civil law assigned cases (1st meeting)

7/28/2019 CIVIL LAW Assigned CASES (1st Meeting)

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Republic of the PhilippinesSUPREME COURTManila

EN BANC

G.R. No. L-6339 April 20, 1954

MANUEL LARA, ET AL., plaintiffs-appellants,vs.

PETRONILO DEL ROSARIO, JR., defendant-appellee.Manansala and Manansala for appellants.Ramon L. Resurreccion for appellee.

MONTEMAYOR, J.:

In 1950 defendant Petronilo del Rosario, Jr., owner of twenty-five taxi cabs or cars, operated a taxi businessunder the name of "Waval Taxi." He employed amongothers three mechanics and 49 chauffeurs or drivers,the latter having worked for periods ranging from 2 to37 months. On September 4, 1950, without giving saidmechanics and chauffeurs 30 days advance notice, DelRosario sold his 25 units or cabs to La Mallorca, atransportation company, as a result of which,according to the mechanics and chauffeurs above-mentioned they lost their jobs because the La Mallorcafailed to continue them in their employment. Theybrought this action against Del Rosario to recovercompensation for overtime work rendered beyondeight hours and on Sundays and legal holidays, andone month salary (mesada) provided for in article 302of the Code of Commerce because the failure of theirformer employer to give them one month notice.Subsequently, the three mechanics unconditionallywithdrew their claims. So only the 49 drivers remainedas plaintiffs. The defendant filed a motion for dismissalof the complaint on the ground that it stated no causeof action and the trial court for the time being deniedthe motion saying that it will be considered when thecase was heard on the merits. After trial the complaintwas dismissed. Plaintiffs appealed from the order of dismissal to the Court of Appeals which Tribunal afterfinding only questions of law are involved, certified thecase to us.

The parties are agreed that the plaintiffs as chauffeursreceived no fixed compensation based on the hours orthe period of time that they worked. Rather, they werepaid on the commission basis, that is to say, eachdriver received 20 per cent of the gross returns orearnings from the operation of his taxi cab. Plaintiffsclaim that as a rule, each drive operated a taxi 12hours a day with gross earnings ranging from P20 toP25, receiving therefrom the corresponding 20 percent share ranging from P4 to P5, and that in somecases, especially during Saturdays, Sundays, andholidays when a driver worked 24 hours a day hegrossed from P40 to P50, thereby receiving a share of from P8 to P10 for the period of twenty-four hours.

The reason given by the trial court in dismissing thecomplaint is that the defendant being engaged in the

taxi or transportation business which is a public utility,came under the exception provided by the Eight-HourLabor Law (Commonwealth Act No. 444); and becauseplaintiffs did not work on a salary basis, that is to say,they had no fixed or regular salary or remunerationother than the 20 per cent of their gross earnings"their situation was therefore practically similar topiece workers and hence, outside the ambit of article302 of the Code of Commerce."

For purposes of reference we are reproducing thepertinent provisions of the Eight-Hour Labor Law,namely, sections 1 to 4.

SECTION 1. The legal working day for any personemployed by another shall not be more than eighthours daily. When the work is not continuous, the timeduring which the laborer is not working and can leavehis working place and can rest completely shall not becounted.

SEC. 2. This Act shall apply to all persons employed inany industry or occupation, whether public or private,with the exception of farm laborers, laborers who

prefer to be paid on piece work basis, domesticservants and persons in the personal service of another and members of the family of the employerworking for him.

SEC. 3. Work may be performed beyond eight hours aday in case of actual or impending emergencies,caused by serious accidents, fire flood, typhoon,earthquakes, epidemic, or other disaster or calamity inorder to prevent loss of life and property or imminentdanger to public safety; or in case of urgent work to beperformed on the machines, equipment, orinstallations in order to avoid a serious loss which theemployer would otherwise suffer, or some other just

cause of a similar nature; but in all cases the laborersand the employees shall be entitled to receivecompensation for the overtime work performed at thesame rate as their regular wages or salary, plus atleast twenty-five per centum additional.

In case of national emergency the Government isempowered to establish rules and regulations for theoperation of the plants and factories and to determinethe wages to be paid the laborers.

SEC. 4. No person, firm, or corporation, businessestablishment or place or center of work shall compelan employee or laborer to work during Sundays andlegal holidays, unless he is paid an additional sum of atleast twenty-five per centum of his regularremuneration: Provided however, That this prohibitionshall not apply to public utilities performing somepublic service such as supplying gas, electricity, power,water, or providing means of transportation orcommunication.

Under section 4, as a public utility, the defendant couldhave his chauffeurs work on Sundays and legalholidays without paying them an additional sum of at


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least 25 per cent of their regular remuneration: butthat with reference only to work performed on Sundaysand holidays. If the work done on such days exceeds 8hours a day, then the Eight-Hour Labor Law wouldoperate, provided of course that plaintiffs came undersection 2 of the said law. So that the question to bedecided here is whether or not plaintiffs are entitled toextra compensation for work performed in excess of 8hours a day, Sundays and holidays included.

It will be noticed that the last part of section 3 of Commonwealth Act 444 provides for extracompensation for over-time work "at the same rate astheir regular wages or salary, plus at least twenty-fiveper centum additional'" and that section 2 of the sameact excludes application thereof laborers who preferredto be on piece work basis. This connotes that a laboreror employee with no fixed salary, wages orremuneration but receiving as compensation from hisemployer uncertain and variable amount dependingupon the work done or the result of said work (piecework) irrespective of the amount of time employed, isnot covered by the Eight-Hour Labor Law and is notentitled to extra compensation should he work in

excess of 8 hours a day. And this seems to be thecondition of employment of the plaintiffs. A driver inthe taxi business of the defendant, like the plaintiffs, inone day could operate his taxi cab eight hours, or lessthan eight hours or in excess of 8 hours, or even 24hours on Saturdays, Sundays, and holidays, with nolimit or restriction other than his desire, inclination andstate of health and physical endurance. He could drivecontinuously or intermittently, systematically orhaphazardly, fast or slow, etc. depending upon hisexclusive wish or inclination. One day when he feelsstrong, active and enthusiastic he works long,continuously, with diligence and industry and makesconsiderable gross returns and receives as much as his

20 per cent commission. Another day when he feelsdespondent, run down, weak or lazy and wants to restbetween trips and works for less number of hours, hisgross returns are less and so is his commission. Inother words, his compensation for the day dependsupon the result of his work, which in turn depends onthe amount of industry, intelligence and experienceapplied to it, rather than the period of time employed.In short, he has no fixed salary or wages. In this weagree with the learned trial court presided by JudgeFelicisimo Ocampo which makes the following findingsand observations of this point.

. . . As already stated, their earnings were in the form

of commission based on the gross receipts of the day.Their participation in most cases depended upon theirown industry. So much so that the more hours theystayed on the road, the greater the gross returns andthe higher their commissions. They have no fixedhours of labor. They can retire at pleasure, they notbeing paid a fixed salary on the hourly, daily, weeklyor monthly basis.

It results that the working hours of the plaintiffs as taxidrivers were entirely characterized by its irregularity,

as distinguished from the specific regular remunerationpredicated on specific and regular hours of work of factories and commercial employees.

In the case of the plaintiffs, it is the result of theirlabor, not the labor itself, which determines theircommissions. They worked under no compulsion of turning a fixed income for each given day. . . ..

In an opinion dated June 1, 1939 (Opinion No. 115)

modified by Opinion No. 22, series 1940, dated June11, 1940, the Secretary of Justice held that chauffeursof the Manila Yellow Taxicab Co. who "observed in aloose way certain working hours daily," and "the timethey report for work as well as the time they leavework was left to their discretion.," receiving no fixedsalary but only 20 per cent of their gross earnings,may be considered as piece workers and therefore notcovered by the provisions of the Eight-Hour Labor Law.

The Wage Administration Service of the Department of Labor in its Interpretative Bulletin No. 2 dated May 28,1953, under "Overtime Compensation," in section 3thereof entitled Coverage, says:

The provisions of this bulletin on overtimecompensation shall apply to all persons employed inany industry or occupation, whether public or private,with the exception of farm laborers, non-agriculturallaborers or employees who are paid on piece work,contract, pakiao, task or commission basis, domesticservants and persons in the personal service of another and members of the family of the employerworking for him.

From all this, to us it is clear that the claim of theplaintiffs-appellants for overtime compensation underthe Eight-Hour Labor Law has no valid support.

