TORTS cases human relations; human dignity.doc

8/13/2019 TORTS cases human relations; human dignity.doc

1/81

Page

| 1

Page82

G.R. No. L-7817. October 31, 1956ALFREDO M. VELAYO, in i! c"#"cit$ "! A!!i%nee o& te in!o'(ent )OMMER)*AL A*R L*NE+, *N).)AL*, Plaintiff-Appellant, (!. +ELL )OM/ANY OF 0E /*L*//*NE *+LAND+, L0D.,Defendant-

Appellee, YE 2A 0RAD*NG )OR/ORA0*ON, /A2L +Y)*/ "n MA4A+A )O., inter(enor!.

FEL*, J.:

Antecedents The Commercial Air Lines, Inc., which will be hereinafter referred to as CALI, is a corporationduly organized and existing in accordance with the hilippines laws, with offices in the City of !anila andpre"iously engaged in air transportation business. The #hell Company of the . I., Ltd., which will bedesignated as the Defendant, is on the other hand, a corporation organized under the laws of $ngland andduly licensed to do business in the hilippines, with principal offices at the %ong&ong and #hanghai 'an&building in the City of !anila.

#ince the start of CALI(s operations, its fuel needs were all supplied by the Defendant. !r. )esmond*itzgerald, its Credit !anager who extended credit to CALI, was in charge of the collection thereof. %owe"er,all matters referring to extensions of the term of payment had to be decided first by !r. #tephen Crawfordand later by !r. +ildred +ooding, who represented in this country Defendant(s 'oard of )irectors, theresidence of which is in London, $ngland $xhs. -' and -A/.

As of August, 01-2, the boo&s of the Defendantshowed a balance of 034,056.72 in its fa"or for goods itsold and deli"ered to CALI. $"en before August 5, 01-2, Defendanthad reasons to belie"e that the financialcondition of the CALI was for from being satisfactory. As a matter of fact, according to !r. *itzgerald, CALI(s

)ouglas C7- plane, then in California, was offered to him by !r. Alfonso #ycip, CALI(s resident of the'oard of )irectors, in partial settlement of their accounts, which offer was, howe"er, declined by !r.Crawford, probably because upon in8uiries made by !r. *itzgerald sometime before August 5, 01-2, for thepurpose of preparing the report for its London office regarding CALI(s indebtedness, Col. Lambert, CALI(s9ice resident and :eneral !anager, answered that the total outstanding liabilities of his corporation wasonly 774,444, and the management of Defendantprobably assumed that the assets of the CALI could "ery

well meet said liabilities and were not included to ta&e charge of the sale of CALI(s said )ouglas C7- planeto collect its credit.

;n August 5, 01-2, the management of CALI informally con"ened its principal creditors excepting only theinsignificant small cla ims/ who were in"ited to a luncheon that was held between06. T. Chuidian, representing :ibbs, :ibbs, Chuidian ? Buasha chanrobles"irtualawlibrary!r. $. 9alera, representing !abasa ? Co. chan robles"irtualawlibrary!r. ). *itzgerald,representing #hell Co. .I. Ltd. chan robles"irtualawlibraryand !r. Alfonso E. #ycip, representing himself,e& %ua Trading Corporation and aul #ycip $xhs. DD, >>>, !!, BBB, II-, ##, TT, FF, 99, ++, GG, ,EE, AAA, ''', CCC, ))), $$$, ***, :::, and %%%/.

The persons present, including !r. )esmond *itzgerald, signed their names and the names of thecompanies they represented on a memorandum pad of the law firm Buisumbing, #ycip, and Buisumbing$xhs. 99 and 990/.

In that meeting at noontime of August 5, 01-2, out of the 01- creditors in all $xh. ;;/ 07 were listed asprincipal creditors ha"ing big balances $xh. DD/, to wit


2/81

Page

| 2

Page82

4070 !emo of meetingchan robles"irtualawlibrary$xhs. III and , par. = . Agcaoili(s memorandumdated August 0, 01-2, to the :eneral !anager of the Dational Airports Corp. chan robles"irtualawlibraryandpp. 6-36-2 t.s.n., >anuary 04, 0176, of the testimony of ). *itzgerald/. Do understanding was reached onthis point and it was then generally agreed that the matter of preference be further studied by a wor&ingcommittee to be formed $xhs. !!, par. = !emo of meeting/. The creditors present agreed to theformation of a wor&ing committee to continue the discussion of the payment of claims and preferencesalleged by certain creditors, and it was further agreed that said wor&ing committee would super"ise thepreser"ation of the properties of the corporation while the creditors attempted to come to an understanding

as to a fair distribution of the assets among them $xhs. !! and BBB, !emo of meeting/. *rom the latterexhibit the following is copiedanuary 7, 01-1, a udgment by default was entered bythe American court $xhs. >, $$, **, ::, and %%/.

Fnaware of Defendant(s assignments of credit and attachment suit, the stoc&holders of CALI resol"ed in aspecial meeting of August 06, 01-2, to appro"e the memorandum agreement of sale to the hilippine AirLines, Inc, and noted Hthat the 'oard had been trying to reach an agreement with the creditors of thecorporation to pre"ent insol"ency proceedings, but so far no definite agreement had been reachedJ $xh.;; !inutes of August 06, 01-2, stoc&holders( meeting/.

'y the first wee& of #eptember, 01-2, the Dational Airports Corporation learned ofDefendant(s action in theFnited #tates and hastened to file its own complaint with attachment against the CALI in the Court of *irstInstance of !anila $xhs. , LLL, and !!!/. The CALI, also prompted by Defendant(s action in gettingthe alleged undue preference o"er the other creditors by attaching the C7- plane in the Fnited #tates,beyond the urisdiction of the hilippines, filed on ;ctober 3, 01-2, a petition for "oluntary insol"ency. ;n thisdate, an order of insol"ency was issued by the court $xh. >>/ which necessarily stayed the Dational AirportsCorporation(s action against the CALI and dissol"ed its attachment $xh. DDD/, thus compelling the DationalAirports Corporation to file its claims with the insol"ency court $xh. ##/.

'y order of ;ctober 62, 01-2, the Court confirmed the appointment of !r. Alfredo !. 9elayo, who wasunanimously elected by the creditors as Assignee in the proceedings, and ordered him to 8ualify as such by

ta&ing the oath of office within 7 days from notice and filing a bond in the sum of =4,444.44 to be appro"edby the Court conditioned upon the faithful performance of his duties, and pro"iding further that all funds thatthe Assignee may collect or recei"e from the debtors of the corporation, or from any other source or sources,be deposited in a local ban& $xh. /. ;n Do"ember =, 01-2, the cler& of court executed a deed ofcon"eyance in fa"or of the Assignee Alfredo !. 9elayo/ o"er all the assets of the CALI $xh. LL/.

The Case. After properly 8ualifying as Assignee, Alfredo !. 9elayo instituted this case Do. 5155 of theCourt of *irst Instance of !anila/ on )ecember 03, 01-2, against the #hell Company of . I., Ltd., for thepurpose of securing from the Court a writ of inunction restraining Defendant, its agents, ser"ants, attorneysand solicitors from prosecuting in and for the County of #an 'ernardino in the #uperior Court of the #tate ofCalifornia, F.#.A. the aforementioned Ci"il Case Do. 56735 against the insol"ent Commercial Air Lines, Inc.,begun by it in the name of the American corporation #hell ;il Company, Inc., and as an alternati"e remedy,in case the purported assignment of Defendant(s alleged credit to the American corporation #hell ;ilCompany, Inc., and the attachment issued against CALI in the said #uperior Court of California shall ha"e

the effect of defeating the procurement by Plaintiffas Assignee in insol"ency of the abo"e mentionedairplane, which is the property of the insol"ent CALI, situated in the ;ntario International Airport, with in theCounty of #an 'ernardino, #tate of California, F.#.A., that udgment for damages in double the "alue of theairplane be awarded in fa"or of Plaintiffagainst Defendant, with costs.

The complaint further prays that upon the filing of a bond executed to the Defendantin an amount to be fixedby the Court, to the effect that Plaintiffwill pay to Defendantall damages the latter may sustain by reason ofthe inunction if the Court should finally decide that thePlaintiffwas not entitled thereto, the Court issued a

writ of preliminary inunction enoining the Defendant, its agent, ser"ants, attorney(s and solicitor, fromprosecuting the aforementioned case Do. 56735, the same writ of preliminary inunction to issue withoutnotice to the Defendantit appearing by "erified complaint that the great irreparable inury will result tothe PlaintiffAppellantbefore the matter could be on notice. The Plaintiffalso prays for such other remediesthat the Court may deem proper in the premises.

;n )ecember 64, 01-2, the Defendantfiled an opposition to the Plaintiff(s petition for the issuance of a writof the preliminary inunction, and on )ecember 66, 01-2, the Court denied the same because whether thecon"eyance of Defendant(s credit was fraudulent or not, the hilippine court would not be in position to


3/81

Page

| 3

Page82

enforce its orders as against the American corporation #hell ;il Company, Inc., which is outside of theurisdiction of the hilippines.

Plaintiffha"ing failed to restrain the progress of the attachment suit in the Fnited #tates by denial of hisapplication for a writ of preliminary inunction and the conse8uences on execution of the C7- plane in theCounty of #an 'ernardino, #tate of California, F. #. A., he confines his action to the reco"ery of damagesagainst the Defendant.

