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Republic of the PhilippinesSUPREME COURTManila

FIRST DIVISION

G.R. No. 88013 March 19, 1990

SIMEX INTERNATIONAL (MANILA), INCORPORATED, petitioner,vs.TE ONORA!LE COURT O" APPEALS a#$ TRADERS RO%AL !AN&, respondents.

Don P. Porcuincula for petitioner.

San Juan, Gonzalez, San Agustin & Sinense for private respondent.

CRU', J.:

e are concerned in this case !ith the "uestion of da#a$es, specificall% #oral and e&e#plar% da#a$es.The ne$li$ence of the private respondent has alread% been established. 'll !e have to ascertain is !hether

the petitioner is entitled to the said da#a$es and, if so, in !hat a#ounts.

The parties a$ree on the basic facts. The petitioner is a private corporation en$a$ed in the e&portation of food products. It bu%s these products fro# various local suppliers and then sells the# abroad, particularl% inthe (nited States, )anada and the Middle *ast. Most of its e&ports are purchased b% the petitioner oncredit.

The petitioner !as a depositor of the respondent ban+ and #aintained a chec+in$ account in its branch atRo#ulo 'venue, )ubao, ue-on )it%. On Ma% /, 0120, the petitioner deposited to its account in the saidban+ the a#ount of P033,333.33, thus increasin$ i ts balance as of that date toP013,423.56. 1 Subse"uentl%, the petitioner issued several chec+s a$ainst its deposit but !as suprised tolearn later that the% had been dishonored for insufficient funds.

The dishonored chec+s are the follo!in$7

0. )hec+ No. 0/410 dated Ma% 1, 0120, in favor of )alifornia Manufacturin$)o#pan%, Inc. for P08,623.337

. )hec+ No. 0/68 dated Ma% 2, 0120, in favor of the 9ureau of InternalRevenue in the a#ount of P4,428.547

4. )hec+ No. 0/6/0 dated :une 6, 0120, in favor of Mr. ;re$ Pedreon$life Tradin$)orporation in the a#ount of P6,138.337

/. )hec+ No. 0/656 dated :une 03, 0120, in favor of Malabon >on$life Tradin$)orporation in the a#ount of P0,1/4.337

8. )hec+ No. 0/655 dated :une 1, 0120, in favor of Sea?>and Services, Inc. inthe a#ount of P5,36.6/7

5. )hec+ No. 0/60 dated :une 03, 0120, in favor of 9a$uio )ountr% )lub)orporation in the a#ount of P6,42/.37 and

2. )hec+ No. 0/623 dated :une 1, 0120, in favor of *nri"ueta 9a%la in the a#ountof P8,5/.33.

's a conse"uence, the )alifornia Manufacturin$ )orporation sent on :une 1, 0120, a letter of de#and to thepetitioner, threatenin$ prosecution if the dishonored chec+ issued to it !as not #ade $ood. It also !ithhelddeliver% of the order #ade b% the petitioner. Si#ilar letters !ere sent to the petitioner b% the Malabon >on$>ife Tradin$, on :une 0/, 0120, and b% the ;. and (. *nterprises, on :une 03, 0120. Malabon also canceledthe petitioner@s credit line and de#anded that future pa%#ents be #ade b% it in cash or certified chec+.Meanti#e, action on the pendin$ orders of the petitioner !ith the other suppliers !hose chec+s !eredishonored !as also deferred.

The petitioner co#plained to the respondent ban+ on :une 03, 0120. 3 Investi$ation disclosed that the su#of P033,333.33 deposited b% the petitioner on Ma% /, 0120, had not been credited to it. The error !asrectified on :une 05, 0120, and the dishonored chec+s !ere paid after the% !ere re?deposited.

In its letter dated :une 3, 0120, the petitioner de#anded reparation fro# the respondent ban+ for its A$rossand !anton ne$li$ence.A This de#and !as not #et. The petitioner then filed a co#plaint in the then )ourt of First Instance of Ri-al clai#in$ fro# the private respondent #oral da#a$es in the su# of P0,333,333.33

and e&e#plar% da#a$es in the su# of P/33,333.33, plus /B attorne%@s fees, and costs.

'fter trial, :ud$e :ohnico ; . Ser"uinia rendered Cud$#ent h oldin$ that #oral and e&e#plar% da#a$es !erenot called for under the circu#stances. o!ever, observin$ that the plaintiff@s ri$ht had been violated, heordered the defendant to pa% no#inal da#a$es in the a#ount of P3,333.33 plus P/,333.33 attorne%@s feesand costs. * This decision !as affir#ed in toto b% the respondent court. +

The respondent court found !ith the trial court that the private respondent !as $uilt% of ne$li$ence buta$reed that the petitioner !as nevertheless not entitled to #oral da#a$es. It said7

The essential in$redient of #oral da#a$es is proof of bad faith EDe 'paricio vs.Paro$ur$a, 0/3 S)R' 23. Indeed, there !as the o#ission b% the defendant?appellee ban+ to credit appellant@s deposit of P033,333.33 on Ma% /, 0120. 9ut theban+ rectified its records. It credited the said a#ount in favor of plaintiff?appellant inless than a #onth. The dishonored chec+s !ere eventuall% paid. These

circu#stances ne$ate an% i#putation or insinuation of #alicious, fraudulent, !antonand $ross bad faith and ne$li$ence on the part of the defendant?appellant.

It is this rulin$ that is faulted in the petition no! before us.

This )ourt has carefull% e&a#ined the facts of this case and finds that it cannot share so#e of theconclusions of the lo!er courts. It see#s to us that the ne$li$ence of the private respondent had beenbrushed off rather li$htl% as if it !ere a #inor infraction re"uirin$ no #ore than a slap on the !rist. e feel itis not enou$h to sa% that the private respondent rectified its records and credited the deposit in less than a#onth as if this !ere sufficient repentance. The error should not have been co##itted in the first place. Therespondent ban+ has not even e&plained !h% it !as co##itted at all. It is true that the dishonored chec+s!ere, as the )ourt of 'ppeals put it, Aeventuall%A paid. o!ever, this too+ al#ost a #onth !hen, properl%,the chec+s should have been paid i##ediatel% upon present#ent.

's the )ourt sees it, the initial carelessness of the respondent ban+, a$$ravated b% the lac+ of pro#ptitude

in repairin$ its error, Custifies the $rant of #oral da#a$es. This rather lac+adaisical attitude to!ard theco#plainin$ depositor constituted the $ross ne$li$ence, if not !anton bad faith, that the respondent courtsaid had not been established b% the petitioner.

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LOURDES C%NTI A MA&A! ALI a#$ GEORG IN A MA& A!ALI, petitioners,vs.COURT O" APPEALS a#$ !ARON TRAEL CORPORATION, respondents.

"ERNAN, J.:

The sole issue in this petition for revie! is !hether or not petitioners are entitled to #ore than the P/,333.33#oral and e&e#plar% da#a$es, P0,333.33 attorne%@s fees and costs a!arded to the# b% the )ourt of 'ppeals in the li$ht of the circu#stances of the case.

Petitioner ;eor$ina Ma+abali had Cust $raduated fro# the )olle$e of Medicine, (niversit% of the Philippines,and as a $raduation $ift fro# her father, !as $iven a trip to on$+on$. Since she had never been abroad,her parents insisted that she be acco#panied b% her sister and co?petitioner >ourdes )%nthia Ma+abali, aschoolteacher at the )ole$io de San '$ustin, Das#ari'RG D'M';*S 'ND P0,333.33 'S 'TTORN*G@S F**S IN T* >I;T OF T* SO)I'> ST'NDIN; OF P*TITION*R;*OR;IN' M'K'9'>I, O IS ' DO)TOR OF M*DI)IN*, 'ND OFP*TITION*R >O(RD*S )GNTI' M'K'9'>I, O IS ' T*')*R= IN T*

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>I;T OF T* S>**P>*SS NI;TS 'ND P(9>I) (MI>I'TION T*GS(FF*R*D FOR TR** D'GS 'ND TR** NI;TS= IN T* >I;T OF T*)'>>O(S F'I>(R* OF PRIV'T* R*SPOND*NT TO 'V* 'NGON* 'TT*ND TOP*TITION*R IN SPIT* OF T* F')T T'T IT R'K*S IN MOR* T'N '>F 'MI>>ION P*SOS ' MONT FROM 'IR FR*I;T '>ON*. 3

To be$in !ith, there is no hard and fast rule in the deter#ination of !hat !ould be a fair a#ount of #oralda#a$es, since each case #ust be $overned b% its o!n peculiar circu#stances.

'rticle 05 of the )ivil )ode reco$ni-es that #oral da#a$es !hich include ph%sical sufferin$, #entalan$uish, fri$ht, serious an&iet%, bes#irched reputation, !ounded feelin$s, #oral shoc+, social hu#iliationand si#ilar inCur%, are incapable of pecuniar% esti#ation.

's to e&e#plar% da#a$es, 'rticle 1 o f the )ivil )ode provides that such da #a$es #a% be i#posed b%!a% of e&a#ple or correction for the public $ood. hile e&e#plar% da#a$es cannot be recovered as a#atter of ri$ht, *the% need not be proved, althou$h plaintiff #ust sho! that he is entitled to #oral, te#perateor co#pensator% da#a$es before the court #a% consider the "uestion of !hether or not e&e#plar%da#a$es should be a!arded. +

' revie! of related Curisprudence sho!s that e had a!arded #oral da#a$es in #ore or less si#ilar casesran$in$ fro# P3,383.33 HNorth!est 'irlines, Inc. v. )uenca P/,333.33 HGutu+ v. Manila *lectric)o#pan%, 'ir France v. )arrascoso, 8 P/3,333.33 HK>M Ro%al Dutch 'irlines v. )ourt of 'ppeals, 9 P0/3,333.33 HOrti$as v. >ufthansa ;er#an 'irlines, 10 and P33,333.33 H>op e- v. Pan '#ericanorld 'ir!a%s, 11 to P/33,333.33 HLulueta v. Pan '#erican orld 'ir!a%s, 1 's to e&e#plar% da#a$es,e a!arded in !utu" and Air #rance P03,333.33, in >ope- P5/,333.33, in Orti$as P033,333.33 and

in $ulueta P33,333.33.

It !ill thus be noted that e have a!arded #oral and e&e#plar% da#a$es dependin$ upon the factsattendant to each case. It !ill also be noted that e $ave separate a!ards for #oral and e&e#plar%da#a$es. This is as it should be because the nature and purposes of said da#a$es are different. hile#oral da#a$es have to do !ith inCur% personal to the a!ardee, such as ph%sical sufferin$ and the li+e,e&e#plar% da#a$es are i#posed b% !a% of e&a#ple or correction for the public $ood.

It is essential ho!ever, in the a!ard of da#a$es that the clai#ant #ust have satisfactoril% proven durin$ thetrial the e&istence of the factual basis of the da#a$es and its causal connection to defendant@s acts. This isso because #oral da#a$es, thou$h incapable of pecuniar% esti#ation, are in the cate$or% of an a!arddesi$ned to co#pensate the clai#ant for actual inCur% suffered and not to i#pose a penalt% on the!ron$doer, 13 and are allo!able onl% !hen specificall% pra%ed for in the co#plaint. 1

's reflected in the records of the case, the )ourt of appeals !as in a$ree#ent !ith the findin$s of the trial

court that petitioners suffered an$uish, e#barrass#ent and #ental sufferin$s due to failure of privaterespondent to perfor# its obli$ation to the petitioners. 'ccordin$ to the )ourt of 'ppeals, private respondentacted in !anton disre$ard of the ri$hts of petitioners. These pronounce#ents la% the basis and Custificationfor this )ourt to a!ard petitioners #oral and e&e#plar% da#a$es.

