o# t$e

"i.%ion +it$ t$e oar" o# >ire.tor!

M! An" 5o% are re#errin to t$e o-.alle" areement +$i.$ 5o% +rote in Dsic a pie.e o#

paperU

A! He, ir!

M! So, $e +a oin to #or+ar" t$at to t$e boar" o# >ire.tor #or approvalU

A! He, ir! Tn, pp! 42-4(, 7%ne ), 1''2/

M! >i" 8r! >el Roario tell 5o% t$at $e +ill %bmit it to $i oar" #or approvalU

A! He, ir! Tn, p! ', 7%ne ), 1''2/!

T$e above tetimon5 o# 8r! &ope: $o+ be5on" "o%bt t$at $e 6ne+ 8r! >el Roario $a"

no a%t$orit5 to bin" @iva to a .ontra.t +it$ AS-CN %ntil an" %nle it oar" o# >ire.tor

approve" it! T$e .omplaint, in #a.t, allee t$at 8r! >el Roario i t$e Ee.%tive Pro"%.er

o# "e#en"ant @iva +$i.$ i a .orporation! par! 2, .omplaint/! A a mere aent o# @iva,

>el Roario .o%l" not bin" @iva %nle +$at $e "i" i rati3e" b5 it oar" o# >ire.tor!

+icente vs! *eralde/ , *2 SCRA 210; Arnold vs! ;illetsan" Pateron, 44 P$il! (4/! A a

mere aent, re.oni:e" a %.$ b5 plaintif, >el Roario .o%l" not be $el" liable ointl5 an"

everall5 +it$ @iva an" $i in.l%ion a part5 "e#en"ant $a no leal bai! )alongavs! ;arner 2arner Dsic , CO&TA , )) P$il! 12*; Salmon v! Tan, ( P$il! **/!

T$e tetimon5 o# 8r! &ope: an" t$e alleation in t$e .omplaint are .lear a"miion t$at

+$at +a %ppoe" to $ave been aree" %pon at t$e Tamarin" rill bet+een 8r! &ope:

an" >el Roario +a not a bin"in areement! It i a it $o%l" be be.a%e .orporate



po+er to enter into a .ontra.t i lo"e" in t$e oar" o# >ire.tor! Se.! 2(, Corporation

Co"e/! it$o%t %.$ boar" approval b5 t$e @iva boar", +$atever areement &ope: an" >el

Roario arrive" at .o%l" not ripen into a vali" .ontra.t bin"in %pon @iva 7ao 3a )in6rading vs! Court of Appeals, 20' SCRA (/! T$e evi"en.e a""%.e" $o+ t$at t$e oar"

o# >ire.tor o# @iva ree.te" E$ibit C an" inite" t$at t$e 3lm pa.6ae #or 140 3lm be

maintaine" E$! -1 - @iva /!

9

T$e .ontention t$at AS-CN $a" 5et to #%ll5 eer.ie it ri$t o# 3rt re#%al over t+ent5-

#o%r 3lm %n"er t$e 1''0 Film E$ibition Areement an" t$at t$e meetin bet+een &ope:

an" >el Roario +a a .ontin%ation o# ai" previo% .ontra.t i %ntenable! A oberve" b5

t$e trial .o%rt, AS-CN ri$t o# 3rt re#%al $a" alrea"5 been eer.ie" +$en 8! Con.io

+rote to @I@A ti.6in of ten 3lm, T$%G

DT$e %be=%ent neotiation +it$ AS-CN t+o 2/ mont$ a#ter t$i letter +a ent, +a

#or an entirel5 "iferent pa.6ae! 8! Con.io $erel# a"mitte" on .ro-eamination to

$avin %e" or eer.ie" t$e ri$t o# 3rt re#%al! S$e tate" t$at t$e lit +a not

a..eptable an" +a in"ee" not a..epte" b5 AS-CN, TSN, 7%ne ), 1''2, pp! )-10/! Even

8r! &ope: $imel# a"mitte" t$at t$e ri$t o# t$e 3rt re#%al ma5 $ave been alrea"5

eer.ie" b5 8! Con.io a $e $a"/! TSN, 7%ne ), 1''2, pp! 1-*/! >el Roario $imel#

6ne+ an" %n"ertan" Dsic t$at AS-CN $a lot it ri$t o# t$e 3rt re#%al +$en $i lit

o# ( title +ere ree.te" Tn, 7%ne ', 1''2, pp! 10-11/ 50

II

Bo+ever, +e 3n" #or AS-CN on t$e i%e o# "amae! e $all 3rt ta6e %p a.t%al

"amae! C$apter 2, Title @III, oo6 I@ o# t$e Civil Co"e i t$e pe.i3. la+ on a.t%al or

.ompenator5 "amae! E.ept a provi"e" b5 la+ or b5 tip%lation, one i entitle" to

.ompenation #or a.t%al "amae onl5 #or %.$ pe.%niar5 lo %fere" b5 $im a $e $a

"%l5 prove"! 51 T$e in"emni3.ation $all .ompre$en" not onl5 t$e val%e o# t$e lo

%fere", b%t alo t$at o# t$e pro3t t$at t$e obliee #aile" to obtain! 5 In .ontra.t an"

=%ai-.ontra.t t$e "amae +$i.$ ma5 be a+ar"e" are "epen"ent on +$et$er t$e

oblior a.te" +it$ oo" #ait$ or ot$er+ie, It .ae o# oo" #ait$, t$e "amae re.overable

are t$oe +$i.$ are t$e nat%ral an" probable .one=%en.e o# t$e brea.$ o# t$e obliation

an" +$i.$ t$e partie $ave #oreeen or .o%l" $ave reaonabl5 #oreeen at t$e time o# t$e

.ontit%tion o# t$e obliation! I# t$e oblior a.te" +it$ #ra%", ba" #ait$, mali.e, or +anton

attit%"e, $e $all be reponible #or all "amae +$i.$ ma5 be reaonabl5 attrib%te" to

t$e non-per#orman.e o# t$e obliation! 53 In .rime an" =%ai-"eli.t, t$e "e#en"ant $all

be liable #or all "amae +$i.$ are t$e nat%ral an" probable .one=%en.e o# t$e a.t or

omiion .omplaine" o#, +$et$er or not %.$ "amae $a been #oreeen or .o%l" $ave

reaonabl5 been #oreeen b5 t$e "e#en"ant! 5

A.t%al "amae ma5 li6e+ie be re.overe" #or lo or impairment o# earnin .apa.it5 in

.ae o# temporar5 or permanent peronal in%r5, or #or in%r5 to t$e plaintif< b%ine

tan"in or .ommer.ial .re"it! 55



T$e .laim o# RS #or a.t%al "amae "i" not arie #rom .ontra.t, =%ai-.ontra.t, "eli.t, or

=%ai-"eli.t! It aroe #rom t$e #a.t o# 3lin o# t$e .omplaint "epite AS-CN< allee"

6no+le"e o# la.6 o# .a%e o# a.tion! T$% pararap$ 12 o# RS< An+er +it$

Co%nter.laim an" Cro-.laim %n"er t$e $ea"in CO9NTERC&AI8 pe.i3.all5 alleeG

12! AS-CN 3le" t$e .omplaint 6no+in #%ll5 +ell t$at it $a no .a%e o# a.tion RS! A are%lt t$ereo#, RS %fere" a.t%al "amae in t$e amo%nt o# P,21,1'*!(2! 56

Nee"le to tate t$e a+ar" o# a.t%al "amae .annot be .ompre$en"e" %n"er t$e above

la+ on a.t%al "amae! RS .o%l" onl5 probabl5 ta6e re#%e %n"er Arti.le 1', 20, an" 21

o# t$e Civil Co"e, +$i.$ rea" a #ollo+G

Art! 1'! Ever5 peron m%t, in t$e eer.ie o# $i ri$t an" in t$e per#orman.e o# $i

"%tie, a.t +it$ %ti.e, ive ever5one $i "%e, an" oberve $onet5 an" oo" #ait$!

Art! 20! Ever5 peron +$o, .ontrar5 to la+, +il#%ll5 or nelientl5 .a%e "amae to

anot$er, $all in"emni#5 t$e latter #or tile ame!

Art! 21! An5 peron +$o +il#%ll5 .a%e lo or in%r5 to anot$er in a manner t$at i

.ontrar5 to moral, oo" .%tom or p%bli. poli.5 $all .ompenate t$e latter #or t$e

"amae!

It ma5 #%rt$er be oberve" t$at in .ae +$ere a +rit o# preliminar5 in%n.tion i i%e",

t$e "amae +$i.$ t$e "e#en"ant ma5 %fer b5 reaon o# t$e +rit are re.overable #rom

t$e in%n.tive bon"! 5+ In t$i .ae, AS-CN $a" not 5et 3le" t$e re=%ire" bon"; a a

matter o# #a.t, it a6e" #or re"%.tion o# t$e bon" an" even +ent to t$e Co%rt o# Appeal to

.$allene t$e or"er on t$e matter, Clearl5 t$en, it +a not ne.ear5 #or RS to 3le a

.o%nterbon"! Ben.e, AS-CN .annot be $el" reponible #or t$e premi%m RS pai" #or

t$e .o%nterbon"!

Neit$er .o%l" AS-CN be liable #or t$e print a"vertiement #or 8ain Sino Qa 8an #or

la.6 o# %K.ient leal bai! T$e RTC i%e" a temporar5 retrainin or"er an" later, a +rit

o# preliminar5 in%n.tion on t$e bai o# it "etermination t$at t$ere eite" %K.ient

ro%n" #or t$e i%an.e t$ereo#! Notabl5, t$e RTC "i" not "iolve t$e in%n.tion on t$e

ro%n" o# la.6 o# leal an" #a.t%al bai, b%t be.a%e o# t$e plea o# RS t$at it be allo+e"

to p%t %p a .o%nterbon"!

A rear" attorne5< #ee, t$e la+ i .lear t$at in t$e aben.e o# tip%lation, attorne5<

#ee ma5 be re.overe" a a.t%al or .ompenator5 "amae %n"er an5 o# t$e

.ir.%mtan.e provi"e" #or in Arti.le 220) o# t$e Civil Co"e! 58

T$e eneral r%le i t$at attorne5< #ee .annot be re.overe" a part o# "amae be.a%e

o# t$e poli.5 t$at no premi%m $o%l" be pla.e" on t$e ri$t to litiate! 59 T$e5 are not to

be a+ar"e" ever5 time a part5 +in a %it! T$e po+er o# t$e .o%rt to a+ar" attorne5< #ee

%n"er Arti.le 220) "eman" #a.t%al, leal, an" e=%itable %ti3.ation! 60 Even +$en

.laimant i .ompelle" to litiate +it$ t$ir" peron or to in.%r epene to prote.t $i



ri$t, till attorne5< #ee ma5 not be a+ar"e" +$ere no %K.ient $o+in o# ba" #ait$

.o%l" be ree.te" in a part5< periten.e in a .ae ot$er t$an erroneo% .onvi.tion o# t$e

ri$teo%ne o# $i .a%e! 61

A to moral "amae t$e la+ i Se.tion 1, C$apter (, Title @III, oo6 I@ o# t$e Civil Co"e!

Arti.le 221 t$ereo# "e3ne +$at are in.l%"e" in moral "amae, +$ile Arti.le 221'en%merate t$e .ae +$ere t$e5 ma5 be re.overe", Arti.le 2220 provi"e t$at moral

"amae ma5 be re.overe" in brea.$e o# .ontra.t +$ere t$e "e#en"ant a.te"

#ra%"%lentl5 or in ba" #ait$! RS< .laim #or moral "amae .o%l" poibl5 #all onl5 %n"er

item 10/ o# Arti.le 221', t$ereo# +$i.$ rea"G

10/ A.t an" a.tion re#erre" to in Arti.le 21, 2, 2, 2), 2', (0, (2, (4, an" (*!

8oral "amae are in t$e .ateor5 o# an a+ar" "eine" to .ompenate t$e .laimant #or

a.t%al in%r5 %fere"! an" not to impoe a penalt5 on t$e +ron"oer! 6 T$e a+ar" i not

meant to enri.$ t$e .omplainant at t$e epene o# t$e "e#en"ant, b%t to enable t$e

in%re" part5 to obtain mean, "iverion, or am%ement t$at +ill erve to obviate t$enmoral %ferin $e $a %n"erone! It i aime" at t$e retoration, +it$in t$e limit o# t$e

poible, o# t$e pirit%al status 'uo ante, an" $o%l" be proportionate to t$e %ferin

ini.te"! 63 Trial .o%rt m%t t$en %ar" aaint t$e a+ar" o# eorbitant "amae; t$e5

$o%l" eer.ie balan.e" retraine" an" mea%re" obe.tivit5 to avoi" %pi.ion t$at it

+a "%e to paion, pre%"i.e, or .orr%ption on t$e part o# t$e trial .o%rt! 6

T$e a+ar" o# moral "amae .annot be rante" in #avor o# a .orporation be.a%e, bein

an arti3.ial peron an" $avin eiten.e onl5 in leal .ontemplation, it $a no #eelin, no

emotion, no ene, It .annot, t$ere#ore, eperien.e p$5i.al %ferin an" mental

an%i$, +$i.$ .all be eperien.e" onl5 b5 one $avin a nervo% 5tem!65 T$e tatement

in People v ! Manero 66 an" Mambulao 4umber Co! v ! P<2 6+ t$at a .orporation ma5 re.over

moral "amae i# it $a a oo" rep%tation t$at i "ebae", re%ltin in o.ial $%miliation

i an obiter dictum! On t$i .ore alone t$e a+ar" #or "amae m%t be et ai"e, in.e

RS i a .orporation!

T$e bai. la+ on eemplar5 "amae i Se.tion *, C$apter (, Title @III, oo6 I@ o# t$e

Civil Co"e! T$ee are impoe" b5 +a5 o# eample or .orre.tion #or t$e p%bli. oo", in

a""ition to moral, temperate, li=%i"ate" or .ompenator5 "amae! 68 T$e5 are

re.overable in .riminal .ae a part o# t$e .ivil liabilit5 +$en t$e .rime +a .ommitte"

+it$ one or more aravatin .ir.%mtan.e; 69 in =%ai-.ontra.t, i# t$e "e#en"ant a.te"

+it$ ro nelien.e;+0 an" in .ontra.t an" =%ai-.ontra.t, i# t$e "e#en"ant a.te" in a

+anton, #ra%"%lent, re.6le, oppreive, or malevolent manner! +1

It ma5 be reiterate" t$at t$e .laim o# RS aaint AS-CN i not bae" on .ontra.t,

=%ai-.ontra.t, "eli.t, or =%ai-"eli.t, Ben.e, t$e .laim #or moral an" eemplar5 "amae

.an onl5 be bae" on Arti.le 1', 20, an" 21 o# t$e Civil Co"e!

T$e element o# ab%e o# ri$t %n"er Arti.le 1' are t$e #ollo+inG 1/ t$e eiten.e o# a

leal ri$t or "%t5, 2/ +$i.$ i eer.ie" in ba" #ait$, an" (/ #or t$e ole intent o#





T$ermal Po+er Plant in Cala.a, atana! T$e P$ilipp rot$er O.eani., In.! PBIRO/

pre=%ali3e" an" +a allo+e" to parti.ipate a one o# t$e bi""er! A#ter t$e p%bli. bi""in

+a .on"%.te", PBIRO< bi" +a a..epte"! NAPOCOR< a..eptan.e +a .onve5e" in a

letter "ate" 7%l5 ), 1'), +$i.$ +a re.eive" b5 PBIRO on 7%l5 1*, 1')!T$e i""in

Term an" Spe.i3.ation4provi"e #or t$e manner o# $ipment o# .oal, t$%G

=)>C6< +

)?PM><6

T$e +innin TEN>ERER +$o t$en be.ome t$e SE&&ER $all arrane an" provi"e earle

b%l6 .arrier #or t$e $ipment o# .oal to arrive at "i.$arin port on or be#ore t$irt5 (0/

.alen"ar "a5 a#ter re.eipt o# t$e &etter o# Cre"it b5 t$e SE&&ER or it nominee a per

Se.tion I@ $ereo# to meet t$e veel arrival .$e"%le at Cala.a, atana, P$ilippine a

#ollo+G

0,000 VL - 10 7%l5 20, 1')

0,000 VL - 10 September 4, 1')*

On 7%l5 10, 1'), PBIRO ent +or" to NAPOCOR t$at in"%trial "ip%te mi$t oon

pla%e A%tralia, t$e $ipment< point o# oriin, +$i.$ .o%l" erio%l5 $amper PBIRO<

abilit5 to %ppl5 t$e nee"e" .oal! From 7%l5 2( to 7%l5 (1, 1'), PBIRO aain apprie"

NAPOCOR o# t$e it%ation in A%tralia, parti.%larl5 in#ormin t$e latter t$at t$e $ip

o+ner t$erein are not +illin to loa" .aro %nle a tri6e-#ree .la%e i in.orporate" in

t$e .$arter part5 or t$e .ontra.t o# .arriae! In or"er to $aten t$e tran#er o# .oal,

PBIRO propoe" to NAPOCOR t$at t$e5 e=%all5 $are t$e b%r"en o# a tri6e-#ree .la%e!

NAPOCOR re#%e"!

On A%%t , 1'), PBIRO re.eive" #rom NAPOCOR a .on3rme" an" +or6able letter o#

.re"it! Intea" o# "eliverin t$e .oal on or be#ore t$e t$irtiet$ "a5 a#ter re.eipt o# t$e

&etter o# Cre"it, a aree" %pon b5 t$e partie in t$e 7%l5 .ontra.t, PBIRO efe.te" it 3rt

$ipment onl5 on November 1, 1')!

Cone=%entl5, in O.tober 1'), NAPOCOR on.e more a"vertie" #or t$e "eliver5 o# .oal to

it Cala.a t$ermal plant! PBIRO parti.ipate" ane+ in t$i %be=%ent bi""in! On

November 24, 1'), NAPOCOR "iapprove" PBIRO< appli.ation #or pre-=%ali3.ation to

bi" #or not meetin t$e minim%m re=%irement!) 9pon #%rt$er in=%ir5, PBIRO #o%n" t$at

t$e real reaon #or t$e "iapproval +a it p%rporte" #ail%re to ati#5 NAPOCOR< "eman"

#or "amae "%e to t$e "ela5 in t$e "eliver5 o# t$e 3rt .oal $ipment!

T$i prompte" PBIRO to 3le an a.tion #or "amae +it$ appli.ation #or in%n.tion aaint

NAPOCOR +it$ t$e Reional Trial Co%rt, ran.$ *, 8a6ati Cit5!' In it .omplaint, PBIRO

allee" t$at NAPOCOR< a.t o# "i=%ali#5in it in t$e O.tober 1') bi""in an" in all

%be=%ent bi""in +a tainte" +it$ mali.e an" ba" #ait$! PBIRO pra5e" #or a.t%al,

moral an" eemplar5 "amae an" attorne5< #ee!



In it an+er, NAPOCOR averre" t$at t$e tri6e in A%tralia .o%l" not be invo6e" a

reaon #or t$e "ela5 in t$e "eliver5 o# .oal be.a%e PBIRO itel# a"mitte" t$at a o# 7%l5

2), 1') t$oe tri6e $a" alrea"5 .eae"! An", even a%min t$at t$e tri6e +ere till

onoin, PBIRO $o%l" $ave $o%l"ere" t$e b%r"en o# a tri6e-#ree .la%e be.a%e

t$eir .ontra.t +a C an" F Cala.a, atana, P$ilippine, meanin,

t$e cost an" freight #rom t$e point o# oriin %ntil t$e point o# "etination +o%l" be #or t$ea..o%nt o# PBIRO! F%rt$ermore, NAPOCOR .laime" t$at "%e to PBIRO< #ail%re to "eliver

t$e .oal on time, it +a .ompelle" to p%r.$ae .oal #rom ASEA at a $i$er pri.e! NAPOCOR

.laime" #or a.t%al "amae in t$e amo%nt o# P12,4(,1)*!(, repreentin t$e in.reae in

t$e pri.e o# .oal, an" a .laim o# P*00,000!00 a litiation epene!10

T$erea#ter, trial on t$e merit en%e"!

On 7an%ar5 1, 1''2, t$e trial .o%rt ren"ere" a "e.iion in #avor o# PBIRO, t$e "ipoitive

portion o# +$i.$ rea"G

BEREFORE, %"ment i $ereb5 ren"ere" in #avor o# plaintif P$ilipp rot$er O.eani.In.! PBIRO/ an" aaint t$e "e#en"ant National Po+er Corporation NAPOCOR/ or"erin

t$e ai" "e#en"ant NAPOCORG

1! To reintate P$ilipp rot$er O.eani., In.! PBIRO/ in t$e "e#en"ant National Po+er

Corporation< lit o# a..re"ite" bi""er an" allo+ PBIRO to parti.ipate in an5 an" all

#%t%re ten"er o# National Po+er Corporation #or t$e %ppl5 an" "eliver5 o# importe"

team .oal;

2! To pa5 P$ilipp rot$er O.eani., In.! PBIRO/;

a! T$e peo e=%ivalent at t$e time o# pa5ment o# )4,000 a a.t%al "amae,

b! T$e peo e=%ivalent at t$e time o# pa5ment o# 100,000 a moral "amae;

.! T$e peo e=%ivalent at t$e time o# pa5ment o# *0,000 a eemplar5 "amae;

"! T$e peo e=%ivalent at t$e time o# pa5ment o# (,2(1!'1 a reimb%rement #or

epene, .ot o# litiation an" attorne5< #ee;

(! To pa5 t$e .ot o# %it;

4! T$e .o%nter.laim o# "e#en"ant NAPOCOR are "imie" #or la.6 o# merit!

SO OR>ERE>!11

9nati3e", NAPOCOR, t$ro%$ t$e Soli.itor eneral, elevate" t$e .ae to t$e Co%rt o#

Appeal! On A%%t 2, 1'', t$e Co%rt o# Appeal ren"ere" a >e.iion aKrmin in toto

t$e >e.iion o# t$e Reional Trial Co%rt! It ratio.inate" t$atG



T$ere i ample evi"en.e to $o+ t$at alt$o%$ PBIRO< "eliver5 o# t$e $ipment o# .oal

+a "ela5e", t$e "ela5 +a in #a.t .a%e" b5 a/ Napo.or< o+n "ela5 in openin a

+or6able letter o# .re"it; an" b/ t$e tri6e +$i.$ pla=%e" t$e A%tralian .oal in"%tr5

#rom t$e 3rt +ee6 o# 7%l5 to t$e t$ir" +ee6 o# September 1')! Stri6e are in.l%"e" in t$e

"e3nition o# #or.e ma9eure in Se.tion @II o# t$e i""in Term an" Spe.i3.ation, supra/,

o P$ibro i not liable #or an5 "ela5 .a%e" t$ereb5!

P$ibro +a in#orme" o# t$e a..eptan.e o# it bi" on 7%l5 ), 1')! >eliver5 o# .oal +a to be

efe.te" t$irt5 (0/ "a5 #rom Napo.or< openin o# a .on3rme" an" +or6able letter o#

.re"it! Napo.or +a onl5 able to "o o on A%%t , 1')!

5 t$at time, A%tralia< .oal in"%tr5 +a in t$e mi""le o# a eet$in .ontrover5 an"

%nret, o..aione" b5 tri6e, overtime ban, mine toppae! T$e oriin, t$e .ope an"

t$e efe.t o# t$i in"%trial %nret are l%.i"l5 "e.ribe" in t$e %n.ontroverte" tetimon5

o# 7ame Ar.$ibal", an emplo5ee o# P$ibro an" member o# t$e Eport Committee o# t$e

A%tralian Coal Ao.iation "%rin t$e time t$ee event tranpire"!

T$e re.or" alo attet t$at P$ibro perio"i.all5 in#orme" Napo.or o# t$ee "evelopment

a earl5 a 7%l5 1, 1'), even be#ore t$e bi" +a approve"! Het, Napo.or "i" not #ort$+it$

open t$e letter o# .re"it in or"er to avoi" "ela5 +$i.$ mi$t be .a%e" b5 t$e tri6e an"

t$eir a#ter-efe.t!

Stri6e are %n"o%bte"l5 in.l%"e" in t$e #or.e ma9eure .la%e o# t$e i""in Term an"

Spe.i3.ation supra/! T$e reno+ne" .ivilit, Pro#! Art%ro Tolentino, "e3ne

#or.e ma9eure a an event +$i.$ ta6e pla.e b5 a..i"ent an" .o%l" not $ave been

#oreeen! Civil Co"e o# t$e P$ilippine, @ol%me I@, Obliation an" Contra.t, 12,

D1''1/ Be #%rt$er tateG

Fort%ito% event ma5 be pro"%.e" b5 t+o eneral .a%eG 1/ b5 Nat%re, %.$ a

eart$=%a6e, torm, oo", epi"emi., 3re, et.!, an" 2/ b5 t$e a.t o# man, %.$ a an

arme" invaion, atta.6 b5 ban"it, overnmental pro$ibition, robber5, et.!

Tolentino a"" t$at t$e term enerall5 applie, broa"l5 pea6in, to nat%ral a..i"ent! In

or"er t$at a.t o# man %.$ a a tri6e, ma5 .ontit%te #ort%ito% event, it i ne.ear5

t$at t$e5 $ave t$e #or.e o# an impoition +$i.$ t$e "ebtor .o%l" not $ave reite"! Be

.ite a parallel eample in t$e .ae o# Philippine <ational 2an5 v. Court of Appeals, '4

SCRA (* 1''/, +$erein t$e S%preme Co%rt ai" t$at t$e o%tbrea6 o# +ar +$i.$

prevent per#orman.e eempt a part5 #rom liabilit5!

Ben.e, b5 la+ an" b5 tip%lation o# t$e partie, t$e tri6e +$i.$ too6 pla.e in A%tralia

#rom t$e 3rt +ee6 o# 7%l5 to t$e t$ir" +ee6 o# September, 1'), eempte" P$ibro #rom

t$e efe.t o# "ela5 o# t$e "eliver5 o# t$e $ipment o# .oal!12



T+i.e t$+arte", NAPOCOR .ome to % via a petition #or revie+ a.ribin to t$e Co%rt o#

Appeal t$e #ollo+in errorG

I

Repon"ent Co%rt o# Appeal ravel5 an" erio%l5 erre" in .on.l%"in an" o $ol"int$at PBIRO< "ela5 in t$e "eliver5 o# importe" .oal +a "%e to NAPOCOR< allee" "ela5

in openin a letter o# .re"it an" to #or.e ma9eure, an" not to PBIRO< o+n "eliberate a.t

an" #a%lt!1(

II

Repon"ent Co%rt o# Appeal ravel5 an" erio%l5 erre" in .on.l%"in an" o $ol"in

t$at NAPOCOR a.te" mali.io%l5 an" %n%ti3abl5 in "i=%ali#5in PBIRO #rom

parti.ipatin in t$e >e.ember ), 1') an" #%t%re bi""in #or t$e %ppl5 o# importe" .oal

"epite t$e eiten.e o# vali" ro%n" t$ere#or %.$ a erio% impairment o# it tra.6

re.or"!

14

III

Repon"ent Co%rt o# Appeal ravel5 an" erio%l5 erre" in .on.l%"in an" o $ol"in

t$at PBIRO +a entitle" to in%n.tive relie#, to a.t%al or .ompenator5, moral an"

eemplar5 "amae, attorne5< #ee an" litiation epene "epite t$e .lear aben.e o#

leal an" #a.t%al bae #or %.$ a+ar"!1*

I@

Repon"ent Co%rt o# Appeal ravel5 an" erio%l5 erre" in abolvin PBIRO #rom an5liabilit5 #or "amae to NAPOCOR #or it %n%ti3e" an" "eliberate re#%al an"Lor #ail%re to

"eliver t$e .ontra.te" importe" .oal +it$in t$e tip%late" perio"!1

@

Repon"ent Co%rt o# Appeal ravel5 an" erio%l5 erre" in "imiin NAPOCOR<

.o%nter.laim #or "amae an" litiation epene!1

It i aiomati. t$at onl5 =%etion o# la+, not =%etion o# #a.t, ma5 be raie" be#ore t$i

Co%rt in a petition #or revie+ %n"er R%le 4* o# t$e R%le o# Co%rt!1) T$e 3n"in o# #a.t o#

t$e Co%rt o# Appeal are .on.l%ive an" bin"in on t$i Co%rt1' an" t$e5 .arr5 even more

+ei$t +$en t$e ai" .o%rt aKrm t$e #a.t%al 3n"in o# t$e trial .o%rt!20 State"

"iferentl5, t$e 3n"in o# t$e Co%rt o# !Appeal, b5 itel#, +$i.$ are %pporte" b5

%btantial evi"en.e, are almot be5on" t$e po+er o# revie+ b5 t$i Co%rt!21

it$ t$e #oreoin ettle" %ripr%"en.e, +e 3n" it pointle to "elve lent$il5 on t$e

#a.t%al i%e raie" b5 petitioner! T$e eiten.e o# tri6e in A%tralia $avin been "%l5

etabli$e" in t$e lo+er .o%rt, +e are le#t onl5 +it$ t$e b%r"en o# "eterminin +$et$er or



not NAPOCOR a.te" +ron#%ll5 or +it$ ba" #ait$ in "i=%ali#5in PBIRO #rom parti.ipatin

in t$e %be=%ent p%bli. bi""in!

&et % .oni"er t$e .ae in it proper perpe.tive!