;n )ecember 62, 01-2, Defendantfiled its answer to the complaint, which was amended on *ebruary =,

01-1. In its answer, Defendant, besides denying certain a"erments of the complaint alleged, among otherreasons, that the assignment of its credit in fa"or of the #hell ;il Company, Inc., in the Fnited #tates was fora "aluable consideration and made in accordance with the established commercial practices, there being nolaw prohibiting a creditor from assigning his credit to another chan robles"irtualawlibrarythat it had nointerest whatsoe"er in Ci"il Case Do. 56735 instituted in the #uperior Court in the #tate of California by the#hell ;il Company, Inc., which is a separate and distinct corporation organized and existing in the #tate of9irginia and doing business in the #tate of California, F. #. A., the Defendantha"ing as its stoc&holders the#hell etroleum Company of London and other persons residing in that City, while the #hell ;il CompanyInc., of the Fnited #tate has its principal stoc&holders the #hell Fnion ;il Company of the F.#. andpresumably countless American in"estors inasmuch as its shares of stoc& are being traded daily in the Dewor& stoc& mar&et chan robles"irtualawlibrarythat !r. *itzgerald,Defendant(s Credit !anager, was merelyin"ited to a luncheonmeeting at the Trade and Commerce 'uilding in the City of !anila on August 5, 01-2,

without &nowing the purpose for which it was called chan robles"irtualawlibraryand that !r. *itzgerald couldnot ha"e officially represented theDefendantat that time because such authority resides on !r. #tephenCrawfurd. Defendant, therefore, prays that the complaint be dismissed with costs against the Plaintiff.

Then Alfonso #ycip, e& %ua Trading Corporation and aul #ycip, as well as !abasa ? Co., filed, withpermission of the Court, their respecti"e complaints in inter"ention ta&ing the side of the Plaintiff. Thesecomplaints in inter"ention were timely answered by Defendantwhich prayed that they be dismissed.

After proper proceedings and hearing, the Court rendered decision on *ebruary 65, 017-, dismissing thecomplaint as well as the complaints in inter"ention, with costs against thePlaintiff. In "iew of thisoutcome, Plaintiffcomes to us praying that the udgment of the lower court be re"ersed and thatthe Defendantbe ordered to pay him damages in the sum of 554,444 being double the "alue of theairplane as established by e"idence, i.e., ==4,444/, with costs, and for such other remedy as the Court maydeem ust and e8uitable in the premises.

The Issues. $ither admission of the parties, or by preponderance of e"idence, or by sheer weight of the

circumstance attending the transactions herein in"ol"ed, +e find that the facts narrated in the precedingstatement of the HantecedentsJ ha"e been sufficiently established, and the 8uestions at issue submitted toour determination i n this instance may be boiled down to the followingpropositionsustice cannot countenance such attitude at all, and much less from a foreign corporation to thedetriment of our :o"ernment and local business.

To ustify its actions, Defendantmay also claim that !r. *itzgerald, based on his feeling of distrust andapprehension, entertained the con"iction that inter"enors Alfonso #ycip and e& %ua Trading Corporationtried to ta&e undue ad"antage by infiltrating their credits. 'ut e"en assuming for the sa&e of argument, thatthese inter"enors really resorted to such strategem or fraudulent de"ice, yet Defendant(s act finds not

ustification for no misdeed on the part of a person is cured by any misdeed of another, and it is to be notedthat neither Alfonso E. #ycip, nor e& %ua Trading Corporation were the only creditors of CALI, nor e"enpreferred ones, and that the infiltration of one(s credit is of no se8uence if it cannot be pro"en in theinsol"ency proceedings to the satisfaction of the court. Fnder the circumstances of the case,Defendant(stransfer of its aforementioned credit would ha"e been ustified only if !r. *itzgerald had declined to ta&e partin the +or&ing Committee and fran&ly and honestly informed the other creditors present that he had noauthority to bind his principal and that the latter was to be left free to collect its credit from CALI by whate"ermeans his principal deemed wise and were a"ailable to it. 'ut then such information would ha"e immediatelydissol"ed all attempts to come to an amicable conciliation among the creditors and would ha"e precipitated


4/81

Page

| 4

Page82

the filing in court of CALI(s "oluntary insol"ency proceedings and nulified the intended transferof Defendant(s credit to its abo"ementioned sister corporation.

II. +e may agree with the trial udge, that the assignment of Defendant(s credit for a "aluable considerationis not "iolati"e of the pro"isions of sections =6 and 34 of the Insol"ency Law ublic Act Do. 0175/, becausethe assignment was made since August 1, 01-2, the original complaint in the Fnited #tates was filed onAugust 06, 01-2, and the writ of attachment issued on this same date, while CALI filed its petition forinsol"ency on ;ctober 3, 01-2. At his %onor correctly states, said #ections =6 and 34 only contemplate actsand transactions occuring within =4 days prior to the commencement of the proceedings in insol"ency and,

conse8uently, all other acts outside of the =4day period cannot possibly be considered as coming within theorbit of the operation. In addition to this, +e may add that Article 34 of the Insol"ency Law refers to acts ofthe debtor in this case the insol"ent CALI/ and not of the creditor, the #hell Company of the . I. Ltd. 'utsection 34 does not constitute the only pro"isions of the law pertinent to the matter. The Insol"ency Law alsopro"ides the following


5/81

Page

| 5

Page82

with mere much more reason the Defendantshould be liable for indemnity for acts it committed in bad faithand with betrayal of confidence.

It may be argued that the afore8uoted pro"isions of the Ci"il Code only came into effect on August =4, 0174,and that they cannot be applicable to acts that too& place in 01-2, prior to its effecti"ity. 'ut Article 6676 ofthe Ci"il Code, though pro"iding thatustice of the #upreme Court of #pain, about the re"olutionary tendency of#panish urisprudence, said the following


6/81

Page

| 6

Page82

The mo"ants maintain that there is e"idence sufficient to support a finding that CALI(s C7- plane had a fairmar&et "alue of K057,444 at or about the time Defendantcredit was assigned to its sister corporation in theFnited #tates and the plane attached. This motion was opposed by DefendantAppelleewhich was repliedby PlaintiffAppellantwith a supplemental motion for reconsideration, and then retorted with a manifestationand motion ofDefendantAppellantfollowed by Defendant(s answer to Plaintiff(s motion for r econsideration.

After considering the e"idence pointed out by said parties in support of their respecti"e contentions, we aremore con"inced that the proofs relati"e to the real "alue of CALI plane C7- at the time Defendant(s credit

was assigned to its sister corporation in the Fnited #tates, is not clear. %ence, PlaintiffAppellant(s and

inter"enors( motion for reconsideration is hereby o"erruled.

The main grounds on which DefendantAppelleebases its motion for reconsideration, as relied upon in itscounsel(s memoranda and oral argument, may be reduced to the following


7/81

Page

| 7

Page82

9. As to the fifth 8uestion raised by counsel forAppelleein the course of his oral argument at the hearing inthe City of 'aguio of his motion, i.e., Hthat Plaintiff(s right of action was based and prosecuted in the lowercourt under the pro"isions of the Insol"ency Law and he is, therefore, stopped from pursuing on appealanother theory under which he might be entitled to damages in consonance with the pro"isions of the newCi"il CodeJ, +e may in"o&e the decision in the case of )imaliwat "s. Asuncion, 71 hil., =15, -40. In thatdecision +e said the followinga&arta, Indonesia, plaintiff went to a disco dance with

fellow crew members Thamer Al:azzawi and Allah Al:azzawi, both #audinationals. 'ecause it was almost morning when they returned to their hotels, they agreed toha"e brea&fast together at the room of Thamer. +hen they were in te sic/ room, Allah left onsome pretext. #hortly after he did, Thamer attempted to rape plaintiff. *ortunately, a roomboyand se"eral security personnel heard her cries for help and rescued her. Later, the Indonesianpolice came and arrested Thamer and All ah Al:azzawi, the latter as an accomplice.

+hen plaintiff returned to >eddah a few days later, se"eral #AF)IA officials interrogated herabout the >a&arta incident. They then re8uested her to go bac& to >a&arta to help arrange therelease of Thamer and Allah. In >a&arta, #AF)IA Legal ;fficer #irah A&&ad and base manager'aharini negotiated with the police for the immediate release of the detained crew members butdid not succeed because plaintiff refused to cooperate. #he was afraid that she might betric&ed into something she did not want because of her inability to understand the localdialect. #he also declined to sign a blan& paper and a document written in the local

dialect. $"entually, #AF)IA allowed plaintiff to return to >eddah but barred her from the >a&artaflights.
http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn1http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn2http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn3http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn3http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn4http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn4http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn5http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn6http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn7http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn8http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn8http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn9http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn9http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn2http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn3http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn4http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn5http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn6http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn7http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn8http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn9http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn1


8/81

Page

| 8

Page82

laintiff learned that, through the intercession of the #audi Arabian go"ernment, the Indonesianauthorities agreed to deport Thamer and Allah after two wee&s of detention. $"entually, they

were again put in ser"ice by defendant #AF)I sic/. In #eptember 0114, defendant #AF)IAtransferred plaintiff to !anila.

;n >anuary 0-, 0116, ust when plaintiff thought that the >a&arta incident was already behindher, her superiors re8uested her to see !r. Ali !eniewy, Chief Legal ;fficer of #AF)IA, in>eddah, #audi Arabia. +hen she saw him, he brought her to the police station where the policetoo& her passport and 8uestioned her about the >a&arta incident. !iniewy simply stood by asthe police put pressure on her to ma&e a statement dropping the case against Thamer andAllah. Dot until she agreed to do so did the police return her passport and allowed her to catchthe afternoon flight out of >eddah.

;ne year and a half later or on >une 05, 011=, in @iyadh, #audi Arabia, a few minutes beforethe departure of her flight to !anila, plaintiff was not allowed to board the plane and insteadordered to ta&e a later flight to >eddah to see !r. !iniewy, the Chief Legal ;fficer of#AF)IA. +hen she did, a certain halid of the #AF)IA office brought her to a #audi court

where she was as&ed to sign a document written in Arabic. They told her that this wasnecessary to close the case against Thamer and Allah. As it turned out, plaintiff signed a noticeto her to appear before the court on >une 63, 011=. laintiff then returned to !anila.

#hortly afterwards, defendant #AF)IA summoned plaintiff to report to >eddah once again andsee !iniewy on >une 63, 011= for further in"estigation. laintiff did so after recei"ing assurance

from #AF)IA(s !anila manager, Aslam #aleemi, that the in"estigation was routinary and that itposed no danger to her.