In the li$ht of the circu#stances obtainin$ in the case at bar, especiall% the social standin$ of petitioners andthe e#barrass#ent and hu#iliation suffered b% the#, the an&iet% the% #ust have felt in their first Courne% toa forei$n land under uncertain circu#stances and !ith #ea$er funds !hich could run out an% ti#e, e areinclined to a!ard da#a$es to the petitioner #ore than !hat !as a!arded b% the )ourt of 'ppeals.

It #ust be e#phasi-ed that #oral da#a$es are not intended to enrich the co#plainant at the e&pense of adefendant. The% are a!arded onl% to enable the inCured parties to obtain #eans, diversions or a#use#entsthat !ill serve to alleviate the #oral sufferin$s the inCured parties have under$one b% reason of defendant@sculpable action. In other !ords, the a!ard of #oral da#a$es is ai#ed at a restoration !ithin the li#its of thepossible, of the spiritual status quo ante= and therefore it #ust be proportionate to the sufferin$inflicted. 1* The a#ount of P/,333.33 is #ini#al co#pared to the sufferin$s and e#barrass#ent of

petitioners !ho left Manila !ith hi$h spirits and e&cite#ent hopin$ to enCo% their first trip to a forei$n landonl% to be #et !ith uncertainties and hu#iliations.

e note ho!ever that petitioners li#ited their clai# for #oral and e&e#plar% da#a$es in their co#plaintfiled !ith the )ourt of First Instance to a total of P4/,333.33 plus attorne%@s fees and costs. e feel that Our a!ard should not e&ceed the said a#ount.

*R*FOR*, the decision of the )ourt of 'ppeals subCect of the petition for revie! is hereb% #odified,increasin$ the a!ard to petitioners of #oral and e&e#plar% da#a$es to P4/,333.33 and attorne%@s fees toP/,333.33 !ith costs. This decision is i##ediatel% e&ecutor%.

SO ORD*R*D.

Gutierrez, Jr., #eliciano, %idin and ortes, JJ., concur.


TIRD DIVISION

G.R. No. L-*0 March 30, 1988

PILIPPINE NATIONAL !AN&, petitioner,vs.TE ONORA!LE COURT O" APPEALS, NAPOLEON C. NAARRO, PATRICIA CRU', ICENTE !.

MEDINA a#$ LETICIA LOPE', respondents.

"ERNAN, J.:

This is a petition for revie! on certiorari of the decision rendered b% respondent )ourt of 'ppeals datedDece#ber 5, 0158 in )'?;.R. No. 6253?R dis#issin$ the co#plaint of petitioner Philippine National 9an+in )ivil )ase No. 6/35 and on the counterclai# #odif%in$ the decision of the trial court b% reducin$ thea!ard of #oral and e&e#plar% da#a$es fro# P033,333.33 to P03,333,33 !ith le$al interest fro# the dateof filin$ of the counterclai# and orderin$ petitioner ban+ to pa% the a#ount of P/,333.33 as attorne%@s fees,!ithout pronounce#ent as to costs= as !ell as fro# the Resolution den%in$ petitioner@s #otion for reconsideration.

Private respondent Napoleon Navarro !as an e#plo%ee of petitioner Philippine National 9an+ stationed at)abanatuan )it% as 9ranch 'ccountant. On various dates fro# 018 to 018/, Id private respondentNapoleon Navarro prepared fift%?one H/0 #ana$er@s chec+s and their correspondin$ debit tic+etspurportedl% representin$ refund of deposits of petitioner@s clients althou$h he +ne! that there !ere nodeposits necessitatin$ such refund. e later caused to be falsified and Identified the si$natures of thealle$ed clients as pa%ees and indorsers, encashed the chec+s, and appropriated unto hi#self the proceedsin the a$$re$ate a#ount of P2,824.55. 'fter the discover% of this ano#al%, respondent Navarro !asdis#issed fro# the service of Philippine National 9an+.

On Februar% /, 018/, petitioner ban+ filed before the then )ourt of First Instance of Nueva *ciCa )ivil )aseNo. 6/38 a$ainst Napoleon Navarro to recover the su# defalcated in the a#ount of P 04,138.20 !ith apra%er for a !rit of preli#inar% attach#ent a$ainst the properties of Napoleon Navarro. hile the !rit of preli#inar% attach#ent !as in the process of issuance, a Deed of Sale of Real Propert% and D!ellin$ouse dated Februar% , 018/ e&ecuted b% respondents Napoleon Navarro and Patricia )ru- in favor of the other respondents spouses Vicente Medina and >eticia >ope- over the for#er@s properties situated in)abanatuan )it% !as re$istered in the Office of the Re$ister of Deeds of )abanatuan )it% at 007/3 o@cloc+in the #ornin$ of Februar% /, 018/. Subse"uentl%, a ne! transfer certificate of title beatin$ No. T?166 !asissued b% the Re$ister of Deeds of )abanatuan )it% in the na#es of spouses Vicente Medina and >eticia>ope-.

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On Februar% 8, 0188, petitioner Philippine National 9an+ filed )ivil )ase No. 6/35 a$ainst respondentsNapoleon ). Navarro and his !ife Patricia )ru- and the spouses Vicente Medina and >eticia >ope- for theannul#ent of the aforesaid Deed of Sale and the cancellation of the Transfer )ertificate of Title No. T?166issued as a conse"uence of said sale. Subse"uentl%, an a#ended co#plaint !as filed, the onl% difference!ith the ori$inal co#plaint bein$ the a#ount defalcated b% defendant Napoleon Navarro !hich !as finall%placed at P2,824.55 after further reconstruction and verification of the records of plaintiffs )abanatuan9ranch.

'n ans!er !ith counterclai# !as filed b% the defendants Vicente Medina and >eticia >ope- alle$in$ $oodfaith in the ac"uisition of the propert% in "uestion and see+in$ pa%#ent of da#a$es, clai#in$ that the filin$

of the co#plaint !as !ithout le$al factual basis and that it bes#irched their reputation causin$ the#da#a$es of P/3,333.33 and la!%er@s fees in the a#ount of P0,333.33.

On #otion of petitioner, the trial court ordered the consolidation of )ivil )ases Nos. 6/38 and 6/35.

On :une , 0153, private respondents and defendants Vicente Medina and >eticia >ope- filed a Motion to 'd#it 'ns!er !ith '#ended )ounterclai# in )ivil )ase No. 6/35 !hereb% the a#ount clai#ed for da#a$es !as increased to P033,333.33 and la!%er@s fees increased to P/,333.33. This #otion !as allo!edb% the lo!er court in an Order dated :une 6, 0153. Prior thereto, petitioner filed an opposition to the #otionto ad#it ans!er !ith a#ended counterclai# contendin$ that petitioner !as not $iven an opportunit% to beheard and to oppose the ad#ission of the afore#entioned pleadin$, and that the supposed evidencepresented to sho! that said defendants suffered #oral da#a$es in the a#ount of P033,333.33 and theincrease of their la!%er@s fees fro# P0,333.33 to P/,333.33 !as insufficient in fact and in la!, hence itshould be disre$arded. 1

On 'u$ust 8, 0153, the lo!er court rendered Cud$#ent the dispositive portion readin$ as follo!s7

*R*FOR*, Cud$#ent is rendered findin$ Napoleon Navarro, defendant in )ivil)ase No. 6/38 liable to the plaintiff in the a#ount of P04,138.20.

The co#plaint of the plaintiff in )ivil )ase No. 6/35 a$ainst the defendants isdis#issed for lac+ of evidence, !ith costs a$ainst the plaintiff.

On the counterclai# b% defendants Vicente Medina and >eticia >ope-, this )ourtfinds the plaintiff Philippine National 9an+ liable to said defendants for #oral ande&e#plar% da#a$es of P033,333.33 !hich the plaintiffs #ust pa% to the saiddefendants !ith interest at the le$al rate fro# the filin$ of the counterclai#, and for la!%er@s fees of P/,333.33 and the costs of this suit.

Fro# this decision of the lo!er court, petitioner Philippine National 9an+ appealed to respondent )ourt of 'ppeals !here the case !as doc+eted as )'?;.R. No. 62501?3?R, assailin$ the lo!er court@s findin$ Ha ondefendant Navarro@s liabilit% to the plaintiff in the a#ount of P04,138.20 and not P2,824.55 as borne out b%the evidence= Hb on the plaintiff? appellant@s liabilit% to the defendant?appellees Vicente Medina and >eticia>ope- for #oral and e&e#plar% da#a$es in the a#ount of P033,333.33 on the counterclai#= Hc in orderin$plaintiff?appellant to pa% defendants? appellees Vicente Medina and >eticia >ope- the su# of P/,333.33 asattorne%@s fees= Hd in ad#ittin$ the #otion to ad#it 'ns!er !ith a#ended counterclai# dated :une 01, 0153to$ether !ith the ans!er !ith a#ended counterclai# flied b% defendants?appellees Vicente Medina and>eticia >ope- for the reason that said #otion does not confor# !ith Section 4, Rule 0 3 in conCunction !ithSections 6, /, and 8 of Rule 0/ of the Revised Rules of )ourt= and He in not declarin$ the Deed of Sale of Real Propert% and D!ellin$ ouse dated Februar% , 018/ e&ecuted bet!een defendants?appellees asrescissible and in not cancellin$ T)T No. 166 under the na#es of spouses Vicente Medina and >eticia>ope- issued b% virtue thereof.

On Dece#ber 5, 0158, respondent appellate court pro#ul$ated its assailed decision based on thesefindin$s7

The plaintiff has presented indubitable evidence consistin$ of #ana$er@s chec+s as!ell as the correspondin$ debit tic+ets, *&hibits F, F?l to DDD?l inclusive sho!in$

that the total a#ount defalcated b% defendant Napoleon ). Navarro !as in thea#ount of P 2,824.55 evidenced b% fift%? one H/00 #ana$er@s chec+s allfraudulentl% encashed b% the said defendant. In vie! of the fore$oin$, the lo!er court erred !hen it held that defendant Napoleon Navarro !as liable to the plaintiff onl% in the a#ount of P04,138.20.

There is no co#plete evidence to sho! that the sale of the real propert% andd!ellin$ house dated Februar% , 018/ e&ecuted b% defendants Napoleon Navarroand Patricia )ru- in favor of the defendants Vicente 9. Medina, and >eticia >ope-!as underta+en in fraud of creditors. There is evidence that the plaintiff !as a!are of

the ne$otiations bet!een defendant Napoleon ). Navarro and defendants Vicente 9.Medina and >eticia >ope-. It see#s that the purpose of the sale !as to enabledefendant Napoleon ). Navarro to pa% the plaintiff the a#ount that said Navarrodefalcated

There is no sho!in$ that the plaintiff acted #aliciousl% and in a !anton #anner infilin$ )ivil )ase No. 6/35 a$ainst the spouses Vicente 9. Medina and >eticia >ope-.There is no doubt that the Id spouses suffered #ental an$uish for havin$ been #adedefendants in )ivil )ase No. 6/35. o!ever, under the established facts andcircu#stances the a#ount of P033,333.33 a!arded to said spouses as #oralda#a$es is e&cessive. The #oral and e&e#plar% da#a$es a!arded to spousesVicente Medina and >eticia >ope- should be reduced to P03,333.33.