T$e Co%rt o# Appeal i %ti3e" in %tainin t$e Reional Trial Co%rt< "e.iioneoneratin PBIRO #rom an5 liabilit5 #or "amae to NAPOCOR a it +a .learl5

etabli$e" #rom t$e evi"en.e, tetimonial an" "o.%mentar5, t$at +$at prevente" PBIRO

#rom .ompl5in +it$ it obliation %n"er t$e 7%l5 1') .ontra.t +a t$e in"%trial "ip%te

+$i.$ beiee" A%tralia "%rin t$at time! Etant in o%r Civil Co"e i t$e r%le t$at no

peron $all be reponible #or t$oe event +$i.$ .o%l" not be #oreeen, or +$i.$, t$o%$

#oreeen, +ere inevitable!22 T$i mean t$at +$en an oblior i %nable to #%l3ll $i

obliation be.a%e o# a #ort%ito% event or #or.e ma9eure, $e .annot be $el" liable #or

"amae #or non-per#orman.e!2(

In a""ition to t$e above leal pre.ept, it i +ort$5 to note t$at PBIRO an" NAPOCOR

epli.itl5 aree" in Se.tion @II o# t$e i""in Term an" Spe.i3.ation

24

t$at neit$ereller PBIRO/ nor b%5er NAPOCOR/ $all be liable #or an5 "ela5 in or #ail%re o# t$e

per#orman.e o# it obliation, ot$er t$an t$e pa5ment o# mone5 "%e, i# an5 %.$ "ela5 or

#ail%re i "%e to For.e Ma9eure! Spe.i3.all5, t$e5 "e3ne" #or.e ma9eure a an5 "iablin

.a%e be5on" t$e .ontrol o# an" +it$o%t #a%lt or nelien.e o# t$e part5, +$i.$ .a%e

ma5 in.l%"e b%t are not retri.te" to A.t o# o" or o# t$e p%bli. enem5; a.t o# t$e

overnment in eit$er it overein or .ontra.t%al .apa.it5; overnmental retri.tion;

tri6e, 3re, oo", +ar, t5p$oon, torm, epi"emi. an" =%arantine retri.tion!

T$e la+ i .lear an" o i t$e .ontra.t bet+een NAPOCOR an" PBIRO! T$ere#ore, +e $ave

no reaon to r%le ot$er+ie!

Bo+ever, pro.ee"in #rom t$e premie t$at PBIRO +a prevente" b5 #or.e ma9eure #rom

.ompl5in +it$ it obliation, "oe it ne.earil5 #ollo+ t$at NAPOCOR a.te" %n%tl5,

.apri.io%l5, an" %n#airl5 in "iapprovin PBIRO< appli.ation #or pre-=%ali3.ation to bi"U

Firt, it m%t be tree" t$at NAPOCOR +a not bo%n" %n"er an5 .ontra.t to approve

PBIRO< pre-=%ali3.ation re=%irement! In #a.t, NAPOCOR $a" eprel5 reerve" it ri$t

to ree.t bi"! T$e Intr%.tion to i""er #o%n" in t$e Pot-M%ali3.ation

>o.%mentLSpe.i3.ation #or t$e S%ppl5 an" >eliver5 o# Coal #or t$e atana Coal-Fire"

T$ermal Po+er Plant I at Cala.a, atana P$ilippine,2* i epli.it, t$%G

I-1 RESER@ATION OF NAPOCOR TO RE7ECT I>S

NAPOCOR reerve t$e ri$t to ree.t an5 or all bi", to +aive an5 minor in#ormalit5 in t$e

bi" re.eive"! 6he right is also reserved to re9ect the bids of any bidder #ho has previously failed to properly perform or complete on time any and all contracts fordelivery of coal or any supply underta5en by a bidder !2Emp$ai %pplie"/



T$i Co%rt $a $el" t$at +$ere t$e ri$t to ree.t i o reerve", t$e lo+et bi" or an5 bi"

#or t$at matter ma5 be ree.te" on a mere te.$ni.alit5!2 An" +$ere t$e overnment a

a"vertier, availin itel# o# t$at ri$t, ma6e it .$oi.e in ree.tin an5 or all bi", t$e

loin bi""er $a no .a%e to .omplain nor ri$t to "ip%te t$at .$oi.e %nle an

%n#airne or in%ti.e i $o+n! A..or"inl5, a bi""er $a no ro%n" o# a.tion to .ompel

t$e overnment to a+ar" t$e .ontra.t in $i #avor, nor to .ompel it to a..ept $i bi"! Event$e lo+et bi" or an5 bi" ma5 be ree.te"!2)In Celeste v. Court of Appeals,2' +e $a" t$e

o..aion to r%leG

8oreover, pararap$ 1* o# t$e Intr%.tion to i""er tate t$at @the *overnmenthereby reserves the right to re9ect any or all bids submitted!< In t$e .ae o# A!C! E%erra

an" Son v! A5tona, 4 SCRA 124*, 124' 1'2/, +e $el"G

< DIn t$e invitation to bi", t$ere i a .on"ition impoe" %pon t$e bi""er to t$e efe.t

t$at t$e bi""er $all be %be.t to t$e ri$t o# t$e overnment to ree.t an5 an" all bi"

%be.t to it "i.retion! Bere the government has made its choice, and unless an

unfairness or in9ustice is sho#n, the losing bidders have no cause to complain, nor ri$t to

"ip%te t$at .$oi.e!<

)ince there is no evidence to prove bad faith and arbitrariness on the part of the petitioners in evaluating the bids, #e rule that the private respondents are not entitled todamages representing lost prots! Emp$ai %pplie"/

@eril5, a reervation o# t$e overnment o# it ri$t to ree.t an5 bi", enerall5 vet in t$e

a%t$oritie a +i"e "i.retion a to +$o i t$e bet an" mot a"vantaeo% bi""er! T$e

eer.ie o# %.$ "i.retion involve in=%ir5, invetiation, .omparion, "eliberation an"

"e.iion, +$i.$ are =%ai-%"i.ial #%n.tion, an" +$en $onetl5 eer.ie", ma5 not be

revie+e" b5 t$e .o%rt!(0 In 2ureau +eritas v. Bce of the President ,(1 +e "e.ree"G

6he discretion to accept or re9ect a bid and a#ard contracts is vested in the *overnmentagencies entrusted #ith that function. 6he discretion given to the authorities on thismatter is of such #ide latitude that the Courts #ill not interfere there#ith, unless it isapparent that it is used as a shield to a fraudulent a#ard! (alandoni v. <A88A, 10) P$il!

4) D1'0/ ! T$e eer.ie o# t$i "i.retion i a poli.5 "e.iion t$at ne.eitate prior

in=%ir5, invetiation, .omparion, eval%ation, an" "eliberation! T$i ta6 .an bet be

"i.$are" b5 t$e overnment aen.ie .on.erne", not b5 t$e Co%rt! T$e role o# t$e

Co%rt i to a.ertain +$et$er a bran.$ or intr%mentalit5 o# t$e overnment $a

tranree it .ontit%tional bo%n"arie! %t t$e Co%rt +ill not inter#ere +it$ ee.%tive

or leilative "i.retion eer.ie" +it$in t$oe bo%n"arie! Ot$er+ie, it tra5 into t$e

realm o# poli.5 "e.iion-ma6in! ! Emp$ai %pplie"/

O+in to t$e "i.retionar5 .$ara.ter o# t$e ri$t involve" in t$i .ae, t$e propriet5 o#

NAPOCOR< a.t $o%l" t$ere#ore be %"e" on t$e bai o# t$e eneral prin.iple

re%latin $%man relation, t$e #ore#ront proviion o# +$i.$ i Arti.le 1' o# t$e Civil Co"e

+$i.$ provi"e t$at ever5 peron m%t, in t$e eer.ie o# $i ri$t an" in t$e

per#orman.e o# $i "%tie, a.t +it$ %ti.e, ive ever5one $i "%e, an" oberve $onet5



an" oo" #ait$!(2A..or"inl5, a peron +ill be prote.te" onl5 +$en $e a.t in t$e

leitimate eer.ie o# $i ri$t, t$at i, +$en $e a.t +it$ pr%"en.e an" in oo" #ait$; b%t

not +$en $e a.t +it$ nelien.e or ab%e!((

>i" NAPOCOR ab%e it ri$t or a.t %n%tl5 in "i=%ali#5in PBIRO #rom t$e p%bli.

bi""inU

e r%le in t$e neative!

In pra.ti.e, .o%rt, in t$e o%n" eer.ie o# t$eir "i.retion, +ill $ave to "etermine %n"er

all t$e #a.t an" .ir.%mtan.e +$en t$e eer.ie o# a ri$t i %n%t, or +$en t$ere $a

been an ab%e o# ri$t!(4

e +ent over t$e re.or" o# t$e .ae +it$ painta6in oli.it%"e an" +e are .onvin.e" t$at

NAPOCOR< a.t o# "iapprovin PBIRO< appli.ation #or pre-=%ali3.ation to bi" +a

+it$o%t an5 intent to in%re or a p%rpoive motive to perpetrate "amae! Apparentl5,

NAPOCOR a.te" on t$e tron .onvi.tion t$at PBIRO $a" a erio%l5-impaire" tra.6re.or"! NAPOCOR .annot be #a%lte" #rom believin o! At t$i %n.t%re, it i +ort$

mentionin t$at at t$e time NAPOCOR i%e" it %be=%ent Invitation to i", i!e!, O.tober

1'), PBIRO $a" not 5et "elivere" t$e 3rt $ipment o# .oal %n"er t$e 7%l5 1')

.ontra.t, +$i.$ +a "%e on or be#ore September *, 1')! Nat%rall5, NAPOCOR i %ti3e"

in entertainin "o%bt on PBIRO< =%ali3.ation or .apabilit5 to a%me an obliation

%n"er a ne+ .ontra.t!

8oreover, PBIRO< a.t%ation in 1') raie" "o%bt a to t$e real it%ation o# t$e .oal

in"%tr5 in A%tralia! It appear #rom t$e re.or" t$at +$en NAPOCOR +a .ontraine" to

.oni"er an ofer #rom anot$er .oal %pplier ASEA/ at a pri.e o# 9S((!44 per metri. ton,

PBIRO %nepe.te"l5 ofere" t$e imme"iate "eliver5 o# 0,000 metri. ton o# 9lan team

.oal at 9S(1!00 per metri. ton #or arrival at Cala.a, atana on September 20-21,

1')!(* O# .o%re, NAPOCOR $a" reaon to pon"er ho# come P?28 could assure theimmediate delivery of DE,EEE metric tons of coal from the same source to arrive at Calacanot later than )eptember FEGF!, !HIJ but it could not deliver the coal it had underta5enunder its contract U

Sini3.antl5, one .$ara.teriti. o# a #ort%ito% event, in a leal ene, an" .one=%entl5 in

relation to .ontra.t, i t$at t$e .on.%rren.e m%t be %.$ a to ren"er it impoible #or

t$e "ebtor to #%l3ll $i obliation in a normal manner!( Fa.e" +it$ t$e above

.ir.%mtan.e, NAPOCOR i %ti3e" in a%min t$at, ma5 be, t$ere +a reall5 no

#ort%ito% event or #or.e ma9eure +$i.$ .o%l" ren"er it impoible #or PBIRO to efe.t t$e

"eliver5 o# .oal! Correpon"inl5, it i alo %ti3e" in treatin PBIRO< #ail%re to "eliver a

erio% impairment o# it tra.6 re.or"! T$at t$e trial .o%rt, t$erea#ter, #o%n" PBIRO<

%nepe.te" ofer a.t%all5 a re%lt o# it "eire to minimi:e loe on t$e part o# NAPOCOR

i in.one=%ential! In "eterminin t$e eiten.e o# oo" #ait$, t$e 5ar"ti.6 i t$e #rame o#

min" o# t$e a.tor at t$e time $e .ommitte" t$e a.t, "irear"in a.t%alitie or #a.t

o%ti"e $i 6no+le"e! e .annot #a%lt NAPOCOR i# it mitoo6 PBIRO< %nepe.te" ofer



a mere attempt on t$e latter< part to %n"er.%t ASEA or an in"i.ation o# PBIRO<

in.oniten.5! T$e .ir.%mtan.e +arrant %.$ .ontemplation!

T$at NAPOCOR believe" all alon t$at PBIRO< #ail%re to "eliver on time +a %n#o%n"e" i

mani#et #rom it letter( remin"in PBIRO t$at it +a bo%n" to "eliver t$e .oal +it$in (0

"a5 #rom it PBIRO</ re.eipt o# t$e &etter o# Cre"it, ot$er+ie it +o%l" be .ontraine"to ta6e leal a.tion! T$e ame $onet belie# .an be "e"%.e" #rom NAPOCOR< oar"

Reol%tion, t$%G

n the legal aspect, Management stressed that failure of P2 to deliver under thecontract ma5es them liable for damages, considering that the reasons invo5ed #ere notvalid. 6he measure of the damages #ill be limited to actual and compensatory damages!

Bo+ever, it +a reporte" t$at P$ilipp rot$er a"vie" t$e5 +o%l" li6e to $ave .ontin%o%

b%ine relation +it$ NPC o t$e5 are +illin to it "o+n or even propoe" t$at t$e .ae

be %bmitte" to t$e >epartment o# 7%ti.e a to avoi" a .o%rt a.tion or arbitration!

On t$e te.$ni.al-e.onomi. ape.t, 8anaement .laim t$at i# PO "eliver in November

1') an" 7an%ar5 1')), t$ere are ome a"vantae! I# PO rea.t to an5 leal a.tion an"

#ail to "eliver, t$e option areG one, to %e 100 Semirara an" e.on", to o into %rent

.oal or"er! T$e 3rt option +ill re%lt in a * 8 "eratin an" oil +ill be nee"e" a

%pplement! ;e #ill stand to lose around PKE M! On t$e ot$er $an", i# NPC oe into an

%rent .oal or"er, t$ere +ill be an a""itional epene o# ),000 or P1!11 8,

.oni"erin t$e pri.e o# t$e latet p%r.$ae +it$ ASEA! n both points, reliability isdecreased!()

T$e ver5 p%rpoe o# re=%irin a bi""er to #%rni$ t$e a+ar"in a%t$orit5 it pre-

=%ali3.ation "o.%ment i to en%re t$at onl5 t$oe reponible an" =%ali3e" bi""er

.o%l" bi" an" be a+ar"e" +it$ overnment .ontra.t! It bear trein t$at t$e a+ar" o#

a .ontra.t i mea%re" not olel5 b5 t$e mallet amo%nt o# bi" #or it per#orman.e, b%t

alo b5 t$e reponibilit5 o# t$e bi""er! Cone=%entl5, t$e interit5, $onet5, an"

tr%t+ort$ine o# t$e bi""er i to be .oni"ere"! An a+ar"in oK.ial i %ti3e" in

.oni"erin a bi""er not =%ali3e" or not reponible i# $e $a previo%l5 "e#ra%"e" t$e

p%bli. in %.$ .ontra.t or i#, on t$e evi"en.e be#ore $im, t$e oK.ial bona 3"e believe

t$e bi""er $a .ommitte" %.$ #ra%", despite the fact that there is yet no 9udicialdetermination to that eect !('Ot$er+ie tate", i# t$e a+ar"in bo"5 bona 3"e believe

t$at a bi""er $a erio%l5 impaire" it tra.6 re.or" be.a%e o# a parti.%lar .on"%.t, it i

%ti3e" in "i=%ali#5in t$e bi""er! T$i poli.5 i ne.ear5 to prote.t t$e interet o# t$e

a+ar"in bo"5 aaint irreponible bi""er!

T$%, one +$o a.te" p%r%ant to t$e in.ere belie# t$at anot$er +ill#%ll5 .ommitte" an a.t

pre%"i.ial to t$e interet o# t$e overnment .annot be .oni"ere" to $ave a.te" in ba"

#ait$! a" #ait$ $a al+a5 been a =%etion o# intention! It i t$at .orr%pt motive t$at

operate in t$e min"! A %n"ertoo" in la+, it .ontemplate a tate o# min" aKrmativel5

operatin +it$ #%rtive "ein or +it$ ome motive o# el#-interet or ill-+ill or #or %lterior



p%rpoe!40$ile .on3ne" in t$e realm o# t$o%$t, it preen.e ma5 be a.ertaine" t$ro%$

t$e part5< a.t%ation or t$ro%$ .ir.%mtantial evi"en.e!41 T$e .ir.%mtan.e %n"er +$i.$

NAPOCOR "iapprove" PBIRO< pre-=%ali3.ation to bi" "o not $o+ an intention to .a%e

"amae to t$e latter! T$e mea%re it a"opte" +a one o# el#-prote.tion! Cone=%entl5, +e

.annot penali:e NAPOCOR #or t$e .o%re o# a.tion it too6! NAPOCOR .annot be ma"e

liable #or a.t%al, moral an" eemplar5 "amae!

Corollaril5, in a+ar"in to PBIRO a.t%al "amae in t$e amo%nt o# )4,000, t$e

Reional Trial Co%rt .omp%te" +$at .o%l" $ave been t$e pro3t o# PBIRO $a" NAPOCOR

allo+e" it to parti.ipate in t$e %be=%ent p%bli. bi""in! It r%le" t$at PBIRO +o%l"

$ave +on t$e ten"er #or t$e %ppl5 o# abo%t '0,000 metri. ton o%t o# at leat

1,200,000 metri. ton #rom t$e p%bli. bi""in o# >e.ember 1') to 1''0! e =%ote t$e

trial .o%rt< r%lin, t$%G

! ! ! PBIRO +a %n%tl5 e.l%"e" #rom parti.ipatin in at leat 3ve */ ten"er beinnin

>e.ember 1') to 1''0, #or t$e %ppl5 an" "eliver5 o# importe" .oal +it$ a total vol%me

o# abo%t 1,200,000 metri. ton val%e" at no le t$an 9S(2 8illion! E$! AA, AA-1-1,

to AA-2/! T$e pri.e o# importe" .oal #or "eliver5 in 1')) +a =%ote" in 7%ne 1')) b5

bi""er at 9S41!(* to 9S4(!'* per metri. ton E$! 77/; in September 1')) at

9S41!*0 to 9S4'!*0 per metri. ton E$! 7-1/; in November 1')) at 9S('!00 to

9S4)!*0 per metri. ton E$! 7-2/ an" #or t$e 1')' "eliverie, at 9S44!(* to 9S4!(*

per metri. ton E$! 7-(/ an" 9S()!00 to 9S4)!2* per metri. ton in September 1''0

E$! 77- an" 77-/! PBIRO +o%l" $ave +on t$e ten"er #or t$e %ppl5 an" "eliver5 o#

abo%t '0,000 metri. ton o# .oal o%t o# at leat 1,200,000 metri. ton a+ar"e" "%rin

ai" perio" bae" on it proven tra.6 re.or" o# )0! 6he Court, therefore nds that as aresult of its dis'ualication, P?28 suered damages e'uivalent to its standard KLmargin in HDE,EEE metric tons of coal at the most conservative price of U)KE,EEE permetric ton, or the total of U)IDN,EEE #hich P?28 #ould have earned had it beenallo#ed to participate in biddings in #hich it #as dis'ualied and in subse'uent tendersfor supply and delivery of imported coal!

e 3n" t$i to be erroneo%!

ai. i t$e r%le t$at to re.over a.t%al "amae, t$e amo%nt o# lo m%t not onl5 be

.apable o# proo# b%t m%t a.t%all5 be proven +it$ reaonable "eree o# .ertaint5,

premie" %pon .ompetent proo# or bet evi"en.e obtainable o# t$e a.t%al amo%nt

t$ereo#!42 A .o%rt .annot merel5 rel5 on pe.%lation, .one.t%re, or %e+or6 a to t$e

#a.t an" amo%nt o# "amae! T$%, +$ile in"emni3.ation #or "amae $all .ompre$en"

not onl5 t$e val%e o# t$e lo %fere", b%t alo t$at o# t$e pro3t +$i.$ t$e obliee #aile"

to obtain,4( it i imperative t$at t$e bai o# t$e allee" %nearne" pro3t i not too

pe.%lative an" .one.t%ral a to $o+ t$e a.t%al "amae +$i.$ ma5 be %fere" on a

#%t%re perio"!

In Pantranco <orth >press, nc. v. Court of Appeals,44 t$i Co%rt "enie" t$e plaintif< .laim

#or a.t%al "amae +$i.$ +a premie" on a .ontra.t $e +a abo%t to neotiate on t$e

ro%n" t$at t$ere +a till t$e re=%iite p%bli. bi""in to be .omplie" +it$, t$%G



A to t$e allee" .ontra.t $e +a abo%t to neotiate +it$ 8initer Bipolito, t$ere i no

$o+in t$at t$e ame $a been a+ar"e" to $im! I# Tan"o. +a abo%t to neotiate a

.ontra.t +it$ 8initer Bipolito, t$ere +a no a%ran.e t$at t$e #ormer +o%l" et it or t$at

t$e latter +o%l" a+ar" t$e .ontra.t to $im in.e t$ere +a t$e re=%iite p%bli.

bi""in! 6he claimed loss of prot arising out of that alleged contract #hich #as still to be

negotiated is a mere epectancy. 6andoc@s claim that he could have earned PF million in prots is highly speculative and no concrete evidence #as presented to prove the same!

T$e onl5 %nearne" in.ome to +$i.$ Tan"o. i entitle" to #rom t$e evi"en.e preente" i

t$at #or t$e one-mont$ perio", "%rin +$i.$ $i b%ine +a interr%pte", +$i.$ i

P,12*!00, .oni"erin t$at $i ann%al net in.ome +a P(,*00!00!

In 4ufthansa *erman Airlines v. Court of Appeals,4* t$i Co%rt li6e+ie "iallo+e" t$e trial

.o%rt< a+ar" o# a.t%al "amae #or %nreali:e" pro3t in t$e amo%nt o# 9S*,000!00 #or

bein $i$l5 pe.%lative! It +a $el" t$at t$e reali:ation o# pro3t b5 repon"ent ! ! ! +a

not a .ertaint5, b%t "epen"e" on a n%mber o# #a.tor, #oremot o# +$i.$ +a $i abilit5 to

invite invetor an" to #in the bid! T$i Co%rt +ent #%rt$er a5in t$at a.t%al or

.ompenator5 "amae .annot be pre%me", b%t m%t be "%l5 prove", an" prove" +it$

reaonable "eree o# .ertaint5!

An" in <ational Po#er Corporation v. Court of Appeals,4 t$e Co%rt, in "en5in t$e bi""er<

.laim #or %nreali:e" .ommiion, r%le" t$at even i# NAPOCOR "oe not "en5 it bi""er</

.laim #or %nreali:e" .ommiion, an" t$at t$ee .laim $ave been tranm%te" into

%"i.ial a"miion, t$ee a"miion .annot prevail over t$e r%le an" re%lation

overnin t$e bi""in #or NAPOCOR .ontra.t, +$i.$ ne.earil5 an" in$erentl5 in.l%"e

t$e reervation b5 t$e NAPOCOR o# it ri$t to ree.t an5 or all bi"!

T$e a+ar" o# moral "amae i li6e+ie improper! To reiterate, NAPOCOR "i" not a.t in

ba" #ait$! 8oreover, moral "amae are not, a a eneral r%le, rante" to a

.orporation!4 $ile it i tr%e t$at bemir.$e" rep%tation i in.l%"e" in moral "amae, it

.annot .a%e mental an%i$ to a .orporation, %nli6e in t$e .ae o# a nat%ral peron, #or a

.orporation $a no rep%tation in t$e ene t$at an in"ivi"%al $a, an" bei"e, it i

in$erentl5 impoible #or a .orporation to %fer mental an%i$!4) In 42C >press, nc. v.Court of Appeals,4' +e r%le"G

8oral "amae are rante" in re.ompene #or p$5i.al %ferin, mental an%i$, #ri$t,

erio% aniet5, bemir.$e" rep%tation, +o%n"e" #eelin, moral $o.6, o.ial $%miliation,

an" imilar in%r5! A .orporation, bein an arti3.ial peron an" $avin eiten.e onl5 in

leal .ontemplation, $a no #eelin, no emotion, no ene; t$ere#ore, it .annot

eperien.e p$5i.al %ferin an" mental an%i$! 8ental %ferin .an be eperien.e"

onl5 b5 one $avin a nervo% 5tem an" it o+ #rom real ill, orro+, an" rie# o# li#e

? all o# +$i.$ .annot be %fere" b5 repon"ent ban6 a an arti3.ial peron!

Neit$er .an +e a+ar" eemplar5 "amae %n"er Arti.le 22(4 o# t$e Civil Co"e! e#ore t$e

.o%rt ma5 .oni"er t$e =%etion o# +$et$er or not eemplar5 "amae $o%l" be

a+ar"e", t$e plaintif m%t $o+ t$at $e i entitle" to moral, temperate, or .ompenator5

"amae!



NAPOCOR, in t$i petition, li6e+ie .ontet t$e %"ment o# t$e lo+er .o%rt a+ar"in

PBIRO t$e amo%nt o# (,2(1!'1 a reimb%rement #or epene, .ot o# litiation an"

attorne5< #ee!

e aree +it$ NAPOCOR!

T$i Co%rt $a lai" "o+n t$e r%le t$at in t$e aben.e o# tip%lation, a +innin part5 ma5

be a+ar"e" attorne5< #ee onl5 in .ae plaintif< a.tion or "e#en"ant< tan" i o

%ntenable a to amo%nt to ro an" evi"ent ba" #ait$!*0 T$i .annot be ai" o# t$e .ae at

bar! NAPOCOR i %ti3e" in reitin PBIRO< .laim #or "amae! A a matter o# #a.t, +e

partiall5 rant t$e pra5er o# NAPOCOR a +e 3n" t$at it "i" not a.t in ba" #ait$ in

"iapprovin PBIRO< pre-=%ali3.ation to bi"!

Trial .o%rt m%t be remin"e" t$at attorne5< #ee ma5 not be a+ar"e" to a part5 impl5

be.a%e t$e %"ment i #avorable to $im, #or it ma5 amo%nt to impoin a premi%m on

t$e ri$t to re"re rievan.e in .o%rt! e a"opt t$e ame poli.5 +it$ repe.t to t$e

epene o# litiation! A +innin part5 ma5 be entitle" to epene o# litiation onl5 +$ere$e, b5 reaon o# plaintif< .learl5 %n%ti3able .laim or "e#en"ant< %nreaonable re#%al

to $i "eman", +a .ompelle" to in.%r ai" epen"it%re! Evi"entl5, t$e #a.t o# t$i .ae

"o not +arrant t$e rantin o# %.$ litiation epene to PBIRO!

At t$i point, +e believe t$at, in t$e interet o# #airne, NAPOCOR $o%l" ive PBIRO

anot$er opport%nit5 to parti.ipate in #%t%re p%bli. bi""in! A earlier mentione", t$e "ela5

on it part +a "%e to a #ort%ito% event!

%t be#ore +e "ipoe o# t$i .ae, +e ta6e t$i o..aion to remin" PBIRO o# t$e

in"ipenabilit5 o# .oal to a .oal-3re" t$ermal plant! it$ $o%e$ol" an" b%inee

bein entirel5 "epen"ent on t$e ele.tri.it5 %pplie" b5 NAPOCOR, t$e "eliver5 o# .oal

.annot be vent%reome! In"ee", p%bli. interet "eman" t$at one +$o ofer to "eliver

.oal at an appointe" time m%t ive a reaonable a%ran.e t$at it .an .arr5 t$ro%$!

it$ t$e "eleterio% poible .one=%en.e t$at ma5 re%lt #rom #ail%re to "eliver t$e

nee"e" .oal, +e believe t$ere i reater train o# .ommitment in t$i 6in" o# obliation!

BEREFORE, t$e "e.iion o# t$e Co%rt o# Appeal in CA-!R! C@ No! 12204 "ate" A%%t

2, 1'' i $ereb5 8O>IFIE>! T$e a+ar", in #avor o# PBIRO, o# a.t%al, moral an"

eemplar5 "amae, reimb%rement #or epene, .ot o# litiation an" attorne5< #ee,

an" .ot o# %it, i >E&ETE>!

SO OR>ERE>!

G.R. No. 100866 Ju*y 1, 199

REBE$$A BO!ER-ROA an& GUILLERMO ROA, petitioner,

v!

#ON. $OURT O2 A""EAL an& #EIR O2 EUGENIA V. ROA, IN$., repon"ent!



GUTIERRE%, JR., J.:

T$i i a petition to revie+ t$e "e.iion an" reol%tion o# t$e Co%rt o# Appeal in CA-!R!

No! 14*(0 aKrmin t$e earlier "e.iion o# t$e Reional Trial Co%rt o# &a%na, ran.$ (,at Calamba, in t$e .onoli"ate" RTC Civil Cae No! )02-)4-C an" )0(-)4-C entitle" Beir

o# E%enia @! Roa, In.! v! Rebe..a o5er-Roa an" Beir o# E%enia @! Roa, In.! v!