In >eddah, a #AF)IA legal officer brought plaintiff to the same #audi court on >une 63,011=. Dothing happened then but on >une 62, 011=, a #audi udge interrogated plaintiffthrough an interpreter about the >a&arta incident. After one hour of interrogation, they let hergo. At the airport, howe"er, ust as her plane was about to ta&e off, a #AF)IA officer told herthat the airline had forbidden her to ta&e flight. At the Inflight #er"ice ;ffice where she was toldto go, the secretary of !r. ahya #addic& too& away her passport and told her to remain in>eddah, at the crew 8uarters, until further orders.

;n >uly =, 011= a #AF)IA legal officer again escorted plaintiff to the same court where theudge, to her astonishment and shoc&, rendered a decision, translated to her in $nglish,sentencing her to fi"e months imprisonment and to 625 lashes. ;nly then did she realize that

the #audi court had tried her, together with Thamer and Allah, for what happened in>a&arta. The court found plaintiff guilty of 0/ adultery 6/ going to a disco, dancing andlistening to the music in "iolation of Islamic laws and =/ socializing with the male crew, incontra"ention of Islamic tradition.JO04P

*acing con"iction, pri"ate respondent sought the help of her employer, petitioner#AF)IA. Fnfortunately, she was denied any assistance. #he then as&ed the hilippine $mbassy in >eddahto help her while her case is on appeal. !eanwhile, to pay for her up&eep, she wor&ed on the domestic flightof #AF)IA, while Thamer and Allah continued to ser"e in the i nternational flights.O00P

'ecause she was wrongfully con"icted, the rince of !a&&ah dismissed the case against her andallowed her to lea"e #audi Arabia. #hortly before her return to !anila,O06Pshe was terminated from theser"ice by #AF)IA, without her being informed of the cause.

;n Do"ember 6=, 011=, !orada filed a ComplaintO0=P

for damages against #AF)IA, and haled Al'alawi HAl 'alawiJ/, its country manager.

;n >anuary 01, 011-, #AF)IA filed an ;mnibus !otion To )ismiss O0-Pwhich raised the followinggrounds, to wit< 0/ that the Complaint states no cause of action against #audia 6/ that defendant Al'alawiis not a real party in interest =/ that the claim or demand set forth in the Complaint has been wai"ed,abandoned or otherwise extinguished and -/ that the trial court has no urisdiction to try the case.

;n *ebruary 04, 011-, !orada filed her ;pposition To !otion to )ismiss/O07P#audia filed areplyO05Pthereto on !arch =, 011-.

;n >une 6=, 011-, !orada filed an Amended Complaint O03Pwherein Al'alawi was dropped as party

defendant. ;n August 00, 011-, #audia filed its !anifestation and !otion to )ismiss Amended ComplaintO02P.

The trial court issued an ;rder O01Pdated August 61, 011- denying the !otion to )ismiss AmendedComplaint filed by #audia.

*rom the ;rder of respondent >udgeO64Pdenying the !otion to )ismiss, #AF)IA filed on #eptember64, 011-, its !otion for @econsiderationO60Pof the ;rder dated August 61, 011-. It alleged that the trial courthas no urisdiction to hear and try the case on the basis of Article 60 of the Ci"il Code, since the proper lawapplicable is the law of the ingdom of #audi Arabia. ;n ;ctober 0-, 011-, !orada filed her;ppositionO66PTo )efendant(s !otion for @econsideration/.

In the @eplyO6=Pfiled with the trial court on ;ctober 6-, 011-, #AF)IA alleged that since its !otion for@econsideration raised lac& of urisdiction as its cause of action, the ;mnibus !otion @ule does not apply,e"en if that ground is raised for the first time on appeal. Additionally, #AF)IA alleged that the hilippines

does not ha"e any substantial interest in the prosecution of the instant case, and hence, without urisdictionto adudicate the same.

@espondent >udge subse8uently issued another ;rder O6-Pdated *ebruary 6, 0117, denying #AF)IA(s!otion for @econsideration. The pertinent portion of the assailed ;rder reads as followseddah. The latter helped her pursue an appeal from the decision ofthe court. To pay for her up&eep, she wor&ed on the domestic flights of defendant #AF)IA

while, ironically, Thamer and Allah freely ser"ed the international flights.JO=1P

+here the factual antecedents satisfactorily establish the existence of a foreign element, we agreewith petitioner that the problem herein could present a HconflictsJ case.

A factual situation that cuts across territorial lines and is affected by the di"erse laws of two or more

states is said to contain a Hforeign elementJ. The presence of a foreign element is ine"itable since social andeconomic affairs of indi"iduals and associations are rarely confined to the geographic limits of their birth orconception.O-4P

The forms in which this foreign element may appear are many. O-0PThe foreign element may simplyconsist in the fact that one of the parties to a contract is an alien or has a foreign domicile, or that a contractbetween nationals of one #tate in"ol"es properties situated in another #tate. In other cases, the foreignelement may assume a complex form.O-6P

In the instant case, the foreign element consisted in the fact that pri"ate respondent !orada is aresident hilippine national, and that petitioner #AF)IA is a resident foreign corporation. Also, by "irtue ofthe employment of !orada with the petitioner #audia as a flight stewardess, e"ents did transpire during hermany occasions of tra"el across national borders, particularly from !anila, hilippines to >eddah, #audiArabia, and "ice "ersa, that caused a HconflictsJ situation to arise.

+e thus find pri"ate respondent(s assertion that the case is purely domestic,imprecise. A conflictsproblem presents itself here, and the 8uestion of urisdiction O-=Pconfronts the court aquo.

After a careful study of the pri"ate respondent(s Amended Complaint, O--Pand the Comment thereon,we note that she aptly predicated her cause of action on Articles 01 and 60 of the Dew Ci"il Code.

;n one hand, Article 01 of the Dew Ci"il Code pro"ides

HArt. 01. $"ery person must, in the exercise of his rights and in the performance of his duties,act with ustice gi"e e"eryone his due and obser"e honesty and good faith.J

;n the other hand, Article 60 of the Dew Ci"il Code pro"ideseddah on the pretense that she would merely testify in an in"estigation of the charges she made against thetwo #AF)IA crew members for the attac& on her person while they were in >a&arta. As it turned out, she

was the one made to face trial for "ery serious charges, including adultery and "iolation of Islamic laws and

tradition.

There is li&ewise logical basis on record for the claim that the Hhanding o"erJ or Hturning o"erJ of theperson of pri"ate respondent to >eddah officials, petitioner may ha"e acted beyond its duties asemployer. etitioner(s purported act contributed to and amplified or e"en proximately caused additionalhumiliation, misery and suffering of pri"ate respondent. etitioner thereby allegedly facilitated the arrest,detention and prosecution of pri"ate respondent under the guise of petitioner(s authority as employer, ta&ingad"antage of the trust, confidence and faith she reposed upon it. As purportedly found by the rince of!a&&ah, the alleged con"iction and imprisonment of pri"ate respondent was wrongful. 'ut these capped theinury or harm allegedly inflicted upon her person and reputation, for which petitioner could be liable asclaimed, to pro"ide compensation or redress for the wrongs done, once duly pro"en.

Considering that the complaint in the court a quo is one in"ol"ing torts, the Hconnecting factorJ orHpoint of contactJ could be the place or places where the tortious conduct or lex loci actus occurred. And

applying the torts principle in a conflicts case, we find that the hilippines could be said as a situsof the tortthe place where the alleged tortious conduct too& place/. This is because it is in the hilippines wherepetitioner allegedly decei"ed pri"ate respondent, a *ilipina residing and wor&ing here. According to her, shehad honestly belie"ed that petitioner would, in the exercise of its rights and in the performance of its duties,Hact with ustice, gi"e her her due and obser"e honesty and good faith.J Instead, petitioner failed to protecther, she claimed. That certain acts or parts of the inury allegedly occurred in another country is of nomoment. *or in our "iew what is important here is the place where the o"erall harm or the fatality of thealleged inury to the person, reputation, social standing and human rights of complainant, had lodged,according to the plaintiff below herein pri"ate respondent/. All told, it is not without basis to identify thehilippines as the situsof the alleged tort.

!oreo"er, with the widespread criticism of the traditional rule of lex loci delicti commissi, moderntheories and rules on tort liability O50Pha"e been ad"anced to offer fresh udicial approaches to arri"e at ustresults. In &eeping abreast with the modern theories on tort liability, we find here an occasion to apply the

H#tate of the most significant relationshipJ rule, which in our "iew should be appropriate to apply now, gi"enthe factual context of this case.
http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn52http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn53http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn54http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn55http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn55http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn56http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn56http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn57http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn58http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn58http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn59http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn59http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn59http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn60http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn61http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn61http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn52http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn53http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn54http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn55http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn56http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn57http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn58http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn59http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn60http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn61


12/81

Page

| 12

Page82

In applying said principle to determine the #tate which has the most significant relationship, thefollowing contacts are to be ta&en into account and e"aluated according to their relati"e importance withrespect to the particular issue< a/ the place where the inury occurred b/ the place where the conductcausing the inury occurred c/ the domicile, residence, nationality, place of incorporation and place ofbusiness of the parties, and d/ the place where the relationship, if any, between the parties is centered. O56P

As already discussed, there is basis for the claim that o"erall inury occurred and lodged in thehilippines. There is li&ewise no 8uestion that pri"ate respondent is a resident *ilipina national, wor&ing withpetitioner, a resident foreign corporation engaged here in the business of international air carriage. Thus,

the HrelationshipJ between the parties was centered here, although it should be stressed that this suit is notbased on mere labor law "iolations. *rom the record, the claim that the hilippines has the most significantcontact with the matter in this dispute, O5=Praised by pri"ate respondent as plaintiff below against defendantherein petitioner/, in our "iew, has been properly established.