The defendants Vicente 9. Medina and >eticia >ope- had to en$a$e counsel toresist the action instituted a$ainst the# b% the Philippine National 9an+. ence, thetrial court did not err in a!ardin$ to said spouses the a#ount of P /,333.33 as

attorne%@s fees.

*R*FOR*, the decision appealed fro# is hereb% #odified in that in )ivil )aseNo. 6/38, the defendant Napoleon ). Navarro is ordered to pa% the plaintiff thea#ount of P2,824.55 !ith le$al interest fro# Februar% /, 018/, the date of thefilin$ of the co#plaint and in )ivil )ase No. 6/35, the co#plaint is dis#issed and theplaintiff Philippine National 9an+ is ordered to pa% defendants Vicente Medina and>eticia >ope- the a#ount of P03,333.33 as #oral and e&e#plar% da#a$es !ith le$alinterest fro# the date of the filin$ of the counterclai# and the a#ount of P/,333.33as attorne%@s fees, !ithout pronounce#ent as to costs.

SO ORD*R*D. 3

9oth petitioner and private respondents Vicente *. Medina and >eticia >ope- #oved for a reconsideration of said decision. hile both #otions !ere denied, onl% petitioner PN9 ca#e to this )ourt throu$h the instant

petition for revie! and onl% in so far as the decision of the 'ppellate )ourt in )ivil )ase No. 6/35 isconcerned. Petitioner contends that7

I

PN9@s )OMP>'INT IN )IVI> )'S* NO. 6/35 'S NOT FI>*D M'>I)IO(S>G 'ND IN 9'D F'IT,*N)* NO 9'SIS FOR T* ''RD OF MOR'> 'ND *J*MP>'RG D'M';*S.

II

T* )ON)>(SION OF T* R*SPOND*NT )O(RT T'T T* FI>IN; OF )M> )'S* NO. 6/35 'SNOT M'D* M'>I)IO(S>G 'ND IN ' 'NTON M'NN*R IS IN)ONSIST*NT IT ITS ''RD OFMOR'> 'ND *J*MP>'RG D'M';*S IN T* R*D()*D 'MO(NT OF P03,333.33.

III

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T* ''RD OF P/,333.33 'S 'TTORN*G@S F**S 'S NO 9'SIS IN F')T 'ND IN >'.

IV

R*SPOND*NTS SPO(S*S M*DIN' 'ND >OP*L@ MOTION TO 'DMIT 'NS*R IT 'M*ND*D)O(NT*R)>'IM )ONTR'V*N*S S*)TION 4, R(>* 03 IN )ON:(N)TION IT S*)TIONS 6,/, 8,R(>* 0/ OF T* R*VIS*D R(>*S OF )O(RT.

V

T* DISMISS'> OF )IVI> )'S* NO. 6/35 IS ITO(T 9'SIS IN >' 'ND IN F')T.

)ivil )ase No. 6/35 as the action brou$ht b% petitioner a$ainst private respondents see+in$ theannul#ent of the Deed of Sale of Real Propert% and D!ellin$ ouse e&ecuted b% private respondentspouses Napoleon ). Navarro and Patricia )ru- in favor of private respondents spouses Vicente *. Medinaand >eticia >ope- and covered b% Transfer )ertificate of Title No. T?166. 'ccordin$ to petitioner, the sale!as fraudulentl% entered into bet!een aforesaid parties to defeat petitioner@s recover% of the a#ountdefalcated b% private respondent Napoleon ). Navarro durin$ the ti#e that the latter !as e#plo%ed b% thefor#er as accountant in its )abanatuan 9ranch, and !hich a#ount !as the subCect of )ivil )ase No. 6/38.

The controvers% revolves on the issue of consistenc%. Is respondent appellate court@s findin$ on the non?e&istence of #alice and bad faith on petitioner@s part !hen it filed )ivil )ase No. 6/35 consistent !ith thelo!er court@s order a!ardin$ #oral and e&e#plar% da#a$es ori$inall% in the a#ount of P033,333.33 butreduced to P03,333.33 b% respondent appellate court and attorne%@s fees in the a#ount of P/,333.33 both infavor of private respondents spouses Medina and >ope-

's #entioned earlier, respondent appellate court ruled that there is no sho!in$ that the plaintiff acted#aliciousl% and in a !anton #anner in filin$ )ivil )ase No. 6/35. It !as ho!ever further ruled that there isno doubt that said spouses suffered #ental an$uish for havin$ been #ade defendants in )ivil )ase No.6/35. This )ourt is tas+ed to resolve this inconsistenc%.

'rticle 05 of the )ivil )ode reco$ni-es that #oral da#a$es include ph %sical sufferin$, #ental an$uish,fri$ht, serious an&iet%, bes#irched reputation, !ounded feelin$s, #oral shoc+, social hu#iliation and si#ilar inCur%. Thou$h incapable of pecuniar% co#putation, #oral da#a$es #a% be recovered if the% are thepro&i#ate result of the defendant@s !ron$ful act or o#ission.

's to e&e#plar% da#a$es, 'rticle 1 o f the )ivil )ode provides that such da #a$es #a% be i#posed b%!a% of e&a#ple or correction for the public $ood. hile e&e#plar% da#a$es cannot be recovered as a#atter of ri$ht, the% need not be proved, althou$h plaintiff #ust sho! that he is entitled to #oral, te#perateor co#pensator% da#a$es before the )ourt #a% consider the "uestion of !hether or not e&e#plar%da#a$es should be a!arded. *

hile no proof of pecuniar% loss is necessar% in order that #oral da#a$es #a% be a!arded, the a#ount of inde#nit% bein$ left to the discretion of the court, + it is nevertheless essential that the clai#ant satisfactoril%proves the e&istence of the factual basis of the da#a$es and its causal relation to defendant@s acts. This isso because #oral da#a$es thou$h incapable of pecuniar% esti#ation, are in the cate$or% of an a!arddesi$ned to co#pensate the clai#ant for actual inCur% suffered and not to i#pose a penalt% on the!ron$doer. Moral da#a$es, in other !ords, are not corrective or e&e#plar% da#a$es.

For #oral da#a$es to be a!arded, the la! re"uires a !ron$ful act or o#ission attributable to petitioner asthe pro&i#ate cause of the #ental an$uish suffered b% private respondents spouses Vicente *. Medina and>eticia >ope-. Respondent appellate court cate$oricall% ruled in the ne$ative %et a!arded #oral ande&e#plar% da#a$es in the reduced a#ount of P03,333.33 in favor of aforesaid respondent spouses. Thisbrin$s to li$ht Our rulin$ in 9o%sa! v. Interphil Pro#otions, Inc. 8 !hich enunciates that7

In order that a person #a% be #ade liable to the pa%#ent of #oral da#a$es, thela! re"uires that his act be !ron$ful. The adverse result of an action does not per se#a+e the act !ron$ful and subCect the actor to the pa%#ent of #oral da#a$es. Thela! could not have #eant to i#pose a penalt% on the ri$ht to liti$ate such ri$ht is soprecious that #oral da#a$es #a% not be char$ed on those !ho #a% e&ercise iterroneousl%, For these the la! ta&es costs. 9

)onfor#abl% !ith settled Curisprudence and in a$ree#ent !ith petitioner@s contention, e find theconclusion of respondent appellate court that the filin$ of )ivil )ase No. 6/35 !as not #ade #aliciousl% andin a !anton #anner inconsistent !ith its a!ard of #oral and e&e#plar% da#a$es in the reduced a#ount of

P03,333.33.

In the absence of #alice and bad faith, the #ental an$uish suffered b% respondents spouses Medina and>ope- for havin$ been #ade defendants in )ivil )ase No. 6/35 is not that +ind of an&iet% !hich !ould!arrant the a!ard of #oral da#a$es. The !orries and an&ieties suffered b% respondents spouses Medinaand >ope- !ere onl% such as are usuall%, caused to a part% haled into court as a defendant in aliti$ation. 10 Therefore, there is no sufficient Custification for the a!ard of #oral da#a$es, #ore so,e&e#plar% da#a$es.

In the sa#e #anner that e find no basis for the a!ard of #oral da#a$es to respondents spouses Medinaand >ope-, e find petitioner neither liable for attorne%@s fees.

It is not sound public polic% to place a penalt% on the ri$ht to liti$ate. To co#pel the defeated part% to pa% thefees of counsel for his successful opponent !ould thro! !ide open the door of te#ptation to the opposin$part% and his counsel to s!ell the fees to undue proportions. To sentence liti$ant to pa% his adversar%@s

la!%er@s fees !ould be i#posin$ a penalt% on his ri$ht to liti$ate. *ven under the Ne! )ivil )ode 11 a liti$ant!ould not be entitled to recover the fees paid to his attorne% as da#a$es !here no bad faith on the part of his adversar% !as sho!n. 1 Needless to sa%, a!ard of attorne%@s fees is the e&ception rather than the$eneral rule.

In the fourth assi$n#ent of error, petitioner assi$ns a procedural fla! to the Motion to 'd#it 'ns!er !ith '#ended )ounterclai# filed on :une , 0153 b% private respondents spouses Medina and >ope-, theassailed portion pertainin$ to the Notice addressed to the )ler+ of )ourt !hich reads7

T* )>*RK OF )O(RT

Ma% %ou please include the fore$oin$ #otion in the )ourt@s calendar for hearin$ on:une 6, 0153 at 1733 o@cloc+ in the #ornin$ or as soon thereafter as counsel #a%be heard, at !hich date and hour the undersi$ned !ill sub#it the sa#e for theconsideration of the onorable )ourt. 13

Petitioner asserts that the fore$oin$ notice contravenes Section 4, Rule 03 in conCunction !ith Sections 6,/and 8 of Rule 0/ of the Revised Rules of )ourt.

The #otion !as filed on :une ,0153. The hearin$ !as re"uested to be set on :une 6, 0153. This is oneda% short of the three H40 da% notice rule provided under Section 6, Rule 0/ of the Revised Rules of )ourt!hich provides that notice of a #otion shall be served b% the applicant to all parties concerned, at leastthree H4 da%s before the hearin$ thereof, to$ether !ith a cop% of the #otion, and of an% affidavits and other papers acco#pan%in$ it. The court, ho!ever, for $ood cause #a% hear a #otion on shorter notice, speciall%on #atters !hich the court #a% dispose of on its o!n #otion.

Records sho! that petitioner received a cop% of the #otion on :une 8,0153 !hile the #otion !as set for hearin$ and heard on :une 6, 0153. To this #otion, petitioner filed an opposition on :ul% 5, 0153 and a#otion for reconsideration upon its denial.

In resolvin$ this error, e consider the Cudicial polic% on rules of procedure.

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'#end#ents to pleadin$s are $enerall% favored and should be liber all% allo!ed in furtherance of Custice inorder that ever% case #a% so far as possible be deter#ined on its real facts and in order to speed the trial of causes or prevent the circuit% of action and unnecessar% e&pense, unless there are circu#stances such asine&cusable dela% or the ta+in$ of the adverse part% b% surprise or the li+e, !hich #i$ht Custif% a refusal of per#ission to a#end. 1 These circu#stances do not obtain in the case at bar.