%illermo Roa, t$e "ipoitive portion o# +$i.$ rea"G

IN @IE OF TBE FOREOIN, %"ment i $ereb5 ren"ere" in #avor o# t$e plaintif an"

aaint t$e "e#en"ant, b5 or"erin a it i $ereb5 or"ere" t$atG

1/ In RTC Civil Cae No! )02-)4-CG Rebe..a o5er-Roa an" all peron .laimin %n"er $er

toG

a/ Imme"iatel5 va.ate t$e rei"ential $o%e near t$e al%b%an pool lo.ate" ini"e t$epremie o# t$e Bi""en @alle5 Sprin Reort at &imao, Cala%an, &a%na;

b/ Pa5 t$e plaintif t$e amo%nt o# P(00!00 per mont$ #rom September 10, 1')(, #or $er

o..%pan.5 o# t$e rei"ential $o%e %ntil t$e ame i va.ate";

./ Remove t$e %n3ni$e" b%il"in ere.te" on t$e lan" o# t$e plaintif +it$in ninet5 '0/

"a5 #rom re.eipt o# t$i "e.iion;

"/ Pa5 t$e plaintif t$e amo%nt o# P100!00 per mont$ #rom September 10, 1')(, %ntil t$e

ai" %n3ni$e" b%il"in i remove" #rom t$e lan" o# t$e plaintif; an"

e/ Pa5 t$e .ot!

2/ In RTC Civil Cae No! )0(-)4-CG %illermo Roa an" all peron .laimin %n"er $im toG

a/ Imme"iatel5 va.ate t$e rei"ential $o%e near t$e tenni .o%rt lo.ate" +it$in t$e

premie o# t$e Bi""en @alle5 Sprin Reort at &imao, Cala%an, &a%na;

b/ Pa5 t$e plaintif t$e amo%nt o# P(00!00 per mont$ #rom September 10, 1')(, #or $i

o..%pan.5 o# t$e ai" rei"ential $o%e %ntil t$e ame i va.ate"; an"

./ Pa5 t$e .ot! 8ollo, p! (/

In t+o 2/ eparate .omplaint #or re.over5 o# poeion 3le" +it$ t$e Reional Trial Co%rt

o# &a%na aaint petitioner Rebe..a o5er-Roa an" %illermo Roa repe.tivel5,

repon"ent .orporation, Beir o# E%enia @! Roa, In.!, pra5e" #or t$e ee.tment o# t$e

petitioner #rom b%il"in ini"e t$e Bi""en @alle5 Sprin Reort lo.ate" at &imao,

Cala%an, &a%na allee"l5 o+ne" b5 t$e repon"ent .orporation!



In t$e .ae o# petitioner Rebe..a o5er-Roa Civil Cae No-)02-)4-C/, t$e repon"ent

.orporation allee" t$at Rebe..a i in poeion o# t+o 2/ $o%e, one o# +$i.$ i till

%n"er .ontr%.tion, b%ilt at t$e epene o# t$e repon"ent .orporation; an" t$at $er

o..%pan.5 on t$e t+o 2/ $o%e +a onl5 %pon t$e toleran.e o# t$e repon"ent

.orporation!

In t$e .ae o# petitioner %illermo Roa Civil Cae No! )0(-)4-C/, t$e repon"ent

.orporation allee" t$at %illermo o..%pie a $o%e +$i.$ +a b%ilt at t$e epene o# t$e

#ormer "%rin t$e time +$en %illermo< #at$er, Eriberto Roa, +a till livin an" +a t$e

eneral manaer o# t$e repon"ent .orporation; t$at t$e $o%e +a oriinall5 inten"e" a

a re.reation $all b%t +a .onverte" #or t$e rei"ential %e o# %illermo; an" t$at

%illermo< poeion over t$e $o%e an" lot +a onl5 %pon t$e toleran.e o# t$e

repon"ent .orporation!

In bot$ .ae, t$e repon"ent .orporation allee" t$at t$e petitioner never pai" rental

#or t$e %e o# t$e b%il"in an" t$e lot an" t$at t$e5 inore" t$e "eman" letter #or t$em

to va.ate t$e b%il"in!

In t$eir eparate an+er, t$e petitioner travere" t$e alleation in t$e .omplaint b5

tatin t$at t$e5 are $eir o# E%enia @! Roa an" t$ere#ore, .o-o+ner o# t$e Bi""en

@alle5 Sprin Reort; an" a .o-o+ner o# t$e propert5, t$e5 $ave t$e ri$t to ta5 +it$in

it premie!

T$e .ae +ere .onoli"ate" an" trie" ointl5!

At t$e pre-trial, t$e partie limite" t$e i%e a #ollo+G

1/ +$et$er plaintif i entitle" to re.over t$e =%etione" premie;

2/ +$et$er plaintif i entitle" to reaonable rental #or o..%pan.5 o# t$e premie in

=%etion;

(/ +$et$er t$e "e#en"ant i leall5 a%t$ori:e" to pier.e t$e veil o# .orporate 3.tion an"

interpoe t$e ame a a "e#ene in an a..ion p%bli.iana;

4/ +$et$er t$e "e#en"ant are tr%l5 b%il"er in oo" #ait$, entitle" to o..%p5 t$e

=%etione" premie;

*/ +$et$er plaintif i entitle" to "amae an" reaonable .ompenation #or t$e %e o# t$e

=%etione" premie;

/ +$et$er t$e "e#en"ant are entitle" to t$eir .o%nter.laim to re.over moral an"

eemplar5 "amae a +ell a attorne5< #ee in t$e t+o .ae;

/ +$et$er t$e preen.e an" o..%pan.5 b5 t$e "e#en"ant on t$e premie in =%etione"

sic/ $amper, "eter or impair plaintif< operation o# Bi""en @alle5 Sprin Reort; an"



)/ +$et$er or not a %nilateral an" %""en +it$"ra+al o# plaintif toleran.e allo+in

"e#en"ant< o..%pan.5 o# t$e premie in =%etione" sic/ i %n%t enri.$ment! Oriinal

Re.or", 4)/

9pon motion o# t$e plaintif repon"ent .orporation, Prei"in 7%"e Fran.i.o 8a!

%errero o# ran.$ (4 i%e" an Or"er "ate" April 2*, 1') in$ibitin $imel# #rom #%rt$ertr5in t$e .ae! T$e .ae +ere re-raWe" to ran.$ ( prei"e" b5 7%"e O"ilon a%tita!

7%"e a%tita .ontin%e" t$e $earin o# t$e .ae!

For #ail%re o# t$e petitioner "e#en"ant belo+/ an" t$eir .o%nel to atten" t$e O.tober

22, 1') $earin "epite noti.e, an" %pon motion o# t$e repon"ent .orporation, t$e .o%rt

i%e" on t$e ame "a5, O.tober 22, 1'), an Or"er .oni"erin t$e .ae %bmitte" #or

"e.iion! At t$i tae o# t$e pro.ee"in, t$e petitioner $a" not 5et preente" t$eir

evi"en.e +$ile t$e repon"ent .orporation $a" .omplete" t$e preentation o# it

evi"en.e!

T$e evi"en.e o# t$e repon"ent .orporation %pon +$i.$ t$e lo+er .o%rt bae" it "e.iioni a #ollo+G

To %pport t$e .omplaint, t$e plaintif ofere" t$e tetimonie o# 8aria 8ilaro Roa an"

t$at o# @i.toria Roa @illarta a +ell a E$ibit A to 8-(!

T$e evi"en.e o# t$e plaintif etabli$e" t$e #ollo+inG t$at t$e plaintif, Beir o# E%enia @

Roa, In.orporate", +a in.orporate" on >e.ember 4, 1'2 E$! C/ +it$ t$e primar5

p%rpoe o# enain in ari.%lt%re to "evelop t$e propertie in$erite" #rom E%enia @!

Roa an" t$at o# 5 E%#ro.ino Roa; t$at t$e Arti.le o# In.orporation o# t$e plaintif, in

1'1, +a amen"e" to allo+ it to enae in t$e reort b%ine E$!C-1/; t$at t$e

in.orporator a oriinal member o# t$e boar" o# "ire.tor o# t$e plaintif +ere all

member o# t$e ame #amil5, +it$ E%#ro.ino Roa $avin t$e biet $are; t$at

a..or"inl5, t$e plaintif p%t %p a reort 6no+n a Bi""en @alle5 Sprin Reort on a

portion o# it lan" lo.ate" at o! &imao, Cala%an, &a%na, an" .overe" b5 TCT No! (2('

E$! A an" A-l/; t$at improvement +ere intro"%.e" in t$e reort b5 t$e plaintif an"

amon t$em +ere .ottae, $o%e or b%il"in, +immin pool, tenni .o%rt, reta%rant

an" open pavilion; t$at t$e $o%e near t$e al%b%an Pool E$! -l/ bein o..%pie"

b5 Rebe..a ! Roa +a oriinall5 inten"e" a taf $o%e b%t later %e" a t$e rei"en.e

o# Eriberto Roa, "e.eae" $%ban" o# t$e "e#en"ant Rebe..a o5er-Roa an" #at$er o#

%illermo Roa; t$at t$i $o%e preentl5 bein o..%pie" b5 Rebe..a ! Roa +a b%ilt

#rom .orporate #%n"; t$at t$e .ontr%.tion o# t$e %n3ni$e" $o%e E$! -2/ +a

tarte" b5 t$e "e#en"ant Rebe..a o5er-Roa an" $er $%ban" Eriberto Roa; t$at t$e

t$ir" b%il"in E$! -(/ preentl5 bein o..%pie" b5 %illermo Roa +a oriinall5

inten"e" a a re.reation $all b%t later .onverte" a a rei"ential $o%e; t$at t$i $o%e

+a b%ilt alo #rom .orporate #%n"; t$at t$e ai" $o%e o..%pie" b5 %illermo Roa

+$en it +a bein b%ilt $a" nipa roo3n b%t +a later .$ane" to alvani:e" iron $eet;

t$at at t$e beinnin, it $a" no partition "o+ntair an" t$e e.on" oor +a an open

pa.e; t$at t$e .onverion #rom a re.reation $all to a rei"ential $o%e +a +it$ t$e

6no+le"e o# E%#ro.ino Roa an" +a not obe.te" to b5 an5 o# t$e oar" o# >ire.tor o#



t$e plaintif; t$at mot o# t$e material %e" in .onvertin t$e b%il"in into a rei"ential

$o%e .ame #rom t$e material le#t b5 Coppola, a 3lm pro"%.er, +$o 3lme" t$e movie

Apo.al5pe No+; t$at Coppola le#t t$e material a part o# $i pa5ment #or rent o# t$e

room t$at $e o..%pie" in t$e reort; t$at a#ter t$e ai" re.reation $all +a .onverte" into

a rei"ential $o%e, "e#en"ant %illermo Roa move" in an" o..%pie" t$e ame toet$er

+it$ $i #amil5 ometime in 1' or 1'); t$at "%rin t$e time E%#ro.ino Roa +a tillalive, Eriberto Roa +a t$e eneral manaer o# t$e .orporation an" t$ere +a el"om

an5 boar" meetin; t$at E%#ro.ino Roa toet$er +it$ Eriberto Roa +ere sic/ t$e one

+$o +ere r%nnin t$e .orporation; t$at "%rin t$i time, Eriberto Roa +a t$e reta%rant

an" +ine .on.eionaire o# t$e reort; t$at a#ter t$e "eat$ o# E%#ro.ino Roa, Eriberto

Roa .ontin%e" a t$e eneral manaer %ntil $i "eat$ in 1')0; t$at a#ter t$e "eat$ o#

Eriberto Roa in 1')0, t$e "e#en"ant Rebe..a ! Roa an" %illermo Roa, .ommitte"

a.t t$at impe"e" t$e plaintif< epanion an" normal operation o# t$e reort; t$at t$e

plaintif .o%l" not even %e it o+n pavilion, 6it.$en an" ot$er #a.ilitie be.a%e o# t$e

a.t o# t$e "e#en"ant +$i.$ le" to t$e 3lin o# .riminal .ae in .o%rt; t$at .ae +ere

even 3le" be#ore t$e 8initr5 o# To%rim, %rea% o# >ometi. Tra"e an" t$e OK.e o# t$e

Prei"ent b5 t$e partie $erein; t$at t$e "e#en"ant violate" t$e reol%tion an" or"er o#

t$e 8initr5 o# To%rim "ate" 7%l5 2), 1')(, A%%t (, 1')( an" November 2, 1')4 E$!

, B an" B-l/ +$i.$ or"ere" t$em or t$e .orporation t$e5 repreent to "eit #rom

an" to t%rn over imme"iatel5 to t$e plaintif t$e manaement an" operation o# t$e

reta%rant an" +ine o%tlet o# t$e ai" reort E$! -l/; t$at t$e "e#en"ant alo

violate" t$e "e.iion o# t$e %rea% o# >ometi. Tra"e "ate" O.tober 2(, 1')( E$! C/;

t$at on A%%t 2, 1')(, be.a%e o# t$e a.t o# t$e "e#en"ant, t$e oar" o# >ire.tor o#

t$e plaintif a"opte" Reol%tion No! )(-12 erie o# 1')( E$! F/ a%t$ori:in t$e

ee.tment o# t$e "e#en"ant #rom t$e premie o..%pie" b5 t$em; t$at on September 1,

1')(, "eman" letter +ere ent to Rebe..a o5er-Roa an" %illermo Roa E$! >

an" >-1/ "eman"in t$at t$e5 va.ate t$e repe.tive premie t$e5 o..%p5; an" t$at t$e

"ip%te bet+een t$e plaintif an" t$e "e#en"ant +a bro%$t be#ore t$e barana5 level

an" t$e ame +a not ettle" E$! E an" E-l/! Oriinal Re.or", pp! 4*4-4*/

T$e petitioner appeale" t$e "e.iion to t$e Co%rt o# Appeal! Bo+ever, a tate" earlier,

t$e appellate .o%rt aKrme" t$e lo+er .o%rt< "e.iion! T$e Petitioner< motion #or

re.oni"eration +a li6e+ie "enie"!

Ben.e, t$i petition!

In a reol%tion "ate" Febr%ar5 *, 1''2, +e ave "%e .o%re to t$e petition!

T$e petitioner no+ .onten"G

I Repon"ent Co%rt erre" +$en it re#%e" to pier.e t$e veil o# .orporate 3.tion over private

repon"ent an" maintain t$e petitioner in t$eir poeion an"Lor o..%pan.5 o# t$e

%be.t premie .oni"erin t$at petitioner are o+ner o# ali=%ot part o# t$e propertie

o# private repon"ent! ei"e, private repon"ent itel# "i.ar"e" t$e mantle o# .orporate

3.tion b5 a.t an"Lor omiion o# it boar" o# "ire.tor an"Lor to.6$ol"er!



II T$e repon"ent Co%rt erre" in not $ol"in t$at petitioner +ere in #a.t "enie" "%e

pro.e or t$eir "a5 in .o%rt bro%$t abo%t b5 t$e ro nelien.e o# t$eir #ormer

.o%nel!

III T$e repon"ent Co%rt miapplie" t$e la+ +$en it or"ere" petitioner Rebe..a o5er-

Roa to remove t$e %n3ni$e" b%il"in in RTC Cae No! )02-)4-C, +$en t$e trial .o%rtopine" t$at $e pent $er o+n #%n" #or t$e .ontr%.tion t$ereo#! CA 8ollo, pp! 1-1)/

ere t$e petitioner "enie" "%e pro.e o# la+ in t$e lo+er .o%rtU

A#ter t$e .ae +ere re-raWe" to t$e ala o# Prei"in 7%"e O"ilon a%tita o# ran.$ (

t$e #ollo+in event tranpire"G

On 7%l5 (, 1'), t$e lo+er .o%rt i%e" an Or"er ettin t$e $earin o# t$e .ae on 7%l5

21, 1')! Petitioner Rebe..a @! Roa re.eive" a .op5 o# t$e Or"er on 7%l5 1*, 1'), +$ile

petitioner %illermo Roa re.eive" $i .op5 on 7%l5 1), 1')! Att5! Conra"o 8ani.a", t$e

petitioner< .o%nel re.eive" anot$er .op5 o# t$e Or"er on 7%l5 11, 1')! Oriinal Re.or",p! 20/

On motion o# t$e repon"ent .orporation< .o%nel, t$e lo+er .o%rt i%e" an Or"er "ate"

7%l5 1*, 1') .an.ellin t$e 7%l5 21, 1') $earin an" reettin t$e $earin to A%%t 11,

1')! Oriinal re.or", 22-2(/ T$ree eparate .opie o# t$e or"er +ere ent an"

re.eive" b5 t$e petitioner an" t$eir .o%nel! Oriinal Re.or", pp! 2), 2', 21/

A motion to .an.el an" re-.$e"%le t$e A%%t 11, 1') $earin 3le" b5 t$e repon"ent

.orporation< .o%nel +a "enie" in an Or"er "ate" A%%t ), 1')! Aain eparate .opie

o# t$e Or"er +ere ent an" re.eive" b5 t$e petitioner an" t$eir .o%nel! Oriinal

Re.or", pp! 2-2'/

At t$e $earin $el" on A%%t 11, 1'), onl5 Att5! enito P! Fabie, .o%nel #or t$e

repon"ent .orporation appeare"! Neit$er t$e petitioner nor t$eir .o%nel appeare"

"epite noti.e o# $earin! T$e lo+er .o%rt t$en i%e" an Or"er on t$e ame "ate, to +itG

O R > E R

$en t$ee .ae +ere .alle" #or .ontin%ation o# trial, Att5! enito P! Fabie appeare"

be#ore t$i Co%rt, $o+ever, t$e "e#en"ant an" t$eir la+5er "epite re.eipt o# t$e Or"er

ettin t$e .ae #or $earin to"a5 #aile" to appear! On 8otion o# Att5! Fabie, #%rt$er .ro

eamination o# +itne @i.toria @allarta i $ereb5 .oni"ere" a $avin been +aive"!

T$e plaintif i $ereb5 iven t+ent5 20/ "a5 #rom to"a5 +it$in +$i.$ to %bmit #ormal

ofer o# evi"en.e an" "e#en"ant are alo iven ten 10/ "a5 #rom re.eipt o# %.$ #ormal

ofer o# evi"en.e to 3le t$eir obe.tion t$ereto!

In t$e meantime, $earin in t$ee .ae i et to September 2', 1') at 10G00 o<.lo.6 in

t$e mornin! Oriinal Re.or", p! 2)/



Copie o# t$e Or"er +ere ent an" re.eive" b5 t$e petitioner an" t$eir .o%nel on t$e

#ollo+in "ate ? Rebe..a o5er-Roa on A%%t 20, 1'), %illermo Roa on A%%t

2, 1'), an" Att5! Conra"o 8ani.a" on September 1', 1')! Oriinal Re.or", pp! 2))-

2'0/

On September 1, 1'), t$e repon"ent .orporation 3le" it Formal Ofer o# Evi"en.e! Inan Or"er "ate" September 2', 1'), t$e lo+er .o%rt i%e" an Or"er a"mittin e$ibit

A to 8-( %bmitte" b5 t$e repon"ent .orporation in it Formal Ofer o# Evi"en.e ! ! !

t$ere bein no obe.tion ! ! ! Oriinal Re.or", p! 41)/ Copie o# t$i Or"er +ere ent an"

re.eive" b5 t$e petitioner an" t$eir .o%nel on t$e #ollo+in "ateG Rebe..a o5er-Roa

on O.tober ', 1'); %illermo Roa on O.tober ', 1') an" Att5! Conra"o 8ani.a" on

O.tober 4, 1') Oriinal Re.or", pp! 420, 421, 42)/!

T$e .$e"%le" $earin on September 2', 1') "i" not p%$ t$ro%$ a t$e petitioner an"

t$eir .o%nel +ere not preent promptin Att5! enito Fabie, t$e repon"ent .orporation<

.o%nel to move t$at t$e .ae be %bmitte" #or "e.iion! T$e lo+er .o%rt "enie" t$e

motion an" et t$e .ae #or $earin on O.tober 22, 1')! Bo+ever, in it Or"er "ate"

September 2', 1'), t$e .o%rt #arned t$at in t$e event t$e petitioner an" t$eir .o%nel

#aile" to appear on t$e net .$e"%le" $earin, t$e .o%rt $all .oni"er t$e .ae

%bmitte" #or "e.iion bae" on t$e evi"en.e on re.or"! Oriinal Re.or", p! 42', 4(0 an"

4(1/

Separate .opie o# t$i Or"er +ere ent an" re.eive" b5 t$e petitioner an" t$eir .o%nel

on t$e #ollo+in "ateG Rebe..a o5er-Roa on O.tober ', 1'), %illermo Roa on

O.tober ', 1'); an" Att5! Conra"o 8ani.a" on O.tober 1, 1')! Oriinal Re.or", pp!

42'-4(0/

>epite noti.e, t$e petitioner an" t$eir .o%nel aain #aile" to atten" t$e .$e"%le"

O.tober 22, 1') $earin! Att5! Fabie repreentin t$e repon"ent .orporation +a

preent! Ben.e, in it Or"er "ate" O.tober 22, 1'), on motion o# Att5! Fabie an" p%r%ant

to t$e or"er "ate" September 2', 1'), t$e Co%rt .oni"ere" t$e .ae %bmitte" #or

"e.iion! Oriinal Re.or", p! 4(/

On November 14, 1'), t$e repon"ent .orporation, 3le" a 8ani#etation, tatin t$at

! ! ! it i %bmittin +it$o%t #%rt$er ar%ment it Oppoition to t$e 8otion #or

Re.oni"eration #or t$e .oni"eration o# t$e Bonorable Co%rt in reolvin %be.t

in.i"ent! Oriinal Re.or", p! 442/

On >e.ember 1, 1'), t$e lo+er .o%rt i%e" an Or"er, to +itG

O R > E R

Coni"erin t$at t$e Co%rt %p to t$i "ate $a not re.eive" an5 8otion #or Re.oni"eration

3le" b5 t$e "e#en"ant in t$e above-entitle" .ae, t$e Co%rt .annot a.t on t$e Oppoition

to 8otion #or Re.oni"eration 3le" b5 t$e plaintif an" re.eive" b5 t$e Co%rt on November

14, 1')! Oriinal Re.or", p! 44/



On 7an%ar5 1*, 1'), t$e lo+er .o%rt ren"ere" t$e =%etione" "e.iion in t$e t+o 2/

.ae! Oriinal Re.or", pp! 4*(-4*'/

On 7an%ar5 20, 1'), Att5! Conra"o 8ani.a", t$e petitioner< .o%nel 3le" an >-Parte 8ani#etation an" atta.$e" t$ereto, a motion #or re.oni"eration o# t$e O.tober 22,

1') Or"er %bmittin t$e .ae #or "e.iion! Be pra5e" t$at t$e Or"er be et ai"e an"t$e .ae be re-opene" #or re.eption o# evi"en.e #or t$e petitioner! Be averre" t$atG 1/

+it$in t$e relementar5 perio" $e prepare" t$e motion #or re.oni"eration an" amon

ot$er "o.%ment, t$e "ra#t +a ent to $i la+ oK.e t$r% $i meener; a#ter inin t$e

3nal .opie, $e .a%e" t$e ervi.e o# a .op5 to t$e repon"ent .orporation< .o%nel +it$

t$e intr%.tion t$at t$e .op5 o# t$e Co%rt be 3le"; $o+ever, t$ere +a a

mi.omm%ni.ation bet+een $i e.retar5 an" meener in t$at t$e e.retar5 maile" t$e

.op5 #or t$e repon"ent .orporation< .o%nel an" pla.e" t$e ret in an envelope #or t$e

meener to 3le t$e ame in .o%rt b%t t$e meener t$o%$t t$at it +a t$e e.retar5

+$o +o%l" 3le it; it +a onl5 later on +$en it +a "i.overe" t$at t$e .op5 #or t$e Co%rt

$a not 5et been 3le" an" t$at %.$ #ail%re to 3le t$e motion #or re.oni"eration +a "%e

to e.%able nele.t an"Lor a..i"ent! T$e motion #or re.oni"eration .ontaine" t$e

#ollo+in alleationG t$at on t$e "ate et #or $earin O.tober 22, 1')/, $e +a on $i

+a5 to Calamba to atten" t$e $earin b%t $i .ar %fere" tranmiion brea6"o+n; an"

t$at "epite efort to repair ai" tranmiion, t$e .ar remaine" inoperative re%ltin in

$i aben.e at t$e ai" $earin! Oriinal Re.or", pp! 40-4'/

On Febr%ar5 (, 1'), Att5! 8ani.a" 3le" a motion #or re.oni"eration o# t$e 7an%ar5 1*,

1') "e.iion! Be eplaine" t$at $e $a" to 3le t$e motion be.a%e t$e re.eivin .ler6

re#%e" to a"mit t$e motion #or re.oni"eration atta.$e" to t$e e-parte mani#etation

be.a%e t$ere +a no proo# o# ervi.e to t$e ot$er part5! In.l%"e" in t$e motion #or

re.oni"eration +a a noti.e o# $earin o# t$e motion on Febr%ar5 (, 1')! Oriinal

Re.or", p! 4-A/

On Febr%ar5 4, 1'), t$e repon"ent .orporation t$ro%$ it .o%nel 3le" a 8ani#etation

an" 8otion mani#etin t$at t$e5 re.eive" t$e .op5 o# t$e motion #or re.oni"eration onl5

to"a5 Febr%ar5 4, 1')/, $en.e t$e5 pra5e" #or t$e potponement o# t$e $earin!

Oriinal Re.or", pp! 4)-4'/

On t$e ame "a5, Febr%ar5 4, 1'), t$e lo+er .o%rt i%e" an Or"er ettin t$e $earin on

Febr%ar5 1(, 1') on t$e ro%n" t$at it re.eive" t$e motion #or re.oni"eration late!

Copie o# t$i Or"er +ere ent eparatel5 to t$e petitioner an" t$eir .o%nel! T$e re.or"

$o+ t$at Att5! 8ani.a" re.eive" $i .op5 on Febr%ar5 11, 1')! A rear" t$e

petitioner, t$e re.or" reveal t$at Rebe..a o5er-Roa "i" not re.eive $er .op5 +$ile a

rear" %illermo Roa, omebo"5 ine" #or $im b%t "i" not in"i.ate +$en t$e .op5 +a

re.eive"! Oriinal Re.or", pp! 4)1-4)(/

At t$e .$e"%le" Febr%ar5 1(, 1') $earin, t$e .o%nel #or t$e partie +ere preent!

Bo+ever, t$e $earin +a reet #or 8ar.$ , 1') in or"er to allo+ t$e repon"ent

.orporation to 3le it oppoition to t$e motion #or re.oni"eration! Or"er "ate" Febr%ar5

1(, 1'), Oriinal Re.or", p! 4)/ Copie o# t$e Or"er +ere ent an" re.eive" b5 t$e



petitioner an" t$eir .o%nel on t$e #ollo+in "ateG Rebe..a o5er-Roa on Febr%ar5 2(,

1'); %illermo Roa on Febr%ar5 2(, 1') an" Att5! 8ani.a" on Febr%ar5 1', 1')!

Oriinal Re.or", pp! 4), 4)'-4'0/

T$e re.or" are not .lear a to +$et$er or not t$e .$e"%le" $earin on 8ar.$ , 1')

+a $el"! Nevert$ele, t$e re.or" reveal t$at on 8ar.$ 1(, 1'), t$e lo+er .o%rt i%e"an Or"er "en5in t$e motion #or re.oni"eration!

T$e +ell-ettle" "o.trine i t$at t$e .lient i bo%n" b5 t$e mita6e o# $i la+5er! A%ila v!

Co%rt o# Firt Intan.e o# atana, ran.$ I, 10 SCRA (*2 D1')); See alo @ivero v!

Santo, et al!, ') P$il! *00 D1'*; Iaa. v! 8en"o:a, )' P$il! 2' D1'*1; 8onte v! Co%rt

o# Firt Intan.e o# Ta5aba, 4) P$il! 40 D1'2; People v! 8an:anilla, 4( P$il! 1 D1'22;

9nite" State v! >%n.a, 2 P$il! 24 D1'14; an" 9nite" State v! 9mali, 1* P$il! ((

D1'10/ T$i r%le, $o+ever, $a it e.eption! T$%, in everal .ae, +e r%le" t$at t$e

part5 i not bo%n" b5 t$e a.tion o# $i .o%nel in .ae t$e ro nelien.e o# t$e

.o%nel re%lte" in t$e .lient< "eprivation o# $i propert5 +it$o%t "%e pro.e o# la+! In

t$e .ae o#4egarda v. Court of Appeals

1'* SCRA 41) D1''1/, +e ai"G

In People< Bomeite X Bo%in Corp! v! Tion.o an" E.aa 12 SCRA 41 D1'4/, t$i

Co%rt r%le" a #ollo+G

Pro.e"%ral te.$ni.alit5 $o%l" not be ma"e a bar to t$e vin"i.ation o# a leitimate

rievan.e! $en %.$ te.$ni.alit5 "eert #rom bein an ai" to 7%ti.e, t$e .o%rt are

%ti3e" in e.eptin #rom it operation a parti.%lar .ae! $ere t$ere +a omet$in

3$5 an" %pi.io% abo%t t$e a.t%ation o# t$e #ormer .o%nel o# petitioner in t$e .ae

at bar, in t$at $e "i" not ive an5 ini3.an.e at all to t$e pro.ee o# t$e .o%rt, +$i.$

$a proven pre%"i.ial to t$e ri$t o# ai" .lient, %n"er a lame an" im5 eplanation

t$at t$e .o%rt< pro.ee %t e.ape" $i attention, it i $el" t$at ai" la+5er "eprive"

$i .lient o# t$eir "a5 in .o%rt, t$% entitlin ai" .lient to petition #or relie# #rom

%"ment "epite t$e lape o# t$e relementar5 perio" #or 3lin ai" perio" #or 3lin ai"

petition!