rescinding from this premise that the hilippines is the situsof the tort complaint of and the placeHha"ing the most interest in the problemJ, we find, by way of recapitulation, that the hilippine law on tortliability should ha"e paramount application to and control in the resolution of the legal issues arising out ofthis case. *urther, we hold that the respondent @egional Trial Court has urisdiction o"er the parties and thesubect matter of the complaint the appropriate "enue is in Buezon City, which could properly applyhilippine law. !oreo"er, we find untenable petitioner(s insistence that HOsPince pri"ate respondent institutedthis suit, she has the burden of pleading and pro"ing the applicable #audi law on the matter.J O5-PAs aptly saidby pri"ate respondent, she has Hno obligation to plead and pro"e the law of the ingdom of #audi Arabia

since her cause of action is based on Articles 01 and 60J of the Ci"il Code of the hilippines. In herAmended Complaint and subse8uent pleadings she ne"er alleged that #audi law should go"ern this case.O57PAnd as correctly held by the respondent appellate court, Hconsidering that it was the petitioner who wasin"o&ing the applicability of the law of #audi Arabia, thus the burden was on it OpetitionerP to plead and toestablish what the law of #audi Arabia isJ.O55P

Lastly, no error could be imputed to the respondent appellate court in upholding the trial court(s denialof defendant(s herein petitioner(s/ motion to dismiss the case. Dot only was urisdiction in order and "enueproperly laid, but appeal after trial was ob"iously a"ailable, and the expeditious trial itself indicated by thenature of the case at hand. Indubitably, the hilippines is the state intimately concerned with the ultimateoutcome of the case below not ust for the benefit of all the litigants, but also for the "indication of thecountry(s system of law and ustice in a transnational setting. +ith these guidelines in mind, the trial courtmust proceed to try and adudge the case in the light of rele"ant hilippine law, with due consideration of theforeign element or elements in"ol"ed. Dothing said herein, of course, should be construed as preudging the

results of the case in any manner whatsoe"er.

BEREFORE, the instant petition for certiorari is hereby )I#!I##$). Ci"il Case Do. B1=02=1-entitled H!ilagros . !orada vs. #audi Arabia AirlinesJ is hereby @$!AD)$) to @egional Trial Court ofBuezon City, 'ranch 21 for further proceedings. +O ORDERED.

G.R. No. 81:6: A%!t :5, 1989GLO4E MA)AY )A4LE AND RAD*O )OR/., "n ER4ER0 ). ENDRY, petitioners, "s. 0EONORA4LE )O2R0 OF A//EAL+ "n RE+0*020O M. 0O4*A+,respondents.)OR0E+,J.:

ri"ate respondent @estituto !. Tobias was employed by petitioner :lobe !ac&ay Cable and @adioCorporation :L;'$ !ACA/ in a dual capacity as a purchasing agent and administrati"e assistant to the

engineering operations manager. In 0136, :L;'$ !ACA disco"ered fictitious purchases and otherfraudulent transactions for which it lost se"eral thousands of pesos.

According to pri"ate respondent it was he who actually disco"ered the anomalies and reported them onDo"ember 04, 0136 to his immediate superior $duardo T. *erraren and to petitioner %erbert C. %endry who

was then the $xecuti"e 9iceresident and :eneral !anager of :L;'$ !ACA.

;n Do"ember 00, 0136, one day after pri"ate respondent Tobias made the report, petitioner %endry

confronted him by stating that he was the number one suspect, and ordered him to ta&e a one wee& forcedlea"e, not to communicate with the office, to lea"e his table drawers open, and to lea"e the office &eys.

;n Do"ember 64, 0136, when pri"ate respondent Tobias returned to wor& after the forced lea"e, petitioner%endry went up to him and called him a Ucroo&U and a Uswindler.U Tobias was then ordered to ta&e a liedetector test. %e was also instructed to submit specimen of his handwriting, signature, and initials forexamination by the police in"estigators to determine his complicity in the anomalies.

;n )ecember 5,0136, the !anila police in"estigators submitted a laboratory crime report $xh. UAU/ clearingpri"ate respondent of participation in the anomalies.

Dot satisfied with the police r eport, petitioners hired a pri"ate in"estigator, retired Col. >ose :. *ernandez,

who on )ecember 04, 0136, submitted a report $xh. U6U/ finding Tobias guilty. This report howe"erexpressly stated that further in"estigation was still to be conducted.

De"ertheless, on )ecember 06, 0136, petitioner %endry issued a memorandum suspending Tobias fromwor& preparatory to the filing of criminal charges against him.

;n )ecember 01,0136, Lt. )ioscoro 9. Tagle, !etro !anila olice Chief )ocument $xaminer, afterin"estigating other documents pertaining to the alleged anomalous transactions, submitted a secondlaboratory crime report $xh. U'U/ reiterating his pre"ious finding that the handwritings, signatures, andinitials appearing in the chec&s and other documents in"ol"ed in the fraudulent transactions were not thoseof Tobias. The lie detector tests conducted on Tobias also yielded negati"e results.

Dotwithstanding the two police reports exculpating Tobias from the anomalies and the fact that the report ofthe pri"ate in"estigator, was, by its own terms, not yet complete, petitioners filed with the City *iscal of!anila a complaint for estafa through falsification of commercial documents, later amended to ust estafa.#ubse8uently fi"e other criminal complaints were filed against Tobias, four of which were for estafa through*alsification of commercial document while the fifth was for of Article 614 ofV the @e"ised enal Code)isco"ering #ecrets Through #eizure of Correspondence/.l)*ph+.-t Two of these complaints were refiled

with the >udge Ad"ocate :eneralVs ;ffice, which howe"er, remanded them to the fiscalVs office. All of the sixcriminal complaints were dismissed by the fiscal. etitioners appealed four of the fiscalVs resolutionsdismissing the criminal complaints with the #ecretary of >ustice, who, howe"er, affirmed their dismissal.

In the meantime, on >anuary 03, 013=, Tobias recei"ed a notice $xh. U*U/ from petitioners that hisemployment has been terminated effecti"e )ecember 0=, 0136. +hereupon, Tobias filed a complaint forillegal dismissal. The l abor arbiter dismissed the complaint. ;n appeal, the Dational Labor @elationsCommission DL@C/ re"ersed the labor arbiterVs decision. %owe"er, the #ecretary of Labor, acting onpetitionersV appeal from the DL@C ruling, reinstated the labor arbiterVs decision. Tobias appealed the#ecretary of LaborVs order with the ;ffice of the resident. )uring the pendency of the appeal with said
http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn62http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn63http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn64http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn64http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn65http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn66http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn66http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn62http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn63http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn64http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn65http://sc.judiciary.gov.ph/jurisprudence/1998/oct1998/122191.htm#_edn66


13/81

Page

| 13

Page82

office, petitioners and pri"ate respondent Tobias entered into a compromise agreement regarding the latterVscomplaint for illegal dismissal.

Fnemployed, Tobias sought employment with the @epublic Telephone Company @$T$LC;/. %owe"er,petitioner %endry, without being as&ed by @$T$LC;, wrote a letter to the latter stating that Tobias wasdismissed by :L;'$ !ACA due to dishonesty.

ri"ate respondent Tobias filed a ci"il case for damages anchored on alleged unlawful, malicious,

oppressi"e, and abusi"e acts of petitioners. etitioner %endry, claiming ill ness, did not testify during thehearings. The @egional Trial Court @TC/ of !anila, 'ranch IG, through >udge !anuel T. @eyes rendered

udgment in fa"or of pri"ate respondent by ordering petitioners to pay him eighty thousand pesos24,444.44/ as actual damages, two hundred thousand pesos 644,444.44/ as moral damages, twentythousand pesos 64,444.44/ as exemplary damages, thirty thousand pesos =4,444.44/ as attorneyVsfees, and costs. etitioners appealed the @TC decision to the Court of Appeals. ;n the other hand, Tobiasappealed as to the amount of damages. %owe"er, the Court of Appeals, an a decision dated August =0,0123 affirmed the @TC decision in toto. etitionersV motion for reconsideration ha"ing been denied, theinstant petition for re"iew on certiorariwas filed.

The main issue in this case is whether or not petitioners are liable for damages to pri"ate respondent.

etitioners contend that they could not be made liable for damages in the lawful exercise of their right todismiss pri"ate respondent.

;n the other hand, pri"ate respondent contends that because of petitionersV abusi"e manner in dismissinghim as well as for the inhuman treatment he got from them, the etitioners must indemnify him for thedamage that he had suffered.

;ne of the more notable inno"ations of the Dew Ci"il Code is the codification of Usome basic principles thatare to be obser"ed for the rightful relationship between human beings and for the stability of the socialorder.U O@$;@T ;D T%$ C;)$ C;!!I##I;D ;D T%$ @;;#$) CI9IL C;)$ ;* T%$%ILIID$#, p. =1P. The framers of the Code, see&ing to remedy the defect of the old Code which merelystated the effects of the law, but failed to draw out its spirit, incorporated certain fundamental precepts which

were Udesigned to indicate certain norms that spring from the fountain of good conscienceU and which were

also meant to ser"e as Uguides for human conduct OthatP should run as golden threads through society, to theend that law may approach its supreme ideal, which is the sway and dominance of usticeU /d./ *oremostamong these principles is that pronounced in Articl e 01 which pro"idesuly =0,0120,045 #C@A =10 Fnited :eneral Industries, Inc, ". aler:.@. Do. L=4647, !arch 07,0126,006 #C@A -4- @ubio ". CA, :.@. Do. 74100, August 60, 0123, 07=#C@A 02=P the 8uestion of whether or not the principle of abuse of rights has been "iolated resulting indamages under Article 64 or Article 60 or other applicable pro"ision of law, depends on the circumstances ofeach case. And in the instant case, the Court, after examining the r ecord and considering certain significantcircumstances, finds that all petitioners ha"e indeed abused the right that they in"o&e, causing damage to

pri"ate respondent and for which the latter must now be indemnified.