's afore #entioned, petitioner filed an oppo sition to the a ssailed #otion statin$ p etitioner@s le$al $roundstherefor and subse"uentl% a #otion for reconsideration of the denial of aforesaid opposition. This eli#inatesthe ele#ent of surprise and denial of due process sou$ht to be avoided in instances !here a#end#ents topleadin$s are sno!ed.

In '.(. ercantile, )nc. et al. v. )nter*ediate Appellate ourt 1* e ruled7

Procedural due process is not based solel% on a #echanistic and literal applicationof a rule such that an% deviation is ine&orabl% fatal. Rules of procedure, and thisincludes the three?da% notice re"uire#ent, are liberall% construed to pro#ote their obCect and to assist the parties in obtainin$ Cust, speed% and ine&pensivedeter#ination of ever% action and proceedin$ HSection , Rule 0, Rules of )ourt. ...>apses in the literal observance of a rule of procedure #a% be overloo+ed !hen the%have not preCudiced the adverse part% and have not deprived the court of itsauthorit%. 1+

Thus, in line !ith the liberal Cudicial polic% on rules of procedure, e find no reversible error co##itted b%the trial court in ad#ittin$ private respondents spouses Medina and >ope-@ Motion to 'd#it 'ns!er !ith '#ended )ounterclai#.

Finall%, petitioner "uestions the dis#issal of )ivil )ase No. 6/35 b% the lo!er court as affir#ed b% therespondent appellate court contendin$ that the sa#e !as done !ithout basis in la! and in fact.

Respondent appellate court ruled there is no co#plete evidence to sho! that the sale of real propert% andd!ellin$ house !as e&ecuted to defraud petitioner ban+ but there is evidence that the latter +ne! of thei#pendin$ sale bet!een private respondents the#selves. It !as sho!n that the purpose of the sale !as toenable private respondent Napoleon ). Navarro to pa% the petitioner the a#ount that private respondentNavarro defalcated

These pronounce#ents in the assailed decision of respondent appellate court for the dis#issal of )ivil )aseNo. 6/35 hin$es on a deter#ination of pertinent facts the resultant findin$s of !hich !hen supported b%substantial evidence are be%ond Our po!er of revie!. 'bsent the reco$ni-ed e&ceptions, findin$ of facts of the )ourt of 'ppeals are conclusive on the parties and the Supre#e )ourt 1 on the tenet that this )ourtdecides appeals !hich onl% involve "uestions of la! and that it is not the function of the Supre#e )ourt to

anal%-e and to !ei$h such evidence all over a$ain, its Curisdiction bein$ li#ited to revie!in$ errors of la!that #i$ht have been co##itted b% the lo!er court. 18

*R*FOR*, e&cept for the deletion of the a!ard of #oral and e&e#plar% da#a$es as !ell as attorne%@sfees to private respondents spouses Vicente *. Medina and >eticia >ope-, the decision of the )ourt of 'ppeals in )'? ;.R. No. 6253 is hereb% affir#ed in all other respects.

No costs.

SO ORD*R*D.

Gutierrez, Jr., #eliciano, %idin and ortes, JJ., concur.

Republic of the Philippines

SUPREME COURTManila

*N 9'N)

G.R. No. L-0081 "2r/ar , 19+8

MEL4UIADES RAAGAS a#$ ADELA LAUDIANO RAAG AS, plaintiffs?appellees,vs.OCTAIO TRA%A, MRS. OCTAIO TRA%A a#$ !IENENIDO CANCILLER, defendants?appellants.

iguel +. iausas for plaintiff-appellee.+ictoriano . ealino for defendants-appellants.

CASTRO, J.:

The co#plaint filed on 'pril 0, 0183 !ith the )ourt of First Instance of >e%te Ecivil case 561 b% thespouses Mel"uiades Raa$as and 'dela >audiano Raa$as a$ainst Octavio Tra%a, his !ife, and 9ienvenido)anciller, alle$es in essence that on or about 'pril 1, 01/2, !hile the latter !as Arec+lessl%A drivin$ a truc+o!ned b% his co?defendants, alon$ the public hi$h!a% in Mac'rthur, >e%te, the said vehicle ran over theplaintiffs@ three?%ear old son Re$ino causin$ his instantaneous death. The plaintiffs as+ for actual da#a$esin the su# of P03,333, #oral, no#inal and corrective da#a$es in a su# to be deter#ined b% the court,P0,333 as attorne%@s fees, P0,333 for e&penses of liti$ation, plus costs.

In their ans!er !ith counterclai# for #oral and actual da#a$es and attorne%@s fees, filed on 'pril ,the defendants specificall% den% that )anciller !as Adrivin$ rec+lessl%A at the ti#e of the #ishap, and assertthat the truc+ A!as full% loaded and !as runnin$ at a ver% lo! speed and on the ri$ht side of the roadA= that it!as the child !ho Arushed fro# an unseen position and bu#ped the truc+ so that he !as hit b% the left rear tire of the said truc+ and diedA, and conse"uentl% the defendants are not to bla#e for the accident !hich!as Aentirel% attributable to an unforeseen eventA or due to the fault of the child and ne$li$ence of hisparents= that the defendant?spouses have e&ercised due dili$ence in the selection and supervision of their driver )anciller, !ho# the% hired in 0168 onl% after a thorou$h stud% of his bac+$round as a truc+ driver=and that each ti#e the% allo!ed hi# to drive it !as onl% after a chec+ of his ph%sical condition and the#echanical fitness of the truc+ assi$ned to hi#.

On Ma% 6 the plaintiffs@ #oved for a Cud$#ent on the pleadin$s, upon the clai# that the defendants@ans!er not onl% Afailed to tender an issueA but as !ell Aad#itted #aterial alle$ationsA of the co#plaint. This#otion !as set for hearin$ on :une 02. On the previous da%, ho!ever, the cler+ of court received a tele$ra#fro# the defendants@ counsel re"uestin$ for postpone#ent of the hearin$ to :ul% on the $round that he!as sic+ of influenza. The lo!er court denied the re"uest for lac+ of Aproper notice to the adverse part%A,and considered the case sub#itted for decision upon the filin$ of the plaintiffs@ #e#orandu#.

On :une 6 it rendered a Cud$#ent on the pleadin$s, conde#nin$ the defendants, Cointl% andseverall%, to pa% Ato the plaintiffs the su# of P03,333 for the death of their child Re$ino >audiano Raa$as,P,333 for #oral da#a$es, P0,333 actual da#a$es, P0,333 for attorne%@s fees, and the costs.A

The court reasoned that the denial in the ans!er of the char$e of rec+less drivin$ Adid not affect theplaintiffs@ positive alle$ation in their co#plaint that the truc+ . . . did not have a current %ear re$istrationplate . . . for the %ear 01/2 !hen the accident occurred that Athis failure . . . has the effect of ad#ittin$h%potheticall% that the% operated ... the said truc+ !ithout proper license . . . !hen the accident occurred,Aand that Aunless there is proof to the contrar%, it is presu#ed that a person drivin$ a #otor vehicle has beenne$li$ent if at the ti#e of the #ishap, he !as violatin$ an% traffic re$ulation Earticle 02/, ne! )ivil )ode.AThe court !ent on to conclude that under the circu#stances a Cud$#ent on the pleadin$s !as Airre#ediabl%proper and fittin$.A

The defendants appealed to the )ourt of 'ppeals, !hich certified the case to this )ourt because theissues raised are purel% of la!.

Section 03 of Rule 4/ of the old Rules of )ourt 0 authori-ed a Cud$#ent on the pleadin$s A!here anans!er fails to tender an issue, or other!ise ad#its the #aterial alle$ations of the adverse part%@s pleadin$.A

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8/88

The vital issue, therefore, to !hich the other issues are subsidiar% or intestinal, is !hether the court aquoacted correctl% !hen it rendered Cud$#ent on the pleadin$s. It is our vie! that the court erred.

The plaintiffs@ clai# for actual, #oral, no#inal and corrective da#a$es, !as controverted b% theaver#ent in the ans!er to the effect that the defendants Ahave no +no!led$e or infor#ation sufficient tofor# a belief as to the truth of the alle$ationsA as to such da#a$es, Athe truth of the #atter bein$ that thedeath of Re$ino Raa$as !as occasioned b% an unforeseen event andor b% the fault of the s#all bo%Re$ino Raa$as or his parents.A Such aver#ent has the effect of tenderin$ a valid issue. e so heldin Pilippine National %an" vs. (acson, >?1601, Ma% 1, 01/5 and in %enavides vs. Ala/astro, >?0158,Dec. 4, 0186. In A/u/a"ar an vs. ian 0o, >?0223, Dece#ber 1, 018 and (i* Gio" vs. %ataan igar

and igarette #actory , >?0/280, 'pril 08, 0183, !e held that even if the alle$ations re$ardin$ the a#ount of da#a$es in the co#plaint are not specificall% denied in the ans!er, such da#a$es are not dee#edad#itted. In o*assi vs. +illa-A/rille, >?5365, 'u$ust 0, 0182, Suntay an1angco vs. Jovellanos, et al ., >?044, :une 43, 0183, and Delfin vs. ourt of Agrarian elations, et al ., >?4462, March 06, 0185, 0185 'PI>D 6/4, !e declared in no uncertain ter#s that actual da#a$es #ust be proved, and that a court cannotrel% on Aspeculation, conCecture or $uess!or+A as to the fact and a#ount of da#a$es, but #ust depend onactual proof that da#a$e had been su ffered and on evidence of the actual a#ount. Finall%, in alonzo vs.Galang et. al ., >?042/0, :ul% 5, 0183, !e reaffir#ed the rule that althou$h an alle$ation is not necessar% inorder that #oral da#a$es #a% be a!arded, Ait is, nevertheless, essential that the clai#ant satisfactoril%prove the e&istence of the factual basis of the da#a$e and its causal relation to defendant@s acts.A

The precedin$ dis"uisition points up the inescapable need of a full?blo!n trial on the #erits at !hichthe parties !ill be afforded ever% opportunit% to present evidence in support of their respective contentionsand defenses.

'))ORDIN;>G, the Cud$#ent on the pleadin$s of :une 6, 0183 is set aside, and this case is hereb%

re#anded to the court of ori$in for trial on the #erits. No pronounce#ent as to costs.

eyes, J.%.(., Dizon, a"alintal, %engzon, J.P., $aldivar, Sancez, Angeles and #ernando JJ., concur.oncepcion, .J., is on leave.


*N 9'N)

G.R. No. L-189 S256272r 9, 19+

SAN MIGUEL !REER%, INC., plaintiff?appellant,vs."RANCISCO MAGNO, defendant?appellee.

(icauco, Picazo and Agcaoili for plaintiff-appellant.Jose +. osales and Jose . +illanueva for defendan t-appellee.

ANGELES, J.:

'n appeal fro# a decision of the )ourt of First Instance of Manila, in civil case No. 68341, dis#issin$ theco#plaint filed b% the San Mi$uel 9re!er%, Inc., and orderin$ it to pa% to the defendant P,333.33 inda#a$es, P0,333.33 as attorne%@s fees, and costs.