In E.%"ero v! 7%"e >%la5 1*) SCRA ' D1'))/, t$i Co%rt, in $ol"in t$at t$e .o%nel<

bl%n"er in pro.e"%re i an e.eption to t$e r%le t$at t$e .lient i bo%n" b5 t$e mita6e o#

.o%nel, ma"e t$e #ollo+in "i=%iitionG

Petitioner .onten", t$ro%$ t$eir ne+ .o%nel, t$at t$e %"ment ren"ere" aaint t$em

b5 t$e repon"ent .o%rt +a n%ll an" voi", be.a%e t$e5 +ere t$erein "eprive" o# t$eir

"a5 in .o%rt an" "ivete" o# t$eir propert5 +it$o%t "%e pro.e o# la+, t$ro%$ t$e ro

inoran.e, mita6e an" nelien.e o# t$eir previo% .o%nel! T$e5 a.6no+le"e t$at,

+$ile a a r%le, .lient are bo%n" b5 t$e mita6e o# t$eir .o%nel, t$e r%le $o%l" not be

applie" a%tomati.all5 to t$eir .ae, a t$eir trial .o%nel< bl%n"er in pro.e"%re an" ro

inoran.e o# eitin %ripr%"en.e .$ane" t$eir .a%e o# a.tion an" violate" t$eir

%btantial ri$t!

e are impree" +it$ petitioner< .ontention!



$ile t$i Co%rt i .oni:ant o# t$e r%le t$at, enerall5, a .lient +ill %fer .one=%en.e o#

t$e nelien.e, mita6e or la.6 o# .ompeten.e o# $i .o%nel, in t$e interet o# 7%ti.e an"

e=%it5, e.eption ma5 be ma"e to %.$ r%le, in a..or"an.e +it$ t$e #a.t an"

.ir.%mtan.e o# ea.$ .ae! A"$eren.e to t$e eneral r%le +o%l", in t$e intant .ae,re%lt in t$e o%tri$t "eprivation o# t$eir propert5 t$ro%$ a te.$ni.alit5!

In it =%etione" "e.iion "ate" November 1', 1')' t$e Co%rt o# Appeal #o%n", in no

%n.ertain term, t$e nelien.e o# t$e t$en .o%nel #or petitioner +$en $e #aile" to 3le

t$e proper motion to "imi or to "ra+ a .ompromie areement i# it +a tr%e t$at t$e5

aree" on a ettlement o# t$e .ae; or in impl5 3lin an an+er; an" t$at a#ter $avin

been #%rni$e" a .op5 o# t$e "e.iion b5 t$e .o%rt $e #aile" to appeal t$ere#rom or to 3le a

petition #or relie# #rom t$e or"er "e.larin petitioner in "e#a%lt! In all t$ee intan.e t$e

appellate .o%rt #o%n" ai" .o%nel nelient b%t $i a.t +ere $el" to bin" $i .lient,

petitioner $erein, nevert$ele!

T$e Co%rt "iaree an" 3n" t$at t$e nelien.e o# .o%nel in t$i .ae appear to be o

ro an" ine.%able! T$i +a .ompo%n"e" b5 t$e #a.t, t$at a#ter petitioner ave ai"

.o%nel anot$er .$an.e to ma6e %p #or $i omiion b5 a6in $im to 3le a petition #or

ann%lment o# t$e %"ment in t$e appellate .o%rt, aain .o%nel aban"one" t$e .ae o#

petitioner in t$at a#ter $e re.eive" a .op5 o# t$e a"vere %"ment o# t$e appellate .o%rt,

$e "i" not "o an5t$in to ave t$e it%ation or in#orm $i .lient o# t$e %"ment! Be

allo+e" t$e %"ment to lape an" be.ome 3nal! S%.$ re.6le an" ro nelien.e

$o%l" not be allo+e" to bin" t$e petitioner! Petitioner +a t$ereb5 efe.tivel5 "eprive" o#

$er "a5 in .o%rt! at pp! 42-42/

T$e $erein petitioner, $o+ever, are not imilarl5 it%ate" a t$e partie mentione" in t$e

above.ite" .ae! e .annot r%le t$at t$e5, too, +ere vi.tim o# t$e ro nelien.e o#

t$eir .o%nel!

T$e petitioner are to be blame" #or t$e O.tober 22, 1') or"er i%e" b5 t$e lo+er .o%rt

%bmittin t$e .ae #or "e.iion! T$e5 re.eive" noti.e o# t$e .$e"%le" $earin an" 5et

t$e5 "i" not "o an5t$in! 8ore pe.i3.all5, t$e partie re.eive" noti.e o# t$e Or"er "ate"

September 2', 1') +it$ t$e #arning t$at i# t$e5 #ail to atten" t$e O.tober 22, 1')

$earin, t$e .ae +o%l" be %bmitte" #or "e.iion bae" on t$e evi"en.e on re.or"!

Earlier, at t$e .$e"%le" $earin on September 2', 1'), t$e .o%nel #or t$e repon"ent

.orporation move" t$at t$e .ae be %bmitte" #or "e.iion #or #ail%re o# t$e petitioner

an" t$eir .o%nel to atten" "epite noti.e! T$e lo+er .o%rt "enie" t$e motion an" ave

t$e petitioner an" t$eir .o%nel anot$er .$an.e b5 re.$e"%lin t$e O.tober 22, 1')

$earin!

In"ee", t$e petitioner 6ne+ all alon t$at t$eir .o%nel +a not atten"in t$e .$e"%le"

$earin! T$e5 "i" not ta6e tep to .$ane t$eir .o%nel or ma6e $im atten" to t$eir

.ae %ntil it +a too late! On t$e .ontrar5, t$e5 .ontin%e" to retain t$e ervi.e o# Att5!

8ani.a" 6no+in #%ll5 +ell $i lape vis-a-vis t$eir .ae! T$e5, t$ere#ore, .annot raie



t$e allee" ro nelien.e o# t$eir .o%nel re%ltin in t$eir "enial o# "%e pro.e to

+arrant t$e reveral o# t$e lo+er .o%rt< "e.iion! In a imilar .ae, Aguila v. Court of :irstnstance of 2atangas, 2ranch ! supra/, +e r%le"G

In t$e intant .ae, t$e petitioner $o%l" $ave noti.e" t$e %..eion o# error .ommitte"

b5 $i .o%nel an" ta6en appropriate tep #or $i repla.ement be#ore it +a altoet$ertoo late! Be "i" not! On t$e .ontrar5, $e .ontin%e" to retain $i .o%nel t$ro%$ t$e erie

o# pro.ee"in t$at all re%lte" in t$e ree.tion o# $i .a%e, obvio%l5 t$ro%$ %.$

.o%nel< ineptit%"e an", let it be a""e", t$e .lient< #orbearan.e! T$e petitioner<

revere $o%l" $ave .a%tione" $im t$at $i la+5er +a mi$an"lin $i .ae an" move"

$im to ee6 t$e $elp o# ot$er .o%nel, +$i.$ $e "i" in t$e en" b%t rat$er tar"il5!

No+ petitioner +ant % to n%lli#5 all o# t$e ante.e"ent pro.ee"in an" re.oni:e $i

earlier .laim to t$e "ip%te" propert5 on t$e %ti3.ation t$at $i .o%nel +a rol5

inept! S%.$ a reaon i $ar"l5 pla%ible a t$e petitioner< ne+ .o%nel $o%l" 6no+!

Ot$er+ie, all a "e#eate" part5 +o%l" $ave to "o to alvae $i .ae i .laim nele.t or

mita6e on t$e part o# $i .o%nel a a ro%n" #or reverin t$e a"vere %"ment! T$ere

+o%l" be no en" to litiation i# t$ee +ere allo+e" a ever5 $ort.omin o# .o%nel .o%l"

be t$e %be.t o# .$allene b5 $i .lient t$ro%$ anot$er .o%nel +$o, i# $e i alo #o%n"

+antin, +o%l" li6e+ie be "io+ne" b5 t$e ame .lient t$ro%$ anot$er .o%nel, an" o

on ad innitum! T$i +o%l" ren"er .o%rt pro.ee"in in"e3nite, tentative an" %be.t to

reopenin at an5 time b5 t$e mere %bter#%e o# repla.in .o%nel! at pp! (*-(*)/

e no+ "i.% t$e merit o# t$e .ae!

In t$e 3rt ainment o# error, t$e petitioner maintain t$at t$eir poeion o# t$e

=%etione" propertie m%t be repe.te" in vie+ o# t$eir o+ner$ip o# an ali=%ot portion o#

all t$e propertie o# t$e repon"ent .orporation bein to.6$ol"er t$ereo#! T$e5 propoe

t$at t$e veil o# .orporate 3.tion be pier.e", .oni"erin t$e .ir.%mtan.e %n"er +$i.$

t$e repon"ent .orporation +a #orme"!

Oriinall5, t$e =%etione" propertie belone" to E%enia @! Roa! A#ter $er "eat$, t$e

$eir o# E%enia @! Roa, amon t$em t$e petitioner $erein, "e.i"e" to #orm a

.orporation ? Beir o# E%enia @! Roa, In.orporate" private repon"ent $erein/ +it$ t$e

in$erite" propertie a .apital o# t$e .orporation! T$e .orporation +a in.orporate" on

>e.ember 4, 1'2 +it$ t$e primar5 p%rpoe o# enain in ari.%lt%re to "evelop t$e

in$erite" propertie! T$e Arti.le o# In.orporation o# t$e repon"ent .orporation +ere

amen"e" in 1'1 to allo+ it to enae in t$e reort b%ine! A..or"inl5, t$e .orporation

p%t %p a reort 6no+n a Bi""en @alle5 Sprin Reort +$ere t$e =%etione" propertie

are lo.ate"!

T$ee #a.t, $o+ever, "o not %ti#5 t$e poition ta6en b5 t$e petitioner!

T$e repon"ent i a bona de .orporation! A %.$, it $a a %ri"i.al peronalit5 o# it o+n

eparate #rom t$e member .ompoin it! etern Aro In"%trial Corporation v! Co%rt o#

Appeal, 1)) SCRA 0' D1''0; Tan oon ee X Co!, In.! v! 7aren.io, 1( SCRA 20* D1'));



H%tivo Son Bar"+are Compan5 v! Co%rt o# Ta Appeal, 1 SCRA 10 D1'1; Emilio Cano

Enterprie, In.! v! Co%rt o# In"%trial Relation, 1( SCRA 2'0 D1'*/ T$ere i no "ip%te

t$at title over t$e =%etione" lan" +$ere t$e Bi""en @alle5 Sprin Reort i lo.ate" i

reitere" in t$e name o# t$e .orporation! T$e re.or" alo $o+ t$at t$e taf $o%e

bein o..%pie" b5 petitioner Rebe..a o5er-Roa an" t$e re.reation $all +$i.$ +a later

on .onverte" into a rei"ential $o%e o..%pie" b5 petitioner %illermo Roa are o+ne" b5t$e repon"ent .orporation! Rear"in propertie o+ne" b5 a .orporation, +e tate" in t$e

.ae o# )toc5holders of :. *uan/on and )ons, nc. v. 8egister of eeds of Manila, SCRA

(( D1'2/G

! ! ! Propertie reitere" in t$e name o# t$e .orporation are o+ne" b5 it a an entit5

eparate an" "itin.t #rom it member! $ile $are o# to.6 .ontit%te peronal

propert5, t$e5 "o not repreent propert5 o# t$e .orporation! T$e .orporation $a propert5

o# it o+n +$i.$ .onit .$ie5 o# real etate Nelon v! O+en, 11( Ala!, (2, 21 So! *;

8orro+ v! o%l", 14* Io+a 1, 12( N!! 4(/! A $are o# to.6 onl5 t5pi3e an ali=%ot part

o# t$e .orporation< propert5, or t$e ri$t to $are in it pro.ee" to t$at etent +$en

"itrib%te" a..or"in to la+ an" e=%it5 Ball X Fale5 v! Alabama Terminal, 1( Ala!, ('),

* So! 2(*/, b%t it $ol"er i not t$e o+ner o# an5 part o# t$e .apital o# t$e .orporation

ra"le5 v! a%"er, ( O$io St!, 2)/! Nor i $e entitle" to t$e poeion o# an5 "e3nite

portion o# it propert5 or aet ott#rie" @! 8iller, 104 9!S!, *21; 7one v! >avi, (* O$io

St!, 44/! T$e to.6$ol"er i not a .o-o+ner or tenant in .ommon o# t$e .orporate propert5

Barton v! 7o$nton, 1 Ala!, (1, *1 So! ''2/! at pp! (*-(/

T$e petitioner point o%t t$at t$eir o..%pan.5 o# t$e taf $o%e +$i.$ +a later %e" a

t$e rei"en.e o# Eriberto Roa, $%ban" o# petitioner Rebe..a o5er-Roa an" t$e

re.reation $all +$i.$ +a .onverte" into a rei"ential $o%e +ere +it$ t$e blein o#

E%#ro.ino Roa, t$e "e.eae" $%ban" o# E%enia @! Roa, +$o +a t$e maorit5 an"

.ontrollin to.6$ol"er o# t$e .orporation! In $i li#etime, E%#ro.ino Roa toet$er +it$

Eriberto Roa, t$e $%ban" o# petitioner Rebe..a o5er-Roa, an" t$e #at$er o#

petitioner %illermo Roa manae" t$e .orporation! T$e oar" o# >ire.tor "i" not obe.t

to %.$ an arranement! T$e petitioner ar%e t$at ! ! ! t$e a%t$orit5 t$% iven b5

E%#ro.ino Roa #or t$e .onverion o# t$e re.reation $all into a rei"ential $o%e .an no

loner be =%etione" b5 t$e to.6$ol"er o# t$e private repon"ent an"Lor it boar" o#

"ire.tor #or t$e5 implie"l5 b%t no lea epli.itl5 "eleate" %.$ a%t$orit5 to ai" E%#ro.ino

Roa! 8ollo, p! 12/

Aain, +e m%t emp$ai:e t$at t$e repon"ent .orporation $a a "itin.t peronalit5

eparate #rom it member! T$e .orporation trana.t it b%ine onl5 t$ro%$ it oK.er

or aent! etern Aro In"%trial Corporation v! Co%rt o# Appeal, supra/! $atever

a%t$orit5 t$ee oK.er or aent ma5 $ave i "erive" #rom t$e boar" o# "ire.tor or ot$er

overnin bo"5 %nle .on#erre" b5 t$e .$arter o# t$e .orporation! An oK.er< po+er a

an aent o# t$e .orporation m%t be o%$t #rom t$e tat%te, .$arter, t$e b5-la+ or in a

"eleation o# a%t$orit5 to %.$ oK.er, #rom t$e a.t o# t$e boar" o# "ire.tor, #ormall5



epree" or implie" #rom a $abit or .%tom o# "oin b%ine! @i.ente v! eral"e:, *2

SCRA 210 D1'(/

In t$e preent .ae, t$e re.or" $o+ t$at E%#ro.ino @! Roa +$o t$en .ontrolle" t$e

manaement o# t$e .orporation, bein t$e maorit5 to.6$ol"er, .onente" to t$e

petitioner< ta5 +it$in t$e =%etione" propertie! Spe.i3.all5, E%#ro.ino Roa ave $i.onent to t$e .onverion o# t$e re.reation $all to a rei"ential $o%e, no+ o..%pie" b5

petitioner %illermo Roa! T$e oar" o# >ire.tor "i" not obe.t to t$e a.tion o#

E%#ro.ino Roa! T$e petitioner +ere allo+e" to ta5 +it$in t$e =%etione" propertie

%ntil A%%t 2, 1')(, +$en t$e oar" o# >ire.tor approve" a Reol%tion ee.tin t$e

petitioner, to +itG

R E S O & 9 T I O N No! )(-12

RESO&@E>, T$at Rebe..a ! Roa an" %illermo Roa, an" all peron .laimin %n"er

t$em, be ee.te" #rom t$eir o..%pan.5 o# t$e Bi""en @alle5 Sprin .ompo%n" on +$i.$

t$eir $o%e $ave been .ontr%.te" an"Lor are bein .ontr%.te" onl5 on toleran.e o# t$eCorporation an" +it$o%t an5 .ontra.t t$ere#or, in or"er to ive +a5 to t$e Corporation<

epanion an" improvement proram an" obviate pre%"i.e to t$e operation o# t$e Bi""en

@alle5 Sprin Reort b5 t$eir .ontin%e" inter#eren.e!

RESO&@E>, F%rt$er t$at t$e ervi.e o# Att5! enito P! Fabie be enae" an" t$at $e be

a%t$ori:e" a $e i $ereb5 a%t$ori:e" to efe.t t$e ee.tment, in.l%"in t$e 3lin o# t$e

.orrepon"in %it, i# ne.ear5 to "o o! Oriinal Re.or", p! (2/

e 3n" not$in irre%lar in t$e a"option o# t$e Reol%tion b5 t$e oar" o# >ire.tor! T$e

petitioner< ta5 +it$in t$e =%etione" propertie +a merel5 b5 toleran.e o# t$e

repon"ent .orporation in "e#eren.e to t$e +i$e o# E%#ro.ino Roa, +$o "%rin $i

li#etime, .ontrolle" an" manae" t$e .orporation! E%#ro.ino Roa< a.tion .o%l" not $ave

bo%n" t$e .orporation #orever! T$e petitioner $ave not .ite" an5 proviion o# t$e

.orporation b5-la+ or an5 reol%tion or a.t o# t$e oar" o# >ire.tor +$i.$ a%t$ori:e"

E%#ro.ino Roa to allo+ t$em to ta5 +it$in t$e .ompan5 premie #orever! e r%le t$at

in t$e aben.e o# an5 eitin .ontra.t bet+een t$e petitioner an" t$e repon"ent

.orporation, t$e .orporation ma5 ele.t to ee.t t$e petitioner at an5 time it +i$e #or t$e

bene3t an" interet o# t$e repon"ent .orporation!

T$e petitioner< %etion t$at t$e veil o# t$e .orporate 3.tion $o%l" be pier.e" i

%ntenable! T$e eparate peronalit5 o# t$e .orporation ma5 be "irear"e" onl5 +$en t$e

.orporation i %e" a a .loa6 or .over #or #ra%" or illealit5, or to +or6 in%ti.e, or +$ere

ne.ear5 to a.$ieve e=%it5 or +$en ne.ear5 #or t$e prote.tion o# t$e .re"itor! S%lon

a5an, In.! v! Araneta, In.!, 2 SCRA (4 D1' .ite" in Tan oon ee X Co!, In.!, v!

7aren.io, supra an" etern Aro In"%trial Corporation v! Co%rt o# Appeal, supra/ T$e

.ir.%mtan.e in t$e preent .ae "o not #all %n"er an5 o# t$e en%merate" .ateorie!

In t$e t$ir" ainment o# error, t$e petitioner init t$at a rear" t$e %n3ni$e"

b%il"in, Rebe..a o5er-Roa i a b%il"er in oo" #ait$!



T$e .ontr%.tion o# t$e %n3ni$e" b%il"in tarte" +$en Eriberto Roa, $%ban" o#

Rebe..a o5er-Roa, +a till alive an" +a t$e eneral manaer o# t$e repon"ent

.orporation! T$e .o%ple %e" t$eir o+n #%n" to 3nan.e t$e .ontr%.tion o# t$e b%il"in!

T$e oar" o# >ire.tor o# t$e .orporation, $o+ever, "i" not obe.t to t$e .ontr%.tion!

T$e5 allo+e" t$e .ontr%.tion to .ontin%e "epite t$e #a.t t$at it +a +it$in t$e propert5

o# t$e .orporation! 9n"er t$ee .ir.%mtan.e, +e aree +it$ t$e petitioner t$at t$eproviion o# Arti.le 4*( o# t$e Civil Co"e $o%l" $ave been applie" b5 t$e lo+er .o%rt!

Arti.le 4*( o# t$e Civil Co"e provi"eG

I# t$ere +a ba" #ait$, not onl5 on t$e part o# t$e peron +$o b%ilt, plante" or o+n on t$e

lan" o# anot$er b%t alo on t$e part o# t$e o+ner o# %.$ lan", t$e ri$t o# one an" t$e

ot$er $all be t$e ame a t$o%$ bot$ $a" a.te" in oo" #ait$!

In %.$ a .ae, t$e proviion o# Arti.le 44) o# t$e Civil Co"e govern t$e relation$ip

bet+een petitioner Rebe..a-o5er-Roa an" t$e repon"ent .orporation, to +itG

Art! 44) ? T$e o+ner o# t$e lan" on +$i.$ an5t$in $a been b%ilt, o+n or plante" in

oo" #ait$, $all $ave t$e ri$t to appropriate a $i o+n t$e +or6, o+in or plantin

a#ter pa5ment o# t$e in"emnit5 provi"e" #or in arti.le *4 an" *4), or to oblie t$e one

+$o b%ilt or plante" to pa5 t$e pri.e o# t$e lan", an" t$e one +$o o+e", t$e proper rent!

Bo+ever, t$e b%il"er or planter .annot be oblie" to b%5 t$e lan" i# it val%e i

.oni"erabl5 more t$an t$at o# t$e b%il"in or tree! In %.$ .ae, $e $all pa5 reaonable

rent, i# t$e o+ner o# t$e lan" "oe not .$ooe to appropriate t$e b%il"in or tree a#ter

proper in"emnit5! T$e partie $all aree %pon t$e term o# t$e leae an" in .ae o#

"iareement, t$e .o%rt $all 3 t$e term t$ereo#!

BEREFORE, t$e preent petition i partl5 RANTE>! T$e =%etione" "e.iion o# t$e Co%rt

o# Appeal aKrmin t$e "e.iion o# t$e Reional Trial Co%rt o# &a%na, ran.$ (, in RTC

Civil Cae No! )02-)4-C i 8O>IFIE> in t$at %bpararap$ ./ an" "/ o# Pararap$ 1 o#

t$e "ipoitive portion o# t$e "e.iion are "elete"! In t$eir tea", t$e petitioner Rebe..a

o5er-Roa an" t$e repon"ent .orporation are or"ere" to #ollo+ t$e proviion o# Arti.le

44) o# t$e Civil Co"e a rear" t$e =%etione" %n3ni$e" b%il"in in RTC Civil Cae No!

)02-)4-C! T$e =%etione" "e.iion i aKrme" in all ot$er repe.t!

SO OR>ERE>!

G.R. No. 10081 Jun) 5, 1999

2RAN$I$O MOTOR $OR"ORATION, petitioner,

v!

$OURT O2 A""EAL an& "OUE GREGORIO an& LIBRAA MANUEL, repon"ent!

UIUMBING, J.:



T$i petition #or revie+ on certiorari, %n"er R%le 4* o# t$e R%le o# Co%rt, ee6 to ann%l

t$e "e.iion 1 o# t$e Co%rt o# Appeal in C!A! !R! C@ No! 10014 aKrmin t$e "e.iion

ren"ere" b5 ran.$ 1(*, Reional Trial Co%rt o# 8a6ati, 8etro 8anila! T$e pro.e"%ral

ante.e"ent o# t$i petition are a #ollo+G

On 7an%ar5 2(, 1')*, petitioner 3le" a .omplaint

aaint private repon"ent to re.overt$ree t$o%an" #o%r $%n"re" t+elve an" i .entavo P(,412!0/, repreentin t$e

balan.e o# t$e eep bo"5 p%r.$ae" b5 t$e 8an%el #rom petitioner; an a""itional %m o#

t+ent5 t$o%an" #o%r $%n"re" 3#t5-#o%r an" ei$t5 .entavo P20,4*4!)0/ repreentin t$e

%npai" balan.e on t$e .ot o# repair o# t$e ve$i.le; an" i t$o%an" peo P,000!00/ #or

.ot o# %it an" attorne5< #ee! 3 To t$e oriinal balan.e on t$e pri.e o# eep bo"5 +ere

a""e" t$e .ot o# repair! In t$eir an+er, private repon"ent interpoe" a .o%nter.laim

#or %npai" leal ervi.e b5 reorio 8an%el in t$e amo%nt o# 3#t5 t$o%an" peo

P*0,000/ +$i.$ +a not pai" b5 t$e in.orporator, "ire.tor an" oK.er o# t$e petitioner!

T$e trial .o%rt "e.i"e" t$e .ae on 7%ne 2, 1')*, in #avor o# petitioner in rear" to t$e

petitioner< .laim #or mone5, b%t alo allo+e" t$e .o%nter-.laim o# private repon"ent!

ot$ partie appeale"! On April 1*, 1''1, t$e Co%rt o# Appeal %taine" t$e trial .o%rt<

"e.iion! 5 Ben.e, t$e preent petition!

For o%r revie+ in parti.%lar i t$e propriet5 o# t$e permiive .o%nter.laim +$i.$ private

repon"ent 3le" toet$er +it$ t$eir an+er to petitioner< .omplaint #or a %m o# mone5!

Private repon"ent reorio 8an%el allee" a an aKrmative "e#ene t$at, +$ile $e +a

petitioner< Aitant &eal OK.er, $e repreente" member o# t$e Fran.i.o #amil5 in t$e

intetate etate pro.ee"in o# t$e late enita Trini"a"! Bo+ever, even a#ter t$e

termination o# t$e pro.ee"in, $i ervi.e +ere not pai"! Sai" #amil5 member, $e ai",

+ere alo in.orporator, "ire.tor an" oK.er o# petitioner! Ben.e to petitioner< .olle.tion

%it, $e 3le" a .o%nter permiive .o%nter.laim #or t$e %npai" attorne5< #ee! 6

For #ail%re o# petitioner to an+er t$e .o%nter.laim, t$e trial .o%rt "e.lare" petitioner in

"e#a%lt on t$i .ore, an" evi"en.e e-parte +a preente" on t$e .o%nter.laim! T$e trial

.o%rt r%le" in #avor o# private repon"ent an" #o%n" t$at reorio 8an%el in"ee"

ren"ere" leal ervi.e to t$e Fran.i.o #amil5 in Spe.ial Pro.ee"in N%mber )0( ? In

t$e 8atter o# Intetate Etate o# enita Trini"a"! Sai" .o%rt alo #o%n" t$at $i leal

ervi.e +ere not .ompenate" "epite repeate" "eman", an" t$% or"ere" petitioner to

pa5 $im t$e amo%nt o# 3#t5 t$o%an" P*0,000!00/ peo! +

>iati3e" +it$ t$e trial .o%rt< or"er, petitioner elevate" t$e matter to t$e Co%rt o#

Appeal, poin t$e #ollo+in i%eG

I!

BETBER OR NOT TBE >ECISION REN>ERE> H TBE &OER CO9RT IS N9&& AN> @OI> AS

IT NE@ER ACM9IRE> 79RIS>ICTION O@ER TBE PERSON OF TBE >EFEN>ANT!

II!



BETBER OR NOT P&AINTIFF-APPE&&ANT NOT EIN A REA& PARTH IN TBE A&&EE>

PER8ISSI@E CO9NTERC&AI8 SBO9&> E BE&> &IA&E TO TBE C&AI8 OF >EFEN>ANT-

APPE&&EES!

III!

BETBER OR NOT TBERE IS FAI&9RE ON TBE PART OF P&AINTIFF-APPE&&ANT TO ANSER

TBE A&&EE> PER8ISSI@E CO9NTERC&AI8! 8

Petitioner .onten"e" t$at t$e trial .o%rt "i" not a.=%ire %ri"i.tion over it be.a%e no

%mmon +a vali"l5 erve" on it toet$er +it$ t$e .op5 o# t$e an+er .ontainin t$e

permiive .o%nter.laim! F%rt$er, petitioner =%etion t$e propriet5 o# it bein ma"e

part5 to t$e .ae be.a%e it +a not t$e real part5 in interet b%t t$e in"ivi"%al member

o# t$e Fran.i.o #amil5 .on.erne" +it$ t$e intetate .ae!

In it aaile" "e.iion no+ be#ore % #or revie+, repon"ent Co%rt o# Appeal $el" t$at a

.o%nter.laim m%t be an+ere" in ten 10/ "a5, p%r%ant to Se.tion 4, R%le 11, o# t$eR%le o# Co%rt; an" no+$ere "oe it tate in t$e R%le t$at a part5 till nee"e" to be

%mmone" ane+ i# a .o%nter.laim +a et %p aaint $im! Fail%re to erve %mmon, ai"

repon"ent .o%rt, "i" not efe.tivel5 neate trial .o%rt< %ri"i.tion over petitioner in t$e

matter o# t$e .o%nter.laim! It li6e+ie pointe" o%t t$at t$ere +a no reaon #or petitioner

to be e.%e" #rom an+erin t$e .o%nter.laim! Co%rt re.or" $o+e" t$at it #ormer

.o%nel, Ni.anor ! Alvare:, re.eive" t$e .op5 o# t$e an+er +it$ .o%nter.laim t+o 2/

"a5 prior to $i +it$"ra+al a .o%nel #or petitioner! 8oreover +$en petitioner< ne+

.o%nel, 7oe N! A=%ino, entere" $i appearan.e, t$ree (/ "a5 till remaine" +it$in t$e

perio" to 3le an an+er to t$e .o%nter.laim! Bavin #aile" to an+er, petitioner +a

.orre.tl5 .oni"ere" in "e#a%lt b5 t$e trial

.o%rt! 9 Even a%min t$at t$e trial .o%rt a.=%ire" no %ri"i.tion over petitioner,

repon"ent .o%rt alo ai", b%t $avin 3le" a motion #or re.oni"eration ee6in relie#

#rom t$e ai" or"er o# "e#a%lt, petitioner +a etoppe" #rom #%rt$er =%etionin t$e trial

.o%rt< %ri"i.tion! 10

On t$e =%etion o# it liabilit5 #or attorne5< #ee o+in to private repon"ent reorio

8an%el, petitioner ar%e" t$at bein a .orporation, it $o%l" not be $el" liable t$ere#or

be.a%e t$ee #ee +ere o+e" b5 t$e in.orporator, "ire.tor an" oK.er o# t$e

.orporation in t$eir peronal .apa.it5 a $eir o# enita Trini"a"! Petitioner tree" t$at

t$e peronalit5 o# t$e .orporation, vis-a-vis t$e in"ivi"%al peron +$o $ire" t$e ervi.e

o# private repon"ent, i eparate an" "itin.t, 11 $en.e, t$e liabilit5 o# ai" in"ivi"%al "i"

not be.ome an obliation .$areable aaint petitioner!