As to the month pay (mesada) under article 302 of theCode of Commerce, article 2270 of the new Civil Code(Republic Act 386) appears to have repealed saidArticle 302 when it repealed the provisions of the Codeof Commerce governing Agency. This repeal took placeon August 30, 1950, when the new Civil Code wentinto effect, that is, one year after its publication inthe Official Gazette. The alleged termination of services of the plaintiffs by the defendant took placeaccording to the complaint on September 4, 1950, thatis to say, after the repeal of Article 302 which theyinvoke. Moreover, said Article 302 of the Code of Commerce, assuming that it were still in force speaksof "salary corresponding to said month." commonlyknown as "mesada." If the plaintiffs herein had nofixed salary either by the day, week or month, thencomputation of the month's salary payable would beimpossible. Article 302 refers to employees receiving afixed salary. Dr. Arturo M. Tolentino in his bookentitled "Commentaries and Jurisprudence on theCommercial Laws of the Philippines," Vol. 1, 4thedition, p. 160, says that article 302 is not applicableto employees without fixed salary. We quote


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Employees not entitled to indemnity. This articlerefers only to those who are engaged under salarybasis, and not to those who only receive compensationequivalent to whatever service they may render. (1Malagarriga 314, citing decision of Argentina Court of Appeals on Commercial Matters.)

In view of the foregoing, the order appealed from ishereby affirmed, with costs against appellants.

Pablo, Bengzon, Padilla, Reyes, Jugo, Bautista Angelo,Labrador, Concepcion, and Diokno, JJ., concur.Paras, C.J., concurs in the result.

Republic of the PhilippinesSUPREME COURTManila

EN BANC

G.R. No. L-6705 December 23, 1954

PATROCINIO RAYMUNDO, plaintiff-appellant,vs.

DOROTEO PEAS, defendant-appellee.Augusto Francisco for appellant.Doroteo Penas in his own behalf.

REYES, J.B.L., J.:

Patrocinio Raymundo has brought up this case bydirect appeal on points of law against a decision of theCourt of First Instance of Manila (case No. 1169),denying her petition for a decree of divorce under Act2710.

The facts are clear and not disputed. AppellantRaymundo and appellee Doroteo Peas were validlymarried to each other in Manila on March 29, 1941.The spouses lived together until 1949, but had nochildren, nor acquired conjugal property. Sometime inJuly 1949, the husband Doroteo Peas abandoned hiswife, appellant herein, and during August andSeptember, 1949, lived maritally with another woman,Carmen Paredes. At the instance of the deserted wife,an information for concubinage was filed on October 3,1949 (Criminal Case No. 11140). The husband, Peas,was convicted and sentenced to imprisonment by theCourt of First Instance of Manila on May 5, 1950.Pending his appeal, on July 14, 1950, the wifeinstituted the present proceedings, praying for adecree of absolute divorce. The conviction of DoroteoPeas was affirmed by the Court of Appeals on October31, 1951.

The Court below found that the acts of concubinagethat gave rise to the action, as well as the judgment of conviction rendered by the Court of First Instance,took place before the repeal of Act 2710 by the newCivil Code, (which becomes effective on August 30,

1950, as held by this Court in Lara vs. Del Rosario, 94Phil., 778 ,50 Off. Gaz., p. 1975).

Nevertheless, the Court a quo dismissed the complainton the ground that the appellant had acquired no rightto a divorce that the Court bound to recognize afterthe effectivity of the New Civil Code. The Courtreasoned out as follows:

Counsel's argument in support of the alleged right of

the plaintiff would be indisputable if (it were ) not forthe following provision of Article 2254 of the new CivilCode.

'Art. 2254. No vested or acquired right can raise fromacts or omissions which are against the law or whichinfringe upon the rights of others.'

The above quoted provisions is entirely new, not foundin the old Civil Code. Evidently it is designed to meetsituations like the present. Under its explicit andunequivocal terms no acquired or vested right can risefrom offenses or acts which infringe upon the rights of others. It follows therefore that the acts of

concubinage of the defendant, which are not onlyagainst the law, but infringe upon the rights of hiswife, could not and did not give rise to o a vested rightin favor of the plaintiff which would entitle her tosecure a divorce from her husband, the defendantherein. Under Article 97 of the new Civil Code the mostthat the wife is now entitled to in case of concubinageon the part of the husband is to secure a legalseparation. (Rec. on Appeal, p. 14.

In our opinion, the judgment appealed from isincorrect. It should be apparent, upon reflection, thatthe prohibition of Article 2254 must be directed at theoffender, not the offended party who is in no wayresponsible for the violation of legal duty. Theinterpretation adopted by the Court below results indepriving a victim of any redress because of the veryacts that injured him. The protection of vested rights isbut a consequence of the constitutional guarantyagainst deprivation of property can in no wayconstitute such due process.

Our view of the true import of Article 2254 issupported by the Report of Code Commissionsubmitted to the Legislature in explanation of themotives behind the innovations of the proposed CivilCode. Speaking of Article 2274 of the draft (now Art.2254 of the Code), the Report states:

It is evident that no one can validly claim any vestedor acquired right if the same is founded upon hishaving violated the law or invaded the rights of others.

It follows that Article 2254 can not militate against theright of appellant to secure an absolute divorce as aresult of the concubinage of her husband. Despite thechange in legislation, plaintiff-appellant is protected byArticle 2253 of the new Civil Code:


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Art. 2253. The Civil Code of 1889 and other previouslaws shall govern rights originating, under said laws,from acts done or events which took place under theregime, even though this Code may regulate them in adifferent manner, or may not recognizethem.lawphil.net

Conceding that there can not be a vested right in the

continuation of a law recognizing absolute divorce(Grant vs. Grant, 32 Am. Rep. 506), still , the terms of Article 2253 are sufficiently broad to protect the rightsof the appellant to a remedy against her husband'sinfidelity in conformity with the terms of the oldlegislation. True that the new Civil Code does notrecognize absolute divorce, but only legal separation(Articles 97 to 108), thereby impliedly repealing Act2710; but other provisions of the Code clearlysafeguard rights and actions arising under thepreceding law. Its Article 4 expresses the wellestablished principle that "laws shall have noretroactive effect unless the contrary is provided"; andArticle 2258 plainly indicates that rights and actions

already existing (and a fortiori, actions alreadyinitiated) should be governed by the prior legislation.

Art. 2258. Actions and rights which came into beingbut were not exercised before the effectivity of thisCode, shall remain in full force in conformity with theold legislation; but their exercise, duration and theprocedure to enforce them shall be regulated by thisCode and by the Rules of Court. If the exercise of theright or of the action was commenced under the oldlaws, but is pending on the date this Code takes effect,and the procedure was different from that establishedin this new body of laws, the parties concerned maychoose which methods or course to pursue.

Further, Article 2267 explicitly enumerates the articlesthat are to apply to actions pending (like the present)when the new Civil Code became effective, and Articles97 to 108 on legal separation are not included therein.

Art. 2267. The following provisions shall apply not onlyto future cases but also to those pending on the datethis Code becomes effective:

(1) Article 29, relative to criminal prosecutions whereinthe accused is acquitted on the ground that his guilthas not been proved beyond reasonable doubt;.

(2) Article 33, concerning cases of defamation, fraud,and physical injuries.

The plain implication of these provisions is that theCode did not intend its provisions on legal separationto apply retroactively; and that the change fromabsolute divorce to legal separation was not designedto affect at the time the reform was introduced.

Thus the present case is readily distinguished from thecase of divorce proceedings instituted under ExecutiveOrder No. 141 of the Japanese occupation Executive

Commission, and which were pending at the liberationof the Islands. We ruled in Pea de Luz vs. Court of First Instance of Leyte, 43 Off. Gaz., p. 4102, thatsuch pending divorce proceedings must be dismissedbecause the occupation divorce law ceased to be inforce and effect upon liberation of the nationalterritory, and because the proclamation of GeneralMcArthur in Leyte on October 23, 1944, had abrogatedall occupation legislation absolutely and withoutqualification. The repeal of Act 2710 by the new Civil

Code is in a different position, since the transitionalprovisions of the latter law expressly prescribe, as wehave seen, the subsistence of rights derived from actsthat took place under the prior legislation.

It is of no comment that the conviction of the husbandonly became final after the new Civil Code, denyingabsolute divorce, came into effect, for their Court hasalready ruled in Chereau vs. Fuentebellla (43 Phil.,220) that section 8 of Act 2710 1is only evidentiary incharacter, since it merely has reference, of course, tothe species of proof required to establish the basal facton which the right to the divorce rests; and thecircumstance that this fact is not so proved in no wise

impairs the jurisdiction of the Court.".The decision appealed from is reversed, and a new

judgment shall be entered granting a decree of absolute divorce as prayed for. Without costs.