The appeal !as ori$inall% lod$ed !ith the )ourt of 'ppeals !hich certified the case to this )ourt, theissue involved bein$ purel% one of la!. Fro# the stipulation of facts sub#itted b% the parties in the lo!er court and the various anne&es referred to therein, the facts of the case that $ave rise to the controvers% areas follo!s7

On Dece#ber 06, 01/3, the Municipal 9oard of 9utuan )it% passed Ordinance No. 00 a#endin$ OrdinanceNo. 5 of said )it%, i#posin$ a ta& of t!o per cent EB on the $ross sales or receipts of those en$a$ed in thesale, tradin$ in, or disposal of all alcoholic or #alt bevera$es, !ines and #i&ed or fer#ented li"uors,includin$ tu/a, /asi and tapuy . ESec. 0 He, 'nne& '. On :une 8, 0183, the sa#e Municipal 9oard passedOrdinance No. 003 a#endin$ Ordinance No. 00, fi&in$ instead a ta& on the sale of beer at the rate of P./

per case of t!ent%?four bottles, and on the sales of soft drin+s at the rate of P.03 per case of t!ent%?four bottles of )oca?)ola, Pepsi?)ola, Tru?Oran$e, Seven?(p, 9irele%, Soda ater, and an% other +ind of softdrin+s or carbonated drin+s. ESec. He and Sec. 4, respectivel%, 'nne& 9.

The San Mi$uel 9re!er%, Inc., a corporation or$ani-ed and e&istin$ under the la!s of the Philippines !ithprincipal offices at Manila, #aintains a !arehouse or branch office in the )it% of 9utuan and is en$a$ed inthe sale of beer and soft drin+s in said )it%. 'lthou$h it appears to have paid the re"uired ta&es under Ordinance No. 00 pro#ptl% and reli$iousl% upon the effectivit% of the ordinance, the co#pan% stoppedpa%in$ the ta&es thereafter E'nne& D, and thereb% incurred in bac+ ta&es. Verbal de#ands !ere #ade b%the )it% Treasurer of 9utuan on the representative of the San Mi$uel 9re!er%, Inc. at 9utuan )it% !ith!arnin$s that a !arrant of distraint and lev% !ill be issued a$ainst its properties unless it settles its ta&liabilit% under the ordinance aforesaid. On Septe#ber 4, 0183, counsel for the co#pan% !rote a letter tothe )it% Treasurer of 9utuan "uestionin$ the po!er of the cit% $overn#ent of 9utuan to lev% upon itsproperties pointin$ out, Athat the po!er of distraint and lev% as e#bodied in %our )harter ERepublic 'ct No./4, as a#ended, can onl% be e&ercised b% %our $oodselves in respect to delin"uencies in the pa%#ent of real estate ta&esA. To this, the )it% Treasurer of 9utuan, in a letter dated Septe#ber 1, 0183, pro#ptl%ans!ered and e&plained that he #a% issue !arrants of distraint and lev% upon properties of delin"uentta&pa%ers under Ordinance No. 8 of the )it% of 9utuan. Thereafter, the San Mi$uel 9re!er%, Inc. receiveda for#al letter of de#and for pa%#ent of its ta& liabilit% fro# the )it% Treasurer of 9utuan, to !hich the9ranch Mana$er of the co#pan% at )a$a%an de Oro )it% !ho has supervision of the co#pan%@s !arehouseat 9utuan )it%, ans!ered on October 03, 0183, re"uestin$ #ore ti#e A!ithin !hich to act on said de#andand in order to refer the #atter to its Manila OfficeA. Several other !ritten de#ands !ere thereafter #ade b%the )it% Treasurer of 9utuan to officials of plaintiff@s branch office in said cit%, but failed to %ield an% concreteresult. 'ccordin$l%, on :anuar% 8, 0180, the cit% treasurer, !ith the approval of the Ma%or of 9utuan )it%issued a !arrant of distraint and lev% a$ainst the properties of the San Mi$uel 9re!er%, Inc. at its branchoffice in that cit% to enforce the collection of the ta&es assessed a$ainst it, i.e., under Ordinance Nos. 00 and003, a#ountin$ to P1,01.6, includin$ penalties correspondin$ to the period fro# Ma%, 01/5 to 'u$ust 0/,0183, and under Ordinance No. 003, the a#ount of P0/,802.18, includin$ penalt%, for the periodcorrespondin$ to :une 8 up to October 43, 0183, or a total of P6,565.4. On :anuar% 1, 0180, at about 1o@cloc+ in the #ornin$, a notice of sei-ure b% virtue of the !arrant of distraint and lev% !as served on theco#pan%@s 9ranch Mana$er at 9utuan )it% !ho, upon previous arran$e#ent !ith the representative of the)it% Treasurer of 9utuan, voluntaril% surrendered the t!o E deliver% truc+s of the co#pan% sei-ed under the !arrant to the said )it% Treasurer at about / o@cloc+ in the afternoon of the sa#e da%.

On :anuar% 0, 0180, the San Mi$uel 9re!er%, Inc. instituted the present action in the )ourt of FirstInstance of Manila, pra%in$ for an order directin$ the defendant Francisco Ma$no to release the deliver%truc+s sei-ed and i#pounded b% the )it% ;overn#ent of 9utuan alle$edl% A!ithout authorit% and for reasonsun+no!n to the co#pan%A, and to order the defendant to pa% to the plaintiff da#a$es in the a#ount of P8,333.33 correspondin$ to the period fro# :anuar% 1, 0180 to :anuar% 03, 0180, and P4,333.33 for eachda% thereafter that the truc+s re#ain i#pounded and unused b% the plaintiff, plus the costs of the suit.Parentheticall%, the action !as brou$ht a$ainst the defendant Francisco Ma$no in his individual capacit%, asdisclosed in the alle$ations in the co#plaint, and as e&pressl% ad#itted in the appellant@s brief, thus A's a#atter of fact, plaintiff filed this action a$ainst Francisco Ma$no, not in is official capacity, /ut in isindividual capacity , . . . .A Ep. 04.

In his ans!er, defendant Francisco Marco interposed, a#on$ others, the defense that in sei-in$ the deliver%truc+s of the San Mi$uel 9re!er%, Inc., he !as actin$, and !as in the perfor#ance of his official dut%, asTreasurer of 9utuan )it%, and, can not be hold liable to pa% to the co#pan% an% da#a$es. e set up acounterclai# of P63,333.33 and P03,333.33 as #oral and e&e#plar% da#a$es, respectivel%, alle$edl%sustained b% hi# and the #e#bers of his fa#il% on account of the shoc+, fri$ht, !ounded feelin$s, #entalan$uish, bes#irched reputation, and social hu#iliation the% suffered b% reason of the filin$ of the casea$ainst hi# b% the plaintiff, plus attorne%@s fees in the a#ount of P,333.33.

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9/88

Durin$ the pendenc% of the action, the San Mi$uel 9re!er%, Inc. paid under protest the ta&es assesseda$ainst it b% the )it% Treasurer of 9utuan, and forth!ith the i#pounded truc+s !ere released.

The parties sub#itted no testi#onial evidence. Instead, the% sub#itted a stipulation of facts alon$ !ithdocu#entar% evidence on the basis of !hich the court a quo, on 'pril , 018, rendered the decisionappealed fro#. ' #otion for reconsideration of the decision havin$ been denied, the plaintiff interposed theinstant appeal.

(nder the first assi$n#ent of error, appellant assails the conclusion of the court that Athe alle$ation in the

co#plaint Epar. / that the sei-ure of plaintiff@s truc+s !as #ade for reasons un+no!n to the plaintiff, isfalseA, because it is not sustained b% the evidence= said appellant clai#in$ that it !as onl% at the ti#e thatthe stipulation of facts !as bein$ prepared that the defendant?appellee #ade #ention for the first ti#e of hisalle$ed authorit% to issue a !arrant of distraint and lev% a$ainst properties of ta& delin"uents under Ordinance No. 8 of the )it% of 9utuan. The contention is untenable. In para$raph 2 of the stipulation of facts, it is ad#itted that on Septe#ber 1, 0183, in a letter of the )it% Treasurer of 9utuan to 'tt%s. Ponce*nrile, Si$uion Re%na, Montecillo 9elo, counsel for the plaintiff, said counsel !as infor#ed that the cit%$overn#ent !as e&ercisin$ its po!er of lev% and distraint a$ainst properties of ta&pa%ers under OrdinanceNo. 8 of the cit%. 'ppellant, therefore, #a% not no! fei$n i$norance of such notice !hich appears in therecords.

To the char$e that Ordinance No. 8 of the )it% of 9utuan is ultra vires, suffice it to sa% that the sa#e #a%not be considered in this appeal. 'n e&a#ination of the co#plaint filed in this case, reveals that e&cept for the $eneral aver#ent therein that its deliver% truc+s !ere sei-ed and i#pounded b% order of the defendantFrancisco Ma$no A!ithout authorit% of la! and for reasons un+no!n to the plaintiffA, !hich is !ithout factualbasis as pointed out above, no #ention !as #ade in the stipulation of facts nor an% evidence ever introduced durin$ the trial of the case in the lo!er court, to sho! that it !as the intention of the appellant to

place in issue the validit% of the ordinance aforesaid.

In cases !here the constitutionalit% of statutes are directl% put in issue, the $eneral rule is, that the "uestionof constitutionalit% #ust be raised at the earliest opportunit%, so that if not raised b% the pleadin$s, ordinaril%it #a% not be raised at the trial, and if not raised in the trial court, it !ill not be considered on appeal EPeopleand on$+on$ Shan$hai 9an+in$ )orporation vs. Vera and )u (nCien$. 45 O.;., 086 citin$ 0 ). :. p.528. ESee also )ad!allader?;ibson >u#ber )o. vs. Del Rosario, 8 Phil. 01= Robb and ilscher vs.People of the Philippines, 82 Phil., 43= Macondra% )o. vs. 9enito and Oca#po, 8 Phil., 045= Sofronio >.ui#son vs. P. >. de ;u-#an, >?0263, :anuar% 40, 0184. The e&ceptions are, as stated in on$+on$ etc.vs. )u (nCien$, supra, in cri#inal cases, !here the "uestion #a% be raised at an% sta$e of the proceedin$s,either in the trial court or on appeal= in civil cases, it has been held that it is the dut% of the court to pass onthe constitutional "uestion, thou$h raised for the first ti#e on appeal, if it appears that a deter#ination of the"uestion is necessar% to a decision of the case= and it has been held that a constitutional "uestion !ill beconsidered b% an appellate court at an% ti#e, !here it involves the Curisdiction of the court belo!. The sa#erule should appl% !here the validit% of a #unicipal ordinance is "uestioned. e do not find an% of thee&ceptions afore#entioned applicable to this case to Custif% a conclusion that the validit% of Ordinance No.

8 of the )it% of 9utuan #a% be properl% passed upon in this appeal.2a3p4l.n5t

Moreover, Francisco Ma$no is sued in this case not in his capacit% as )it% Treasurer of 9utuan but in hisindividual capacit%. e is not the proper part% a$ainst !ho# the alle$ed invalidit% of the ordinance in"uestion should be pleaded, nor is this the proper proceedin$ !herein the alle$ed infir#it% of the saidordinance #a% be raised. ' #unicipal ordinance is not subCect to collateral attac+. Public polic% forbidscollateral i#peach#ent of le$islative acts E64 ). :., ///?//8.