Nevert$ele, on t$e #oreoin i%e, t$e Co%rt o# Appeal r%le" a #ollo+G

Bo+ever, t$i "itin.t an" eparate peronalit5 i merel5 a 3.tion .reate" b5 la+ #or

.onvenien.e an" to promote %ti.e! A..or"inl5, t$i eparate peronalit5 o# t$e

.orporation ma5 be "irear"e", or t$e veil o# .orporate 3.tion pier.e", in .ae +$ere it

i %e" a a .loa6 or .over #or #o%n" i./ illealit5, or to +or6 an in%ti.e, or +$ere



ne.ear5 to a.$ieve e=%it5 or +$en ne.ear5 #or t$e prote.tion o# .re"itor! S%lo n

a5an, In.! v! Araneta, In.!, 2 SCRA (4/ Corporation are .ompoe" o# nat%ral peron

an" t$e leal 3.tion o# a eparate .orporate peronalit5 i not a $iel" #or t$e .ommiion

o# in%ti.e an" ine=%it5! C$emple P$ilippine, In.! v! Pamatian, * SCRA 40)/!

In t$e intant .ae, evi"en.e $o+ t$at t$e plaintif-appellant Fran.i.o 8otorCorporation i .ompoe" o# t$e $eir o# t$e late enita Trini"a" a "ire.tor an"

in.orporator #or +$om "e#en"ant reorio 8an%el ren"ere" leal ervi.e in t$e intetate

etate .ae o# t$eir "e.eae" mot$er! Coni"erin t$e a#oretate" prin.iple an"

.ir.%mtan.e etabli$e" in t$i .ae, e=%it5 an" %ti.e "eman" plaintif-appellant<

veil o# .orporate i"entit5 $o%l" be pier.e" an" t$e "e#en"ant be .ompenate" #or leal

ervi.e ren"ere" to t$e $eir, +$o are "ire.tor o# t$e plaintif-appellant .orporation! 1

No+ be#ore %, petitioner ain t$e #ollo+in errorG

I!

TBE CO9RT OF APPEA&S ERRE> IN APP&HIN TBE >OCTRINE OF PIERCIN TBE @EI& OF

CORPORATE ENTITH!

II!

TBE CO9RT OF APPEA&S ERRE> IN AFFIR8IN TBAT TBERE AS 79RIS>ICTION O@ER

PETITIONER ITB RESPECT TO TBE CO9NTERC&AI8! 13

Petitioner %bmit t$at repon"ent .o%rt $o%l" not $ave reorte" to pier.in t$e veil o#

.orporate 3.tion be.a%e t$e trana.tion .on.erne" onl5 repon"ent reorio 8an%el an"

t$e $eir o# t$e late enita Trini"a"! A..or"in to petitioner, t$ere +a no .a%e o# a.tion

b5 ai" repon"ent aaint petitioner; peronal .on.ern o# t$e $eir $o%l" be

"itin%i$e" #rom t$oe involvin .orporate afair! Petitioner #%rt$er .onten" t$at t$e

preent .ae "oe not #all amon t$e intan.e +$erein t$e .o%rt ma5 loo6 be5on" t$e

"itin.t peronalit5 o# a .orporation! A..or"in to petitioner, t$e ervi.e #or +$i.$

repon"ent reorio 8an%el ee6 to .olle.t #ee #rom petitioner are peronal in nat%re!

Ben.e, it aver t$e $eir $o%l" $ave been %e" in t$eir peronal .apa.it5, an" not involve

t$e .orporation!1

it$ rear" to t$e permiive .o%nter.laim, petitioner alo init t$at t$ere +a no proper

ervi.e o# t$e an+er .ontainin t$e permiive .o%nter.laim! It .laim t$at t$e

.o%nter.laim i a eparate .ae +$i.$ .an onl5 be properl5 erve" %pon t$e oppoin

part5 t$ro%$ %mmon! F%rt$er petitioner tate t$at b5 nat%re, a permiive

.o%nter.laim i one +$i.$ "oe not arie o%t o# nor i ne.earil5 .onne.te" +it$ t$e

%be.t o# t$e oppoin part5< .laim! Petitioner aver t$at in.e t$ere +a no ervi.e o#

%mmon %pon it +it$ rear" to t$e .o%nter.laim, t$en t$e .o%rt "i" not a.=%ire

%ri"i.tion over petitioner! Sin.e a .o%nter.laim i .oni"ere" an a.tion in"epen"ent #rom

t$e an+er, a..or"in to petitioner, t$en in efe.t t$ere $o%l" be t+o im%ltaneo%



a.tion bet+een t$e ame partieG ea.$ part5 i at t$e ame time bot$ plaintif an"

"e#en"ant +it$ repe.t to t$e ot$er, 15 re=%irin in ea.$ .ae eparate %mmone!

In t$eir Comment, private repon"ent #o.% on t$e t+o =%etion raie" b5 petitioner!

T$e5 "e#en" t$e propriet5 o# pier.in t$e veil o# .orporate 3.tion, b%t "en5 t$e ne.eit5

o# ervin eparate %mmone on petitioner in rear" to t$eir permiive .o%nter.laim.ontaine" in t$e an+er!

Private repon"ent maintain bot$ trial an" appellate .o%rt #o%n" t$at repon"ent

reorio 8an%el +a emplo5e" a aitant leal oK.er o# petitioner .orporation, an" t$at

$i ervi.e +ere oli.ite" b5 t$e in.orporator, "ire.tor an" member to $an"le an"

repreent t$em in Spe.ial Pro.ee"in No! )0(, .on.ernin t$e Intetate Etate o# t$e

late enita Trini"a"! T$e5 aert t$at t$e member o# petitioner .orporation too6

a"vantae o# t$eir poition b5 not .ompenatin repon"ent reorio 8an%el a#ter t$e

termination o# t$e etate pro.ee"in "epite $i repeate" "eman" #or pa5ment o# $i

ervi.e! T$e5 .ite 3n"in o# t$e appellate .o%rt t$at %pport pier.in t$e veil o#

.orporate i"entit5 in t$i parti.%lar .ae! T$e5 aert t$at t$e .orporate veil ma5 be

"irear"e" +$en it i %e" to "e#eat p%bli. .onvenien.e, %ti#5 +ron, prote.t #ra%", an"

"e#en" .rime! It ma5 alo be pier.e", a..or"in to t$em, +$ere t$e .orporate entit5 i

bein %e" a an alter eo, a"%n.t, or b%ine .on"%it #or t$e ole bene3t o# t$e

to.6$ol"er or o# anot$er .orporate entit5! In t$ee intan.e, t$e5 aver, t$e .orporation

$o%l" be treate" merel5 a an ao.iation o# in"ivi"%al peron! 16

Private repon"ent "ip%te petitioner< .laim t$at it ri$t to "%e pro.e +a violate"

+$en repon"ent< .o%nter.laim +a rante" "%e .o%re, alt$o%$ no %mmon +a

erve" %pon it! T$e5 .laim t$at no proviion in t$e R%le o# Co%rt re=%ire ervi.e o#

%mmon %pon a "e#en"ant in a .o%nter.laim! Private repon"ent ar%e t$at +$en t$e

petitioner 3le" it .omplaint be#ore t$e trial .o%rt it vol%ntaril5 %bmitte" itel# to t$e

%ri"i.tion o# t$e .o%rt! A a .one=%en.e, t$e i%an.e o# %mmon on it +a no loner

ne.ear5! Private repon"ent a5 t$e5 erve" a .op5 o# t$eir an+er +it$ aKrmative

"e#ene an" .o%nter.laim on petitioner< #ormer .o%nel, Ni.anor ! Alvare:! $ile

petitioner +o%l" $ave t$e Co%rt believe t$at repon"ent erve" ai" .op5 %pon Alvare:

a#ter $e $a" +it$"ra+n $i appearan.e a .o%nel #or t$e petitioner, private repon"ent

aert t$at t$i .ontention i %tterl5 baele! Re.or" "i.loe t$at t$e an+er +a

re.eive" t+o 2/ "a5 be#ore t$e #ormer .o%nel #or petitioner +it$"re+ $i appearan.e,

a..or"in to private repon"ent! T$e5 maintain t$at t$e preent petition i b%t a #orm o#

"ilator5 appeal, to et of petitioner< obliation to t$e repon"ent b5 r%nnin %p more

interet it .o%l" re.over #rom t$em! Private repon"ent t$ere#ore .laim "amae aaint

petitioner! 1+

To reolve t$e i%e in t$i .ae, +e m%t 3rt "etermine t$e propriet5 o# pier.in t$e veil

o# .orporate 3.tion!

ai. in .orporation la+ i t$e prin.iple t$at a .orporation $a a eparate peronalit5

"itin.t #rom it to.6$ol"er an" #rom ot$er .orporation to +$i.$ it ma5 be

.onne.te"! 18 Bo+ever, %n"er t$e "o.trine o# pier.in t$e veil o# .orporate entit5, t$e



.orporation< eparate %ri"i.al peronalit5 ma5 be "irear"e", #or eample, +$en t$e

.orporate i"entit5 i %e" to "e#eat p%bli. .onvenien.e, %ti#5 +ron, prote.t #ra%", or

"e#en" .rime! Alo, +$ere t$e .orporation i a mere alter eo or b%ine .on"%it o# a

peron, or +$ere t$e .orporation i o orani:e" an" .ontrolle" an" it afair are o

.on"%.te" a to ma6e it merel5 an intr%mentalit5, aen.5, .on"%it or a"%n.t o# anot$er

.orporation, t$en it "itin.t peronalit5 ma5 be inore"!

19

In t$ee .ir.%mtan.e, t$e.o%rt +ill treat t$e .orporation a a mere ar%pation o# peron an" t$e liabilit5 +ill

"ire.tl5 atta.$ to t$em! T$e leal 3.tion o# a eparate .orporate peronalit5 in t$oe .ite"

intan.e, #or reaon o# p%bli. poli.5 an" in t$e interet o# %ti.e, +ill be %ti3abl5 et

ai"e!

In o%r vie+, $o+ever, iven t$e #a.t an" .ir.%mtan.e o# t$i .ae, t$e "o.trine o#

pier.in t$e .orporate veil $a no relevant appli.ation $ere! Repon"ent .o%rt erre" in

permittin t$e trial .o%rt< reort to t$i "o.trine! T$e rationale be$in" pier.in a

.orporation< i"entit5 in a iven .ae i to remove t$e barrier bet+een t$e .orporation

#rom t$e peron .ompriin it to t$+art t$e #ra%"%lent an" illeal .$eme o# t$oe +$o

%e t$e .orporate peronalit5 a a $iel" #or %n"erta6in .ertain pro.ribe" a.tivitie!

Bo+ever, in t$e .ae at bar, intea" o# $ol"in .ertain in"ivi"%al or peron reponible

#or an allee" .orporate a.t, t$e it%ation $a been revere"! It i t$e petitioner a a

.orporation +$i.$ i bein or"ere" to an+er #or t$e peronal liabilit5 o# .ertain in"ivi"%al

"ire.tor, oK.er an" in.orporator .on.erne"! Ben.e, it appear to % t$at t$e "o.trine

$a been t%rne" %pi"e "o+n be.a%e o# it erroneo% invo.ation! Note t$at a..or"in to

private repon"ent reorio 8an%el $i ervi.e +ere oli.ite" a .o%nel #or member o#

t$e Fran.i.o #amil5 to repreent t$em in t$e intetate pro.ee"in over enita Trini"a"<

etate! T$ee etate pro.ee"in "i" not involve an5 b%ine o# petitioner!

Note alo t$at $e o%$t to .olle.t leal #ee not %t #rom .ertain Fran.i.o #amil5

member b%t alo #rom petitioner .orporation on t$e .laim t$at it manaement $a"

re=%ete" $i ervi.e an" $e a..e"e" t$ereto a an emplo5ee o# petitioner #rom +$om it

.o%l" be "e"%.e" $e +a alo re.eivin a alar5! Bi move to re.over %npai" leal #ee

t$ro%$ a .o%nter.laim aaint Fran.i.o 8otor Corporation, to ofet t$e %npai" balan.e

o# t$e p%r.$ae an" repair o# a eep bo"5 .o%l" onl5 re%lt #rom an obvio%

miappre$enion t$at petitioner< .orporate aet .o%l" be %e" to an+er #or t$e

liabilitie o# it in"ivi"%al "ire.tor, oK.er, an" in.orporator! S%.$ re%lt i# permitte"

.o%l" eail5 pre%"i.e t$e .orporation, it o+n .re"itor, an" even ot$er to.6$ol"er;

$en.e, .learl5 ine=%ito% to petitioner!

F%rt$ermore, .oni"erin t$e nat%re o# t$e leal ervi.e involve", +$atever obliation

ai" in.orporator, "ire.tor an" oK.er o# t$e .orporation $a" in.%rre", it +a in.%rre" in

t$eir peronal .apa.it5! $en "ire.tor an" oK.er o# a .orporation are %nable to

.ompenate a part5 #or a peronal obliation, it i #ar-#et.$e" to allee t$at t$e

.orporation i perpet%atin #ra%" or promotin in%ti.e, an" be t$ereb5 $el" liable

t$ere#or b5 pier.in it .orporate veil! $ile t$ere are no $ar" an" #at r%le on

"irear"in eparate .orporate i"entit5, +e m%t al+a5 be min"#%l o# it #%n.tion an"

p%rpoe! A .o%rt $o%l" be .are#%l in aein t$e milie% +$ere t$e "o.trine o# pier.in



t$e .orporate veil ma5 be applie"! Ot$er+ie an in%ti.e, alt$o%$ %ninten"e", ma5 re%lt

#rom it erroneo% appli.ation!

T$e peronalit5 o# t$e .orporation an" t$oe o# it in.orporator, "ire.tor an" oK.er in

t$eir peronal .apa.itie o%$t to be 6ept eparate in t$i .ae! T$e .laim #or leal #ee

aaint t$e .on.erne" in"ivi"%al in.orporator, oK.er an" "ire.tor .o%l" not be properl5"ire.te" aaint t$e .orporation +it$o%t violatin bai. prin.iple overnin .orporation!

8oreover, ever5 a.tion ? in.l%"in a .o%nter.laim ? m%t be proe.%te" or "e#en"e" in

t$e name o# t$e real part5 in interet! 0 It i plainl5 an error to la5 t$e .laim #or leal #ee

o# private repon"ent reorio 8an%el at t$e "oor o# petitioner F8C/ rat$er t$an

in"ivi"%al member o# t$e Fran.i.o #amil5!

Bo+ever, +it$ rear" to t$e pro.e"%ral i%e raie" b5 petitioner< alleation, t$at it

nee"e" to be %mmone" ane+ in or"er #or t$e .o%rt to a.=%ire %ri"i.tion over it, +e

aree +it$ repon"ent .o%rt< vie+ to t$e .ontrar5! Se.tion 4, R%le 11 o# t$e R%le o# Co%rt

provi"e t$at a .o%nter.laim or .ro-.laim m%t be an+ere" +it$in ten 10/ "a5 #rom

ervi.e! Not$in in t$e R%le o# Co%rt a5 t$at %mmon $o%l" 3rt be erve" on t$e

"e#en"ant be#ore an an+er to .o%nter.laim m%t be ma"e! T$e p%rpoe o# a %mmon i

to enable t$e .o%rt to a.=%ire %ri"i.tion over t$e peron o# t$e "e#en"ant! Alt$o%$ a

.o%nter.laim i treate" a an entirel5 "itin.t an" in"epen"ent a.tion, t$e "e#en"ant in

t$e .o%nter.laim, bein t$e plaintif in t$e oriinal .omplaint, $a alrea"5 %bmitte" to t$e

%ri"i.tion o# t$e .o%rt! Follo+in R%le ', Se.tion ( o# t$e 1'' R%le o# Civil

Pro.e"%re, 1 i# a "e#en"ant $erein petitioner/ #ail to an+er t$e .o%nter.laim, t$en %pon

motion o# plaintif, t$e "e#en"ant ma5 be "e.lare" in "e#a%lt! T$i i +$at $appene" to

petitioner in t$i .ae, an" t$i Co%rt 3n" no pro.e"%ral error in t$e "ipoition o# t$e

appellate .o%rt on t$i parti.%lar i%e! 8oreover, a note" b5 t$e repon"ent .o%rt, +$en

petitioner 3le" it motion ee6in to et ai"e t$e or"er o# "e#a%lt, in efe.t it %bmitte"

itel# to t$e %ri"i.tion o# t$e .o%rt! A +ell ai" b5 repon"ent .o%rtG

F%rt$er on t$e la.6 o# %ri"i.tion a raie" b5 plaintif-appellantD, Dt$e re.or" $o+ t$at

%pon it re=%et, plaintif-appellant +a rante" time to 3le a motion #or re.oni"eration o#

t$e "ip%te" "e.iion! Plaintif-appellant "i" 3le it motion #or re.oni"eration to et ai"e

t$e or"er o# "e#a%lt an" t$e %"ment ren"ere" on t$e .o%nter.laim!

T$%, even i# t$e .o%rt a.=%ire" no %ri"i.tion over plaintif-appellant on t$e .o%nter.laim,

a it vioro%l5 init, plaintif-appellant i .oni"ere" to $ave %bmitte" to t$e .o%rt<

%ri"i.tion +$en it 3le" t$e motion #or re.oni"eration ee6in relie# #rom t$e .o%rt!

Soriano v! Pala.io, 12 SCRA 44/! A part5 i etoppe" #rom aailin t$e %ri"i.tion o# a

.o%rt a#ter vol%ntaril5 %bmittin $imel# to it %ri"i.tion! Teone v! ironella, 1*'

SCRA 100/! Etoppel i a bar aaint an5 .laim o# la.6 o# %ri"i.tion! alai v! alai,

1*' SCRA (/!

BEREFORE, t$e petition i $ereb5 RANTE> an" t$e aaile" "e.iion i $ereb5

RE@ERSE> ino#ar onl5 a it $el" Fran.i.o 8otor Corporation liable #or t$e leal

obliation o+in to private repon"ent reorio 8an%el; b%t t$i "e.iion i +it$o%t



pre%"i.e to $i 3lin t$e proper %it aaint t$e .on.erne" member o# t$e Fran.i.o

#amil5 in t$eir peronal .apa.it5! No prono%n.ement a to .ot!!0#phi!.n1t

SO OR>ERE>!

G.R. No. 1616 Ju*y 31, 001

"#ILI""INE NATIONAL BAN;, petitioner,

v!

RITRATTO GROU" IN$., RIATTO INTERNATIONAL, IN$., an& AAAN GENERALMER$#ANIE,repon"ent!

;A"UNAN, J.<

In a petition #or revie+ on .ertiorari %n"er R%le 4* o# t$e Revie" R%le o# Co%rt, petitioner

ee6 to ann%l an" et ai"e t$e Co%rt o# Appeal< "e.iion in C!A! C@ !R! S!P! No! **(4

"ate" 8ar.$ 2, 2000, aKrmin t$e Or"er i%in a +rit o# preliminar5 in%n.tion o# t$eReional Trial Co%rt o# 8a6ati, ran.$ 14 "ate" 7%ne (0, 1''', an" it Or"er "ate"

O.tober 4, 1''', +$i.$ "enie" petitioner< motion to "imi!

T$e ante.e"ent o# t$i .ae are a #ollo+G

Petitioner P$ilippine National an6 i a "ometi. .orporation orani:e" an" eitin %n"er

P$ilippine la+! 8ean+$ile, repon"ent Ritratto ro%p, In.!, Riatto International, In.! an"

>a"aan eneral 8er.$an"ie are "ometi. .orporation, li6e+ie, orani:e" an" eitin

%n"er P$ilippine la+!

On 8a5 2', 1'', PN International Finan.e &t"! PN-IF&/ a %bi"iar5 .ompan5 o# PN,orani:e" an" "oin b%ine in Bon Qon, eten"e" a letter o# .re"it in #avor o# t$e

repon"ent in t$e amo%nt o# 9S(00,000!00 e.%re" b5 real etate mortae

.ontit%te" over #o%r 4/ par.el o# lan" in 8a6ati Cit5! T$i .re"it #a.ilit5 +a later

in.reae" %..eivel5 to 9S1,140,000!00 in September 1''; to 9S1,2'0,000!00 in

November 1''; to 9S1,42*,000!00 in Febr%ar5 1''; an" "e.reae" to

9S1,421,(1!1) in April 1'')! Repon"ent ma"e repa5ment o# t$e loan in.%rre" b5

remittin t$oe amo%nt to t$eir loan a..o%nt +it$ PN-IF& in Bon Qon!

Bo+ever, a o# April (0, 1''), t$eir o%ttan"in obliation too" at 9S1,4',24!0!

P%r%ant to t$e term o# t$e real etate mortae, PN-IF&, t$ro%$ it attorne5-in-#a.t

PN, noti3e" t$e repon"ent o# t$e #ore.lo%re o# all t$e real etate mortae an" t$at

t$e propertie %be.t t$ereo# +ere to be ol" at a p%bli. a%.tion on 8a5 2, 1''' at t$e

8a6ati Cit5 Ball!

On 8a5 2*, 1''', repon"ent 3le" a .omplaint #or in%n.tion +it$ pra5er #or t$e i%an.e

o# a +rit o# preliminar5 in%n.tion an"Lor temporar5 retrainin or"er be#ore t$e Reional

Trial Co%rt o# 8a6ati! T$e Ee.%tive 7%"e o# t$e Reional Trial Co%rt o# 8a6ati i%e" a 2-

$o%r temporar5 retrainin or"er! On 8a5 2), 1''', t$e .ae +a raWe" to ran.$ 14 o#



t$e Reional Trial Co%rt o# 8a6ati! T$e trial %"e t$en et a $earin on 7%ne ), 1'''! At

t$e $earin o# t$e appli.ation #or preliminar5 in%n.tion, petitioner +a iven a perio" o#

even "a5 to 3le it +ritten oppoition to t$e appli.ation! On 7%ne 1*, 1''', petitioner

3le" an oppoition to t$e appli.ation #or a +rit o# preliminar5 in%n.tion to +$i.$ t$e

repon"ent 3le" a repl5! On 7%ne 2*, 1''', petitioner 3le" a motion to "imi on t$e

ro%n" o# #ail%re to tate a .a%e o# a.tion an" t$e aben.e o# an5 privit5 bet+een t$epetitioner an" repon"ent! On 7%ne (0, 1''', t$e trial .o%rt %"e i%e" an Or"er #or t$e

i%an.e o# a +rit o# preliminar5 in%n.tion, +$i.$ +rit +a .orrepon"inl5 i%e" on 7%l5

14, 1'''! On O.tober 4, 1''', t$e motion to "imi +a "enie" b5 t$e trial .o%rt %"e

#or la.6 o# merit!

Petitioner, t$erea#ter, in a petition #or certiorari an" pro$ibition aaile" t$e i%an.e o#

t$e +rit o# preliminar5 in%n.tion be#ore t$e Co%rt o# Appeal! In t$e imp%ne"

"e.iion,1 t$e appellate .o%rt "imie" t$e petition! Petitioner t$% ee6 re.o%re to t$i

Co%rt an" raie t$e #ollo+in errorG

1!

TBE CO9RT OF APPEA&S PA&PA&H ERRE> IN NOT >IS8ISSIN TBE CO8P&AINT A OU,

CONSI>ERIN TBAT H TBE A&&EATIONS OF TBE CO8P&AINT, NO CA9SE OF ACTION

EISTS AAINST PETITIONER, BICB IS NOT A REA& PARTH IN INTEREST EIN A 8ERE

ATTORNEH-IN-FACT A9TBORIYE> TO ENFORCE AN ANCI&&ARH CONTRACT!

2!

TBE CO9RT OF APPEA&S PA&PA&H ERRE> IN A&&OIN TBE TRIA& CO9RT TO ISS9E IN

ECESS OR &ACQ OF 79RIS>ICTION A RIT OF PRE&I8INARH IN79NCTION O@ER AN>

EHON> BAT AS PRAHE> FOR IN TBE CO8P&AINT A M9O CONTRARH TO C?>: :)6A::, A:P +). *UA (8!, 101 SCRA )2!2

Petitioner pra5, inter alia, t$at t$e Co%rt o# Appeal< >e.iion "ate" 8ar.$ 2, 2000 an"

t$e trial .o%rt< Or"er "ate" 7%ne (0, 1''' an" O.tober 4, 1''' be et ai"e an" t$e

"imial o# t$e .omplaint in t$e intant .ae!(

In t$eir Comment, repon"ent ar%e t$at even a%min arguendo t$at petitioner an"

PN-IF& are t+o eparate entitie, petitioner i till t$e part5-in-interet in t$e appli.ation

#or preliminar5 in%n.tion be.a%e it i ta6e" to .ommit a.t o# #ore.loin repon"ent<

propertie!4 Repon"ent maintain t$at t$e entire .re"it #a.ilit5 i voi" a it .ontain

tip%lation in violation o# t$e prin.iple o# m%t%alit5 o# .ontra.t!* In a""ition, repon"ent

%ti3e" t$e a.t o# t$e .o%rt a 'uo in appl5in t$e "o.trine o# Pier.in t$e @eil o#

Corporate I"entit5 b5 tatin t$at petitioner i merel5 an alter ego or a b%ine .on"%it

o# PN-IF&!

T$e petition i impree" +it$ merit!



Repon"ent, in t$eir .omplaint, an.$or t$eir pra5er #or in%n.tion on allee" invali"

proviion o# t$e .ontra.tG

RO9N>S

I

TBE >ETER8INATION OF TBE INTEREST RATES EIN &EFT TO TBE SO&E >ISCRETION OF

TBE >EFEN>ANT PN CONTRA@ENES TBE PRINCIPA& OF 89T9A&ITH OF CONTRACTS!

II

TBERE EIN A STIP9&ATION IN TBE &OAN AREE8ENT TBAT TBE RATE OF INTEREST

AREE> 9PON 8AH E 9NI&ATERA&&H 8O>IFIE> H >EFEN>ANT, TBERE AS NO

STIP9&ATION TBAT TBE RATE OF INTEREST SBA&& E RE>9CE> IN TBE E@ENT TBAT TBE

APP&ICA&E 8AI898 RATE OF INTEREST IS RE>9CE> H &A OR H TBE 8ONETARH

OAR>!

ae" on t$e a#orementione" ro%n", repon"ent o%$t to enoin an" retrain PN

#rom t$e #ore.lo%re an" event%al ale o# t$e propert5 in or"er to prote.t t$eir ri$t to

ai" propert5 b5 reaon o# voi" .re"it #a.ilitie a bae #or t$e real etate mortae over

t$e ai" propert5!)

T$e .ontra.t =%etione" i one entere" into bet+een repon"ent an" PN-IF&, not PN! In

t$eir .omplaint, repon"ent a"mit t$at petitioner i a mere attorne5-in-#a.t #or t$e PN-

IF& +it$ #%ll po+er an" a%t$orit5 to, inter alia, #ore.loe on t$e propertie mortae" to

e.%re t$eir loan obliation +it$ PN-IF&! In ot$er +or", $erein petitioner i an aent

+it$ limite" a%t$orit5 an" pe.i3. "%tie %n"er a pe.ial po+er o# attorne5 in.orporate" in

t$e real etate mortae! It i not priv5 to t$e loan .ontra.t entere" into b5 repon"ent

an" PN-IF&!

T$e i%e o# t$e vali"it5 o# t$e loan .ontra.t i a matter bet+een PN-IF&, t$e petitioner<

prin.ipal an" t$e part5 to t$e loan .ontra.t, an" t$e repon"ent! Het, "epite t$e

re.onition t$at petitioner i a mere aent, t$e repon"ent in t$eir .omplaint pra5e" t$at

t$e petitioner PN be or"ere" to re-.omp%te t$e re.$e"%lin o# t$e interet to be pai" b5

t$em in a..or"an.e +it$ t$e term an" .on"ition in t$e "o.%ment evi"en.in t$e .re"it

#a.ilitie, an" .re"itin t$e amo%nt previo%l5 pai" to PN b5 $erein repon"ent!'

Clearl5, petitioner not bein a part to t$e .ontra.t $a no po+er to re-.omp%te t$e interet

rate et #ort$ in t$e .ontra.t! Repon"ent, t$ere#ore, "o not $ave an5 .a%e o# a.tion

aaint petitioner!

T$e trial .o%rt, $o+ever, in it Or"er "ate" O.tober 4, 1''4, r%le" t$at in.e PN-IF&, i a

+$oll5 o+ne" %bi"iar5 o# "e#en"ant P$ilippine National an6, t$e %it aaint t$e

"e#en"ant PN i a %it aaint PN-IF&!10 In %ti#5in it r%lin, t$e trial .o%rt, .itin t$e

.ae o# 3oppel Phil. nc. vs. 7atco,11 reaone" t$at t$e .orporate entit5 ma5 be "irear"e"



+$ere a .orporation i t$e mere alter eo, or b%ine .on"%it o# a peron or +$ere t$e

.orporation i o orani:e" an" .ontrolle" an" it afair are o .on"%.te", a to ma6e it

merel5 an intr%mentalit5, aen.5, .on"%it or a"%n.t o# anot$er .orporation!12

e "iaree!