Paras, C.J., Pablo, Bengzon, Padilla, Montemayor,Reyes, A., and Bautista Angelo, JJ., concur.

Footnotes

1 A divorce shall not be granted without the guilt of the defendant being established by final sentence in acriminal action. Sec. 8, Act 2710.

AZNAR ET AL VS GARCIA

FACTS: Edward Christensen is a citizen of the Stateof California and domiciled in the Philippines. Heexecuted in his will acknowledging his natural daughterMaria Lucy Christensen as sole heir but left a legacy of some money in favor of Helen Christensen Garcia whois declared by the Supreme Court in its decision asacknowledged natural daughter of Edward C. Counselof Helen asserts that her claim must be increased inview of the successional rights of illegitimate childrenunder Phil. law. Counsel of Maria insists that Art. 16(2) provides that the NATIONAL LAW OF THE PERSOapplies in intestate and testamentary successions andsince Edward C. is a citizen of CA, its law should beapplied. Lower court ruled that CA law should beapplied thus this petition for review.

Issue:

What law should be applicable Philippine or CaliforniaLaw?


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Ruling:

The court refers to Art. 16 (2) providing that intestateand testamentary successions with respect to order of succession and amt. of successional right is regulatedby the NATIONAL LAW OF THE PERSON.

California Probate Code provides that a testator maydispose of his property in the form and manner hedesires.

Art. 946 of the Civil Code of California provides that if no law on the contrary, the place where the personalproperty is situated is deemed to follow the person of its owner and is governed by the LAW OF HISDOMICILE.

These provisions are cases when the Doctrine of Renvoi may be applied where the question of validityof the testamentary provision in question is referredback to the decedents domicile the Philippines.

S.C. noted the California law provides 2 sets of lawsfor its citizens: One for residents therein as providedby the CA Probate Code and another for citizensdomiciled in other countries as provided by Art. 946 of the Civil Code of California.

The conflicts of law rule in CA (Art. 946) authorize thereturn of question of law to the testators domicile. Thecourt must apply its own rule in the Philippines asdirected in the conflicts of law rule in CA, otherwise thecase/issue will not be resolved if the issue is referredback and forth between 2 states.

The SC reversed the lower courts decision andremanded the case back to it for decision withan instruction that partition be made applyingthe Philippine law.

Tanada vs. Tuvera, 136 SCRA 27 (1985)

FACTS: Invoking the peoples right to be informed onmatters of public concern, a right recognized in Section6, Article IV of the 1973 constitution, petitioners seeka writ of mandamus to compel respondent publicofficials to publish, and/or cause the publication in theOfficial Gazette, of various presidential decrees, lettersof instructions, general orders,proclamations, executive orders, letter of implementation and administrative orders. Therespondents would have this case dismissed on theground that petitioners have no legal personality tobring this petition. Petitioners maintain that since thesubject of the petition concerns a public right and itsobject is to compel public duty, they need not showany specific interest. Respondents further contend thatpublication in the OG is not a sine qua nonrequirement for the effectivity of laws where the lawsthemselves provide for their own effectivity dates.

ISSUE: Whether or not publication in the OfficialGazatte is an indispensable requirement for theeffectivity of the PDs, LOIs, general orders, EOs, etc.where the laws themselves provide fortheir own effectivity dates.

RULING: Yes. It is the peoples right to be informed onmatters of public concern and corollarily access toofficial records, and to documents and paperspertaining to official acts, transactions,

or decisions, shall be afforded the citizens subject tosuch limitation as may be provided by law (Sec. 6 Art.IV, 1973 Constitution). Laws, to be valid andenforceable, must be published in the OG or otherwiseeffectively promulgated. The fact that a PD or LOIstates its date of effectivity does not preclude theirpublication in the OG as they constitute importantlegislative acts. The publication of presidentialissuances of public nature or of general applicability is a requirement of due process. Before a person maybe bound by law, he must first be officially informed of its contents.

Important Point: It illustrates how decrees and

issuances issued by one man Marcosare in fact lawsof general application and provide for penalties. Theconstitution afforded Marcos both executive andlegislative powers. The generality of law (Civil Code,Art. 14) will never work without constructive notice.The ruling of this case provides the publicationconstitutes the necessary constructive notice and isthus the cure for ignorance as an excuse. Ignorancewill not even mitigate the crime.

YAO KEE VS SY-GONZALES

F: Sy-Kiat, a Chinese national, died in 1977 inKaloocan City, where he was residing, leaving behindsubstantial real and personal properties here in thePhils. Petition for letters of administration filed by hisnatural children, was opposed on the ground that SyKiat was legally married to Yao Kee, in Fookien, Chinaon 1/13/31 and that the oppositors are the legitimatechildren. The probate court rendered judgment in favorof the oppositors; this was modified and set aside bythe CA w/c held that both sets of children wereacknowledged natural children. Both parties moved forpartial reconsideration.

HELD: For failure to prove the foreign law or custom,and consequently, the validity of the marriage inaccordance w/ said law or custom, the marriagebetween Yao Kee and Sy Kiat cannot be recognized inthis jurisdiction. In the case at bar, petitioners did notpresent any competent evidence relative to the lawand customs of China on marriage. The testimonies of Yao and Gan Ching cannot be considered as proof of China's law or custom on marriage not only bec. theyare self-serving evidence, but more importantly, thereis no showing that they are competent to testify on thesubject matter.Custom is defined as "a rule of conduct formed byrepetition of acts, uniformly observed (practiced) as a


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social rule, legally binding and obligatory." The lawrequires that "a custom must be proved as a fact,according to the rules of evidence." On this score theCourt had occasion to state that "a local custom as asource of right can not be considered by a court of

justice unless such custom is properly established bycompetent evidence like any other fact." The sameevidence, if not one of a higher degree, should berequired of a foreign custom.

_________________________________________

G.R. No. L-25265 May 9, 1978

PEOPLE OF THE PHILIPPINES, plaintiff-appellant,vs.SOCORRO C. RAMOS, defendant-appellee, PHOENIXPUBLISHING HOUSE INC., intervenor.

G.R. No. L-25644 May 9, 1978

SOCORRO C. RAMOS, petitioner,vs.HON. PLACIDO RAMOS, in his capacity as Presiding

Judge, Branch III, CFI, Manila; and the PEOPLE OF THEPHILIPPINES, represented by State Prosecutor DELIAP. MEDINA, respondents.

Solicitor General Arturo A. Alafriz, Assistant SolicitorGeneral Pacifica P. de Castro and Solicitor Sumilang V.Bernardo for People of the Philippines.

Florence D. Regalado for Socorro C. Ramos.

Sevilla & Aquino Law Office for Intervenor.

SANTOS, J.:

The above-entitled cases the first an appeal and thesecond a special civil action are decided jointlybecause they raise a common issue which arosefrom the prosecution of a common defendant, SocorroC. Ramos, for alleged violations of the copyright law viz, whether or not the extra day in the leap year,1964 should be taken into consideration in thecomputation of the two-year period of prescriptionprovided in Section 24 of the copyright law.

The factual and procedural antecedents follow.

On September 3, 1965, two criminal cases No80006 of the Court of First Instance of Manila, BranchIII, and No. 80007 also of the same Court, BranchXIV identical in every respect, except for the factthat they pertain to different editions of the sametextbook, were filed against Socorro C. Ramos, foralleged violations of Act 3134, otherwise known as theCopyright Law, as amended. The information inCriminal Case No. 80007 alleged

That on or about July to September, 1963, in the Cityof Manila and within the jurisdiction of this HonorableCourt, the said accused, as the proprietor aid generalmanager of the National Book Store, as enterpriseengaged in the business of publishing, selling anddistributing books, did then and there, wilfully andillegaly sell and distribute spurious and pirated copiesof the high school textbook, entitled General ScienceToday for Philippine School, First Year, by Gilam, VanHouten and Cornista, said accused knowing that saidbook was duly copyrighted by the Phoenix PublishingHouse, Inc., and was being distributed exclusively byits sister corporation, Alemar's or Sibal and Sons,Inc. 1

On September 7, 1965, identical motions toquash 2 were filed by accused Ramos on the ground of prescription, alleging therein, inter alia, that:

xxx xxx xxx

Consequently, the delivery of the alleged offense wasmade as early as July 17, 1963 and all subsequentknowledge or discoveries of posterior sales andpossession of said books by the respondents, includingthat involved in the police search of September 4,1963 were only confirmatory of the first. Under 91 of the Revised Penal Code and in the light of the afore-

quoted ruling announced in the Pangasinan Trans. Co.case, supra; the prescriptive period, therefore,commenced to run on the day after such discovery onJuly 17, 1963 and, accordingly, the offense has longsince prescribed since under the Copyright Law, Act3134:

Sec. 24. All actions, suits, or proceedings arising underthis Act shall be originally cognizable by the Court of First Instance of the Philippine Islands and shallprescribe after two years from the time the cause of action arose.