(nder the second assi$n#ent of error, it is contended that the trial court fell into error in not orderin$ thedefendant?appellee to pa% to the appellant in da#a$es the a#ount of P,083.33, not!ithstandin$ thead#ission of the defendant in the stipulation of facts that the San Mi$uel 9re!er%, Inc. incurred da#a$es inthat a#ount, representin$ the hire of t!o E truc+s at the rate of P23.33 per da% !hich the plaintiff !asco#pelled to secure and use for the period fro# :anuar% 1, 0180 to Februar% 2, 0180, durin$ !hich ti#e thet!o deliver% truc+s of the plaintiff !ere i#pounded b% the appellee. The ar$u#ent is based on a !ron$pre#ise. It erroneousl% assu#es that the defendant is personally lia/le for da#a$es to the appellant,disre$ardin$ the established fact that the defendant had issued the !arrant of distraint and lev% a$ainst

plaintiff@s properties in his capacit% as )it% Treasurer of 9utuan !ho, under the la!, is e#po!ered to issuethe !arrant. Ordinance No. 8 of the )it% of 9utuan provides, a#on$ others, as follo!s7

Sec. 0. (pon the failure of an% person o!in$ an% delin"uent ta& or delin"uent revenue topa% the sa#e, at the ti#e re"uired under e&istin$ ordinance, the )it% Treasurer, his deput%, or an% of his cler+s dul% authori-ed in !ritin$ b% the )it% Treasurer #a% sei-e or distraint an%$oods, chattels or effects, and other personal propert%, includin$ stoc+s and other securities,debts, credits, ban+ accounts and an% interest in and ri$hts to personal propert%, of such personin sufficient "uantit% to satisf% the ta&, or char$e, to$ether !ith an% incre#ent thereto incident todelin"uenc%, and the e&penses of the distrain t.

Since there is no dispute that the appellee issued the !arrant of distraint and lev% a$ainst the deliver% truc+sof the appellant on :anuar% 1, 0180, in his capacit% as )it% Treasurer of 9utuan, and as there is no

disa$ree#ent that defendant?appellee issued said !arrant b% virtue of Ordinance No. 8 of the )it% of 9utuan above?"uoted EPar. 0/, Stipulation of Facts, and not havin$ been sho!n that the defendant, either as a private citi-en or as )it% Treasurer of 9utuan, had acted in bad faith, there can be no "uestion thatappellee Francisco Ma$no, !ho !as #erel% perfor#in$ a dut% enCoined b% la! to be perfor#ed !hen heissued the !arrant of distraint and lev%, cannot be #ade to ans!er personally for da#a$es to the appellant.

Finall%, under the third assi$n#ent of error, appellant #aintains that the trial court should not have a!ardedda#a$es in favor of the appellee under the counterclai# of the latter, for the reason that no evidence !asintroduced b% the appellee in support of the #oral and e&e#plar% da#a$es he and his fa#il% alle$edl%suffered. It ar$ues further that attorne%@s fees should not have been assessed a$ainst it.

In respect of the appellee@s counterclai# for #oral and e&e#plar% da#a$es, the trial court said7

ith respect to the counterclai# of defendant, it appears that defendant introduced no evidenceto support his clai# for P63,333.33 #oral da#a$es, P03,333 e&e#plar% da#a$es and

P,333.33 attorne%@s fees.

Nevertheless, the trial court sentenced the plaintiff to pa% to the defendant, da#a$es in the su# of P,333.33, and costs.

In order that #oral da#a$es #a% be a!arded, there #ust be pleadin$ and proof of #oral sufferin$, #entalan$uish, fri$ht and the li+e EDaran$ vs. 9eli-ar, >?01625, :anuar% 40, 0185. hile no proof of pecuniar%loss is necessar% in order that #oral da#a$es #a% be a!arded, the a#ount of inde#nit% bein$ left to thediscretion of the court E'rticle 08, it is, nevertheless, essential that the clai#ant should satisfactoril%prove the e&istence of the factual basis of the da#a$es E'rticle 05 and its causal connection todefendant@s acts. This is so, because #oral da#a$es, thou$h incapable of pecuniar% esti#ation, are in thecate$or% of an a!ard, desi$ned to co#pensate the clai#ant for actual inCur% suffered and not to i#pose apenalt% on the !ron$?doer E'l$arra vs. SandeCas, 5 Phil. 26= Malon-o vs. ;alan$, >?042/0, :ul% 5,0183. Neither #a% !e consider the a!ard as e&e#plar% da#a$es, because the #ere findin$s that certainalle$ations in the co#plaint are not true, and the plaintiff co##itted a #ista+e in institutin$ the actiona$ainst the !ron$ part%, do not Custif% the a!ard of this +ind of da#a$es. It infrin$es upon the ri$ht of a

citi-en to have access to the courts. The portals of the courts of Custice should not be closed to liti$ants !hoas+ for the protection of their ri$hts. Penalt% in the concept of da#a$es should not be i#posed si#pl%because a co#plaint is found un#eritorious b% the courts.

The a#ount of attorne%@s fees, on the other hand, is addressed to the sound discretion of the court. It #a%be a!arded alon$ !ith e&penses of liti$ation, other than Cudicial costs, in cases !here the court dee#s it Cust and e"uitable under the circu#stances of the case. 'nd !hen as in this case, the defendant publicofficer !as sued in his private capacit% for acts done in the perfor#ance of official dut% re"uired b% la!, and!as forced to e#plo% the services of private counsel to defend his ri$hts, it is but proper that attorne%@s feesbe char$ed a$ainst the plaintiff. No#inal da#a$es #a% also be adCudicated. e believe the a!ard of P,333.33 attorne%@s fees and P033.33 no#inal da#a$es, is Cust and e"uitable in the pre#ises.

*R*FOR*, the decision appealed fro# is #odified, settin$ aside the a!ard of P,333.33 to thedefendant in concept of da#a$es, but increasin$ the attorne%@s fees to P,333.33, and orderin$ the plaintiff to pa% to the defendant P033.33 as no#inal da#a$es. :ud$#ent is affir#ed in all other respects. )ostsa$ainst plaintiff?appellant.

9


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11/88

ADIN;A SO, and !ith the #alicious intent of inCurin$ and e&posin$ said co#plainant to public hatred,conte#pt and ridicule, !rite and publish in the re$ular issue of said publication on Ma% 0, 0111, in dail%colu#n ADIR*)T ITA, "uoted hereunder, to !it7

SI 'TTG. SO N; 9O)

A>INT*KA din sa pan$un$ura+ot iton$ Din$ So n$ 9ureau of )usto#s Intelli$ence (nit sa South arbor.

Daan?daan$ libon$ piso an$ +ini+ita n$ #asiba at #ata+a! na si So sa #$a i#porter na a%a! ide+lara an$totoon$ la#an n$ #$a container para #a+ai!as sa pa$ba%ad n$ #ala+in$ custo#s duties at ta&es.

Si So an$ na$papadrino sa #$a pa$?inspection n$ #$a container na ito. Si%e#pre?binibi$%an din ni%a n$salapi %un$ iban$ #$a ahensi%a para pu#i+it na lan$ at iti+o# an$ +anilan$ n$a Hsic bibi$ di%an sa #$abu!a%an$ ta$a 9O).

'!an$?a!a a+o sa atin$ $ob%erno. 9an+rupt na n$a, ninana+a!an pa n$ #$a +a!atan tulad ni So.

*!an +o ba rito +a% 'tt%. So, ba+it hindi na lan$ tu#a%o n$ sarili ni%an$ robber%?hold?up $an$ para +u#itan$ #as #abilis.

o% So.. hindi ba$a% sa i%o an$ pa$i$in$ attorne% . . . Mas ba$a% sa i%o an$ pa$i$in$ bu!a%an$ na+a+orbata at holdaper. Ma$nana+a! +a SoA

*R*IN said co#plainant !as indicated as an e&tortionist, a corrupt public official, s#u$$ler and havin$ille$all% ac"uired !ealth, all as alread% stated, !ith the obCect of destro%in$ his reputation, discreditin$ andridiculin$ hi# before the bar of public opinion.4

)ri#inal )ase No. 11?0833

That on or about 01th da% of Ma%, 0111 in Pasa% )it%, Metro Manila, Philippines and !ithin the Curisdiction of this onorable )ourt, the above?na#ed accused, conspirin$ and confederatin$ to$ether and #utuall%helpin$ one another, bein$ then the colu#nist, publisher and #ana$in$ editor, respectivel% of AR*M'T*A, atabloid published dail% and of $eneral circulation in the Philippines, did then and there !illfull%, unla!full%and feloniousl% and !ith #alicious intent to discredit or dishonor co#plainant, 'TTG. )'R>OS ADIN;A SO,and !ith the #alicious intent of inCurin$ and e&posin$ said co#plainant to public hatred, conte#pt andridicule, !rite and publish in the re$ular issue of said publication on Ma% 01, 0111, in dail% colu#n ADIR*)TITA, "uoted hereunder, to !it7

& & & &

ATulad ni 'tt%. Din$ So n$ 9ureau of )usto#s Intelli$ence Division, sa+sa+an din n$ la+as iton$ si Daniel '"uino n$ Presidential 'nti?S#u$$lin$ (nit na na+atala$a sa South arbor.

Tulad ni So, #a$nana+a! na tuna% iton$ si '"uino.

Pan$hihin$i n$ pera sa #$a bro+ers, an$ la+ad nito.

Pa$ hindi na$bi$a% n$ pera an$ #$a bro+ers, #aiipit an$ pa$re?release n$ +anilan$ +ar$a#ento.A

*R*IN said co#plainant !as indicated as an e&tortionist, a corrupt public official, s#u$$ler and havin$ille$all% ac"uired !ealth, all as alread% stated, !ith the obCect of destro%in$ his reputation, discreditin$ and

ridiculin$ hi# before the bar of public opinion.6

)ri#inal )ase No. 11?0/15

That on or about /th da% of :une, 0111 in Pasa% )it%, Metro Manila, Philippines and !ithin the Curisdictionof this onorable )ourt, the above?na#ed accused, conspirin$ and confederatin$ to$ether and #utuall%helpin$ one another, bein$ then the colu#nist, publisher and #ana$in$ editor, respectivel% of AR*M'T*A, atabloid published dail% and of $eneral circulation in the Philippines, did then and there !illfull%, unla!full%and feloniousl% and !ith #alicious intent to discredit or dishonor co#plainant, 'TTG. )'R>OS ADIN;A T.SO, and !ith the #alicious intent of inCurin$ and e&posin$ said co#plainant to public hatred, conte#pt andridicule, !rite and publish in the re$ular issue of said publication on :une /, 0111, its dail% colu#nADIR*)T ITA, "uoted hereunder, to !it7

& & & &

Na$file n$ P03 M na libel suit iton$ si 'tt%. )arlos So n$ 9ureau of )usto#s laban sa in%on$ lin$+od at ilan$opis%ales n$ Re#ate sa Pasa% )it% )ourt. Na$alit iton$ tarantadon$ si 'tt%. So dahil binanatan +o si%a atine&pose an$ +a$a$uhan ni%a sa 9O).

o%, So . . . da$da$an #o pa an$ pa$nana+a! #o dahil hindi +ita tatantanan. 9uha% +a pa sinusuno$ naan$ i%on$ +alulu!a sa i#p%erno.