The trial court made a finding that notwithstanding the fact that it was pri"ate respondent Tobias whoreported the possible existence of anomalous transactions, petitioner %endry Ushowed belligerence and toldplaintiff pri"ate respondent herein/ that he was the number one suspect and to ta&e a one wee& "acationlea"e, not to communicate with the office, to lea"e his table drawers open, and to lea"e his &eys to saiddefendant petitioner %endry/U O@TC )ecision, p. 6 @ollo, p. 6=6P. This, petitioners do not dispute. 'utregardless of whether or not it was pri"ate respondent Tobias who reported the anomalies to petitioners, thelatterVs reaction towards the former upon unco"ering the anomalies was less than ci"il. An employer whoharbors suspicions that an employee has committed dishonesty might be ustified in ta&ing the appropriateaction such as ordering an in"estigation and directing the employee to go on a lea"e. *irmness and theresol"e to unco"er the truth would also be expected from such employer. 'ut the highhanded treatmentaccorded Tobias by petitioners was certainly uncalled for. And this reprehensible attitude of petitioners was

to continue when pri"ate respondent returned to wor& on Do"ember 64, 0136 after his one wee& forcedlea"e. Fpon reporting for wor&, Tobias was confronted by %endry who said. UTobby, you are the croo& andswindler in this company.U Considering that the first report made by the police in"estigators was submitted


14/81


15/81

Page

| 15

Page82

fine, considering the haste in which the criminal complaints were filed, the fact that they were filed during thependency of the illegal dismissal case against petitioners, the threat made by %endry, the fact that the cases

were filed notwithstanding the two police reports exculpating Tobias from in"ol"ement in the anomaliescommitted against :L;'$ !ACA, coupled by the e"entual dismissal of all the cases, the Court is led intono other conclusion than that petitioners were moti"ated by malicious intent in filing the six criminalcomplaints against Tobias.

etitioners next contend that the award of damages was excessi"e. In the complaint filed against petitioners,

Tobias prayed for the following< one hundred thousand pesos 044,444.44/ as actual damages fiftythousand pesos 74,444.44/ as exemplary damages eight hundred thousand pesos 244,444.44/ asmoral damages fifty thousand pesos 74,444.44/ as attorneyVs fees and costs. The trial court, after ma&inga computation of the damages incurred by Tobias O0ee@TC )ecision, pp. 32 @ollo, pp. 07-0770, awardedhim the following< eighty thousand pesos 24,444.44/ as actual damages two hundred thousand pesos644,444.44/ as moral damages twenty thousand pesos 64,444.44/ as exemplary damages thirtythousand pesos =4,444.44/ as attorneyVs fees and, costs. It must be underscored that petitioners ha"ebeen guilty of committing se"eral actionable tortious acts, i.e., the abusi"e manner in which they dismissedTobias from wor& including the baseless imputation of guilt and the harassment during the in"estigations thedefamatory language heaped on Tobias as well as the scornful remar& on *ilipinos the poison letter sent to@$T$LC; which resulted in TobiasV loss of possible employment and, the malicious filing of the criminalcomplaints. Considering the extent of the damage wrought on Tobias, the Court finds that, contrary topetitionersV contention, the amount of damages awarded to Tobias was reasonable under the circumstances.

et, petitioners still insist that the award of damages was improper, in"o&ing the principle of damnumabs8uein5uria. It is argued that UOtPhe only probable actual damage that plaintiff pri"ate respondent herein/could ha"e suffered was a direct result of his ha"ing been dismissed from his employment, which was a "alidand legal act of the defendantsappellants petitioners herein/.l)*ph+.-t U Oetition, p. 03 @ollo, p. 02P.

According to the principle of damnum a"sque in5uria, damage or loss which does not constitute a "iolation ofa legal right or amount to a legal wrong is not actionable O$scano ". CA, :.@. Do. L-3643, #eptember 67,0124, 044 #C@A 013 #ee also :ilchrist ". Cuddy 61 hil, 7-6 0107/ The 'oard of Li8uidators ". alaw,:.@. Do. L02247, August 0-, 0153, 64 #C@A 123P. This principle finds no application in this case. It bearsrepeating that e"en granting that petitioners might ha"e had the right to dismiss Tobias from wor&, theabusi"e manner in which that right was exercised amounted to a legal wrong for which petitioners must nowbe held liable. !oreo"er, the damage incurred by Tobias was not only in connection with the abusi"e manner

in which he was dismissed but was also the result of se"eral other 8uasidelictual acts committed bypetitioners.

etitioners next 8uestion the award of moral damages. %owe"er, the Court has already ruled in 6assmer v.3ele7, :.@. Do. L64421, )ecember 65, 015-, 06 #C@A 5-2, 57=, that OpPer express pro"ision of Article6601 04/ of the Dew Ci"il Code, moral damages are reco"erable in the cases mentioned in Article 60 of saidCode.U %ence, the Court of Appeals committed no error in awarding moral damages to Tobias.

Lastly, the award of exemplary damages is impugned by petitioners. Although Article 66=0 of the Ci"il Codepro"ides that UOiPn 8uasidelicts, exemplary damages may be granted if the defendant acted with grossnegligence,U the Court, in8ulueta v. Pan American 6orld Air*a$s, /nc., :.@. Do. L 62721, >anuary 2, 013=,-1 #C@A 0, ruled that if gross negligence warrants the award of exemplary damages, with more reason is itsimposition ustified when the act performed is deliberate, malicious and tainted with bad faith. As in

the8uluetacase, the nature of the wrongful acts shown to ha"e been committed by petitioners againstTobias is sufficient basis for the award of exemplary damages to the latter.

+%$@$*;@$, the petition is hereby )$DI$) and the decision of the Court of Appeals in CA:.@. C9 Do.41477 is A**I@!$). #; ;@)$@$).

G.R. No. 85C6C October 3, 1991DAV*D /. LLOREN0E, petitioner, "s. 0E +AND*GAN4AYAN 0*RD D*V*+*ON, "n /EO/LE OF 0E/*L*//*NE+, respondents.+AM*EN0O, J.:p

The petitioner 8uestions the )ecision of the #andiganbayan holding him ci"illy liable in spite of an ac8uittal.The facts are not disputeda"ier T#D, ;ct. 66Q23, p. 6 $xhs. !6, D0, and ;0/. They were all

re8uired to apply for CA clearances in support of their gratuity benefits $xhs. C, !6,D0, and 40/. Condition a/ of the clearance pro"ideda"ier for her


16/81

Page

| 16

Page82

gratuity benefits li&ewise recited her accountabilities of 67,416.44 plus 16.444.44,which was handwritten. 'oth accounts were deducted from her gratuity benefits, andthe balance released to her on Do"ember 05, 0120. The "oucher passed postaudit byAtty. @odriguez on )ecember 0, 0120 $xhs. L,L0, L6, and L=/.

The said 16,444.44 was the disallowed portion of the cash ad"ances recei"ed by !r.Curio in connection with his duties as Usuper cargoU in the distribution of seed nuts

throughout the country. %e recei"ed them through and in the name of !rs. >a"ier fromthe FC'. +hen the amount was disallowed, the FC' withheld from the CA certainrecei"ables the latter, in turn, deducted the same amount from the gratuity benefits of!rs. >a"ier, she being primarily liable therefor $xhs, L, L0, L6, and L=/, At the timeof the deduction, the additional li8uidation papers had already been submitted and

were in process. >ust in case she would not be successful in ha"ing the entire amountwiped out, she re8uested !r. Curio, who admittedly recei"ed it, to execute, as he did,an affida"it dated Do"ember 65, 0120, in which he assumed whate"er portion thereofmight not be allowed ...

The clearance of !r. Curio dated Do"ember -,0120, $xh. ) or )0/ li&ewise fa"orablypassed all officers concerned, including !rs. #otto, the latter signing despite thenotation handwritten on )ecember 2, 0120, that !r. Curio had pending

accountabilities, namely< :#I# loan 6,01=.3-, 640 accounts recei"able =,213.37, and FC' loan =,56=.-1, or a total of 04,30-.32. %owe"er, when theclearance was submitted to Atty. Llorente for appro"al, he refused to appro"e it. *orthis reason, the clearance was held up in his office and did not reach Atty.@odriguez, ...

The reason gi"en by Atty. Llorente was that when the clearance was presented to himon )ecember 2, 0120, he was already aware of the affida"it dated Do"ember 65,0120, in which !r. Curio assumed to pay any residual liability for the disallowed cashad"ances, which at the time, )ecember 2, 0120, stood at 16,444.44 $xhs. 6 and 6A/. !oreo"er, !r. Curio had other pending obligations noted on his clearance totallingl4,30-.12 $xh. 0a/. To ustify his stand, Atty. Llorente in"o&ed Condition a/ ofthe clearance $xhs. ) and I'/, which, he said, was U"ery stringentU and could not be

interpreted in any other way ...

;n )ecember 0, 0126, !r. Curio brought the matter of his unappro"ed clearance toCol. )ueWas $xh. :/, who referred it to the Legal )epartment, which was under Atty.Llorente as )eputy Administrator for legal affairs. After followup in that department,!r. Curio recei"ed the answer of Col. )ueWas dated *ebruary 00, 012=, saying thatthe clearance was being withheld until the former settled his alleged accountability for16,444.44 reduced already to 75,444.44 $xh. I/. !r. Curio ele"ated the matter tothe Chairman of the CA 'oard, who indorsed it to Col. )ueWas, who, in turn, sent it tothe Legal )epartment. This time the latter, through its !anager, !anuel *. astor, >r.,first cousin of Atty. Llorente, submitted a formal report under date of August 0-, 0125,to the CA Chairman, ustifying the action ta&en by Atty. Llorente and Col. )ueWas$xh. 06/. The CA Chairman did not respond in writing, but ad"ised !r. Curio to wait

for the resolution of the Tanodbayan with which he !r. Curio/ had filed this caseinitially against Atty. Llorente and, later on, against Col. )uerias also. ;n August =0,0125, Atty. Llorente resigned from the CA the clearance, howe"er, could not be

issued because, according to the CA Corporate Legal Counsel, Arthur >. Li8uate, theCA did not want to preempt the Tanodbayan. ;n Do"ember 06, 0125, the latterdecided to institlite this case in court ...