Assuming arguendo, that the last actual sale should bethe starting point of computation, again the offensecharged has prescribed, since, as already pointed out,the documented evidence on this point shows that thelast sale was made on August 30, 1963.

The prosecution, also in both cases, filed its Oppositionto the Motion to Quash 3 raising two issues, to wit:

1. That the issue of prescription in this case can beresolved only after the presentation of evidence andhence, it is premature to raise that issue before trial


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2. That, as the violation committed by the defendantwas a continuing offense, the two-year prescriptiveperiod may be counted from September 3, 1963, orone day before the search in defendants' premises ,which confirmed her possession of spurious andpirated copies of the textbook in question.

The prosecution's theory is that "(T)he crime being acontinuing offense, the statute of limitations begins torun from the completion of the last act or series of acts

which constitute the offense, " and this last act wascommitted on September 3, 1963. Therefore when theinformation was filed on September 3, 1965, it wasfiled within the two-year period, albeit the last day of the prescriptive period.

Again, in both the accused filed a "Reply to Oppositionto Motion to Quash." 4 She alleged that even assumingthat the crime is a continuing offense, the prescriptiveperiod should start from August 30, 1963, the date of the last invoiced sale, and not September 3, 1963, asthere was no indubitable proof that she had sold copiesof the questioned book on that date. Nonetheless,accused contended that even if the prescriptive period

should start from September 3, 1963, as proposed bythe prosecution, the two-year period was tolled onSeptember 2, 1965. She pointed out that two yearsmean a period of 730 days in accordance with Article13 of the New Civil Code, and 1964, being a leap yearconsisting of 366 days, the 730th day fell onSeptember 2, 1965. Hence, "... . when the informationwas filed on September 3, 1965, the offense, if any,had already prescribed. "

The prosecution filed a Rejoinder 5 in both casesalleging as follow:

l. That February 28, and 29, 1964, should be regarded

as one day only, and consequently, the two-yearperiod commencing on September 3, 1963 would endon September 3, 1965;

2. That under Act No. 3326, the prescriptive periodwas interrupted by the filing of the proceedings in thefiscal's office;

3. That prescription would not lie in this case becausethe complainant never waived the right to prosecutethe defendant.

Accused Ramos, also in cases, filed an Urgent Motionto Strike the Rejoinder, 6 on the ground that it wasfiled after the case had been submitted for resolution.She prayed that "in the event that the same should atall be considered and allowed, that the accused benotified thereof and granted reasonable opportunity tofile a surrejoinder...".

It appears that the Rejoinder was admitted by bothtrial courts, but a Surrejoinder 7 was filed only inCriminal Case No. 80006. Here, the accused traversedthe prosecution's contentions in the Rejoinder, thus:

1. Under applicable and specific provisions of Philippinelaw, the two-year period of prescription commencingon September 3, 1963 ended on September 2, 1965...;

2. The filing (of) proceedings in the Office of the CityFiscal of Manila did not interrupt the prescriptiveperiod.

In Criminal Case No. 80007, Hon. Jesus De Veyra

granted the motion to quash by an order datedOctober 7, 1965. 8 Pertinent portion of his orderreads:

. . . . And now to the main issue - whether the crimehas prescribed. In the Opposition to the Motion toQuash, the Prosecution, in its insistence on the theoryof a continuing crime, admits that the two-yearprescriptive period should run from September 3,1963. This case was filed on September 3, 1965 -oneday too late. Article 13, CCP provides that year shallmean a period of 365 days. This had been applied tocriminal cases (People v. del Rosario, 51 O.G., 2686).1964 was a leap year so that when this case was

filed, it was filed one day too late.The Motion to Quash is, therefore, granted and thiscase dismissed on the ground that the crime hasalready prescribed. (Emphasis supplied.)

The prosecution appealed the above order to this Courton October 15, 1965. 9

Meanwhile, in Criminal Case No. 80006, the motion toquash was not resolved until December 23, 1965. Onthis date, Hon. Placido Ramos denied the motion toquash, and set the arraignment of the accused onJanuary 12, 1966, thus

Wherefore, finding the information to have been filedwell within the statutory period of two years from thedate of the last offense committed by the accused theCourt denies the motion to quash.

The arraignment of the accused is hereby set onJanuary 12, 1966 at 8:30 A.M.

The trial court refused to accept the prosecution's viewthat the prescriptive period should run from September3, held instead, that the same should commence onSeptember 4, 1963.

xxx xxx xxx

The evidence shows that on September 4, 1963, theManila Police by virtue of a search warrant procured bythe offended party, seized, among other articles, 69copies of General Science Today for PhilippineSchools, First Year, by Gilman, Van Houten andCornista and one copy of the same textbook forSecond Year (Exhibit 5). The evidence likewise showsthat on September 3, 1963, the National Book Store,run and managed by the accused, sold one saidtextbook, Exhibit 'D' and Exhibit '2'. The mere


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February 28, and 29 of a leap year should be countedas one day or separate days in computing the period of prescription.

2. In G.R. No. L-25644-the special civil action theissues raised in the foregoing assignment of errorswere relied upon in respondent People'sAnswer. 22 And, following respondent Judge Ramos'reasoning, it was contended that the period of prescription should start from September 4, 1963, and

not September 3, 1963, as originally proposed by theprosecution. Furthermore, as an affirmative defense, itwas alleged that the petitioner has no cause of actionfor certiorari, prohibition and mandamus since JudgeRamos did not commit any grave abuse of discretion inrefusing to quash the information. Respondentcontended that the "(P)etitioner's remedy is to appealthe judgment of conviction rendered after a trial on themerits. " This allegation was opposed by petitionerRamos; 23 she insisted that she had a cause of actionfor certiorari prohibition and mandamus. RespondentPeople filed a Reply Memorandum 24 disputingpetitioner's allegations.

We are, thus, faced with conflicting orders of twodifferent Branches of the Court of First Instance of Manila-one holding that the crime has prescribed, theother that it has not.

1. Now to resolve the preliminary issues:

a. On the propriety of the special civil action forcertiorari and prohibition.

We find for petitioner. As We had occasion to holdin Quizon vs. Baltazar, 76 SCRA 559:

As to the contention of respondents that the denial of amotion to quash is not a ground for certiorari andprohibition, suffice it to state that to allow an accusedto undergo the ordeals of trial and conviction when theinformation or complaint against him is patentlydefective or the offense charged therein has beenindisputably shown to have already prescribed is unfairand unjust for which reason, procedurally, the ordinaryremedy of appeal cannot be plain and adequate.

As to mandamus, We are incline to agree withrespondent's allegation that "petitioner has no cause of action for mandamus which is a writ intended tocontrol the exercise of a purely ministerial function. Toquash an information is not a ministerialfunction," 25 However, mandamus as a remedy is asuperfluity here, considering that petitioner can obtainfull relief thru certiorari and prohibition.

b. On the applicability of the four-year prescriptiveperiod provided in Act No. 3326. 26

The same is not applicable. Said Act provides:

Section 1. Violations penalized by special actsshall unless otherwise provided in such acts, prescribein accordance with the following rules: (a)........... (b)

after four years for those punished by imprisonmentfor more than one month, but less than two years; ...(Emphasis supplied.)

Act No. 3326 applies only if the special act does notprovide for its own prescriptive period. It has noapplication here, where the Copyright Law provides forits own prescriptive period, viz:

Section 24. All actions, suits, or proceedings arising

under this Act shall be originally cognizable by theCourts of First Instance of the Philippines and shallprescribe after two years from the time the cause of action arose.

2. Now on the main issue of prescription. The questionto be resolved is the proper computation of the two-year period of prescription from September 3, 1963.Resolution of this issue hinges, in turn, on whetherFebruary 28, and 29 of a leap year, 1964, should becounted as one day, as proposed by the prosecution;or as separate days, as alleged by the defense.

This issue which was in 1965 still undetermined is now

a settled matter. It was held in 1969 in Namarco vs.Tuazon27 that February 28 and 29 of a leap yearshould be counted as separate days in computingperiods of prescription. Thus, this Court, speaking thruformer Chief Justice Roberto Concepcion, held thatwhere the prescriptive period was supposed tocommence on December 21, 1955, the filing of theaction on December 21, 1965, was done after the ten-year period has lapsed since 1960 and 1964 wereboth leap years and the case was thus filed two (2)days too late. Since this case was filed on September3, 1965, it was filed one day too late; considering thatthe 730th day fell on September 2, 1965 the year1964 being a leap year.