*R*IN said co#plainant !as indicated as an e&tortionist, a corrupt public official, s#u$$ler and havin$ille$all% ac"uired !ealth, all as alread% stated, !ith the obCect of destro%in$ his reputation, discreditin$ andridiculin$ hi# before the bar of public opinion./

On Nove#ber 4, 0111, Tulfo, Salao, and )a#bri !ere arrai$ned, !hile 9arli-o and Picha% !ere arrai$nedon Dece#ber 0/, 0111. The% all pleaded not $uilt% to the offenses char$ed.

't pre?trial, the follo!in$ !ere ad#itted b% petitioners7 E0 that durin$ the four dates of the publication of the"uestioned articles, the co#plainin$ !itness !as not assi$ned at South arbor= E that the accused andco#plainin$ !itness did not +no! each other durin$ all the ti#e #aterial to the four dates of publication= E4that Re#ate is a ne!spapertabloid of $eneral circulation in the Philippines= E6 the e&istence and$enuineness of the Re#ate ne!spaper= E/ the colu#n therein and its authorship and the alle$ed libelousstate#ent as !ell as the editorial post containin$ the desi$nated positions of the other accused= and E8 theprosecutions "ualified ad#ission that it is the dut% of #edia persons to e&pose corruption.8

The prosecution presented four !itnesses, na#el%7 Oscar M. 'blan, 'tt%. :a#es Fortes, :r., ;lad%sFontanilla, and co#plainant 'tt%. So. The prosecution presented docu#entar% evidence as !ell.

'blan testified that he had re ad the four colu#ns !ritten b% Tulfo, and that the articles !ere untrue because

he had +no!n 'tt%. So since 011 and had !or+ed !ith hi# in the )usto#s Intelli$ence and Investi$ationService Division of the 9ureau of )usto#s. e further testified that upon readin$ the articles !ritten b%Tulfo, he concluded that the% referred to 'tt%. So because the subCect articles identified A'tt%. )arlosA asA'tt%. Din$ SoA of the )usto#s Intelli$ence and Investi$ation Service Division, 9ureau of )usto#s andthere !as onl% one 'tt%. )arlos ADin$A So of the 9ureau of )usto#s.5

Fontanilla, Records Officer I of the 9ureau of )usto#s, testified that she issued a certification in connection!ith these cases upon the re"uest of 'tt%. So.2 This certification stated that as per records available in her office, there !as onl% one e#plo%ee b% the na#e of A'tt%. )arlos T. SoA !ho !as also +no!n as A'tt%. Din$SoA in the Intelli$ence Division of the )usto#s Intelli$ence and Investi$ation Service or in the entire 9ureauof )usto#s.1

'tt%. Fortes testified that he +ne! 'tt%. So as a fello! #e#ber of the I$lesia Ni Kristo and as a la!%er, andthat havin$ read the articles of Tulfo, he believed that these !ere untrue, as he +ne! 'tt%. )arlos ADin$ASo.03

11

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'tt%. So testified that he !as the private co#plainant in these consolidated cases. e further testified that heis also +no!n as 'tt%. ADin$A So, that he had been connected !ith the 9ureau of )usto#s since October 0120, and that he !as assi$ned as Officer?in?)har$e EOI) of the )usto#s Intelli$ence and Investi$ationService Division at the Manila International )ontainer Port since Dece#ber 5, 0111. e e&ecuted t!oco#plaint?affidavits, one dated :une 6, 0111 and the other dated :ul% /, 0111, for )ri#inal )ase Nos. 11?0/12 to 11?0833. Prior to this, he also filed 06 cases of libel a$ainst Raff% Tulfo, brother of petitioner *r!inTulfo. e testified that petitioner Tulfos act of i#putin$ upon hi# cri#inalit%, assailin$ his honest% andinte$rit%, caused hi# dishonor, discredit, and conte#pt a#on$ his co?#e#bers in the le$al profession, co?officers of the 'r#ed Forces of the Philippines, co?#e#bers and peers in the I$lesia ni Kristo, his co?officersand e#plo%ees and superior officers in the 9ureau of )usto#s, and a#on$ ordinar% persons !ho had readsaid articles. e said it also caused hi# and his fa#il% sleepless ni$hts, #ental an$uish, !ounded feelin$s,

intri$ues, and e#barrass#ent. e further testified that he included in his co#plaint for libel the officers of Re#ate such as the publisher, #ana$in$ editor, cit% editor, and national editor because under 'rticle 483 of the Revised Penal )ode ERP), the% are e"uall% responsible and liable to the sa#e e&tent as if the% !erethe author of the articles. e also testified that ADin$A is his nic+na#e and that he is the onl% person in theentire 9ureau of )usto#s !ho $oes b% the na#e of 'tt%. )arlos T. So or 'tt%. )arlos ADin$A So.00

In his defense, petitioner Tulfo testified that he did not !rite the subCect articles !ith #alice, that he neither +ne! 'tt%. So nor #et hi# before the publication of the articles. e testified that his criticis# of a certain 'tt%. So of the South arbor !as not directed a$ainst the co#plainant, but a$ainst a person b% the na#e of 'tt%. ADin$A So at the South arbor. Tulfo clai#ed that it !as the pra ctice of certain people to use other peoples na#es to advance their corrupt practices. e also clai#ed that his articles had neither discreditednor dishonored the co#plainant because as per his source in the 9ureau of )usto#s, 'tt%. So had beenpro#oted. e further testified that he did not do an% research on 'tt%. So before the subCect articles,because as a colu#nist, he had to rel% on his source, and that he had several sources in the 9ureau of )usto#s, particularl% in the South arbor .0

Petitioner Salao testified that he ca#e to +no! 'tt%. )arlos ADin$A So !hen the latter filed a case a$ainstthe#. e testified that he is an e#plo%ee of )arlo Publishin$ ouse, Inc.= that he !as desi$nated as thenational editor of the ne!spaper Re#ate since Dece#ber 0111= that the duties of the position are to edit,evaluate, encode, and supervise la%out of the ne!s fro# the provinces= and that Tulfo !as under thesupervision of Re% 9riones, Vice President for *ditorial and ead of the *ditorial Division. Salao further testified that he had no participation in the subCect articles of Tulfo, nor had he an%thin$ to do !ith the latterscolu#n.04

Petitioner )a#bri, #ana$in$ editor of Re#ate, testified that she classifies the ne!s articles !ritten b% thereporters, and that in the *ditorial Division, the officers are herself= 9riones, her supervisor= >%dia 9ueno, asne!s and cit% editor= and Salao as national editor. She testified that petitioner 9arli-o is her subordinate,!hose duties and responsibilities are the t%pesettin$, editin$, and la%out of the pa$e assi$ned to her, theMetro pa$e. She further testified that she had no participation in the !ritin$, editin$, or publication of thecolu#n of Tulfo because the colu#n !as not edited. She clai#ed that none a#on$ her co?accused fro# theRe#ate ne!spaper edited the colu#ns of Tulfo, that the publication and editin$ of the subCect articles !erethe responsibilit% of Tulfo, and that he !as $iven blan+et authorit% to !rite !hat he !anted to !rite. She also

testified that the pa$e !herein Tulfos colu#n appeared !as supervised b% 9ueno as ne!s editor.06

Petitioner Picha% testified that he had been the president of )arlo Publishin$ ouse, Inc. since Dece#ber 0112. e testified that the co#pan% practice !as to have the colu#nists report directl% to the vice?presidentof editorials, that the colu#nists !ere $iven autono#% on their colu#ns, and that the vice?president for editorials is the one !ho !ould decide !hat articles are to be published and !hat are not. e further testified that Tulfo !as alread% a re$ular contributor .0/

Th2 R/;:#< o= 6h2 RTC

In a Decision dated Nove#ber 05, 333, the RT) found petitioners $uilt% of the cri#e of >ibel. Thedispositive portion reads as follo!s7

*R*FOR*, the )ourt finds the accused *RIN T(>FO, S(S'N )'M9RI, R*G S'>'O, :O)*>GN9'R>ILO and PI>IP PI)'G $uilt% be%ond reasonable doubt of four E6 counts of the cri#e of >I9*>, asdefined in 'rticle 4/4 of the Revised Penal )ode, and penali-ed b% prision correccional in its #ini#u# and

#ediu# periods, or a fine ran$in$ fro# P33.33 Pesos to P8,333.33 Pesos or both, under 'rticle 4//of the sa#e )ode.

'ppl%in$ the Indeter#inate Sentence >a!, the )ourt hereb% sentences *') of the accused to suffer i#prison#ent of SIJ E8 MONTS of arresto #a%or, as #ini#u#, to FO(R E6 G*'RS and TO EMONTS of prision correccional, as #a&i#u#, for *') count !ith accessor% penalties provided b% la!.

)onsiderin$ that the accused *r!in Tulfo, Susan )a#bri, Re% Salao, :ocel%n 9arli-o and Philip Picha%!rote and published the four E6 defa#ator% articles !ith rec+less disre$ard, bein$, in the #ind of the )ourt,

of !hether it !as false or not, the said articles libelous per se, the% are hereb% ordered to pa%, Cointl% andseverall%, the su# of *I;T (NDR*D TO(S'ND EP233,333.33 P*SOS, as actual da#a$es, the su#of ON* MI>>ION P*SOS EP0,333,333.33, as #oral da#a$es, and an additional a#ount of FIV*(NDR*D TO(S'ND P*SOS EP/33,333.33, b% !a% of e&e#plar% da#a$es, all !ith subsidiar%i#prison#ent, in case of insolvenc%, and to pa% the costs.

SO ORD*R*D.08

Th2 R/;:#< o= 6h2 Co/r6 o= A552a;

9efore the )ourt of 'ppeals E)', Tulfo assi$ned the follo!in$ errors7

0. T* >O*R )O(RT *RR*D IN I;NORIN; T* (NR*9(TT*D T*STIMONG OF T* 'PP*>>'NTT'T * DID NOT )RITI)IL* T* PRIV'T* )OMP>'IN'NT ORKIN; 'T T* N'I'. * )RITI)IL*D 'NOT*R P*RSON ORKIN; 'T T* SO(T 'R9OR. *N)*, T* *>*M*NT OF ID*NTITG IS>')KIN;.

. T* >O*R )O(RT *RR*D IN I;NORIN; T* >')K OF T* *SS*NTI'> *>*M*NT OFDIS)R*DIT OR DISONOR, 'S D*FIN*D 9G :(RISPR(D*N)*.

4. T*R* 'S NO M'>I)* ';'INST T* PRIV'T* )OMP>'IN'NT 'TTG. )'R>OS ADIN;A SO.05

is co?accused assi$ned the follo!in$ errors7

'

The trial court seriousl% erred in holdin$ accused Susan )a#bri, Re% Salao, :ocel%n 9arli-o and PhilipPicha% liable for the defa#ations contained in the "uestioned articles despite the fact that the trial court did

not have an% findin$ as to their participation in the !ritin$, editin$ andor publication of the "uestionedarticles.

9

The trial court seriousl% erred in concludin$ that libel !as co##itted b% all of the accused on the basis of itsfindin$ that the ele#ents of libel have been satisfactoril% established b% evidence on record.