Dine days thereafter, or on Do"ember 60, 0125, !r. Curio accomplished anotherclearance, which no longer imposed Condition a/ of his earlier clearance $xh. $/.The new clearance was appro"ed, e"en if he still had pending accountabilities,totalling 04,30-.32 that had remained unsettled since )ecember 0120. %is "oucher

was also appro"ed, and his gratuity benefits paid to him in the middle of )ecember0125, after deducting those obligations $xh. */. Dothing was mentioned anymoreabout the disallowed cash ad"ances of 16,444.44, which had been reduced to77,444.44 ...

'etween )ecember 0120 and )ecember 0125, !r. Curio failed to get gainfulemployment as a result, his family literally went hungry, In 0120, he applied for wor&

with the hilippine Cotton Authority, but was refused, because he could not present hisCA clearance. The same thing happened when he sought employment with thehilippine *ish !ar&eting Administration in >anuary 0126. In both prospecti"eemployers, the item applied for was 6,744.44 a month. At that time, he was onlyabout -7 years old and still competiti"e in the ob mar&et. 'ut in 0125, being alreadypast 74 years, he could no longer be hired permanently, there being a regulation to

that effect. %is present employment with the hilippine orts Authority, which startedon !arch 05, 0123, was casual for that reason. %ad his gratuity benefits been paid in0120, he would ha"e recei"ed a bigger amount, considering that since then interesthad accrued and the foreign exchange rate of the peso to the dollar had gone up ... 1

;n )ecember 04, 0125, an Information for "iolation of #ection =c/ of the Anti:raft and Corrupt racticesAct was filed against the petitionera"ier whoseclearance and "oucher were, according to him, preciselywithheld because of herunsettled accountability for the cash ad"ances of 16,444.44, but here later on gi"endue course and her gratuity benefits released on Do"ember 05, 0120, minus thatamount T#D, Do". 6-Q23, pp. =0=6 $xhs. L, L0, L6 and L=/.

The cash ad"ances of 16,444.44 were the primary obligation of !rs. >a"ier, sincethey were secured through her and in her name from the FC'. That was why they

were charged to and deducted from, her gratuity benefits. Conse8uently, as early asthat date and in so far as the CA and the FC' were concerned, the accountability

was already fully paid. The assumption of residual liability by !r. Curio for the cashad"ances on Do"ember 65, 0120, was a matter between him and !rs. >a"ier $xhs. 6and 6A/. 1

The general rule is that this Court is bound by the findings of fact of the #andiganbayan.11

As we said, the acts of the petitioner were legal that is, pursuant to procedures/, as he insists in this petition,yet it does not follow, as we said, that his acts were done in good faith. *or emphasis, he had no "alidreason to Ugo legalU all of a sudden with respect to !r. Curio, since he had cleared three employees who, asthe #andiganbayan found, Uwere all similarly circumstanced in that they all had pending obligations when,their clearances were filed for consideration, warranting similar official action.U 1:

The Court is con"inced that the petitioner had unustly discriminated against !r. Curio.

It is no defense that the petitioner was moti"ated by no illwill a grudge, according to the #andiganbayan/,since the facts spea& for themsel"es. It is no defense either that he was, after all, complying merely withlegal procedures since, as we indicated, he was not as strict with respect to the three retiring otheremployees. There can be no other logical conclusion that hewas acting unfairly, no more, no less, to !r.Curio.


18/81

Page

| 18

Page8

2

It is the essence of Article 01 of the Ci"il Code, under which the petitioner was made to pay damages,together with Article 63, that the performance of duty be done with ustice and good faith. In the caseof 3ela$o vs. 0hell Co. of the Philippines, 13*e held the defendant liable under Article 01 for disposing of itspropert" a perfectly legal act in order to escape the reach of a creditor. In two fairly more recentcases, 0evilla vs. Court of Appeals1Cand 3alen7uela vs. Court of Appeals,15we held that a principal isliable under Article 01 in terminating the agency again, a legal act when terminating the agency woulddepri"e the agent of his legitimate business.

+e belie"e that the petitioner is liable under Article 01.

The Court finds the award of 14,444.44 to be ustified b" Article 6646 of the Ci"il Code, which holds thedefendant liable for all Unatural and probableU damages. %ennenegildo Cunct presented e"idence that as aconse8uence of the petitionerVs refusal to clear him, he failed to land a ob at the hilippine Cotton Authorityand hilippine *irst !ar&eting Authority. %e also testified that a ob in either office would ha"e earned himsalary of 6,744.44 a month, or 074,444.44 in fi"e years. )educting his probable expenses of reasonablyabout 0,444.44 a month or 54,444.44 in fi"e years, the petitioner owes him a total actual damages of14,444.44

+%$@$*;@$, premises considered, the etition is )$DI$). Do pronouncement as to costs. IT I# #;;@)$@$).

G.R. No. 1:639. +e#teber :5, 19984/* E/RE++ )ARD )OR/ORA0*ON,petitioner, vs. )O2R0 OF A//EAL+ "n R*)ARDO .

MARA+*GAN, respondents.

A/2NAN, J.>

The 8uestion before this Court is whether pri"ate respondent can reco"er moral damages arising fromthe cancellation of his credit card by petitioner credit card corporation.

The facts of the case are as stated in the decision of the respondent court, O0Pto wit. !arasigan byCafe Adriatico, a business establishment accredited with the defendantappellant 'I $xpressCard Corporation '$CC for bre"ity/ on )ecember 2, 0121 when the plaintiff entertained some

guests thereat.

The records of this case show that plaintiff, who is a lawyer by profession was a complimentarymember of '$CC from *ebruary 0122 to *ebruary 0121 and was issued Credit Card Do. 04440677=- with a credit limit of =,444.44 and with a monthly billing e"ery 63th of the month$xh. D/, subect to the terms and conditions stipulated in the contract $xh. 0b/. %ismembership was renewed for another year or until *ebruary 0114 and the credit limit wasincreased to 7,444.44 $xh. A/. The plaintiff oftentimes exceeded his credit limits $xhs. I, I0to I06/ but this was ne"er ta&en against him by the defendant and e"en his mode of paying hismonthly bills in chec& was tolerated. Their contractual relations went on smoothly until hisstatement of account for ;ctober, 0121 amounting to 2,123.2- was not paid in due time. Theplaintiff admitted ha"ing inad"ertently failed to pay his account for the said month because he

was in Buezon pro"ince attending to some professional and personal commitments. %e wasinformed by his secretary that defendant was demanding immediate payment of his outstandingaccount, was re8uiring him to issue a chec& for 07,444.44 which would include his future bills,and was threatening to suspend his credit card. laintiff issued *ar $ast 'an& and Trust Co.

Chec& Do. -1-537 in the amount of 07,444.44, postdated )ecember 07, 0121 which wasrecei"ed on Do"ember 6=, 0121 by Tess Lorenzo, an employee of the defendant $xhs. > and >0/, who in turn ga"e the said chec& to >eng Angeles, a coemployee who handles the account ofthe plaintiff. The chec& remained in the custody of >eng Angeles. !r. @oberto !ani8uiz, head ofthe collection department of defendant was formally informed of the postdated chec& about a

wee& later. ;n Do"ember 62, 0121, defendant ser"ed plaintiff a letter by ordinary mail informinghim of the temporary suspension of the pri"ileges of his credit card and the inclusion of hisaccount number in their Caution List. %e was also told to refrain from further use of his creditcard to a"oid any incon"enienceQembarrassment and that unless he settles his outstandingaccount with the defendant within 7 days from receipt of the letter, his membership will bepermanently cancelled $xh. =/. There is no showing that the plaintiff recei"ed this letter before)ecember 2, 0121. Confident that he had settled his account with the issuance of the postdatedchec&, plaintiff in"ited some guests on )ecember 2, 0121 and entertained them at CafXAdriatico. +hen he presented his credit card to CafX Adriatico for the bill amounting to 3=7.=6,said card was dishonored. ;ne of his guests, !ary $llen @ingler, paid the bill by using her owncredit card, a Fniban&ard $xhs. !, !0 and !6/.

In a letter addressed to the defendant dated )ecember 06, 0121, plaintiff re8uested that he besent the exact billing due him as of )ecember 07, 0121, to withhold the deposit of his postdatedchec& and that said chec& be returned to him because he had already instructed his ban& tostop the payment thereof as the defendant "iolated their agreement that the plaintiff issue thechec& to the defendant to co"er his account amounting to only 2,123.2- on the condition that

the defendant will not suspend the effecti"ity of the card $xh. )/. A letter dated )ecember 05,0121 was sent by the plaintiff to the manager of *$'TC, @amada 'ranch, !anila re8uesting theban& to stop the payment of the chec& $xhs. $, $0/. Do reply was recei"ed by plaintiff fromthe defendant to his letter dated )ecember 06, 0121. laintiff sent defendant another letterdated !arch 06, 0114 reminding the latter that he had long rescinded and cancelled whate"erarrangement he entered into with defendant and re8uesting for his correct billing, less theimproper charges and penalties, and for an explanation within fi"e 7/ days from receipt thereof

why his card was dishonored on )ecember 2, 0121 despite assurance to the contrary bydefendantVs personnelincharge, otherwise the necessary court action shall be filed to holddefendant responsible for the humiliation and embarrassment suffered by him $xh. */. laintiffalleged further that after a few days, a certain Atty. Albano, representing himself to be wor&ing

with office of Atty. Lopez, called him in8uiring as to how the matter can be threshed outextraudicially but the latter said that such is a serious matter which cannot be discussed o"erthe phone. The defendant ser"ed its final demand to the plaintiff dated !arch 60, 0114

re8uiring him to pay in full his o"erdue account, including stipulated fees and charges, within 7days from receipt thereof or face court action also to replace the postdated chec& with cash

within the same period or face criminal suit for "iolation of the 'ouncing Chec& Law $xh.:Q$xh. 0=/. The plaintiff, in a reply letter dated April 7, 0114 $xh. %/, demanded defendantVscompliance with his re8uest in his first letter dated !arch 06, 0114 within three =/ days fromreceipt, otherwise the plaintiff will file a case against them, x x x. O6P

Thus, on !ay 3, 0114 pri"ate respondent filed a complaint for damages against petitioner before the@egional Trial Court of !a&ati, 'ranch 074, doc&eted as Ci"il Case Do. 14003-.