In explaining the rationale for its holding, the Courttook pains to trace the antecedent decisional andstatutory bases for its conclusion, thus

Prior to the approval of the Civil Code of Spain, theSupreme Court thereof held, on March 30, 1887, that,when the law spoke of months, it meant a 'natural'month or 'solar' month, in the absence of expressprovision to the contrary. Such provision wasincorporated into the Civil Code of Spain, subsequentlypromulgated. Hence, the same Supreme Courtdeclared that, pursuant to Article 7 of said Code,'whenever months are referred to in the law. it shall beunderstood that months are of 30 days,' not the'natural', 'solar' or 'calendar' months, unless they are'designated by name,' in which case, 'they shall becomputed by the actual number of days they have.'This concept was, later, modified in the Philippines, bySection 13 of the Revised Administrative Code,pursuant to which 'month shall be understood to referto a calendar month.' With the approval of the CivilCode of the Philippines (RA 386) we have reverted tothe provisions of the Spanish Civil Code in accordancewith which a month is to be considered as the regular


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30-month and not the solar or civil month with theparticularity that, whereas the Spanish Civil Codemerely mentioned 'months, days or nights,' ours hasadded thereto the term 'years' and explicitly ordains inArticle 13 that it shall be understood that years are of three hundred sixty-five days. 28

With respect to the opinion of some members of theCourt that Article 13 of the Civil Code is unrealistic, theCourt adverted to the proper remedy thus

Although some justices of the Supreme Court areinclined to think that Article 13 of the Civil Codedefining 'years' to mean 365 days is not realistic, theremedy is not judicial legislation. If public interestdemands a reversion to the policy embodied in theRevised Administrative Code, this may be donethrough legislative process, not by judicial decree. 29

Finally, there is no merit in the allegation that thereckoning of the prescriptive period should start fromSeptember 4, 1963. This was the date when the policeauthorities discovered several pirated books inaccused's store. But the accused was charged, in both

Criminal Cases Nos. 80006 and 80007, with havingallegedly sold anddistributed spurious and piratedcopies of the textbook in question, not of illegalpossession of the same. The prosecution's claim thatthe preliminary investigation proceedings in the ManilaCity Fiscal's Office and in the prosecution Division of the Department of Justice interrupted the running of the prescriptive period, is also without merit. We heldin People vs. Tayco 30 that the running of the period of prescription is interrupted not by the act of theoffended party in reporting the offense to the final butthe filing of the complaint or information in court.

WHEREFORE, the order dated October 7, 1965 of the

Court of First Instance of Manila Branch XIV in CriminalCase No. 80007 dismissing the case on the ground of prescription, is AFFIRMED. The order dated December23, 1965 of the same court, Branch III, in CriminalCase No. 80006, is REVERSED and SET ASIDE, and thecase is DISMISSED, on the ground that the crimecharged therein had already prescribed. Withoutpronouncement as to costs.

VELAYO VS SHELL CO

100 Phil 168

Torts and Damages Obligations arising from human

relationsPrior to 1948, Commercial Airlines (CALI) owed P170k(abt. $79k) to Shell and CAL offered its C-54 plane aspayment to Shell Company (the plane was inCalifornia) but Shell at that time declined as it thoughtCALI had sufficient money to pay its debt. In 1948however, CALI was going bankrupt so it called upon aninformal meeting of its creditors. In that meeting, thecreditors agreed to appoint representatives to aworking committee that would determine the order of

preference as to how each creditor should be paid.They also agreed not to file suit against CALI but CALIdid reserve that it will file insolvency proceedingsshould its assets be not enough to pay them up. ShellCompany was represented by a certain Fitzgerald tothe three man working committee. Later, the workingcommittee c onvened to discuss how CALIs assetshould be divided amongst the creditors but while suchwas pending, Fitzgerald sent a telegraph message toShell USA advising the latter that Shell Philippines is

assigning its credit to Shell USA in the amount of $79k,thereby effectively collecting almost all if not the entireindebtedness of CALI to Shell Philippines. Shell USAgot wind of the fact that CALI has a C-54 plane isCalifornia and so Shell USA petitioned before aCalifornia court to have the plane be the subject of awrit of attachment which was granted.

Meanwhile, the stockholders of CALI were unaware of the assignment of credit made by Shell Philippines toShell USA and they went on to approve the sale of CALIs asset to the Philippine Airlines. In Septemb er1948, the other creditors learned of the assignmentmade by Shell. This prompted these other creditors tofile their own complaint of attachment against CALIsassets. CALI then filed for insolvency proceedings toprotect its assets in the Philippines from beingattached. Velayos appointment as CALIs assignee wasapproved in lieu of the insolvency proceeding. In orderfor him to recover the C-54 plane in California, it filedfor a writ of injunction against Shell Philippines in orderfor the latter to restrain Shell USA from proceedingwith the attachment and in the alternative that

judgment be awarded in favor of CALI for damagesdouble the amount of the C-54 plane. The C-54 planewas not recovered. Shell Company argued it is notliable for damages because there is nothing in the lawwhich prohibits a company from assigning its credit, it

being a common practice.ISSUE: Whether or not Shell is liable for damagesconsidering that it did not violate any law.

HELD: Yes. The basis of such liability, in the absence of law, is Article 21 of the Civil Code which states:

Art. 21. Any person who willfully causes loss or injuryto another in a manner that is contrary to morals,good customs or public policy shall compensate thelatter for the damage.

Thus at one stroke, the legislator, if the forgoing rule isapproved (as it was approved), would vouchsafeadequate legal remedy for that untold numbers of moral wrongs which is impossible for human foresightto provide for specifically in the statutes. A moralwrong or injury, even if it does not constitute aviolation of a statute law, should be compensated bydamages. Moral damages (Art. 2217) may berecovered (Art. 2219). In Article 20, the liability fordamages arises from a willful or negligent act contraryto law. In this article, the act is contrary to morals,good customs or public policy.


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SEA COMMERCIAL COMPANY, INC., petitioner, vs. THEHONORABLE COURT OF APPEALS, JAMANDREINDUSTRIES, INC. and TIRSO JAMANDRE,respondents.

D E C I S I O N

GONZAGA-REYES, J.:

In this petition for review by certiorari, SEACommercial Company, Inc. (SEACOM) assails the

decision of the Court of Appeals in CA-G.R. CV NO.31263 affirming in toto the decision of the RegionalTrial Court of Manila, Branch 5, in Civil Case No.122391, in favor of Jamandre Industries, Inc. (JII) etal., the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered in favor of the defendant and against the plaintiff, ordering theplaintiff:

1) To pay defendant the sum of P66,156.15 (minus18,843.85) with legal interest thereon, from the dateof the filing of the counterclaim until fully paid;

2) To pay defendant P2,000.00 as moral andexemplary damages;

3) To pay attorneys fees in the sum of P10,000.00;and

4) To pay the costs of this suit.

SO ORDERED.

SEACOM is a corporation engaged in the business of selling and distributing agricultural machinery,products and equipment. On September 20, 1966,SEACOM and JII entered into a dealership agreementwhereby SEACOM appointed JII as its exclusive dealerin the City and Province of Iloilo [1] Tirso Jamandreexecuted a suretyship agreement binding himself

jointly and severally with JII to pay for all obligationsof JII to SEACOM[2]. The agreement was subsequentlyamended to include Capiz in the territorial coverageand to make the dealership agreement on a non-exclusive basis [3]. In the course of the businessrelationship arising from the dealership agreement, JIIallegedly incurred a balance of P18,843.85 for unpaiddeliveries, and SEACOM brought action to recover saidamount plus interest and attorneys fees.

JII filed an Answer denying the obligation andinterposing a counterclaim for damages representingunrealized profits when JII sold to the Farm SystemDevelopment Corporation (FSDC) twenty one (21)units of Mitsubishi power tillers. In the counterclaim,JII alleged that as a dealer in Capiz, JII contracted tosell in 1977 twenty-four (24) units of Mitsubishi powertillers to a group of farmers to be financed by saidcorporation, which fact JII allegedly made known topetitioner, but the latter taking advantage of saidinformation and in bad faith, went directly to FSDC anddealt with it and sold twenty one (21) units of saidtractors, thereby depriving JII of unrealized profit of

eighty-five thousand four hundred fifteen and 61/100pesos (P85,415.61).