T$e eneral r%le i t$at a a leal entit5, a .orporation $a a peronalit5 "itin.t an"

eparate #rom it in"ivi"%al to.6$ol"er or member, an" i not afe.te" b5 t$e peronal

ri$t, obliation an" trana.tion o# t$e latter!1( T$e mere #a.t t$at a .orporation o+n

all o# t$e to.6 o# anot$er .orporation, ta6en alone i not %K.ient to %ti#5 t$eir bein

treate" a one entit5! I# %e" to per#orm leitimate #%n.tion, a %bi"iar5< eparate

eiten.e ma5 be repe.te", an" t$e liabilit5 o# t$e parent .orporation a +ell a t$e

%bi"iar5 +ill be .on3ne" to t$oe ariin in t$eir repe.tive b%ine! T$e .o%rt ma5 in

t$e eer.ie o# %"i.ial "i.retion tep in to prevent t$e ab%e o# eparate entit5 privilee

an" pier.e t$e veil o# .orporate entit5!

e 3n", $o+ever, t$at t$e r%lin in 3oppel 3n" no appli.ation in t$e .ae at bar! In ai".ae, t$i Co%rt "irear"e" t$e eparate eiten.e o# t$e parent an" t$e %bi"iar5 on

t$e ro%n" t$at t$e latter +a #orme" merel5 #or t$e p%rpoe o# eva"in t$e pa5ment o#

$i$er tae! In t$e .ae at bar, repon"ent #ail to $o+ an5 .oent reaon +$5 t$e

eparate entitie o# t$e PN an" PN-IF& $o%l" be "irear"e"!

$ile t$ere eit no "e3nite tet o# eneral appli.ation in "eterminin +$en a %bi"iar5

ma5 be treate" a a mere intr%mentalit5 o# t$e parent .orporation, ome #a.tor $ave

been i"enti3e" t$at +ill %ti#5 t$e appli.ation o# t$e treatment o# t$e "o.trine o# t$e

pier.in o# t$e .orporate veil! T$e .ae o# *arrett vs. )outhern 8ail#ay Co!14 i

enli$tenin! T$e .ae involve" a %it aaint t$e So%t$ern Rail+a5 Compan5! Plaintif +a

emplo5e" b5 &enoir Car or6 an" allee" t$at $e %taine" in%rie +$ile +or6in #or

&enoir! Be, $o+ever, 3le" a %it aaint So%t$ern Rail+a5 Compan5 on t$e ro%n" t$at

So%t$ern $a" a.=%ire" t$e entire .apital to.6 o# &enoir Car or6, $en.e, t$e latter

.orporation +a b%t a mere intr%mentalit5 o# t$e #ormer! T$e Tenneee S%preme Co%rt

tate" t$at a a eneral r%le t$e to.6 o+ner$ip alone b5 one .orporation o# t$e to.6 o#

anot$er "oe not t$ereb5 ren"er t$e "ominant .orporation liable #or t$e tort o# t$e

%bi"iar5 %nle t$e eparate .orporate eiten.e o# t$e %bi"iar5 i a mere $am, or

%nle t$e .ontrol o# t$e %bi"iar5 i %.$ t$at it i b%t an intr%mentalit5 or a"%n.t o#

t$e "ominant .orporation! Sai" Co%rt t$en o%tline" t$e .ir.%mtan.e +$i.$ ma5 be %e#%l

in t$e "etermination o# +$et$er t$e %bi"iar5 i b%t a mere intr%mentalit5 o# t$e parent-

.orporationG

6he Circumstance rendering the subsidiary an instrumentality ! It i mani#etl5 impoible

to .atalo%e t$e in3nite variation o# #a.t t$at .an arie b%t t$ere are .ertain .ommon

.ir.%mtan.e +$i.$ are important an" +$i.$, i# preent in t$e proper .ombination, are

.ontrollin!

T$ee are a #ollo+G



a/ T$e parent .orporation o+n all or mot o# t$e .apital to.6 o# t$e %bi"iar5!

b/ T$e parent an" %bi"iar5 .orporation $ave .ommon "ire.tor or oK.er!

./ T$e parent .orporation 3nan.e t$e %bi"iar5!

"/ T$e parent .orporation %b.ribe to all t$e .apital to.6 o# t$e %bi"iar5 or ot$er+ie

.a%e it in.orporation!

e/ T$e %bi"iar5 $a rol5 ina"e=%ate .apital!

#/ T$e parent .orporation pa5 t$e alarie an" ot$er epene or loe o# t$e %bi"iar5!

/ T$e %bi"iar5 $a %btantiall5 no b%ine e.ept +it$ t$e parent .orporation or no

aet e.ept t$oe .onve5e" to or b5 t$e parent .orporation!

$/ In t$e paper o# t$e parent .orporation or in t$e tatement o# it oK.er, t$e%bi"iar5 i "e.ribe" a a "epartment or "iviion o# t$e parent .orporation, or it

b%ine or 3nan.ial reponibilit5 i re#erre" to a t$e parent .orporation< o+n!

i/ T$e parent .orporation %e t$e propert5 o# t$e %bi"iar5 a it o+n!

/ T$e "ire.tor or ee.%tive o# t$e %bi"iar5 "o not a.t in"epen"entl5 in t$e interet o#

t$e %bi"iar5 b%t ta6e t$eir or"er #rom t$e parent .orporation!

6/ T$e #ormal leal re=%irement o# t$e %bi"iar5 are not oberve"!

T$e Tenneee S%preme Co%rt t$% r%le"G

In t$e .ae at bar onl5 t+o o# t$e eleven lite" in"i.ia o..%r, namel5, t$e o+ner$ip o#

mot o# t$e .apital to.6 o# &enoir b5 So%t$ern, an" poibl5 %b.ription to t$e .apital

to.6 o# &enoir! ! ! T$e .omplaint m%t be "imie"!

Similarl5, in t$i %ri"i.tion, +e $ave $el" t$at t$e "o.trine o# pier.in t$e .orporate veil

i an e=%itable "o.trine "evelope" to a""re it%ation +$ere t$e eparate .orporate

peronalit5 o# a .orporation i ab%e" or %e" #or +ron#%l p%rpoe! T$e "o.trine applie

+$en t$e .orporate 3.tion i %e" to "e#eat p%bli. .onvenien.e, %ti#5 +ron, prote.t

#ra%" or "e#en" .rime, or +$en it i ma"e a a $iel" to .on#%e t$e leitimate i%e, or

+$ere a .orporation i t$e mere alter ego or b%ine .on"%it o# a peron, or +$ere t$e.orporation i o orani:e" an" .ontrolle" an" it afair are o .on"%.te" a to ma6e it

merel5 an intr%mentalit5, aen.5, .on"%it or a"%n.t o# anot$er .orporation!1*

In Concept 2uilders, nc. v. <48C,1 +e $ave lai" t$e tet in "eterminin t$e appli.abilit5 o#

t$e "o.trine o# pier.in t$e veil o# .orporate 3.tion, to +itG



1! Control, not mere maorit5 or .omplete .ontrol, b%t .omplete "omination, not onl5 o#

3nan.e b%t o# poli.5 an" b%ine pra.ti.e in repe.t to t$e trana.tion atta.6e" o t$at

t$e .orporate entit5 a to t$i trana.tion $a" at t$e time no eparate min", +ill or

eiten.e o# it o+n!

2! S%.$ .ontrol m%t $ave been %e" b5 t$e "e#en"ant to .ommit #ra%" or +ron, toperpet%ate t$e violation o# a tat%tor5 or ot$er poitive leal "%t5, or "i$onet an",

%n%t a.t in .ontravention o# plaintif leal ri$t; an",

(! T$e a#oreai" .ontrol an" brea.$ o# "%t5 m%t proimatel5 .a%e t$e in%r5 or %n%t

lo .omplaine" o#!

T$e aben.e o# an5 one o# t$ee element prevent pier.in t$e .orporate veil! In

appl5in t$e intr%mentalit5 or alter eo "o.trine, t$e .o%rt are .on.erne" +it$ realit5

an" not #orm, +it$ $o+ t$e .orporation operate" an" t$e in"ivi"%al "e#en"ant<

relation$ip to t$e operation!1

Ai"e #rom t$e #a.t t$at PN-IF& i a +$oll5 o+ne" %bi"iar5 o# petitioner PN, t$ere i no

$o+in o# t$e in"i.ative #a.tor t$at t$e #ormer .orporation i a mere intr%mentalit5 o#

t$e latter are preent! Neit$er i t$ere a "emontration t$at an5 o# t$e evil o%$t to be

prevente" b5 t$e "o.trine o# pier.in t$e .orporate veil eit! Ine.apabl5, t$ere#ore, t$e

"o.trine o# pier.in t$e .orporate veil bae" on t$e alter eo or intr%mentalit5 "o.trine

3n" no appli.ation in t$e .ae at bar!

In an5 .ae, t$e parent-%bi"iar5 relation$ip bet+een PN an" PN-IF& i not t$e

ini3.ant leal relation$ip involve" in t$i .ae in.e t$e petitioner +a not %e"

be.a%e it i t$e parent .ompan5 o# PN-IF&! Rat$er, t$e petitioner +a %e" be.a%e it

a.te" a an attorne5-in-#a.t o# PN-IF& in initiatin t$e #ore.lo%re pro.ee"in! A %it

aaint an aent .annot +it$o%t .ompellin reaon be .oni"ere" a %it aaint t$e

prin.ipal! 9n"er t$e R%le o# Co%rt, ever5 a.tion m%t be proe.%te" or "e#en"e" in t$e

name o# t$e real part5-in-interet, %nle ot$er+ie a%t$ori:e" b5 la+ or t$ee R%le!1) In

man"ator5 term, t$e R%le re=%ire t$at partie-in-interet +it$o%t +$om no 3nal

"etermination .an be $a", an a.tion $all be oine" eit$er a plaintif or "e#en"ant!1' In

t$e .ae at bar, t$e in%n.tion %it i "ire.te" onl5 aaint t$e aent, not t$e prin.ipal!

Anent t$e i%an.e o# t$e preliminar5 in%n.tion, t$e ame m%t be li#te" a it i a mere

proviional reme"5 b%t a"%n.t to t$e main %it!20 A +rit o# preliminar5 in%n.tion i an

an.illar5 or preventive reme"5 t$at ma5 onl5 be reorte" to b5 a litiant to prote.t or

preerve $i ri$t or interet an" #or no ot$er p%rpoe "%rin t$e pen"en.5 o# t$e

prin.ipal a.tion! T$e "imial o# t$e prin.ipal a.tion t$% re%lt in t$e "enial o# t$e

pra5er #or t$e i%an.e o# t$e +rit! F%rt$er, t$ere i no $o+in t$at repon"ent are

entitle" to t$e i%an.e o# t$e +rit! Se.tion (, R%le *), o# t$e 1'' R%le o# Civil Pro.e"%re

provi"eG

SECTION (! *rounds for issuance of preliminary in9unction! ? A preliminar5 in%n.tion ma5

be rante" +$en it i etabli$e"G



a/ T$at t$e appli.ant i entitle" to t$e relie# "eman"e", an" t$e +$ole or part o# %.$

relie# .onit in retrainin t$e .ommiion or .ontin%an.e o# t$e a.t or a.t .omplaine"

o#, or in re=%irin t$e per#orman.e o# an a.t or a.t, eit$er #or a limite" perio" or

perpet%all5,

b/ T$at t$e .ommiion, .ontin%an.e or non-per#orman.e o# t$e a.t or a.t .omplaine"o# "%rin t$e litiation +o%l" probabl5 +or6 in%ti.e to t$e appli.ant; or

./ T$at a part5, .o%rt, aen.5 or a peron i "oin, t$reatenin, or i attemptin to "o, or

i pro.%rin or %ferin to be "one, ome a.t or a.t probabl5 in violation o# t$e ri$t o#

t$e appli.ant repe.tin t$e %be.t o# t$e a.tion or pro.ee"in, an" ten"in to ren"er t$e

%"ment inefe.t%al!

T$%, an in%n.tive reme"5 ma5 onl5 be reorte" to +$en t$ere i a prein ne.eit5 to

avoi" in%rio% .one=%en.e +$i.$ .annot be reme"ie" %n"er an5 tan"ar"

.ompenation!21 Repon"ent "o not "en5 t$eir in"ebte"ne! T$eir propertie are b5 t$eir

o+n .$oi.e en.%mbere" b5 real etate mortae! 9pon t$e non-pa5ment o# t$e loan,+$i.$ +ere e.%re" b5 t$e mortae o%$t to be #ore.loe", t$e mortae" propertie

are properl5 %be.t to a #ore.lo%re ale! 8oreover, repon"ent =%etione" t$e allee"

voi" tip%lation in t$e .ontra.t onl5 +$en petitioner initiate" t$e #ore.lo%re pro.ee"in!

Clearl5, repon"ent $ave #aile" to prove t$at t$e5 $ave a ri$t prote.te" an" t$at t$e

a.t aaint +$i.$ t$e +rit i to be "ire.te" are violative o# ai" ri$t!22 T$e Co%rt i not

%nmin"#%l o# t$e 3n"in o# bot$ t$e trial .o%rt an" t$e appellate .o%rt t$at t$ere ma5 be

erio% ro%n" to n%lli#5 t$e proviion o# t$e loan areement! Bo+ever, a earlier

"i.%e", repon"ent .ommitte" t$e mita6e o# 3lin t$e .ae aaint t$e +ron part5,

t$%, t$e5 m%t %fer t$e .one=%en.e o# t$eir error!

All tol", repon"ent "o not $ave a .a%e o# a.tion aaint t$e petitioner a t$e latter i

not priv5 to t$e .ontra.t t$e proviion o# +$i.$ repon"ent ee6 to "e.lare voi"!

A..or"inl5, t$e .ae be#ore t$e Reional Trial Co%rt m%t be "imie" an" t$e

preliminar5 in%n.tion i%e" in .onne.tion t$ere+it$, m%t be li#te"!

IN @IE OF TBE FOREOIN, t$e petition i $ereb5 RANTE>! T$e aaile" "e.iion o# t$e

Co%rt o# Appeal i $ereb5 RE@ERSE>! T$e Or"er "ate" 7%ne (0, 1''' an" O.tober 4,

1''' o# t$e Reional Trial Co%rt o# 8a6ati, ran.$ 14 in Civil Cae No! ''-10( are $ereb5

ANN9&&E> an" SET ASI>E an" t$e .omplaint in ai" .ae >IS8ISSE>!

SO OR>ERE>!

G.R. No. L-+81 )()')r 6, 1989

TRAER RO!AL BAN;, petitioner,

v!

T#E #ONORABLE $OURT O2 A""EAL, #ON. BALTA%AR M. I%ON, "r)4&n? Ju&?), R)?ona* Tra* $our(, Bran7/ 113, "a4ay $(y an& AL2REO$#ING, repon"ent!



)an (uan, Africa, *on/ale/ and )an Agustin for petitioner.

2algos and Pere/ for respondents.

GRINO-AUINO, J.:

T$i petition #or certiorari aail t$e Co%rt o# Appeal< "e.iion "ate" April 2', 1') in CA-

!R! SP No! 0(*'(, entitle" Alfredo Ching vs. ?on. 2alta/ar M. i/on and 6raders 8oyal2an5 n%lli#5in t$e Reional Trial Co%rt< or"er "ate" A%%t 1*,1')( an" 8a5 24,1')4

an" pro$ibitin it #rom #%rt$er pro.ee"in in Civil Cae No! 102)-P!

On 8ar.$ (0,1')2, t$e P$ilippine loomin 8ill, In.! P8/ an" Al#re"o C$in ointl5

%bmitte" to t$e Se.%ritie an" E.$ane Commiion a petition #or %penion o#

pa5ment SEC No! 22*0/ +$ere Al#re"o C$in +a oine" a .o-petitioner be.a%e %n"er

t$e la+, $e +a allee"l5 entitle", a %ret5, to avail o# t$e "e#ene o# P8 an" $e +aepe.te" to raie mot o# t$e to.6$ol"er< e=%it5 o# Pl00 million bein re=%ire" %n"er t$e

plan #or t$e re$abilitation o# P8! Tra"er Ro5al an6 +a in.l%"e" amon P8< .re"itor

name" in S.$e"%le A a..ompan5in P8< petition #or %penion o# pa5ment!

On 8a5 1(, 1')(, t$e petitioner ban6 3le" Civil Cae No! 102)-P in t$e Reional Trial

Co%rt, ran.$ CIII in Paa5 Cit5, aaint P8 an" Al#re"o C$in, to .olle.t P22,22,'4!0*

e.l%ive o# interet, penaltie an" ot$er ban6 .$are repreentin P8< o%ttan"in

obliation to t$e ban6! Al#re"o C$in, a to.6$ol"er o# P8, +a implea"e" a .o-

"e#en"ant #or $avin ine" a a %ret5 #or P8< obliation to t$e etent o# ten million

peo Pl0,000,000/ %n"er a >ee" o# S%ret5$ip "ate" 7%l5 21, 1'!

In it en banc "e.iion in SEC-E No! 01) C$%n Qa io, et al! v! Bon! Antonio R!

8anabat, et al!/, t$e SEC "e.lare" t$at it $a" a%me" %ri"i.tion over petitioner Al#re"o

C$in p%r%ant to Se.tion , R%le ( o# t$e ne+ R%le o# Pro.e"%re o# t$e SEC provi"in

t$at partie in interet +it$o%t +$om no 3nal "etermination .an be $a" o# an a.tion $all

be oine" eit$er a .omplainant, petitioner or repon"ent to prevent m%ltipli.it5 o# %it!

On 7%l5 ', 1')2, t$e SEC i%e" an Or"er pla.in P8< b%ine, in.l%"in it aet an"

liabilitie, %n"er re$abilitation re.eiver$ip, an" or"ere" t$at all a.tion #or .laim lite"

in S.$e"%le A o# t$e petition pen"in be#ore an5 .o%rt or trib%nal are $ereb5 %pen"e" in

+$atever tae t$e ame ma5 be, %ntil #%rt$er or"er #rom t$e Commiion p! 22, Rollo/!

A "ire.te" b5 t$e SEC, ai" or"er +a p%bli$e" on.e a +ee6 #or t$ree .one.%tive +ee6

in t$e %lletin To"a5, P$ilippine >ail5 Epre an" Time 7o%rnal at t$e epene o# P8 an"

Al#re"o C$in!

P8 an" C$in ointl5 3le" a motion to "imi Civil Cae No! 102)-P in t$e RTC, Paa5

Cit5, invo6in t$e pen"en.5 in t$e SEC o# P8< appli.ation #or %penion o# pa5ment

+$i.$ C$in .o-ine"/ an" over +$i.$ t$e SEC $a" alrea"5 a%me" %ri"i.tion!



e#ore t$e motion to "imi .o%l" be reolve", t$e .o%rt "roppe" P8 #rom t$e

.omplaint, on motion o# t$e plaintif ban6, #or t$e reaon t$at t$e SEC $a" alrea"5 pla.e"

P8 %n"er re$abilitation re.eiver$ip!

On A%%t 1*, 1')(, t$e trial .o%rt "enie" C$in< motion to "imi t$e .omplaint aaint

$imel#! T$e .o%rt pointe" o%t t$at P!>! 1*) i onl5 .on.erne" +it$ t$e a.tivitie o#.orporation, partner$ip an" ao.iation! Never +a it inten"e" to re%late an"Lor

.ontrol a.tivitie o# in"ivi"%al p!11, Rollo/! C$in< motion #or re.oni"eration o# t$at

or"er +a "enie" on 8a5 24,1')4! Repon"ent 7%"e ar%e" t$at %n"er P < >! '02-A, a

amen"e", t$e SEC ma5 not vali"l5 a.=%ire %ri"i.tion over an in"ivi"%al, li6e C$in p! 2,

Rollo/!

C$in 3le" a petition #or certiorari an" pro$ibition in t$e Co%rt o# Appeal CA-!R! SP No!

0(*'(/ to ann%l t$e or"er o# repon"ent 7%"e an" to pro$ibit $im #rom #%rt$er

pro.ee"in in t$e .ivil .ae!

T$e main i%e raie" in t$e petition +a +$et$er t$e .o%rt a 'uo .o%l" a.=%ire %ri"i.tion over C$in in $i peronal an" in"ivi"%al .apa.it5 a a %ret5 o# P8 in t$e

.olle.tion %it 3le" b5 t$e ban6, "epite t$e #a.t t$at P8< obliation to t$e ban6 $a"

been pla.e" %n"er re.eiver$ip b5 t$e SEC!

On April 2', 1'), t$e Co%rt o# Appeal rante" t$e +rit pra5e" #or! It n%lli3e" t$e

=%etione" or"er o# repon"ent 7%"e an" pro$ibite" $im #rom #%rt$er pro.ee"in in Civil

Cae No! 102)-P, e.ept to enter an or"er "imiin t$e .ae! T$e pertinent r%lin o# t$e

Co%rt o# Appeal rea"G

In %m, in.e t$e SEC $a" a%me" %ri"i.tion over petitioner in SEC Cae No! 22*0 an"

reiteratin t$e propriet5 o# %.$ a%mption in SEC-E No! 01); an" in.e %n"er P> '02-A,

a amen"e" b5 P> 1*), !!! %pon appointment o# a !!! re$abilitation re.eiver!!! p%r%ant to

t$i >e.ree, all a.tion #or .laim aaint .orporation !!! %n"er manaement or

re.eiver$ip pen"in be#ore an5 .o%rt, trib%nal, boar" or bo"5 $all be %pen"e"

a..or"inl5 !!! repon"ent %"e .learl5 a.te" +it$o%t %ri"i.tion in ta6in .oni:an.e o#

t$e .ivil .ae in t$e .o%rt a 'uo bro%$t b5 repon"ent ban6 to en#or.e t$e %ret5

areement aaint petitioner #or t$e p%rpoe o# .olle.tin pa5ment o# P8< o%ttan"in

obliation! Repon"ent ban6 $o%l" $ave =%etione" t$e SEC< a%mption o# %ri"i.tion

over petitioner in an appellate #or%m an" not in t$e .o%rt a 'uo, a trib%nal +it$ +$i.$ t$e

SEC eno5 a .o-e=%al an" .oor"inate ran6! p! 2, Rollo!/

T$e an6 aail t$at "e.iion in t$i petition #or revie+ allein t$at t$e appellate .o%rt

erre";

1! in $ol"in t$at %ri"i.tion over repon"ent Al#re"o C$in +a a%me" b5 t$e SEC

be.a%e $e +a a .o-iner or %ret5 o# P8 an" t$at t$e lo+er .o%rt ma5 not a%me

%ri"i.tion over $im o a to avoi" m%ltipli.it5 o# %it; an"



2! in $ol"in t$at t$e %ri"i.tion a%me" b5 t$e SEC over C$in +a to t$e e.l%ion o#

.o%rt or trib%nal o# .oor"inate ran6!

T$e petition #or revie+ i meritorio%!

Alt$o%$ C$in +a implea"e" in SEC Cae No! 22*0, a a .o-petitioner o# P8, t$e SEC.o%l" not a%me %ri"i.tion over $i peron an" propertie! T$e Se.%ritie an" E.$ane

Commiion +a empo+ere", a re$abilitation re.eiver, to ta6e .%to"5 an" .ontrol o# t$e

aet an" propertie o# P8 onl5, #or t$e SEC $a %ri"i.tion over .orporation onl5 not

over private in"ivi"%al, e.ept to.6$ol"er in an intra-.orporate "ip%te Se.! *, P!>!

'02-A an" Se.! 2 o# P!>! 1*)/! ein a nominal part5 in SEC Cae No! 22*0, C$in<

propertie +ere not in.l%"e" in t$e re$abilitation re.eiver$ip t$at t$e SEC .ontit%te" to

ta6e .%to"5 o# P8< aet! T$ere#ore, t$e petitioner ban6 +a not barre" #rom 3lin a

%it aaint C$in, a a %ret5 #or P8! An anomalo% it%ation +o%l" arie i# in"ivi"%al

%retie #or "ebtor .orporation ma5 e.ape liabilit5 b5 impl5 .o- 3lin +it$ t$e

.orporation a petition #or %penion o# pa5ment in t$e SEC +$oe %ri"i.tion i limite"

onl5 to .orporation an" t$eir .orporate aet!

T$e term partie-in-interet in Se.tion , R%le ( o# t$e SEC< Ne+ R%le o# Pro.e"%re

.ontemplate onl5 private in"ivi"%al %e" or %in a to.6$ol"er, "ire.tor, or oK.er

o# a .orporation!

C$in .an be %e" eparatel5 to en#or.e $i liabilit5 a %ret5 #or P8, a eprel5

provi"e" b5 Arti.le 121 o# t$e Ne+ Civil Co"eG

ART! 121! T$e .re"itor ma5 pro.ee" aaint an5 o# t$e oli"ar5 "ebtor or all o# t$em

im%ltaneo%l5! T$e "eman" ma"e aaint one o# t$em $all not be an obta.le to t$oe

+$i.$ ma5 %be=%entl5 be "ire.te" aaint t$e ot$er, a lon a t$e "ebt $a not been

#%ll5 .olle.te"!

It i elementar5 t$at a .orporation $a a peronalit5 "itin.t an" eparate #rom it

in"ivi"%al to.6$ol"er or member! ein an oK.er or to.6$ol"er o# a .orporation "oe

not ma6e one< propert5 t$e propert5 alo o# t$e .orporation, #or t$e5 are eparate entitie

A"elio Cr%: v! M%iterio >alia5, 1*2 SCRA 4)2/!

C$in< a.t o# oinin a a .o-petitioner +it$ P8 in SEC Cae No! 22*0 "i" not vet in t$e

SEC %ri"i.tion over $i peron or propert5, #or %ri"i.tion "oe not "epen" on t$e

.onent or a.t o# t$e partie b%t %pon epre proviion o# la+ Tolentino v! So.ial

Se.%rit5 S5tem, 1() SCRA 42); &ee v! 8%ni.ipal Trial Co%rt o# &eapi Cit5, r! I, 14*

SCRA 40)/!

BEREFORE, t$e petition #or revie+ i rante"! T$e "e.iion o# t$e Co%rt o# Appeal in CA-

!R! SP No! 0(*'( i et ai"e! Repon"ent 7%"e o# t$e Reional Trial Co%rt in Paa5 Cit5

i or"ere" to reintate Civil Cae No! 102)-P an" to pro.ee" t$erein aaint t$e private

repon"ent Al#re"o C$in! Cot aaint t$e private repon"ent!



SO OR>ERE>!

G.R. No. 58168 )7)')r 19, 1989

$ON$E"$ION MAGA!A!-LABRAOR, OLEA MAGA!A!-$ABRERA, LUIA

MAGA!A!-$OR"U%, a444()& ) /)r /u4an&, r. Jo4) $oru@, 2ELI$IA ".MAGA!A!, an& MER$EE MAGA!A!-IA%, petitioner,

v!

T#E $OURT O2 A""EAL an& AELAIA RORIGUE%-MAGA!A!, )7a*A&'n4(ra(r o (/) E4(a() o (/) *a() G)naro 2. Ma?4ay4ay repon"ent!

2ERNAN, C.J.:

In t$i petition #or revie+ on .ertiorari, petitioner ee6 to revere an" et ai"e D1 t$e

"e.iion o# t$e Co%rt o# Appeal "ate" 7%l5 l(, 1')1,

1

aKrmin t$at o# t$e Co%rt o# FirtIntan.e o# Yambale an" Olonapo Cit5 +$i.$ "enie" petitioner< motion to intervene in

an ann%lment %it 3le" b5 $erein private repon"ent, an" D2 it reol%tion "ate"

September , 1')1, "en5in t$eir motion #or re.oni"eration!

Petitioner are raiin a p%rel5 leal =%etion; +$et$er or not repon"ent Co%rt o# Appeal

.orre.tl5 "enie" t$eir motion #or intervention!

T$e #a.t are not .ontroverte"!

On Febr%ar5 ', 1'', A"elai"a Ro"ri%e:-8aa5a5, +i"o+ an" pe.ial a"minitrati o#

t$e etate o# t$e late Senator enaro 8aa5a5, bro%$t be#ore t$e t$en Co%rt o# FirtIntan.e o# Olonapo an a.tion aaint Artemio Pananiban, S%bi. &an" Corporation

S9IC/, Filipina 8an%#a.t%rer< an6 FI&8ANANQ/ an" t$e Reiter o# >ee" o#

Yambale! In $er .omplaint, $e allee" t$at in 1'*), $e an" $er $%ban" a.=%ire", t$r%

.on%al #%n", a par.el o# lan" +it$ improvement, 6no+n a Pe=%ena Ilan", .overe"

b5 TCT No! (2*); t$at a#ter t$e "eat$ o# $er $%ban", $e "i.overe" Da an annotation at

t$e ba.6 o# TCT No! (2*) t$at t$e lan" +a a.=%ire" b5 $er $%ban" #rom $i eparate

.apital; Db t$e reitration o# a >ee" o# Ainment "ate" 7%ne 2*, 1' p%rporte"l5

ee.%te" b5 t$e late Senator in #avor o# S9IC, a a re%lt o# +$i.$ TCT No! (2*) +a

.an.elle" an" TCT No! 224(1 i%e" in t$e name o# S9IC; an" D. t$e reitration o# >ee"

o# 8ortae "ate" April 2), 1' in t$e amo%nt o# P 2,00,000!00 ee.%te" b5 S9IC in

#avor o# FI&8ANANQ; t$at t$e #oreoin a.t +ere voi" an" "one in an attempt to "e#ra%"

t$e .on%al partner$ip .oni"erin t$at t$e lan" i .on%al, $er marital .onent to t$e

annotation on TCT No! (2*) +a not obtaine", t$e .$ane ma"e b5 t$e Reiter o# >ee"

o# t$e title$ol"er +a efe.te" +it$o%t t$e approval o# t$e Commiioner o# &an"

Reitration an" t$at t$e late Senator "i" not ee.%te t$e p%rporte" >ee" o# Ainment

or $i .onent t$ereto, i# obtaine", +a e.%re" b5 mita6e, violen.e an" intimi"ation! S$e

#%rt$er allee" t$at t$e ainment in #avor o# S9IC +a +it$o%t .oni"eration an"

.one=%entl5 n%ll an" voi"! S$e pra5e" t$at t$e >ee" o# Ainment an" t$e >ee" o#



8ortae be ann%lle" an" t$at t$e Reiter o# >ee" be or"ere" to .an.el TCT No! 224(1

an" to i%e a ne+ title in $er #avor!