After trial, the trial court ruled for pri"ate respondent, finding that herein petitioner abused its right incontra"ention of Article 01 of the Ci"il Code.O=PThe dispositi"e portion of the decision readsune 6-, 0114. The facts found bythe trial court are succinctly summarized by the Court of Appeals belowune 03, 0110/.

After trial, the lower court sustained the plaintiff(s submissions and found defendant @ichard Li guiltyof gross negligence and liable for damages under Article 6035 of the Ci"il Code. The trial court li&ewise heldAlexander Commercial, Inc., Li(s employer, ointly and se"erally liable for damages pursuant to Article 6024.

It ordered the defendants to ointly and se"erally pay the following amountsune 6-, 0114.

*irst, the case of 0t. rancis 4i'h 0chool vs. Court of Appeals O61Pupon which respondent court hasplaced undue reliance, dealt with the subect of a school and its teacher(s super"ision of students during anextracurricular acti"ity. These cases now fall under the pro"ision on special parental authority found in Art.

602 of the *amily Code which generally encompasses all authorized school acti"ities, whether inside oroutside school premises.

#econd, the employer(s primary liability under the concept of pater familias embodied by Art. 6024 inrelation to Art. 6035/ of the Ci"il Code is 8uasidelictual or tortious in character. %is liability is relie"ed on ashowing that he exercised the diligence of a good father of the family in the selection and super"ision of i tsemployees. ;nce e"idence is introduced showing that the employer exercised the re8uired amount of care inselecting its employees, half of the employer(s burden is o"ercome. The 8uestion ofdiligent supervision, howe"er, depends on the circumstances of employment.

;rdinarily, e"idence demonstrating that the employer has exercised diligent super"ision of itsemployee durin' the performance of the latter;s assi'ned taskswould be enough to relie"e him of the liabilityimposed by Article 6024 in relation to Article 6035 of the Ci"il Code. The employer is not expected toexercise super"ision o"er either the employee(s pri"ate acti"ities or during the performance of tas&s either

unsanctioned by the former or unrelated to the employee(s tas&s. The case at bench presents a situation of a

different character, in"ol"ing a practice utilized by large companies with either their employees of managerialran& or their representati"es.

It is customary for large companies to pro"ide certain classes of their employees with courtesy"ehicles. These company cars are either wholly owned and maintained by the company itself or are subectto "arious plans through which employees e"entually ac8uire their "ehicles after a gi"en period of ser"ice, orafter paying a to&en amount. !any companies pro"ide liberal Hcar plansJ to enable their managerial or otheremployees of ran& to purchase cars, which, gi"en the cost of "ehicles these days, they would not otherwisebe able to purchase on their own.

Fnder the first example, the company actually owns and maintains the car up to the point of turno"erof ownership to the employee in the second example, the car is really owned and maintained by theemployee himself. In furnishing "ehicles to such employees, are companies totally absol"ed of responsibility

when an accident in"ol"ing a companyissued car occurs during pri"ate use after normal office hoursM

!ost pharmaceutical companies, for instance, which pro"ide cars under the first plan, re8uire rigoroustests of road worthiness from their agents prior to turning o"er the car subect of company maintenance/ totheir representati"es. In other words, li&e a good father of a family, they entrust the company "ehicle onlyafter they are satisfied that the employee to whom the car has been gi"en full use of the said company carfor company or pri"ate purposes will not be a threat or menace to himself, the company or to others. +hen acompany gi"es full use and enoyment of a company car to its employee, it in effect guarantees that it is, li&ee"ery good father, satisfied that its employee will use the pri"ilege reasonably and responsi"ely.

In the ordinary course of business, not all company employees are gi"en the pri"ilege of using acompanyissued car. *or large companies other than those cited in the example of the preceding paragraph,the pri"ilege ser"es important business purposes either related to the image of success an entity intends topresent to its clients and to the public in general, or for practical and utilitarian reasons to enable itsmanagerial and other employees of ran& or its sales agents to reach clients con"eniently. In most cases,pro"iding a company car ser"es both purposes. #ince important business transactions and decisions mayoccur at all hours in all sorts of situations and under all &inds of guises, the pro"ision for the unlimited use ofa company car thereforeprincipall$ ser"es the business and goodwill of a company and onl$ incidentall$ thepri"ate purposes of the indi"idual who actually uses the car, the managerial employee or company salesagent. As such, in pro"iding for a company car for business use andQor for the purpose of furthering thecompany(s image, a company owes a responsibility to the public to see to it that the managerial or otheremployees to whom it entrusts "irtually unlimited use of a company issued car are able to use the companyissue capably and responsibly.

In the instant case, Li was an Assistant !anager of Alexander Commercial, Inc. In his testimonybefore the trial court, he admitted that his functions as Assistant !anager did not re8uire him to scrupulously&eep normal office hours as he was re8uired 8uite often to perform wor& outside the office, "isitingprospecti"e buyers and contacting and meeting with company clients.O=4PThese meetings, clearly, were notstrictly confined to routine hours because, as a managerial employee tas&ed with the ob of representing hiscompany with its clients, meetings with clients were both social as well as wor&related functions. Theser"ice car assigned to Li by Alexander Commercial, Inc. therefore enabled both Li as well as thecorporation to put up the front of a highly successful entity, increasing the latter(s goodwill before itsclientele. It also facilitated meeting between Li and its clients by pro"iding the former with a con"enient modeof tra"el.

!oreo"er, Li(s claim that he happened to be on the road on the night of the accident because he wascoming from a social "isit with an officemate in araWa8ue was a bare allegation which was ne"ercorroborated in the court below. It was ob"iously selfser"ing. Assuming he really came from his officemate(s

place, the same could gi"e rise to speculation that he and his officemate had ust been from a wor&relatedfunction, or they were together to discuss sales and other wor& related strategies.
http://sc.judiciary.gov.ph/jurisprudence/1996/feb1996/115024.htm#_ftn27http://sc.judiciary.gov.ph/jurisprudence/1996/feb1996/115024.htm#_ftn27http://sc.judiciary.gov.ph/jurisprudence/1996/feb1996/115024.htm#_ftn28http://sc.judiciary.gov.ph/jurisprudence/1996/feb1996/115024.htm#_ftn29http://sc.judiciary.gov.ph/jurisprudence/1996/feb1996/115024.htm#_ftn29http://sc.judiciary.gov.ph/jurisprudence/1996/feb1996/115024.htm#_ftn30http://sc.judiciary.gov.ph/jurisprudence/1996/feb1996/115024.htm#_ftn30http://sc.judiciary.gov.ph/jurisprudence/1996/feb1996/115024.htm#_ftn30http://sc.judiciary.gov.ph/jurisprudence/1996/feb1996/115024.htm#_ftn27http://sc.judiciary.gov.ph/jurisprudence/1996/feb1996/115024.htm#_ftn28http://sc.judiciary.gov.ph/jurisprudence/1996/feb1996/115024.htm#_ftn29http://sc.judiciary.gov.ph/jurisprudence/1996/feb1996/115024.htm#_ftn30


26/81

Page

| 26

Page8

2

In fine, Alexander Commercial, Inc. has not demonstrated, to our satisfaction, that it exercised thecare and diligence of a good father of the family in entrusting its company car to Li. Do allegations weremade as to whether or not the company too& the steps necessary to determine or ascertain the dri"ingproficiency and history of Li, to whom it ga"e full and unlimited use of a company car. O=0PDot ha"ing beenable to o"ercome the burden of demonstrating that it should be absol"ed of liability for entrusting itscompany car to Li, said company, based on the principle of"onus pater familias, ought to be ointly andse"erally liable with the former for the inuries sustained by !a. Lourdes 9alenzuela during the accident.

*inally, we find no reason to o"erturn the amount of damages awarded by the respondent court,

except as to the amount of moral damages. In the case of moral damages, while the said damages are notintended to enrich the plaintiff at the expense of a defendant, the award should nonetheless becommensurate to the suffering inflicted. In the instant case we are of the opinion that the reduction in moraldamages from an amount of 0,444,444.44 to 744,444.44 by the Court of Appeals was not ustifiedconsidering the nature of the resulting damage and the predictable sequelae of the inury.

As a result of the accident, !a. Lourdes 9alenzuela underwent a traumatic amputation of her leftlower extremity at the distal left thigh ust abo"e the &nee. 'ecause of this, 9alenzuela will fore"er bedepri"ed of the full ambulatory functions of her left extremity, e"en with the use of state of the art prosthetictechnology. +ell beyond the period of hospitalization which was paid for by Li/, she will be re8uired toundergo adustments in her prosthetic de"ise due to the shrin&age of the stump from the process of healing.

These adustments entail costs, prosthetic replacements and months of physical and occupationalrehabilitation and therapy. )uring her lifetime, the prosthetic de"ise will ha"e to be replaced and readusted

to changes in the size of her lower limb effected by the biological changes of middleage, menopause andaging. Assuming she reaches menopause, for example, the prosthetic will ha"e to be adusted to respond tothe changes in bone resulting from a precipitate decrease in calcium le"els obser"ed in the bones of all postmenopausal women. In other words, the damage done to her would not only be permanent and lasting, it

would also be permanently changing and adusting to the physiologic changes which her bodywould normall$ undergo through the years. The replacements, changes, and adustments will re8uirecorresponding adusti"e physical and occupational therapy. All of these adustments, it has beendocumented, are painful.

The foregoing discussion does not e"en scratch the surface of the nature of the resulting damagebecause it would be highly speculati"e to estimate the amount of psychological pain, damage and inury

which goes with the sudden se"ering of a "ital portion of the human body. A prosthetic de"ice, howe"ertechnologically ad"anced, will only allow a reasonable amount of functional restoration of the motor functionsof the lower limb. The sensory functions are fore"er lost. The resultant anxiety, sleeplessness, psychological

inury, mental and physical pain are inestimable.