The trial court rendered its decision on January 24,1990 ordering JII to pay SEACOM the amount of Eighteen Thousand Eight Hundred Forty Three and85/100 (P18,843.85) representing its outstandingobligation. The trial court likewise granted JIIscounterclaim for unrealized profits, and for moral andexemplary damages and attorney fees as above

quoted.SEACOM appealed the decision on the counterclaim.

The Court of Appeals held that while there exists noagency relationship between SEACOM and JII, SEACOMis liable for damages and unrealized profits to JII.

This Court, however, is convinced that with or withoutthe existence of an agency relationship betweenappellant SEACOM and appellee JII andnotwithstanding the error committed by the lowercourt in finding that an agency relationship existedbetween appellant and defendant corporation the

former is liable for the unrealized profits which thelatter could have gained had not appellant unjustlystepped in and in bad faith unethically intervened.

It should be emphasized that the very purpose of thedealership agreement is for SEACOM to have JII as itsdealer to sell its products in the provinces of Capiz andIloilo. In view of this agreement, the second assignederror that the lower court erred in holding thatappellant learned of the FSDC transaction fromdefendant JII is clearly immaterial and devoid of merit. The fact that the dealership is on a non-exclusive basis does not entitle appellant SEACOM to

join the fray as against its dealer. To do so, is toviolate the norms of conduct enjoined by Art. 19 of theCivil Code. By virtue of such agreement, thecompetition in the market as regards the sale of farmequipment shall be between JII, as the dealer of SEACOM and other companies, not as against SEACOMitself. However, SEACOM, not satisfied with thepresence of its dealer JII in the market, joined thecompetition even as the against the latter and,therefore, changed the scenario of the competitionthereby rendering inutile the dealership agreementwhich they entered into the manifest prejudice of JII. Hence, the trial court was correct when it appliedArt. 19 of the Civil Code in the case at bar in thatappellant SEACOM acted in bad faith when it competedwith its own dealer as regards the sale of farmmachineries, thereby depriving appellee JII of theopportunity to gain a clear profit of P85,000.00.

and affirmed the judgment appealed from in toto.

Hence this petition for review on certiorari, whichsubmits the following reasons for the allowancethereof:

THE RESPONDENT COURT OF APPEALS DECQUESTIONS OF SUBSTANCE IN A WAY NOT
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ACCORDANCE WITH LAW AND JURISPRUDENCE,CONSIDERING THAT:

A

THE RESPONDENT COURT OF APPEALS GRAVELYERRED IN RULING THAT PETITIONER IS LIABLE TOPAY DAMAGES AND UNREALIZED PROFITS TO THEPRIVATE RESPONDENTS DESPITE THE FACT THAT NOAGENCY RELATIONSHIP EXISTS BETWEEN THEM.

B

THE RESPONDENT COURT OF APPEALS GRAVELYERRED IN RULING THAT PETITIONER ACTED IN BADFAITH AGAINST THE PRIVATE RESPONDENTCORPORATION DESPITE THE FACT THAT SAID RULINGIS CONTRARY TO THE EVIDENCE ON RECORD.

C

THE RESPONDENT COURT OF APPEALS GRAVELYERRED IN RULING THAT THE NON-EXCLUSIVITYCLAUSE IN THE DEALERSHIP AGREEMENT EXECUTEDBETWEEN THE PETITIONER AND PRIVATERESPONDENT CORPORATION PRECLUDES THEPETITIONER FROM COMPETING WITH THE PRIVATERESPONDENT CORPORATION.

D

THE RESPONDENT COURT OF APPEALS GRAVELYERRED IN RULING THAT PRIVATE RESPONDENT ISENTITLED TO UNREALIZED PROFITS, MORAL ANDEXEMPLARY DAMAGES AND ATTORNEYS FEES .[4]

Petitioner SEACOM disputes the conclusion of the Courtof Appeals that despite the fact that no agencyrelationship existed between the parties, the SEACOMis still liable in damages and unrealized profits for thereason that it acted in bad faith. Petitioner SEACOMinvokes the non-exclusivity clause in the dealershipagreement and claims that the transaction with FSDCwas concluded pursuant to a public bidding and not onthe basis of alleged information it received fromprivate respondent Tirso Jamandre. Moreover,petitioner SEACOM claims that it did not underprice itsproducts during the public bidding wherein bothSEACOM and JII participated. Petitioner also disputesthe award of moral damages to JII which is acorporation, in the absence of any evidence that thesaid corporation had a good reputation which wasdebased.

Private respondents in their comment, contends thatthe four assigned errors raise mixed questions of factand law and are therefore beyond the jurisdiction of the Supreme Court which may take cognizance of onlyquestions of law. The assigned errors were alsorefuted to secure affirmance of the appealeddecision. JII maintains that the bidding set by FSDCon March 24, 1997 was scheduled after thedemonstration conducted by JII, and after JII informedSEACOM about the preference of the farmers to buy

Mitsubishi tillers. JII further rebuts the SEACOMscontention that the transaction with FSDC waspursuant to a public bidding with full disclosure to thepublic and private respondent JII considering that JIIhad nothing to do with the list of 37 bidders andcannot be bound by the listing made by SEACOMsemployee; moreover, JII did not participate in thebidding not having been informed aboutit. Furthermore, the price at which SEACOM sold toFSDC was lower than the price it gave to JII. Also,

even if the dealership agreement was not exclusive, itwas breached when petitioner in bad faith sold directlyto FSDC with whom JII had previously offered thesubject farm equipment. With respect to the awards of moral and exemplary damages, JII seeks anaffirmation of the ruling of the Court of Appeals

justifying the awards.

SEACOM filed Reply defending the jurisdiction of thisCourt over the instant petition since the decision of theCourt of Appeals was based on a misapprehension of facts. SEACOM insists that FSDCs purchase wasmade pursuant to a public bidding, and even if SEACOM did not participate thereon, JII would not

necessarily have closed the deal since thirty seven(37) bidders participated. SEACOM contends that noevidence was presented to prove that the bidding wasa fraudulent scheme of SEACOM and FSDC. SEACOMfurther controverts JIIs contention that JII did nottake part in the bidding as Tirso Jamandre was one of the bidders and that SEACOM underpriced its productsto entice FSDC to buy directly from it. In fine, JII isnot entitled to the award of unrealized profits anddamages.

In its Rejoinder, private respondents insist that there isan agency relationship, citing the evidence showingthat credit memos and not cash vouchers were issued

to JII by SEACOM for every delivery from November26, 1976 to December 24, 1978. Private respondentsmaintain that SEACOM to rpedoed the emerging dealbetween JII and FSDC after being informed about it byJII by dealing directly with FSDC at a lower price andafter betraying JII, SEACOM would cover up the deceitby conniving with FSDC to post up a sham publicbidding.

SEACOM s sur-rejoinder contains basically a reiterationof its contention in previous pleadings. Additionally, itis contended that private respondents are barred fromquestioning in their Rejoinder, the finding of the Courtof Appeals that there is no agency relationship

between the parties since this matter was not raised aserror in their comment.

The core issue is whether SEACOM acted in bad faithwhen it competed with its own dealer as regards thesale of farm machineries to FSDC.

Both the trial court and the Court of Appeals heldaffirmatively; the trial court found that JII was anagent of SEACOM and the act of SEACOM in dealingdirectly with FSDC was unfair and unjust to its agent,
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and that there was fraud in the transaction betweenFSDC and SEACOM to the prejudice of JII. On theother hand, the Court of Appeals ruled that there wasno agency relationship between the parties butSEACOM is nevertheless liable in damages for havingacted in bad faith when it competed with its owndealer in the sale of the farm machineries toFSDC. Both courts invoke as basis for the awardArticle 19 of the Civil Code which reads as follows:

"Art. 19. Every person must, in the exercise of hisrights and in the performance of his duties, act with justice, give everyone his due and observe honestyand good faith.