On 8ar.$ , 1'', $erein petitioner, iter o# t$e late enator, 3le" a motion #or

intervention on t$e ro%n" t$at on 7%ne 20, 1'), t$eir brot$er .onve5e" to t$em one-$al#

1L2 / o# $i $are$ol"in in S9IC or a total o# 41,*! $are an" a ainee o#aro%n" 41 o# t$e total o%ttan"in $are o# %.$ to.6 o# S9IC, t$e5 $ave a

%btantial an" leal interet in t$e %be.t matter o# litiation an" t$at t$e5 $ave a leal

interet in t$e %..e o# t$e %it +it$ repe.t to S9IC!

On 7%l5 2, 1'', t$e .o%rt "enie" t$e motion #or intervention, an" r%le" t$at petitioner

$ave no leal interet +$atoever in t$e matter in litiation an" t$eir bein allee"

ainee or tran#eree o# .ertain $are in S9IC .annot leall5 entitle t$em to

intervene be.a%e S9IC $a a peronalit5 eparate an" "itin.t #rom it to.6$ol"er!

On appeal, repon"ent Co%rt o# Appeal #o%n" no #a.t%al or leal %ti3.ation to "it%rb

t$e 3n"in o# t$e lo+er .o%rt! T$e appellate .o%rt #%rt$er tate" t$at +$atever .laim t$epetitioner $ave aaint t$e late Senator or aaint S9IC #or t$at matter .an be

ventilate" in a eparate pro.ee"in, %.$ t$at +it$ t$e "enial o# t$e motion #or

intervention, t$e5 are not le#t +it$o%t an5 reme"5 or %"i.ial relie# %n"er eitin la+!

Petitioner< motion #or re.oni"eration +a "enie"! Ben.e, t$e intant re.o%re!

Petitioner an.$or t$eir ri$t to intervene on t$e p%rporte" ainment ma"e b5 t$e late

Senator o# a .ertain portion o# $i $are$ol"in to t$em a evi"en.e" b5 a >ee" o# Sale

"ate" 7%ne 20, 1')! S%.$ tran#er, petitioner poit, .lot$e t$em +it$ an interet,

prote.te" b5 la+, in t$e matter o# litiation!

Invo6in t$e prin.iple en%n.iate" in t$e .ae o# PN v! P$il! @e! Oil Co!, 4' P$il! )*,)2 X

)*( 1'2/, 3petitioner tronl5 ar%e t$at t$eir o+ner$ip o# 41! o# t$e entire

o%ttan"in .apital to.6 o# S9IC entitle t$em to a ini3.ant vote in t$e .orporate

afair; t$at t$e5 are afe.te" b5 t$e a.tion o# t$e +i"o+ o# t$eir late brot$er #or it

.on.ern t$e onl5 tanible aet o# t$e .orporation an" t$at it appear t$at t$e5 are more

vitall5 interete" in t$e o%t.ome o# t$e .ae t$an S9IC!

@ie+e" in t$e li$t o# Se.tion 2, R%le 12 o# t$e Revie" R%le o# Co%rt, t$i Co%rt aKrm

t$e repon"ent .o%rt< $ol"in t$at petitioner $erein $ave no leal interet in t$e %be.t

matter in litiation o a to entitle t$em to intervene in t$e pro.ee"in belo+! In t$e .ae

o# atama Farmer< Cooperative 8ar6etin Ao.iation, In.! v! Roal, +e $el"G A .learl5

tate" in Se.tion 2 o# R%le 12 o# t$e R%le o# Co%rt, to be permitte" to intervene in a

pen"in a.tion, t$e part5 m%t $ave a leal interet in t$e matter in litiation, or in t$e

%..e o# eit$er o# t$e partie or an interet aaint bot$, or $e m%t be o it%ate" a to

be a"verel5 afe.te" b5 a "itrib%tion or ot$er "ipoition o# t$e propert5 in t$e .%to"5

o# t$e .o%rt or an oK.er t$ereo# !



To allo+ intervention, Da it m%t be $o+n t$at t$e movant $a leal interet in t$e matter

in litiation, or ot$er+ie =%ali3e"; an" Db .oni"eration m%t be iven a to +$et$er t$e

a"%"i.ation o# t$e ri$t o# t$e oriinal partie ma5 be "ela5e" or pre%"i.e", or +$et$er

t$e intervenor< ri$t ma5 be prote.te" in a eparate pro.ee"in or not! ot$

re=%irement m%t .on.%r a t$e 3rt i not more important t$an t$e e.on"! 5

T$e interet +$i.$ entitle a peron to intervene in a %it bet+een ot$er partie m%t be in

t$e matter in litiation an" o# %.$ "ire.t an" imme"iate .$ara.ter t$at t$e intervenor +ill

eit$er ain or loe b5 t$e "ire.t leal operation an" efe.t o# t$e %"ment! Ot$er+ie, i#

peron not partie o# t$e a.tion .o%l" be allo+e" to intervene, pro.ee"in +ill be.ome

%nne.earil5 .ompli.ate", epenive an" interminable! An" t$i i not t$e poli.5 o# t$e

la+! 6

T$e +or" an interet in t$e %be.t mean a "ire.t interet in t$e .a%e o# a.tion a

plea"e", an" +$i.$ +o%l" p%t t$e intervenor in a leal poition to litiate a #a.t allee" in

t$e .omplaint, +it$o%t t$e etabli$ment o# +$i.$ plaintif .o%l" not re.over! +

Bere, t$e interet, i# it eit at all, o# petitioner-movant i in"ire.t, .ontinent, remote,

.one.t%ral, .one=%ential an" .ollateral! At t$e ver5 leat, t$eir interet i p%rel5

in.$oate, or in $eer epe.tan.5 o# a ri$t in t$e manaement o# t$e .orporation an" to

$are in t$e pro3t t$ereo# an" in t$e propertie an" aet t$ereo# on "iol%tion, a#ter

pa5ment o# t$e .orporate "ebt an" obliation!

$ile a $are o# to.6 repreent a proportionate or ali=%ot interet in t$e propert5 o# t$e

.orporation, it "oe not vet t$e o+ner t$ereo# +it$ an5 leal ri$t or title to an5 o# t$e

propert5, $i interet in t$e .orporate propert5 bein e=%itable or bene3.ial in nat%re!

S$are$ol"er are in no leal ene t$e o+ner o# .orporate propert5, +$i.$ i o+ne" b5

t$e .orporation a a "itin.t leal peron! 8

Petitioner #%rt$er .onten" t$at t$e availabilit5 o# ot$er reme"ie, a "e.lare" b5 t$e Co%rt

o# appeal, i totall5 immaterial to t$e availabilit5 o# t$e reme"5 o# intervention!

e .annot ive .re"it to %.$ averment! A earlier tate", t$at t$e movant< interet ma5

be prote.te" in a eparate pro.ee"in i a #a.tor to be .oni"ere" in allo+in or

"iallo+in a motion #or intervention! It i ini3.ant to note at t$i %n.t%re t$at a per

re.or", t$ere are #o%r pen"in .ae involvin t$e partie $erein, en%merate" a #ollo+G

D1 Spe.ial Pro.ee"in No! 122122 be#ore t$e CFI o# 8anila, ran.$ II, entitle"

Con.ep.ion 8aa5a5-&abra"or, et al! v! S%bi. &an" Corp!, et al!, involvin t$e vali"it5

o# t$e tran#er b5 t$e late enaro 8aa5a5 o# one-$al# o# $i $are$ol"in in S%bi.

&an" Corporation; D2 Civil Cae No! 2*-0 be#ore t$e CFI o# Yambale, ran.$ III,

A"elai"a Ro"ri%e:-8aa5a5 v! Pananiban, et.!; Con.ep.ion &abra"or, et al!

Intervenor, ee6in to ann%l t$e p%rporte" >ee" o# Ainment in #avor o# S9IC an" it

annotation at t$e ba.6 o# TCT No! (2*) in t$e name o# repon"ent< "e.eae" $%ban";

D( SEC Cae No! 0010, 3le" b5 repon"ent pra5in, amon ot$er t$in t$at $e be

"e.lare" in $er .apa.it5 a t$e %rvivin po%e an" a"minitratri o# t$e etate o# enaro

8aa5a5 a t$e ole %b.riber an" to.6$ol"er o# S9IC! T$ere, petitioner, b5 motion,



o%$t to intervene! T$eir motion to re.oni"er t$e "enial o# t$eir motion to intervene +a

rante"; D4 SP No! M-2(' be#ore t$e CFI o# Ri:al, ran.$ I@, petitioner $erein 3lin a

.ontinent .laim p%r%ant to Se.tion *, R%le ), Revie" R%le o# Co%rt!9 Petitioner<

interet are no "o%bt ampl5 prote.te" in t$ee .ae!

Neit$er "o +e len" .re"en.e to petitioner< ar%ment t$at t$e5 are more interete" in t$eo%t.ome o# t$e .ae t$an t$e .orporation-ainee, o+in to t$e #a.t t$at t$e latter i

+illin to .ompromie +it$ +i"o+-repon"ent an" in.e a .ompromie involve t$e ivin

o# re.ipro.al .on.eion, t$e onl5 .on.eivable .on.eion t$e .orporation ma5 ive i a

total or partial relin=%i$ment o# t$e .orporate aet! 10

S%.$ .laim all t$e more bolter t$e .ontinent nat%re o# petitioner< interet in t$e

%be.t o# litiation!

T$e #a.t%al 3n"in o# t$e trial .o%rt are .lear on t$i point! T$e petitioner .annot .laim

t$e ri$t to intervene on t$e trent$ o# t$e tran#er o# $are allee"l5 ee.%te" b5 t$e

late Senator! T$e .orporation "i" not 6eep boo6 an" re.or"!

11

Per#or.e, no tran#er +aever re.or"e", m%.$ le efe.te" a to pre%"i.e t$ir" partie! T$e tran#er m%t be

reitere" in t$e boo6 o# t$e .orporation to afe.t t$ir" peron! T$e la+ on .orporation

i epli.it! Se.tion ( o# t$e Corporation Co"e provi"e, t$%G No tran#er, $o+ever, $all

be vali", e.ept a bet+een t$e partie, %ntil t$e tran#er i re.or"e" in t$e boo6 o# t$e

.orporation $o+in t$e name o# t$e partie to t$e trana.tion, t$e "ate o# t$e tran#er,

t$e n%mber o# t$e .erti3.ate or .erti3.ate an" t$e n%mber o# $are tran#erre"!

An" even a%min ar%en"o t$at t$ere +a a vali" tran#er, petitioner are nonet$ele

barre" #rom intervenin inam%.$ a t$eir ri$t .an be ventilate" an" ampl5 prote.te" in

anot$er pro.ee"in!

BEREFORE, t$e intant petition i $ereb5 >ENIE>! Cot aaint petitioner!

SO OR>ERE>!

G.R. No. 8+9+ 2)ruary +, 1991

GOO EART# EM"ORIUM IN$., an& LIM ;A "ING, petitioner,

v!

#ONORABLE $OURT O2 A""EAL an& RO$E-RE!E REALT! IN$., repon"ent.

A.>. acanay for petitioners.

Antonio Ouintos 4a# Bce for private respondent.

"ARA, J.:p



T$i i a petition #or revie+ on certiorari o# t$e >e.ember 2', 1') "e.iion C o# t$e Co%rt

o# Appeal in CA-!R! No! 11'0 entitle" ROCES-REHES REA&TH, INC! v! BONORA&E

79>E REIONA& TRIA& CO9RT OF 8ANI&A, RANCB 44, OO> EARTB E8PORI98, INC!

an" &I8 QA PIN reverin t$e "e.iion o# repon"ent 7%"e CC o# t$e Reional Trial Co%rt

o# 8anila, ran.$ 44 in Civil Cae No! )*-(04)4, +$i.$ revere" t$e reol%tion o# t$e

8etropolitan Trial Co%rt O# 8anila, ran.$ 2) in Civil Cae No! 0'(', CCC "en5in $ereinpetitioner< motion to =%a$ t$e alias +rit o# ee.%tion i%e" aaint t$em!

A at$ere" #rom t$e re.or", t$e ante.e"ent #a.t o# t$i .ae, are a #ollo+G

A &eae Contra.t, "ate" O.tober 1, 1')1, +a entere" into b5 an" bet+een ROCES-

REHES REA&TH, INC!, a leor, an" OO> EARTB E8PORI98, INC!, a leee, #or a term o#

t$ree 5ear beinnin November 1, 1')1 an" en"in O.tober (1, 1')4 at a mont$l5 rental

o# P*,000!00 8ollo, p! (2; Anne C o# Petition/! T$e b%il"in +$i.$ +a t$e %be.t o#

t$e .ontra.t o# leae i a 3ve-tore5 b%il"in lo.ate" at t$e .orner o# Ri:al Aven%e an"

%to Street in Sta! Cr%:, 8anila!

From 8ar.$ 1')(, %p to t$e time t$e .omplaint +a 3le", t$e leee $a" "e#a%lte" in t$e

pa5ment o# rental, a a .one=%en.e o# +$i.$, private repon"ent ROCES-REHES REA&TH,

INC!, $ereina#ter "einate" a ROCES #or brevit5/ 3le" on O.tober 14, 1')4, an

ee.tment .ae 9nla+#%l >etainer/ aaint $erein petitioner, OO> EARTB E8PORI98,

INC! an" &I8 QA PIN, $ereina#ter "einate" a EE, 8ollo, p! 21; Anne o# t$e

Petition/! A#ter t$e latter $a" ten"ere" t$eir reponive plea"in, t$e lo+er .o%rt 8TC,

8anila/ on motion o# Ro.e ren"ere" %"ment on t$e plea"in "ate" April 1, 1')4, t$e

"ipoitive portion o# +$i.$ tateG

7%"ment i $ereb5 ren"ere" or"erin "e#en"ant $erein petitioner/ an" all peron

.laimin title %n"er $im to va.ate t$e premie an" %rren"er t$e ame to t$e plaintif

$erein repon"ent/; or"erin t$e "e#en"ant to pa5 t$e plaintif t$e rental o#

P*,000!00 a mont$ beinnin 8ar.$ 1')( %p to t$e time "e#en"ant a.t%all5 va.ate t$e

premie an" "eliver poeion to t$e plaintif; to pa5 attorne5< #ee in t$e amo%nt o#

P*,000!00 an" to pa5 t$e .ot o# t$i %it! 8ollo, p! 111; 8emoran"%m o# Repon"ent/

On 8a5 1, 1')4, Ro.e 3le" a motion #or ee.%tion +$i.$ +a oppoe" b5 EE on 8a5

2), 1')4 im%ltaneo% +it$ t$e latter< 3lin o# a Noti.e o# Appeal 8ollo, p! 112, bid!/! On

7%ne 1(, 1')4, t$e trial .o%rt reolve" %.$ motion r%linG

A#ter .oni"erin t$e motion #or t$e i%an.e o# a +rit o# ee.%tion 3le" b5 .o%nel #or t$e

plaintif $erein repon"ent/ an" t$e oppoition 3le" in relation t$ereto an" 3n"in t$at

t$e "e#en"ant #aile" to 3le t$e ne.ear5 %pere"ea bon", t$i .o%rt reolve" to rant

t$e ame #or bein meritorio%! 8ollo, p! 112/

On 7%ne 14, 1')4, a +rit o# ee.%tion +a i%e" b5 t$e lo+er .o%rt! 8ean+$ile, t$e

appeal +a aine" to t$e Reional Trial Co%rt 8anila/ ran.$ &@I! Bo+ever, on A%%t

1*, 1')4, EE t$r% .o%nel 3le" +it$ t$e Reional Trial Co%rt o# 8anila, a motion to

+it$"ra+ appeal citing a reaon t$at t$e5 are ati3e" +it$ t$e "e.iion o# t$e



8etropolitan Trial Co%rt o# 8anila, ran.$ @III, +$i.$ ai" .o%rt rante" in it Or"er o#

A%%t 2, 1')4 an" t$e re.or" +ere reman"e" to t$e trial .o%rt 8ollo, p! (2; CA

>e.iion/! 9pon an e-parte 8otion o# ROCES, t$e trial .o%rt i%e" an Alias rit o#

Ee.%tion "ate" Febr%ar5 2*, 1')* 8ollo, p! 104; Anne > o# Petitioner< 8emoran"%m/,

+$i.$ +a implemente" on Febr%ar5 2, 1')*! EE t$r% .o%nel 3le" a motion to =%a$

t$e +rit o# ee.%tion an" noti.e o# lev5 an" an %rent >-parte S%pplemental 8otion #ort$e i%an.e o# a retrainin or"er, on 8ar.$ , an" 20, 1')*, repe.tivel5! On 8ar.$ 21,

1')*, t$e lo+er .o%rt i%e" a retrainin or"er to t$e $erif to $ol" t$e ee.%tion o# t$e

%"ment pen"in $earin on t$e motion to =%a$ t$e +rit o# ee.%tion 8ollo, p! 22; RTC

>e.iion/! $ile ai" motion +a pen"in reol%tion, EE 3le" a Petition #or Relie# #rom

%"ment be#ore anot$er .o%rt, Reional Trial Co%rt o# 8anila, ran.$ I, +$i.$ petition

+a "o.6ete" a Civil Cae No! )0-(001', b%t t$e petition +a "imie" an" t$e

in%n.tive +rit i%e" in .onne.tion t$ere+it$ et ai"e! ot$ partie appeale" to t$e Co%rt

o# Appeal; EE on t$e or"er o# "imial an" Ro.e on "enial o# $i motion #or in"emnit5,

bot$ "o.6ete" a CA-!R! No! 1*)(-C@! oin ba.6 to t$e oriinal .ae, t$e 8etropolitan

Trial Co%rt a#ter $earin an" "ipoin ome ot$er in.i"ent, prom%late" t$e =%etione"

Reol%tion, "ate" April ), 1')*, t$e "ipoitive portion o# +$i.$ rea" a #ollo+G

Premie .oni"ere", t$e motion to =%a$ t$e +rit i $ereb5 "enie" #or la.6 o# merit!

T$e retrainin or"er i%e" on 8ar.$ 11 an" 2(, 1')* are $ereb5 re.alle", li#te" an" et

ai"e! 8ollo, p! 20, 8TC >e.iion/

EE appeale" an" b5 .oin.i"en.e! +a raWe" to t$e ame Co%rt, RTC ran.$ I! Ro.e

move" to "imi t$e appeal b%t t$e Co%rt "enie" t$e motion! On certiorari, t$e Co%rt o#

Appeal "imie" Ro.e< petition an" reman"e" t$e .ae to t$e RTC! 8eantime, ran.$ I

be.ame va.ant an" t$e .ae +a re-raWe" to ran.$ &I@!

On April , 1'), t$e Reional Trial Co%rt o# 8anila, 3n"in t$at t$e amo%nt o# P1 million

evi"en.e" b5 E$ibit I an" anot$er P1 million evi"en.e" b5 t$e pacto de retro ale

intr%ment E$ibit 2/ +ere in #%ll ati#a.tion o# t$e %"ment obliation, revere" t$e

"e.iion o# t$e 8%ni.ipal Trial Co%rt, t$e "ipoitive portion o# +$i.$ rea"G

Premie .oni"ere", %"ment i $ereb5 ren"ere" reverin t$e Reol%tion appeale" #rom

=%a$in t$e +rit o# ee.%tion an" or"erin t$e .an.ellation o# t$e noti.e o# lev5 an"

"e.larin t$e %"ment "ebt a $avin been #%ll5 pai" an"Lor &i=%i"ate"! 8ollo, p! 2'/!

On #%rt$er appeal, t$e Co%rt o# Appeal revere" t$e "e.iion o# t$e Reional Trial Co%rt

an" reintate" t$e Reol%tion o# t$e 8etropolitan Trial Co%rt o# 8anila, t$e "ipoitive

portion o# +$i.$ i a #ollo+G

BEREFORE, t$e %"ment appeale" #rom i $ereb5 RE@ERSE> an" t$e Reol%tion "ate"

April ), 1')*, o# t$e 8etropolitan Trial Co%rt o# 8anila ran.$ III i $ereb5 REINSTATE>!

No prono%n.ement a to .ot! 8ollo, p! 40/!



EE< 8otion #or Re.oni"eration o# April *, 1')) +a "enie" 8ollo, p! 4(/! Ben.e, t$i

petition!

T$e main i%e in t$i .ae i +$et$er or not t$ere +a #%ll ati#a.tion o# t$e %"ment

"ebt in #avor o# repon"ent .orporation +$i.$ +o%l" %ti#5 t$e =%a$in o# t$e rit o#

Ee.%tion!

A .are#%l t%"5 o# t$e .ommon e$ibit E$ibit 1LA an" 2L/ $o+ t$at no+$ere in an5

o# ai" e$ibit +a t$ere an5 +ritin all%"in to or re#errin to an5 ettlement bet+een

t$e partie o# petitioner< %"ment obliation 8ollo, pp! 4*-4)/!

8oreover, t$ere i no in"i.ation in t$e re.eipt, E$ibit 1, t$at it +a in pa5ment, #%ll or

partial, o# t$e %"ment obliation! &i6e+ie, t$ere i no in"i.ation in t$e pacto deretro ale +$i.$ +a "ra+n in #avor o# 7e% 8ar.o Ro.e an" 8ar.o @! Ro.e an" not t$e

repon"ent .orporation, t$at t$e obliation embo"ie" t$erein $a" omet$in to "o +it$

petitioner< %"ment obliation +it$ repon"ent .orporation!

Fin"in t$at t$e .ommon e$ibit, E$ibit 1LA $a" been ine" b5 peron ot$er t$an

%"ment .re"itor Ro.e-Re5e Realt5, In.!/ .o%ple" +it$ t$e #a.t t$at ai" e$ibit +a

not even allee" b5 EE an" &im Qa Pin in t$eir oriinal motion to =%a$ t$e alias +rit o#

ee.%tion 8ollo, p! (/ b%t pro"%.e" onl5 "%rin t$e $earin bid!/ +$i.$ pro"%.tion

re%lte" in petitioner $avin to .laim belatedly t$at t$ere +a an overpa5ment o# abo%t

$al# a million peo 8ollo, pp! 2*-2/ an" remar6in on t$e %tter aben.e o# an5 +ritin in

E$ibit 1LA an" 2L to in"i.ate pa5ment o# t$e %"ment "ebt, repon"ent Appellate

Co%rt .orre.tl5 .on.l%"e" t$at t$ere +a in #a.t no pa5ment o# t$e %"ment "ebt! A

aptl5 oberve" b5 t$e ai" .o%rtG

$at imme"iatel5 .at.$e one< attention i t$e total aben.e o# an5 +ritin all%"in to or

re#errin to an5 ettlement bet+een t$e partie o# private repon"ent< petitioner</

%"ment obliation! In movin #or t$e "imial o# t$e appeal &im Qa Pin +$o +a t$en

aite" b5 .o%nel impl5 tate" t$at "e#en"ant $erein petitioner/ are ati3e" +it$

t$e "e.iion o# t$e 8etropolitan Trial Co%rt Re.or" o# CA, p! *4/!

Notabl5, in private repon"ent< petitioner</ 8otion to M%a$ t$e rit o# Ee.%tion an"

Noti.e o# &ev5 "ate" March J, !HIQ, t$ere i abol%tel5 no re#eren.e to t$e allee"

pa5ment o# one million peo a evi"en.e" b5 E$ibit 1 "ate" )eptember FE, !HIN! A

pointe" o%t b5 petitioner repon"ent .orporation/ t$i +a bro%$t o%t b5 &in"a Pan%tat,

8anaer o# oo" Eart$ onl5 in t$e .o%re o# t$e latter< tetimon5! 8ollo, p! (/

Arti.le 1240 o# t$e Civil Co"e o# t$e P$ilippine provi"e t$atG

Pa5ment $all be ma"e to t$e peron in +$oe #avor t$e obliation $a been .ontit%te",

or $i %..eor in interet, or an5 peron a%t$ori:e" to re.eive it!

In t$e .ae at bar, t$e %ppoe" pa5ment +ere not ma"e to Ro.e-Re5e Realt5, In.! or

to it %..eor in interet nor i t$ere poitive evi"en.e t$at t$e pa5ment +a ma"e to a



peron a%t$ori:e" to re.eive it! No %.$ proo# +a %bmitte" b%t merel5 in#erre" b5 t$e

Reional Trial Co%rt 8ollo, p! 2*/ #rom 8ar.o Ro.e $avin ine" t$e &eae Contra.t a

Prei"ent +$i.$ +a +itnee" b5 7e% 8ar.o Ro.e! T$e latter, $o+ever, +a no loner

Prei"ent or even an oK.er o# Ro.e-Re5e Realt5, In.! at t$e time $e re.eive" t$e mone5

E$ibit 1/ an" ine" t$e ale +it$ pacto de retro E$ibit 2/! Be, in #a.t, "enie" bein

in poeion o# a%t$orit5 to re.eive pa5ment #or t$e repon"ent .orporation nor "oe t$ere.eipt $o+ t$at $e ine" in t$e ame .apa.it5 a $e "i" in t$e &eae Contra.t at a time

+$en $e +a Prei"ent #or repon"ent .orporation 8ollo, p! 20, 8TC "e.iion/!

On t$e ot$er $an", 7e% 8ar.o Ro.e teti3e" t$at t$e amo%nt o# P1 million evi"en.e"

b5 t$e re.eipt E$ibit 1/ i t$e pa5ment #or a loan eten"e" b5 $im an" 8ar.o Ro.e in

#avor o# &im Qa Pin! T$e aertion i $ome b5 t$e re.eipt itel# +$ereb5 t$e5

a.6no+le"e" pa5ment o# t$e loan in t$eir name an" in no ot$er .apa.it5!

A .orporation $a a peronalit5 "itin.t an" eparate #rom it in"ivi"%al to.6$ol"er or

member! ein an oK.er or to.6$ol"er o# a .orporation "oe not ma6e one< propert5

alo o# t$e .orporation, an" vi.e-vera, #or t$e5 are eparate entitie Tra"er Ro5al an6

v! CA-!R! No! )412, September 2, 1')'; Cr%: v! >alia5, 1*2 SCRA 4)2/! S$areo+ner

are in no leal ene t$e o+ner o# .orporate propert5 or .re"it/ +$i.$ i o+ne" b5 t$e

.orporation a a "itin.t leal peron Con.ep.ion 8aa5a5-&abra"or v! CA-!R! No!

*)1), >e.ember 1', 1')'/! A a .one=%en.e o# t$e eparate %ri"i.al peronalit5 o# a

.orporation, t$e .orporate "ebt or .re"it i not t$e "ebt or .re"it o# t$e to.6$ol"er, nor i

t$e to.6$ol"er< "ebt or .re"it t$at o# t$e .orporation Pro#! 7oe Nolle"o< T$e

Corporation Co"e o# t$e P$ilippine, p! *, 1')) E"ition, citing Pro#eor allantine/!

T$e aben.e o# a note to evi"en.e t$e loan i eplaine" b5 7e% 8ar.o Ro.e +$o

teti3e" t$at t$e IO9 +a %be=%entl5 "elivere" to private repon"ent 8ollo, pp! '-

')/! Contrar5 to t$e Reional Trial Co%rt< premie t$at it +a in.%mbent %pon repon"ent

.orporation to prove t$at t$e amo%nt +a "elivere" to t$e Ro.e brot$er in t$e pa5ment

o# t$e loan in t$e latter< #avor, t$e "eliver5 o# t$e amo%nt to an" t$e re.eipt t$ereo# b5

t$e Ro.e brot$er in t$eir name raie t$e pre%mption t$at t$e ai" amo%nt +a "%e to

t$em! T$ere i a "ip%table pre%mption t$at mone5 pai" b5 one to t$e ot$er +a "%e to

t$e latter Se.! *#/ R%le 1(1, R%le o# Co%rt/! It i #or EE an" &im Qa Pin to prove

ot$er+ie! In ot$er +or", it i #or t$e latter to prove t$at t$e pa5ment ma"e +ere #or t$e

ati#a.tion o# t$eir %"ment "ebt an" not vi.e vera!