)

The trial court seriousl% erred in considerin$ co#plainant to be the one referred to b% *r!in Tulfo in hisarticles in "uestion.02

In a Decision01 dated :une 05, 334, the *i$hth Division of the )' dis#issed the appeal and affir#ed the

Cud$#ent of the trial court. ' #otion for reconsideration dated :une 43, 334 !as filed b% Tulfo, !hile the

12

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rest of his co?accused filed a #otion for reconsideration dated :ul% , 334. In a Resolution datedDece#ber 00, 334, both #otions !ere denied for lac+ of #erit. 3

P26:6:o# =or R2>:2? o# C2r6:orar: /#$2r R/;2 *

Tulfo brou$ht this petition doc+eted as ;.R. No. 08034, see+in$ to reverse the Decision of the )' in )'?;.R. )R No. /402 !hich affir#ed the decision of the RT). Petitioners )a#bri, Salao, 9arli-o, and Picha%brou$ht a si#ilar petition doc+eted as ;.R. No. 080058, see+in$ the nullification of the sa#e )' decision.

In a Resolution dated March 0/, 336, the t!o cases !ere consolidated since both cases arise fro# thesa#e set of facts, involve the sa#e parties, assail the sa#e decision of the )', and see+ identical reliefs.0

A:iable For The Defa#ator% 'rticles In The Ma% 00, 0, 01 'nd :une /,0111 Issues Of Re#ate Si#pl% 9ecause The% ere Mana$in$ *ditor, National *ditor 'nd )it% *ditor Respectivel% Of Re#ate 'nd 9% oldin$ Picha% 'lso >iable For >ibel Merel% 9ecause e as ThePresident Of )arlo Publishin$ ouse, Inc. ithout Ta+in$ Into 'ccount The (nrebutted *vidence ThatPetitioners ad No Participation In The *ditin$ Or Publication Of The Defa#ator% 'rticles In uestion.

9 ? The )ourt Of 'ppeals )o##itted ;rave 'buse Of Discretion In Manifestl% Disre$ardin$ The (nrebutted*vidence That Petitioners ad No Participation In The *ditin$ Or Publication Of The Defa#ator% 'rticles Inuestion.

) ? The )ourt Of 'ppeals Seriousl% Misappreciated The *vidence In oldin$ That The Person Referred ToIn The Published 'rticles as Private )o#plainant 'tt%. )arlos So.4

Our Rulin$

The petitions #ust be dis#issed.

The assi$n#ent of errors of petitioner Tulfo shall be discussed first.

In his appeal, Tulfo clai#s that the )' erred in not appl%in$ the rulin$ in 9orCal v. )ourt of 'ppeals.6

Inessence, he ar$ues that the subCect articles fall under A"ualifiedl% privile$ed co##unicationA under 9orCal

and that the presu#ption of #alice in 'rt. 4/6 of the RP) does not appl%. e ar$ues that it is theburden of the prosecution to prove #alice in fact.

This case #ust be distin$uished fro# 9orCal on several points, the first bein$ that 9orCal ste##ed fro# acivil action for da#a$es based on libel, and !as not a cri#inal case. Second, the rulin$ in 9orCal !as thatthere !as no sufficient identification of the co#plainant, !hich shall be differentiated fro# the present casein discussin$ the second assi$n#ent of error of Tulfo. Third, the subCect in 9orCal !as a private citi-en,!hereas in the present case, the subCect is a public official. Finall%, it !as held in 9orCal that the articles!ritten b% 'rt 9orCal !ere Afair co##entaries on #atters of public interest.A / It shall be discussed and has%et to be deter#ined !hether or not the articles fall under the cate$or% of Afair co##entaries.A

In passin$, it #ust be noted that the defense of Tulfos articles bein$ "ualifiedl% privile$ed co##unication israised for the first ti#e in the present petition, and this particular issue !as never brou$ht before either theRT) or the )'. Thus, neither the RT) nor the )' had a chance to properl% consider and evaluate thisdefense. Tulfo no! dra!s parallels bet!een his case and that of 'rt 9orCal, and ar$ues that the prosecutionshould have proved #alice in fact, and it !as error on the part of the trial and appellate courts to use thepresu#ption of #alice in la! in 'rt. 4/6 of the RP). This la%s an unusual burden on the part of theprosecution, the RT), and the )' to refute a defense that Tulfo had never raised before the#. hether or not the subCect articles are privile$ed co##unications #ust first be established b% the defense, !hich itfailed to do at the level of the RT) and the )'. *ven so, it shall be dealt !ith no!, considerin$ that anappeal in a cri#inal proceedin$ thro!s the !hole case open for revie!.

There is no "uestion of the status of 'tt%. So as a public official, !ho served as the OI) of the 9ureau of )usto#s Intelli$ence and Investi$ation Service at the Nino% '"uino International 'irport EN'I' at the ti#eof the printin$ of the alle$edl% libelous articles. >i+e!ise, it cannot be refuted that the $oin$s?on at the9ureau of )usto#s, a $overn#ent a$enc%, are #atters of public interest. It is no! a #atter of establishin$

!hether the articles of Tulfo are protected as "ualified privile$ed co##unication or are defa#ator% and!ritten !ith #alice, for !hich he !ould be liable.

"r22$o7 o= 6h2 Pr2 >. R25o#::;:6 o= 6h2 Pr2

The )ourt has lon$ respected the freedo# of the press, and upheld the sa#e !hen it ca#e toco##entaries #ade on public fi$ures and #atters of public interest. *ven in cases !herein the freedo# of the press !as $iven $reater !ei$ht over the ri$hts of individuals, the )ourt, ho!ever, has stressed that suchfreedo# is not absolute and unbounded. The e&ercise of this ri$ht or an% ri$ht enshrined in the 9ill of Ri$hts,indeed, co#es !ith an e"ual burden of responsible e&ercise of that ri$ht. The reco$nition of a ri$ht is notfree license for the one clai#in$ it to run rou$hshod over the ri$hts of others.

The :ournalists )ode of *thics adopted b% the National (nion of :ournalists of the Philippines sho!s thatthe press reco$ni-es that it has standards to follo! in the e&ercise of press freedo#= that this freedo#carries duties and responsibilities. 'rt. I of said code states that Cournalists Areco$ni-e the dut% to air the

other side and the dut% to correct substantive errors pro#ptl%.A 'rt. VIII states that Cournalists Ashall presu#epersons accused of cri#e of bein$ innocent until proven other!ise.A

In the present case, it cannot be said that Tulfo follo!ed the :ournalists )ode of *thics and e&ercised his Cournalistic freedo# responsibl%.

In his series of articles, he tar$eted one 'tt%. ADin$A So of the 9ureau of )usto#s as bein$ involved incri#inal activities, and !as usin$ his public position for personal $ain. e !ent even further than that, andcalled 'tt%. So an e#barrass#ent to his reli$ion, sa%in$ Ai+a! na %ata an$ pina+a$a$o at #a$nana+a! sa#i%e#bro nito.A8 e accused 'tt%. So of stealin$ fro# the $overn#ent !ith his alle$ed corruptactivities.5 'nd !hen 'tt%. So filed a libel suit a$ainst hi#, Tulfo !rote another article, challen$in$ 'tt%. So,sa%in$, ANa$alit iton$ tarantadon$ si 'tt%. So dahil binabanta%an +o si%a at in?e&pose an$ +a$a$uhan ni%asa H9ureau of )usto#s.A2

In his testi#on%, Tulfo ad#itted that he did not personall% +no! 'tt%. So, and had neither #et nor +no!n hi#

prior to the publication of the subCect articles. e also ad#itted that he did not conduct a #ore in?depth

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research of his alle$ations before he published the#, and relied onl% on his source at the 9ureau of )usto#s.

In his defense before the trial court, Tulfo clai#ed +no!led$e of people usin$ the na#es of others for personal $ain, and even stated that he had been the victi# of such a practice. e ar$ued then that it #a%have been so#eone else usin$ the na#e of 'tt%. So for corrupt practices at the South arbor, and thisperson !as the tar$et of his articles. This ar$u#ent !ea+ens his case further, for even !ith the +no!led$ethat he #a% be in error, even +no!in$ of the possibilit% that so#eone else #a% have used 'tt%. Sos na#e,as Tulfo sur#ised, he #ade no effort to verif% the infor#ation $iven b% his source or even to ascertain theidentit% of the person he !as accusin$.

The trial court found Tulfos accusations a$ainst 'tt%. So to be false, but Tulfo ar$ues that the falsit% of contents of articles does not affect their privile$ed character. It #a% be that the falsit% of the articles does notprove #alice. Neither did 9orCal $ive Cournalists carte blanche !ith re$ard to their publications. It cannot besaid that a false article accusin$ a public fi$ure !ould al!a%s be covered b% the #antle of "ualifiedprivile$ed co##unication. The portion of 9orCal cited b% Tulfo #ust be scrutini-ed further7

*ven assu#in$ that the contents of the articles are false, #ere error, inaccurac% or even falsit% alone doesnot prove actual #alice. *rrors or #isstate#ents are inevitable in an% sche#e of trul% free e&pression anddebate. )onsistent !ith $ood faith and reasonable care, the press should not be held to account, to a pointof suppression, for honest #ista+es or i#perfections in the choice of lan$ua$e. There #ust be so#e roo#for #isstate#ent of fact as !ell as for #isCud$#ent. Onl% b% $ivin$ the# #uch lee!a% and tolerance canthe% coura$eousl% and effectivel% function as critical a$encies in our de#ocrac%. In %ulletin Pu/lising orp. v. Noel !e held U

' ne!spaper especiall% one national in reach and covera$e, should be free to report on events anddevelop#ents in !hich the public has a le$iti#ate interest !ith #ini#u# fear of bein$ hauled to court b%one $roup or another on cri#inal or civil char$es for libel, so lon$ as the ne!spaper respects and +eeps!ithin the standards of #oralit% and civilit% prevailin$ !ithin the $eneral co##unit%.

To avoid the self?censorship that !ould necessaril% acco#pan% strict liabilit% for erroneous state#ents, rules$overnin$ liabilit% for inCur% to reputation are re"uired to allo! an ade"uate #ar$in of error b% protectin$so#e inaccuracies. It is for the sa#e reason that the Ne3 !or" i*es doctrinere"uires that liabilit% for defa#ation of a public official or public fi$ure #a% not be i#posed in the absence of proof of Aactual #aliceAon the part of the person #a+in$ the libelous state#ent.1 E*#phasis supplied.

Readin$ #ore deepl% into the case, the e&ercise of press freedo# #ust be done Aconsistent !ith $ood faithand reasonable care.A This !as clearl% abandoned b% Tulfo !hen he !rote the subCect articles. This is nocase of #ere error or honest #ista+e, but a case of a Cournalist abdicatin$ his responsibilit% to verif% hisstor% and instead #isinfor#in$ the public. :ournalists #a% be allo!ed an ade"uate #ar$in of error in thee&ercise of their profession, but this #ar$in does not e&pand to cover ever% defa#ator% or inCurious

state#ent the% #a% #a+e in the furtherance of their profession, nor does this #ar$in cover totalabandon#ent of responsibilit%.

9orCal #a% have e&panded the protection of "ualified privile$ed co##unication be%ond the instances $ivenin 'rt. 4/6 of the RP), but this e&pansion does not cover Tulfo. The addition to the instances of "ualifiedprivile$ed co##unications is reproduced as follo!s7

To reiterate, fair co##entaries on #atters of public interest are privile$ed and constitute a valid defense inan action for libel or slander. The doctrine of fair co##ent #eans that !hile in $eneral ever% discreditablei#putation publicl% #ade is dee#ed false, because ever% #an is presu#ed innocent until his $uilt is Cudiciall% proved, and ever% false i#putation is dee#ed #alicious, ne

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