The principle of abuse of rights stated in the abovearticle, departs from the classical theory that he whouses a right injures no one. The modern tendency isto depart from the classical and traditional theory, andto grant indemnity for damages in cases where there isan abuse of rights, even when the act is not illicit .[5]

Article 19 was intended to expand the concept of tortsby granting adequate legal remedy for the untold

number of moral wrongs which is impossible for humanforesight to provide specifically in statutory law .[6] If mere fault or negligence in ones acts can make himliable for damages for injury caused thereby, withmore reason should abuse or bad faith make himliable. The absence of good faith is essential to abuseof right. Good faith is an honest intention to abstainfrom taking any unconscientious advantage of another,even through the forms or technicalities of the law,together with an absence of all information or belief of fact which would render the transactionunconscientious. In business relations, it means goodfaith as understood by men of affairs .[7]

While Article 19 may have been intended as a meredeclaration of principl e[8] , the cardinal law on humanconduct expressed in said article has given rise tocertain rules, e.g. that where a person exercises hisrights but does so arbitrarily or unjustly or performshis duties in a manner that is not in keeping withhonesty and good faith, he opens himself toliability.[9] The elements of an abuse of rights underArticle 19 are: (1) there is a legal right or duty; (2)which is exercised in bad faith; (3) for the sole intentof prejudicing or injuring another .[10]

The issue whether JII is entitled to recovery on itscounterclaim for unrealized profit in the twenty one(21) units of Mitsubishi power tillers sold by SEACOMto FSDC was resolved by the trial court in favor of JIIon the basis of documentary evidenc e[11] showingthat (1) JII has informed SEACOM as early as February1977 of the promotions undertaken by JII for the saleof 24 contracted units to FSDC and in connectiontherewith, requested a 50% discount to make the pricecompetitive, and to increase the warranty period foreight months to one year. In said letter Jamandreclarified that they were not amenable to SEACOMsoffering directly to FSDC and to be only g iven the

usual overriding commission as we have considerableinvestments on this transaction. (2) In response, thegeneral sales manager of SEACOM declined to give therequested 50% discount and offered a less 30% less10% up to end March xxx on cash before deliverybasis, granted the requested extension of thewarranty period and stated that we are glad to notethat you have quite a number of units pending with theFSDC.

The trial court ruled that with said information,SEACOM dealt directly with FSDC and offered its unitsat a lower price, leaving FSDC no choice but to acceptthe said offer of (SEACOM).

In affirming the judgment of the of the trial court, theCourt of Appeals held that by virtue of the dealershipagreement the competition in the market as regardsthe sale of farm equipment shall be between JII, as thedealer of SEACOM, and other companies, not asagainst SEACOM itself, the Court stated:

However, SEACOM not satisfied with the presence of its dealer JII in the market, joined the competition

even as against the latter, and thereby changed thescenario of the competition thereby rendering inutilethe dealership agreement which they entered into tothe manifest prejudice of JII. Hence the trial court trialcourt was correct when it applied Art. 19 of the CivilCode in the case at bar in that appellant SEACOMacted in bad faith when it competed with its owndealer as regards the sale of farm machineries,thereby depriving appellee JII of the opportunity togain a clear profit of P85,000. 00.

We find no cogent reason to overturn the factualfinding of the two courts that SEACOM joined thebidding for the sale of the farm equipment after it was

informed that JII was already promoting the sales of said equipment to the FSDC. Moreover, the conclusionof the trial court that the SEACOM offered FSDC alower price than the price offered by JII to FSDC issupported by the evidence: the price offered by JII toFSDC is P27,167 per uni t[12] but the prices at whichSEACOM sold to FSDC were at P22,867.00 for ModelCT 83-2, P21,093.50 for model CT 83-E, andP18,979.25 for model CT 534. The fact that SEACOMmay have offered to JII, in lieu of a requested 50%discount, a discount effectively translating to 37% of the list price and actually sold to FSDC at 35% lessthan the list price [13] does not detract from the factthat by participating in the bidding of FSDC, it actually

competed with its own dealer who had earlierconducted demonstrations and promoted its ownproducts for the sale of the very same equipment, Exh.

N for the plaintiff confirms that both SEACO M andJamandre participated in the bidding .[14] However,the SEACOM was awarded the contract directly fromManila.[15] The testimony of Tirso Jamandre that JIIwas the sole representative of SEACOM in the localdemonstrations to convince the farmers andcooperative officers to accept the Mitsubishi brand of
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equipment in preference to other brands, wasunrebutted by SEACOM.

Clearly, the bad faith of SEACOM was established. Byappointing as a dealer of its agricultural equipment,SEACOM recognized the role and undertaking of JII topromote and sell said equipment. Under thedealership agreement, JII was to act as a middlemanto sell SEACOMs products, in its area of operations,i.e. Iloilo and Capiz provinces, to the exclusion of other

places ,[16] to send its men to Manila for training onrepair, servicing and installation of the items to behandled by it, and to comply with other personnel andvehicle requirements intended for the benefit of thedealership .[17] After being informed of thedemonstrations JII had conducted to promote the salesof SEACOM equipment, including the operations at JIIsexpense conducted for five months, and the approvalof its facilities (service and parts) byFSDC,[18] SEACOM participated in the bidding for thesaid equipment at a lower price, placing itself in directcompetition with its own dealer. The actuations of SEACOM are tainted by bad faith.

Even if the dealership agreement was amended tomake it on a non-exclusive basis ,[19] SEACOM maynot exercise its right unjustly or in a manner that isnot in keeping with honesty or good faith; otherwise itopens itself to liability under the abuse of right ruleembodied in Article 19 of the Civil Code above-quoted. This provision, together with the succeedingarticle on human relation, was intended to embodycertain basic principles that are to be observed for therightful relationship between human beings and for thestability of the social order. [20] What is sought to bewritten into the law is the pervading principle of equityand justice above strict legalism .[21]

We accordingly resolve to affirm the award forunrealized profits. The Court of Appeals noted that thetrial court failed to specify to which the two appelleesthe award for moral and exemplary damages isgranted. However, in view of the fact that moraldamages are not as a general rule granted to acorporation, and that Tirso Jamandre was the one whotestified on his feeling very aggrieved and on hismental anguish and sleepless nights thinking of howSEACOM dealt with us behind (our) backs , [22] theaward should go to defendant Jamandre, President of JII.

WHEREFORE, the judgment appealed from is

AFFIRMED with the modification that the awardof P2,000.00 in moral and exemplary damages shall bepaid to defendant Tirso Jamandre.

Costs against appellant.

SO ORDERED.

Melo, (Chairman), Vitug, Panganiban, and Purisima,JJ., concur.

ABS CBN Broadcasting Corporation vs. CA [301 SCRA572 (Jan 21 1999)]Power of the Board of DirectorsDelegation to Executive Committee

Facts: In 1990, ABS CBN and Viva executed a FilmExhibition Agreement whereby Viva gave ABS CBN anexclusive right to exhibit some Viva films. Saidagreement contained a stipulation that ABS shall havethe right of first refusal to the next 24 Viva films for TV

telecast, provided that such right shall be exercised byABS from the actual offer in writing.Hence, through this agreement, Viva offered ABS a listof 36 films from which ABS may exercise its right of first refusal. ABS however, through VP Concio, did notaccept the list since she could only tick off 10 films.This rejection was embodied in a letter.In 1992, Viva again approached ABS with a listconsisting of 52 original films where Viva proposed tosell these airing rights for P60M.Vivas Vic del Rosario and ABS general managerEugenio Lopez III met at the Tamarind Grill to discussthis package proposal. What transcribed at thatmeeting was subject to conflicting versions.

According to Lopez, he and del Rosario agreed thatABS was granted exclusive film rights to 14 films forP36M, and that this was put in writing in a napkin,signed by Lopez and given to del Rosario. On theother hand, del Rosario denied the existence of thenapkin in which Lopez wrote something, and insistedthat what he and Lopez discussed was Vivas filmpackage of the 52 original films for P60M stated above,and that Lopez refused said offer, allegedly signifyinghis intent to send a counter proposal. When thecounter proposal arrived, Vivas BoD rejected it, hence,he sold the rights to the 52 original films to RBS.Thus, ABS filed before RTC a complaint for specificperformance with prayer for TRO against RBS and

Viva. RTC issued the TRO enjoining the airing of thefilms subject of controversy. After hearing, RTCrendered its decision in favor of RBS and Vivacontending that there was no meeting of minds on theprice and terms of the offer. The agreement betweenLopez and del Rosario was subject to Viva BoDapproval, and since this was rejected by the board,then, there was no basis for ABS demand that acontract was entered into between them. That the1990 Agreement with the right of first refusal wasalready exercised by Ms. Concio when it rejected theoffer, and such 1990 Agreement was an entirely newcontract other than the 1992 alleged agreement at theTamarind Grill. CA affirmed. Hence, this petition for

certiorari with SC.Lopez claims that it had not fully exercised its right of first refusal over 24 films since it only chose 10. Heinsists that SC give credence to his testimony that heand del Rosario discussed the airing of the remaining14 films under the right of first refusal agreement inTamarind Grill where there was a contract written inthe alleged napkin.