T$e #a.t t$at at t$e time pa5ment +a ma"e to t$e t+o Ro.e brot$er, EE +a alo

in"ebte" to repon"ent .orporation #or a larer amo%nt, i not %pportive o# t$e Reional

Trial Co%rt< .on.l%ion t$at t$e pa5ment +a in #avor o# t$e latter, epe.iall5 in t$e .ae

at bar +$ere t$e amo%nt +a not re.eipte" #or b5 repon"ent .orporation an" t$ere i

abol%tel5 no in"i.ation in t$e re.eipt #rom +$i.$ it .an be reaonabl5 in#erre", t$at ai"

pa5ment +a in ati#a.tion o# t$e %"ment "ebt! &i6e+ie, no %.$ in#eren.e .an be

ma"e #rom t$e ee.%tion o# t$e pacto de retro ale +$i.$ +a not ma"e in #avor o#

repon"ent .orporation b%t in #avor o# t$e t+o Ro.e brot$er in t$eir in"ivi"%al .apa.itie

+it$o%t an5 re#eren.e to t$e %"ment obliation in #avor o# repon"ent .orporation!



In a""ition, t$e totalit5 o# t$e amo%nt .overe" b5 t$e re.eipt E$ibit 1LA/ an" t$at o# t$e

ale +it$ pacto de retroE$ibit 2L/ all in t$e %m o# P2 million, #ar e.ee" petitioner<

%"ment obliation in #avor o# repon"ent .orporation in t$e %m o# P1,*0,000!00 b5

P440,000!00, +$i.$ militate aaint t$e .laim o# petitioner t$at t$e a#oreai" amo%nt

P28/ +a in #%ll pa5ment o# t$e %"ment obliation!

Petitioner< eplanation t$at t$e e.e i interet an" a"van.e rental #or an etenion o#

t$e leae .ontra.t 8ollo, pp! 2*-2)/ i belie" b5 t$e aben.e o# an5 interet a+ar"e" in

t$e .ae an" o# an5 areement a to t$e etenion o# t$e leae nor +a t$ere an5 %.$

pretene in t$e 8otion to M%a$ t$e Alias rit o# Ee.%tion!

Petitioner< averment t$at t$e repon"ent .o%rt $a" ravel5 ab%e" it "i.retion in

arrivin at t$e aaile" #a.t%al 3n"in a .ontrar5 to t$e evi"en.e an" appli.able

"e.iion o# t$i Bonorable Co%rt are t$ere#ore, patentl5 %n#o%n"e"! Repon"ent .o%rt +a

.orre.t in tatin t$at it .annot o be5on" +$at appear in t$e "o.%ment %bmitte" b5

petitioner t$emelve E$ibit 1 an" 2/ in t$e aben.e o# .lear an" .onvin.in

evi"en.e t$at +o%l" %pport it .laim t$at t$e %"ment obliation $a in"ee" been #%ll5

ati3e" +$i.$ +o%l" +arrant t$e =%a$al o# t$e Alias rit o# Ee.%tion!

It $a been an etabli$e" r%le t$at +$en t$e eiten.e o# a "ebt i #%ll5 etabli$e" b5

t$e evi"en.e +$i.$ $a been "one in t$i .ae/, t$e b%r"en o# provin t$at it $a been

etin%i$e" b5 pa5ment "evolve %pon t$e "ebtor +$o ofer %.$ a "e#ene to t$e .laim

o# t$e plaintif .re"itor $erein repon"ent .orporation/ C$%a C$ien.o v! @ara, 11 P$il!

21'; Ramo v! &e"ema, 12 P$il! *; Pinon v! >e Oorio, (0 P$il! (*/! For in"ee", it i

+ell-entren.$e" in O%r %ripr%"en.e t$at ea.$ part5 in a .ae m%t prove $i o+n

aKrmative alleation b5 t$e "eree o# evi"en.e re=%ire" b5 la+ Stron$ol" In%ran.e

Co! v! CA, !R! No! )((, 8a5 2',1')'; Tai Ton C$%a.$e X Co! v! In%ran.e Commiion,

1*) SCRA (/!

T$e appellate .o%rt .annot, t$ere#ore, be ai" to $ave ravel5 ab%e" it "i.retion in

3n"in la.6 o# .onvin.in an" reliable evi"en.e to etabli$ pa5ment o# t$e %"ment

obliation a .laime" b5 petitioner! T$e b%r"en o# evi"en.e retin on t$e petitioner to

etabli$ t$e #a.t %pon +$i.$ t$eir a.tion i premie" $a not been ati#a.toril5

"i.$are" an" t$ere#ore, t$e5 $ave to bear t$e .one=%en.e!

PRE8ISES CONSI>ERE>, t$e petition i $ereb5 >ENIE> an" t$e >e.iion o# t$e Repon"ent

.o%rt i $ereb5 AFFIR8E>, reintatin t$e April ), 1')* Reol%tion o# t$e 8etropolitan Trial

Co%rt o# 8anila!

SO OR>ERE>!

G.R. No. L-5++6+ January 31, 198

ALBERTO . UNIO an& ILO$O $OMMER$IAL $OR"ORATION, petitioner,

v!

NATIONAL LABOR RELATION $OMMIION, NEMEIO VALENTON, ANTO EL



ROARIO, VI$ENTE TA"U$OL, ANRE OLI, $RE$EN$IO OLLER, $E$ILIOLABUNI, OTERO L. TUMANG, n /4 7aa7(y a4 A44(. R)?ona* r)7(or orAr(ra(on, R)?ona* OD7) No. 1, Mn4(ry o Laor E'*oy')n(, an&AMBROIO B. ION, n /4 7aa7(y a4 A7(n? R)?ona* /)r, R)?ona* OD7)No. 1, Mn4(ry o Laor E'*oy')n(, repon"ent!

7olanda 2ustamante for petitioners.

6he )olicitor *eneral for respondent <48C.

2en9amin :. 2aterina for private respondents,

MELEN$IO-#ERRERA, J.:

In t$i pe.ial .ivil a.tion #or .ertiorari an" Pro$ibition +it$ Preliminar5 In%n.tion,petitioner Alberto S%nio an" Ilo.o Commer.ial Corporation ee6 to et ai"e t$e

Reol%tion o# 8ar.$ 24, 1')1 o# t$e National &abor Relation Commiion N&RC/, +$i.$

aKrme" t$e >e.iion o# t$e Aitant Reional >ire.tor, "ate" November *, 1'', in N&RC

Cae No! R-1-122)-), "ire.tin petitioner an" Cab%ao I.e Plant In.orporate" to

reintate private repon"ent to t$eir #ormer poition +it$o%t lo o# eniorit5 an"

privilee an" to pa5 t$em ba.6+ae #rom Febr%ar5 1, 1') to t$e "ate o# t$eir a.t%al

reintatement!

T$e .ontrover5 aroe #rom t$e #ollo+in ante.e"entG

On 7%l5 (0,1'(, E8 Ramo X Compan5, In.! E8RACO #or brevit5/ an" Cab%ao I.e Plant,In.! CIPI #or $ort/, iter .orporation, ol" an i.e plant to Ri:al >evelopment an" Finan.e

Corporation R>FC +it$ a mortae on t$e ame propertie .ontit%te" b5 t$e latter in

#avor o# t$e #ormer to e.%re t$e pa5ment o# t$e balan.e o# t$e p%r.$ae pri.e! 1

5 virt%e o# t$at ale, E8RACO-CIPI terminate" t$e ervi.e o# all t$eir emplo5ee

in.l%"in private repon"ent $erein, an" pai" t$em t$eir eparation pa5! R>FC $ire" it

o+n o+n emplo5ee an" operate" t$e plant!

On November 2), 1'(, R>FC ol" t$e i.e plant to petitioner Ilo.o Commer.ial

Corporation ICC $ea"e" b5 it Prei"ent an" eneral 8anaer, petitioner Alberto S! S%nio!

Petitioner alo $ire" t$eir o+n emplo5ee a private repon"ent +ere no loner in t$e

plant! T$e ale +a %be.t to t$e mortae in #avor o# E8RACO-CIPI! ot$ R>FC-ICC #aile"

to pa5 t$e balan.e o# t$e p%r.$ae pri.e, a a .one=%en.e o# +$i.$, E8RACO-CIPI

intit%te" etra%"i.ial #ore.lo%re pro.ee"in! T$e propertie +ere ol" at p%bli. a%.tion

on A%%t (0, 1'4, t$e $i$et bi""er bein E8RACO CIPI! On t$e ame "ate, ai"

.ompanie obtaine" an e-parte rit o# Poeion #rom t$e Co%rt o# Firt Intan.e o#

Ilo.o S%r in Civil Cae No! (02-@!



On t$e ame "ate, A%%t (0, 1'4, E8RACO-CIPI ol" t$e i.e plant to Nilo @illan%eva,

%pe.t to t$e ri$t o# re"emption o# R>FC! Nilo @illan%eva t$en re-$ire" private

repon"ent!

On A%%t 2, 1'*, R>FC re"eeme" t$e i.e plant! e.a%e o# t$e ate to Nilo @illan%eva,

E8RACO-CIPI +ere %nable to t%rn over poeion to R>FC an"Lor petitioner, promptint$e latter to 3le a .omplaint #or re.over5 o# poeion aaint E8RACO-CIPI +it$ t$e t$en

Co%rt o# Firt Intan.e o# Ilo.o S%r Civil Cae No! )1-QC/! Nilo @illan%eva intervene"

Sai" Co%rt or"ere" t$e i%an.e o# a rit o# Preliminar5 8an"ator5 In%n.tion pla.in

R>FC in poeion o# t$e i.e plant! E8PRACO-CIPI an" @illan%eva appeale" to t$e Co%rt o#

Appeal CA-R No! 0*))0- SP +$i.$ %p$el" t$e =%etionee, Or"er! A Petition #or .ertiorari

+it$ t$i Co%rt &-4(/ aailin t$at Reol%tion +a "enie" #or la.6 o# merit or 7an%ar5

, 1')!

On Febr%ar5 1, 1'), R>FC an" petitioner 3nall5 obtain poeion o# t$e i.e plant b5

virt%e o# t$e 8an"ator5 In%n.tion previo%l5 i%e", +$i.$ or"ere" "e#en"ant parti.%larl5Nilo C! @illan%eva an" $i aent repreentative, or an5 peron #o%n" in t$e premie to

va.ate an" %rren"er t$e propert5 in litiation! Petitioner "i" not re-emplo5 private

repon"ent!

Private repon"ent 3le" .omplaint aaint petitioner #or illeal "imial +it$ t$e

Reional OK.e, 8initr5 o# &abor X Emplo5ment, San Fernan"o, &a 9nion!

On November *, 1'', t$e Aitant Reional >ire.tor ren"ere" a "e.iion t$e "e.retal

portion o# +$i.$ rea"G

IN @IE OF TBE FOREOIN CONSI>ERATIONS, repon"ent Cab%ao I.e Plant, In.!, Ilo.o

Commer.ial Corporation an"Lor Alberto S%nio, are $ereb5 "ire.te" to reintate t$e

.omplainant to t$eir #ormer poition +it$o%t lo o# eniorit5 privilee an" to pa5 t$eir

ba.6+ae #rom Febr%ar5 1, 1') to t$e "ate +$en t$e5 are a.t%all5 reintate"

Petitioner appeale" to t$e N&RC, +$i.$ aKrme" t$e Reional >ire.tor< "e.iion an"

"imie" t$e appeal #or la.6 o# merit on 8ar.$ 24, 1')1 reaonin t$at +$en R>FC too6

poeion o# t$e propert5 an" private repon"ent +ere terminate" in 1'(, t$e latter

alrea"5 $a" a vete" ri$t to t$eir e.%rit5 o# ten%re, an" +$en t$e5 +ere re$ire" t$oe

ri$t .ontin%e"! 3

Petitioner are no+ be#ore % aailin t$e At! Reional >ire.tor< >e.iion, "ate"

November *, 1'', t$e Reol%tion o# t$e N&RC, Se.on" >iviion, "ate" 8ar.$ 24, 1')1, a

+ell a t$e rit o# Ee.%tion i%e" p%r%ant t$ereto "ate" 7%l5 14, 1')1, #or P1*,20!)0

repreentin ba.6+ae! T$e5 raie a lone i%eG

T$at repon"ent National &abor Relation Commiion an"Lor At! Reional >ire.tor

Sotero T%man a.te" in e.e o# %ri"i.tion an"Lor +it$ rave ab%e o# "i.retion



amo%ntin to la.6 o# %ri"i.tion in ren"erin t$e "e.iion an" t$e reol%tion in N&RC Cae

No! R-1-122)-), an" in or"erin t$e ee.%tion o# ai" "e.iion

e i%e" a Temporar5 Retrainin Or"er to maintain t$e tat% =%o, reolve" to ive "%e

.o%re to t$e Petition, an" re=%ire" t$e partie to %bmit t$eir repe.tive rie#! Onl5

petitioner $ave .omplie"!

>i" p%bli. repon"ent< a.t +it$ rave ab%e o# on amo%ntin to la.6 o# %ri"i.tion in

or"erin t$e reintatement o# private repon"ent an" t$e pa5ment o# t$eir ba.6+aeU

Petitioner "en5 an5 emplo5er-emplo5ee relation$ip +it$ private repon"ent ar%in

t$at no privit5 o# .ontra.t eit bet+een t$em, t$e latter bein t$e emplo5ee o# Nilo

@illan%eva +$o re-$ire" t$em +$en $e too6 over t$e operation o# t$e i.e plant #rom CIPI;

t$at private repon"ent $o%l" o a#ter Nilo @illan%eva #or +$atever ri$t t$e5 ma5 be

entitle" to, or t$e CIPI +$i.$ i till eitin, t$at no %..eion o# ri$t an" obliation

too6 pla.e bet+een @illan%eva an" petitioner a t$e tran#er o# poeion +a a

.one=%en.e o# t$e eer.ie o# t$e ri$t o# re"emption; t$at t$e amo%nt o# ba.6+ae+a "etermine" +it$o%t petitioner bein iven a .$an.e to be $ear" an" t$at rantin

t$at repon"ent are entitle" to t$e relie# a"%"e", %.$ a+ar" .annot be en#or.e"

aaint petitioner S%nio, +$o +a implea"e" in t$e .omplaint a t$e eneral 8anaer o#

ICC!

P%bli. repon"ent, in it Comment, .o%ntere" t$at t$e ale o# a b%ine o# <a oin

.on.ern "oe not ipso factoterminate emplo5er-emplo5ee relation +$en t$e %..eor-

emplo5er .ontin%e t$e b%ine operation o# t$e pre"e.eor-emplo5er in an eentiall5

%n.$ane" manner! Private repon"ent ar%e t$at t$e .$ane o# manaement or

o+ner$ip o# a b%ine entit5 i not one o# t$e %t .a%e #or t$e termination o# ervi.e

o# emplo5ee %n"er Arti.le 2)( o# t$e &abor Co"e, a amen"e"! ot$ repon"ent

a""itionall5 .laim t$at petitioner S%nio, a t$e eneral 8anaer o# ICC an" o+ner o# one

$al# 1L2/ o# it interet, i peronall5 liable #or $i mali.io% a.t o# illeall5 "imiin

private repon"ent, #or no ro%n" eit to %ti#5 t$eir termination!

e %tain petitioner!

It i tr%e t$at t$e ale o# a b%ine o# a oin .on.ern "oe not ipso facto terminate t$e

emplo5er-emplo5ee relation ino#ar a t$e %..eor-emplo5er i .on.erne", an" t$at

.$ane o# o+ner$ip or manaement o# an etabli$ment or .ompan5 i not one o# t$e

%t .a%e provi"e" b5 la+ #or termination o# emplo5ment! T$e it%ation $ere, $o+ever,

+a not one o# imple .$ane o# o+ner$ip! O# note i t$e #a.t t$at +$en, on 7%l5 (0,

1'(, E8RACO-CIPI ol" t$e plant to R>FC, CIPI $a" terminate" t$e ervi.e o# it

emplo5ee, in.l%"in $erein private repon"ent, ivin t$em t$eir eparation pa5 +$i.$

t$e5 $a" a..epte"! $en R>FC too6 over o+ner$ip an" manaement, t$ere#ore, it $ire"

it o+n emplo5ee, not t$e private repon"ent, +$o +ere no loner t$ere! R>FC

%be=%entl5 ol" t$e propert5 to petitioner on November 2), 1'(! %t b5 reaon o#

t$eir #ail%re to pa5 t$e balan.e o# t$e p%r.$ae pri.e, E8RACO-CIPI #ore.loe" on t$e

mortae over t$e i.e plant; t$e propert5 +a ol" at p%bli. a%.tion to E8RACO-CIPI a



t$e $i$et bi""er, an" t$e5 event%all5 re-poee" t$e plant on A%%t (0, 1'4!

>%rin all t$e perio" t$at R>FC an" petitioner +ere operatin t$e plant #rom 7%l5 (0,

1'( to A%%t (0, 1'4, t$e5 $a" t$eir o+n emplo5ee! CIPI-E8RACO t$en ol" t$e plant,

alo on A%%t (0, 1'4, to Nilo @illan%eva, %be.t to R>FC< ri$t o# re"emption! Nilo

@illan%eva t$en re$ire" private repon"ent a emplo5ee o# t$e plant, alo in 1'4!

In 1'*, R>FC re"eeme" t$e propert5 an" "eman"e" poeion b%t E8RACO-CIPI an"

Nilo @illan%eva reite" o t$at petitioner +ere .ompelle" to %e #or re.over5 o#

poeion, obtainin it, $o+ever, onl5 in 1')!

9n"er t$oe .ir.%mtan.e, it .annot be %ti3abl5 ai" t$at t$e plant toet$er +it$ it

taf an" peronnel move" #rom one o+ner$ip to anot$er! No %..eion o# emplo5ment

ri$t an" obliation .an be ai" to $ave ta6en pla.e bet+een E8RACO-CIPI-Nilo

@illan%eva, on t$e one $an", an" petitioner on t$e ot$er! Petitioner event%all5 a.=%ire"

poeion b5 virt%e o# t$e eer.ie o# t$eir ri$t o# re"emption an" o# a 8an"ator5

In%n.tion in t$eir #avor +$i.$ or"ere" Nilo @illan%eva an" an5 peron #o%n" in t$e

premie to va.ate! $at i more, +$en E8RACO-CIPI ol" t$e i.e plant to R>FC in 1'(,

private repon"ent< emplo5ment +a terminate" b5 E8RACO-CIPI an" t$e5 +ere iven

t$eir eparation pa5, +$i.$ t$e5 a..epte"! >%rin t$e t$irteen mont$, t$ere#ore, t$at

R>FC an" petitioner +ere in poeion an" operatin t$e plant %p to A%%t, 1'4, t$e5

$ire" t$eir o+n emplo5ee, not t$e private repon"ent! In #a.t, it ma5 even be ai" t$at

private repon"ent $a" lept on t$eir ri$t +$en t$e5 #aile" to .ontet %.$ termination

at t$e time o# ale, i# t$e5 believe" t$e5 $a" ri$t to prote.t! F%rt$er, Nilo @illan%eva

re$ire" private repon"ent in A%%t, 1'4, %be.t to a reol%tor5 .on"ition! T$at

.on"ition $avin arien, t$e ri$t o# private repon"ent +$o .laim %n"er $im mat be

"eeme" to $ave alo .eae"!

Private repon"ent .an neit$er %..e#%ll5 invo6e e.%rit5 o# ten%re in t$eir #avor! T$eir

ten%re $o%l" not be re.6one" #rom 1' be.a%e t$e5 +ere alrea"5 terminate" in 1'(!

Private repon"ent +ere onl5 re$ire" in 1'4 b5 Nilo @illan%eva! Petitioner too6 over b5

%"i.ial pro.e in 1') o t$at private repon"ent $a" a.t%all5 onl5 #o%r 5ear o# re$ire"

emplo5ment +it$ Nilo @illan%eva, "%rin all o# +$i.$ perio", petitioner #o%$t $ar"

aaint Nilo @illan%eva to re.over poeion o# t$e plant! Ino#ar a petitioner are

.on.erne" t$ere#ore, t$ere +a no ten%rial e.%rit5 to pea6 o# t$at +o%l" entitle private

repon"ent to reintatement an" ba.6+ae! e .ome no+ to t$e peronal liabilit5 o#

petitioner, S%nio, +$o +a ma"e ointl5 an" everall5 reponible +it$ petitioner .ompan5

an" CIPI #or t$e pa5ment o# t$e ba.6+ae o# private repon"ent! T$i i reverible error!

T$e Aitant Reional >ire.tor< >e.iion #aile" to "i.loe t$e reaon +$5 $e +a ma"e

peronall5 liable! Repon"ent, $o+ever, allee" a ro%n" t$ereo#, $i bein t$e o+ner

o# one-$al# 1L2/ interet o# ai" .orporation, an" $i allee" arbitrar5 "imial o# private

repon"ent! Petitioner S%nio +a implea"e" in t$e Complaint $i .apa.it5 a eneral

8anaer o# petitioner .orporation! +$ere appear to be no evi"en.e on re.or" t$at $e

a.te" mali.io%l5 or in ba" #ait$ in terminatin t$e ervi.e o# private repon"ent! Bi

a.t, t$ere#ore, +a +it$in t$e .ope o# $i a%t$orit5 an" +a a .orporate a.t!



It i bai. t$at a .orporation i invete" b5 la+ +it$ a peronalit5 eparate an" "itin.t

#rom t$oe o# t$e peron .ompoin it a +ell a #rom t$at o# an5 ot$er leal entit5 to

+$i.$ it ma5 be relate"! 8ere o+ner$ip b5 a inle to.6$ol"er or b5 anot$er

.orporation o# all or nearl5 all o# t$e .apital to.6 o# a .orporation i not o# itel# %K.ient

ro%n" #or "irear"in t$e eparate .orporate peronalit5! 5 Petitioner S%nio, t$ere#ore,

$o%l" not $ave been ma"e peronall5 an+erable #or t$e pa5ment o# privaterepon"ent< ba.6 alarie!

BEREFORE, t$e aaile" >e.iion an" Reol%tion, "ate" November *, 1'' an" 8ar.$

24, 1')1, repe.tivel5, an" t$e .one=%ent rit o# Ee.%tion are $ereb5 SET ASI>E an"

t$e Temporar5 Retrainin Or"er $ereto#ore i%e" b5 t$i Co%rt $ereb5 ma"e permanent!

P%bli. repon"ent are $ereb5 or"ere" to ret%rn to petitioner t$e latter< levie" propertie

in t$eir poeion! No .ot!

SO OR>ERE>!

G.R. No. L-3618+ January 1+, 1989RE!NOL "#ILI""INE $OR"ORATION, petitioner,

v!

#ON. $OURT O2 A""EAL an& ERGF "ROU$T, IN$., repon"ent!

2elo, Abiera & Associates for petitioner.

Ponciano U. Pitargue for private respondent.

GRIO-AUINO, J.:

T$i i a petition #or revie+ o# t$e "e.iion "ate" >e.ember 1, 1'2 o# t$e Co%rt o#

Appeal in Re5nol" P$ilippine Corporation v! Ser< Pro"%.t, In.! "imiin t$e

petitioner< .olle.tion %it!

In it .omplaint o# 7%ne 2, 1', t$e petitioner o%$t to re.over #rom t$e private

repon"ent Ser< Pro"%.t, In.! t$e %m o# P(2,**!2 repreentin t$e %npai" pri.e o#

al%min%m #oil an" .ore ol" an" "elivere" b5 it to t$e latter!

T$e private repon"ent "enie" liabilit5 #or pa5ment o# t$e a..o%nt on t$e ro%n" t$at t$e

al%min%m #oil an" .ore +ere or"ere" or p%r.$ae" b5 Ser< C$o.olate Pro"%.t, a

partner$ip o# Antonio o=%iola5 an" &%i Se=%ia 8en"o:a, not Ser< Pro"%.t, In.!, a

.orporation manae" an" .ontrolle" b5 Antonio o=%iola5 an" $i +i#e Con.$ita

o=%iola5, a maorit5 to.6$ol"er an" prin.ipal oK.er!

On 7%l5 (1, 1'), t$e trial .o%rt ren"ere" %"ment 3n"in t$e private repon"ent liable

an" or"ere" it ?



to pa5 <Re5nol" P$ilippine Corporation t$e balan.e o# it a..o%nt in t$e %m o# T$irt5 T+o

T$o%an" Five B%n"re" Sit5 Five Peo an" Sit5-T+o Centavo P(2,**!2/ +it$

interet per ann%m #rom 7an%ar5 2, 1', %ntil pai"; T+o t$o%an" Peo P2,000!00/ a

attorne5< #ee, an" litiation epene; an" .ot o# t$i %it!< p! 4, Rollo, pp! ))-)',

Re.or" on Appeal!/

9pon private repon"ent< appeal to t$e Co%rt o# Appeal, t$at .o%rt on >e.ember 1,

1'2, revere" t$e trial .o%rt an" "imie" t$e .omplaint on t$e ro%n" t$at petitioner

$a" no .a%e o# a.tion aaint Ser< Pro"%.t, In.! p! 4(, Rollo/!

Re5nol" i no+ be#ore 9, ee6in a revie+ o# t$e Co%rt o# Appeal< "e.iion! T$e petition

raie a #a.t%al i%eG $o i t$e real "ebtor o# t$e petitionerU I it t$e partner$ip o#

o=%iola5 an" 8en"o:a, "oin b%ine %n"er t$e tra"e name o# Ser< C$o.olate

Pro"%.t,< or t$e repon"ent .orporation, Ser< Pro"%.t, In.!U

ae" on t$e tetimon5 o# t$e +itnee, t$e trial .o%rt $el" t$e .orporation, Ser<

Pro"%.t, In.!, liable a t$e real b%5er an" %er o# t$e al%min%m #oil an" .ore! Bo+ever,t$e Co%rt o# Appeal relie" on t$e ale or"er, "eliver5 re.eipt, tatement o# a..o%nt

an" "eman" letter +$ere t$e p%r.$aer name" +a Ser< C$o.olate Pro"%.t, t$e

partner$ip!

$ile it i an etabli$e" prin.iple t$at in a petition #or revie+ %n"er R%le 4* o# t$e R%le

o# Co%rt, t$e S%preme Co%rt +ill revie+ onl5 =%etion o# la+ an" t$at t$e #a.t%al 3n"in

o# t$e Co%rt o# Appeal are .on.l%ive %pon 9, nevert$ele, t$ere are .ertain re.oni:e"

e.eption to t$at r%le! T$e e.eption areG 1/ +$en t$e .on.l%ion i ro%n"e" entirel5

on pe.%lation, %rmie an" .one.t%re; 2/ +$en t$e in#eren.e i mani#etl5 mita6en,

ab%r", an" impoible; (/ +$ere t$ere i rave ab%e o# "i.retion; 4/ +$en t$e

%"ment i bae" on a miappre$enion o# #a.t; */ +$en t$e Co%rt in ma6in it

3n"in, +ent be5on" t$e i%e o# t$e .ae, an" t$e ame are .ontrar5 to t$e a"miion

o# bot$ t$e appellant an" t$e appellee; / +$en t$e 3n"in o# t$e Appellate Co%rt are

.ontrar5 to t$oe o# t$e trial .o%rt; / +$en t$e 3n"in are +it$o%t .itation o# pe.i3.

evi"en.e on +$i.$ t$e5 are bae" 8en"o:a v! Co%rt o# Appeal, 1* SCRA *';

8anlapa: v! Co%rt o# Appeal, 14 SCRA 2() D1'); Sa.a5 v! San"ianba5an, 142 SCRA

0' D1') %ita v! CA, 1(' SCRA * D1')*/! It +a $el" t$at +$ere 3n"in o# t$e

Co%rt o# Appeal an" trial .o%rt are .ontrar5 to ea.$ ot$er, t$e S%preme Co%rt ma5

.r%tini:e t$e evi"en.e on re.or" Cr%: v! CA, 12' SCRA 222 D1')4/!

In t$i .ae, t$e trial .o%rt +$i.$ $ear" t$e +itnee teti#5, $en.e +a in a %perior

poition to ae t$e probative +ort$ o# t$eir evi"en.e, #o%n" t$at alt$o%$ t$e

.ommer.ial "o.%ment +ere in"ee" in t$e name o# Ser< C$o.olate Pro"%.t, t$e

#ollo+in #a.t prove" t$at t$e tr%e p%r.$aer o# t$e al%min%m #oil an" .ore #rom t$e

petitioner, +a Ser< Pro"%.t, In.! not t$e partner$ip "enominate" Ser< C$o.olate

Pro"%.tG





Similarl5, apropo i t$e "e.iion o# t$i Co%rt in 6elephone >ngineering & )erviceCompany, nc. vs. ;or5men@s Compensation Commission, et al., 104 SCRA (*4, +$ere e

$el"G

Petitioner a"mitte" t$at TESCO an" 98ACOR are iter .ompanie operatin %n"er one

inle manaement an" bae" in t$e ame b%il"in! Alt$o%$ repe.t #or .orporateperonalit5 a %.$, i t$e eneral r%le, t$ere are e.eption! In appropriate .ae, t$e veil

o# .orporate 3.tion ma5 be pier.e" a +$en t$e ame i ma"e a a $iel" to .on#%e

leitimate i%e!

BEREFORE, t$e petition #or revie+ i rante"! T$e "e.iion o# t$e Co%rt o# Appeal i

revere" an" et ai"e an" t$at o# t$e trial .o%rt i reintate"! Cot aaint t$e private

repon"ent Ser< Pro"%.t, In.!

SO OR>ERE>!

Date post:	02-Jun-2018
Category:	Documents
Upload:	anamergal
View:	216 times
Download:	0 times

Corporation Cases for November 22

Documents