As the amount of moral damages are subect to this Court(s discretion, we are of the opinion that theamount of 0,444,444.44 granted by the trial court is in greater accord with the extent and nature of theinury . physical and psychological suffered by 9alenzuela as a result of Li(s grossly negligent dri"ing of his!itsubishi Lancer in the early morning hours of the accident.

BEREFORE, @$!I#$# C;D#I)$@$), the decision of the court of Appeals is modified with theeffect of @$ID#TATID: the udgment of the @egional Trial Court. +O ORDERED.

G.R. No. 1CC:. Febr"r$ 15 , :1+ERG*O AMONOY,petitioner, vs. +#o!e! O+E G20*ERRE; "n ANGELA FORN*LDA, respondents.

/ANGAN*4AN, J.>

Damnum a"sque in5uria. Fnder this principle, the legitimate exercise of a person(s rights, e"en if itcauses loss to another, does not automatically result in an actionable inury. The law does not prescribe aremedy for the loss. This principle does not, howe"er, apply when there is an abuse of a person(s right, or

when the exercise of this right is suspended or extinguished pursuant to a court order. Indeed, in thea"ailment of one(s rights, one must act with ustice, gi"e others their due, and obser"e honesty and goodfaith.

0e )"!e

'efore us is a etition for @e"iew under @ule -7 of the @ules of Court, assailing the April 60, 0111)ecisionO0Pof the Court of Appeals CA/ in CA:@ C9 Do. -0-70, which set aside the udgment O6Pof the@egional Trial Court @TC/ of Tanay, @izal. The @TC had earlier dismissed the Complaint for damages filedby herein respondents against petitioner. The dispositi"e portion of the challenged CA )ecision reads asfollowsanuary 0157 Asuncion asamba and Alfonso *ormilda executed adeed of real estate mortgage on the said two 6/ lots adudicated to them, in fa"or of Amonoy to secure thepayment of his attorney(s fees. 'ut it was only on 5 August 0151 after the taxes had been paid, the claimssettled and the properties adudicated, that the estate was declared closed and terminated.

HAsuncion asamba died on 6- *ebruary 0151 while Alfonso *ornilda passed away on 6 >uly 0151. Amongthe heirs of the latter was his daughter, plaintiffappellant Angela :utierrez.

H'ecause his attorney(s fees thus secured by the two lots were not paid, on 60 >anuary 0134 Amonoy filedfor their foreclosure in Ci"il Case Do. 06365 entitled0er'io Amono$ vs. 4eirs of Asuncion Pasam"a and4eirs of Alfonso ornildabefore the C*I of asig, @izal, and this was assigned to 'ranch 9III. The heirsopposed, contending that the attorney(s fees charged OwereP unconscionable and that the agreed sum wasonly 00,517.16. 'ut on 62 #eptember 0136 udgment was rendered in fa"or of Amonoy re8uiring the heirsto pay within 14 days the 63,544.44 secured by the mortgage, 00,224.44 as "alue of the har"ests, and1,5-7.44 as another round of attorney(s fees. *ailing in that, the two 6/ lots would be sold at publicauction.

HThey failed to pay. ;n 5 *ebruary 013=, the said lots were foreclosed and on 6= !arch 013= the auctionsale was held where Amonoy was the highest bidder at 6=,354.44. ;n 6 !ay 013= his bid was udicially
http://sc.judiciary.gov.ph/jurisprudence/1996/feb1996/115024.htm#_ftn31http://sc.judiciary.gov.ph/jurisprudence/2001/feb2001/140420.htm#_edn1http://sc.judiciary.gov.ph/jurisprudence/2001/feb2001/140420.htm#_edn1http://sc.judiciary.gov.ph/jurisprudence/2001/feb2001/140420.htm#_edn2http://sc.judiciary.gov.ph/jurisprudence/2001/feb2001/140420.htm#_edn2http://sc.judiciary.gov.ph/jurisprudence/2001/feb2001/140420.htm#_edn3http://sc.judiciary.gov.ph/jurisprudence/2001/feb2001/140420.htm#_edn3http://sc.judiciary.gov.ph/jurisprudence/2001/feb2001/140420.htm#_edn4http://sc.judiciary.gov.ph/jurisprudence/2001/feb2001/140420.htm#_edn4http://sc.judiciary.gov.ph/jurisprudence/2001/feb2001/140420.htm#_edn4http://sc.judiciary.gov.ph/jurisprudence/1996/feb1996/115024.htm#_ftn31http://sc.judiciary.gov.ph/jurisprudence/2001/feb2001/140420.htm#_edn1http://sc.judiciary.gov.ph/jurisprudence/2001/feb2001/140420.htm#_edn2http://sc.judiciary.gov.ph/jurisprudence/2001/feb2001/140420.htm#_edn3http://sc.judiciary.gov.ph/jurisprudence/2001/feb2001/140420.htm#_edn4


27/81

Page

| 27

Page8

2

confirmed. A deficiency was claimed and to satisfy it another execution sale was conducted, and again thehighest bidder was Amonoy at 06,0=3.74.

HIncluded in those sold was the lot on which the :utierrez spouses had their house.

H!ore than a year after the )ecision in Ci"il Case Do. 06365 was rendered, the said decedent(s heirs filed on01 )ecember 013= before the C*I of asig, @izalO,P Ci"il Case Do. 023=0 entitled &aria Penano, et al vs.0er'io Amono$, et al, a suit for the annulment thereof. The case was dismissed by the C*I on 3 Do"ember

0133, and this was affirmed by the Court of Appeals on 66 >uly 0120.

HThereafter, the C*I on 67 >uly 0127 issued a +rit of ossession and pursuant to which a notice to "acatewas made on 65 August 0127. ;n Amonoy(s motion of 6- April 0125, the ;rders of 67 April 0125 and 5 !ay0125 were issued for the demolition of structures in the said lots, including the house of the :utierrezspouses.

H;n 63 #eptember 0127 the petition entitled David ornilda, et al vs Branch C /3th Pasi', Deput$0heriff ?oaquin Antonil and Att$. 0er'io Amono$, :.@. Do. L36=45, was filed before the #upremeCourt. Among the petitioners was the plaintiffappellant Angela :utierrez. ;n a twin &usi$un !ahigpit na!usiyon ara apanagutin augnay ng aglalapastangan, and !usiyung !a&ahingi ng Ftos saagpapapigil ng agpapagiba at ananagutin sa aglalapastangan/ with full titles as fanciful and elongatedas their Petis$un' etisyung !a&apagsuri Taglay and agpigil ng Ftos/, a temporary restraining order was

granted on 6 >une 0125 enoining the demolition of the petitioners( houses.

HThen on 7 ;ctober 0122 a )ecision was rendered in the said :.@. Do. L36=45 disposing thatuly 0127, granting a+rit of ossession, as well as its ;rders, dated 67 April 0125 and 05 !ay 0125, directing and authorizingrespondent #heriff to demolish the houses of petitioners Angela and Leocadia *ornilda are hereby set aside,and the Temporary @estraining ;rder heretofore issued, is made permanent. The six 5/ parcels of landherein contro"erted are hereby ordered returned to petitioners unless some of them ha"e been con"eyed toinnocent third persons.JO7P

'ut by the time the #upreme Court promulgated the abo"ementioned )ecision, respondents( house

had already been destroyed, supposedly in accordance with a +rit of )emolition ordered by the l ower court.

Thus, a Complaint for damages in connection with the destruction of their house was filed byrespondents against petitioner before the @TC on )ecember 07, 0121.

In its >anuary 63, 011= )ecision, the @TC dismissed respondents( suit. ;n appeal, the CA set asidethe lower court(s ruling and ordered petitioner to pay respondents 674,444 as actual damages. etitionerthen filed a !otion for @econsideration, which was also denied.

%ence, this recourse.O5P

0e *!!e

In his !emorandum,O3Ppetitioner submits this lone issue for our considerationune 6,0125. The CA also found, based on the Certificate of #er"ice of the #upreme Court process ser"er, that acopy of the T@; was ser"ed on petitioner himself on >une -, 0125.

etitioner, howe"er, did not heed the T@; of this Court. +e agree with the CA that he unlawfullypursued the demolition of respondents( house well until the middle of 0123. This is clear from @espondentAngela :utierrez(s testimony. The appellate court 8uoted the following pertinent portion thereof


28/81

Page

| 28

Page8

2

that engendered the suit before the @TC. 9erily, his acts constituted not onl$ an a"use of a ri'ht, "ut aninvalid exercise of a ri'ht that had "een suspended when he recei"ed the T@; from this Court on >une -,0125. 'y then, he was no longer entitled to proceed with the demolition.

A commentator on this topic explainsanuary 61, 0125, 1the dispositi"e portion of whichreads as followsennifer C. Lee, the degree of 'achelor of #cience in Commerce,maor in accounting, with cum laudehonors sic/, retroacti"e to !arch 62, 0126, and toexecute and deli"er to plaintiff all the necessary school credentials e"idencing hergraduation with such honors and said defendants are ordered to pay plaintiff ointly

and se"erally the sum of 37,444 as moral damages, the sum of 64,444 asexemplary damages, with interest thereon at 06R per annum beginning >uly 66, 0126,until said amounts are fully paid< and the sum of 07,444 as attorneyVs fees. Thecounterclaim is ordered dismissed. Costs against defendants. :

etitioners appealed to the respondent Court of Appeals where the case was doc&eted as CA:.@. Do. #41=52. In a decision dated !ay 62, 0123, the appellate court affirmed in totothe decision of the trial court. 3

The motion for reconsideration filed by petitioners was denied in a @esolution of the appellate court dated>uly 3, 0123.C

%ence, this petition where petitioners allege as grounds the

Date post:	04-Jun-2018
Category:	Documents
Upload:	princess-melody
View:	220 times
Download:	0 times

TORTS cases human relations; human dignity.doc

Documents