Issue: Whether or not there was a perfected contractbetween Lopez and del Rosario.
http://sc.judiciary.gov.ph/jurisprudence/1999/nov99/122823.htm#_edn16http://sc.judiciary.gov.ph/jurisprudence/1999/nov99/122823.htm#_edn17http://sc.judiciary.gov.ph/jurisprudence/1999/nov99/122823.htm#_edn18http://sc.judiciary.gov.ph/jurisprudence/1999/nov99/122823.htm#_edn19http://sc.judiciary.gov.ph/jurisprudence/1999/nov99/122823.htm#_edn20http://sc.judiciary.gov.ph/jurisprudence/1999/nov99/122823.htm#_edn20http://sc.judiciary.gov.ph/jurisprudence/1999/nov99/122823.htm#_edn21http://sc.judiciary.gov.ph/jurisprudence/1999/nov99/122823.htm#_edn22http://sc.judiciary.gov.ph/jurisprudence/1999/nov99/122823.htm#_edn22http://sc.judiciary.gov.ph/jurisprudence/1999/nov99/122823.htm#_edn22http://sc.judiciary.gov.ph/jurisprudence/1999/nov99/122823.htm#_edn21http://sc.judiciary.gov.ph/jurisprudence/1999/nov99/122823.htm#_edn20http://sc.judiciary.gov.ph/jurisprudence/1999/nov99/122823.htm#_edn19http://sc.judiciary.gov.ph/jurisprudence/1999/nov99/122823.htm#_edn18http://sc.judiciary.gov.ph/jurisprudence/1999/nov99/122823.htm#_edn17http://sc.judiciary.gov.ph/jurisprudence/1999/nov99/122823.htm#_edn16


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Held: NO. A contract is a meeting of minds between 2persons whereby one binds himself to give somethingor to render some service to another for aconsideration. There is no contract unless thefollowing requisites concur: (1) consent of thecontracting parties (2) object certain which is thesubject of the contract (3) cause of the obligation,which is established.Contracts that are consensual in nature are perfectedupon mere meeting of the minds. Once there is

concurrence between the offer and the acceptanceupon the subject matter, consideration, and terms of payment, a contract is produced. The offer must becertain. To convert the offer into a contract, theacceptance must be absolute and must not qualify theterms of the offer; it must be plain, unequivocal,unconditional, and without variance of any sort fromthe proposal. A qualified acceptance, or one thatinvolves a new proposal, constitutes a counter offerand is a rejection of the original offer. Consequently,when something is desired which is not exactly what isproposed in the offer, such acceptance is not sufficientto generate consent because any modification orvariation from the terms of the offer annuls the offer.

In the case at bar, when del Rosario met with Lopez atthe Tamarind Grill, the package of 52 films was Vivasoffer to enter into a new Exhibition Agreement. ButABS, through its counter proposal sent to Viva,actually made a counter offer. Clearly, there was noacceptance. The acceptance should be unqualified.When Vivas BoD rejected the counter proposal, thenno contract could have been executed. Assumingarguendo that del Rosario did enter into a contractwith Lopez at Tamarind Grill, this acceptance did notbind Viva since there was no proof whatsoever that delRosario had specific authority to do so. Under theCorporation Code, unless otherwise provided by saidlaw, corporate powers, such as the power to enter into

contracts, are exercised by the BoD. However, theboard may delegate such powers to either anexecutive committee or officials or contractedmanagers. The delegation, except for the executivecommittee, must be for specific purposes. Delegationto officers makes the latter agents of the corporation,and accordingly, the general rules of agency ad to thebinding effects of their acts would apply. For suchofficers to be deemed fully clothed by the corporationto exercise a power of the Board, the latter mustspecially authorize them to do so. That del Rosario didnot have the authority to accept ABS counter offerwas best evidenced by his submission of the counterproposal to Vivas BoD for the latters approval . In anyevent, there was no meeting of the minds between delRosario and Lopez.The contention of Lopez that their meeting in TamarindGrill was a continuation of their right of first refusalagreement over the remaining 14 films is untenable.ABS righ t of first refusal had already been exercisedwhen Ms. Concio wrote to Viva choosing only 10 out of the 36 films offered by del Rosario. It already refusedthe 26 films.

RELLOSA vs. PELLOSGR # 138964 Aug 9, 2001

FACTS:Respondents were lessees of a panel of land owned byMarta Reyes located at San Pascual St., Malate,Manila. After the demise of Marta, Victor Reyes, herson, inherited the land. Victor informed the

respondents that they would have a right of firstrefusal to buy the land. In 1989, without theknowledge of respondents, the land was sold topetitioner Cynthia Ortega who was able to ultimatelysecure title to the property in her name.On May 25, 1989, Cynthia Ortega filed petition forcondemnation of the structures on the land. The officeof building Official issued a resolution ordering thedemolition of the houses of respondents on November27, 1989. Copies were received by respondents onDecember 7, 1989 and on December 12, the dayrespondents filed an appeal contesting the order,petitioners proceeded with the demolition of the house.Respondents filed case before Manila RTC which was

dismissed. On appeal, CA reversed the decision andordered petitioners to pay respondents for moral andexemplary damages and attorneys fees.

ISSUE:Whether the CA ruling in favor of respondents tenable.

RULING:The court rules for affirmance of the assailed decision.A right to power, privilege or immunity guaranteedunder a constitution, statute or decisional law orrecognized as a result of long usage constitute of alegally enforceable claim of one person againstanother.

The decision of CA was MODIFIED by reducing theawards for exemplary and moral damages to P20,000to each respondent. The decision of the appellate courtis affirmed.

CASES ON PREJUDICIAL QUESTION

MERCED V. DIAZ [109 P 156 (1960)]

Where the husband files a civil case for annulment of the second marriage on the ground of lack of consent,and the second wife subsequently files a criminal casefor bigamy against him, the civil case for annulment isa prejudicial question to be determined before the

criminal case can proceed. Consent is an essentialelement of a valid marriage. Without consent, themarriage is void. But the question of invalidity cannotordinarily be decided in the criminal action for bigamybut in a civil action for annulment. Since the validity of the second marriage, subject of the action for bigamy,cannot be determined in the criminal case, and sinceprosecution for bigamy does not lie unless theelements of the second marriage appear to exist, it isnecessary that a decision in a civil action to the effect


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that the second marriage contains all the essentials of a marriage must first be secured.

G.R. No. L-15315 August 26, 1960

ABUNDIO MERCED, petitioner,vs.HON. CLEMENTINO V. DIEZ, ETC. ETAL., respondents.

Pedro A. Bandoquillo for petitioner.Fulvio Pelaez for respondents.

LABRADOR, J .:

This is a petition for a writ of certiorari with prohibitionto prohibit the judge presiding the Court of FirstInstance of Negros Oriental, Hon. Clementino V. Diez,from proceeding further in the Criminal Case No. V-6520, entitled People of the Philippines vs. Abundio

Merced until after final termination of Civil Case No. R-5387, for the annulment of the marriage of petitionerAbundio Merced with Elizabeth Ceasar, also pending insame court.

The record disclose the following proceedings in thecourt a quo : On January 30, 1958, Abundio Mercedfiled a complaint for annulment of his second marriagewith Elizabeth Ceasar. The complaint is docketed asCivil Case No. R-5387. The complaint alleges thatdefendant Elizabeth Ceasar and her relatives forced,threatened and intimated him into signing an affidavitto the effect that he and defendant had been livingtogether as husband and wife for over five years,which is not true; that this affidavit was used bydefendant in securing their marriage of exceptionalcharacter, without the need for marriage license; thathe was again forced, threatened and intimated bydefendant and her relatives into entering the marriagewith her on August 21, 1957 before Municipal JudgeMedardo A. Conde; that immediately after thecelebration of the marriage plaintiff left defendant andnever lived with her; that the defendant wrote him onOctober 29, 1957, admitting that he was forced intothe marriage and asking him to go to Cebu to have themarriage annulled, but he refused to go for fear hemay be forced into living with the defendant. Mercedprays for annulment of the marriage and for moraldamages in the amount of P2,000. On March 3, 1958,Elizabeth Ceasar filed her answer to the complaint. Inher answer, she denies the material allegations of thecomplaint and avers as affirmative defenses thatneither she nor her relatives know of plaintiff'sprevious marriage to Eufrocina Tan; that sometime inJuly, 1957, plaintiff asked her mother to intercede ontheir behalf to secure her father's consent to theirmarriage as plaintiff could not concentrate on hisstudies without marrying Elizabeth, but that hermother advised him to finish his studies first; that

sometime in April, 1957, defendant learned thatplaintiff was engaged to marry Eufrocina Tan, butplaintiff, upon being confronted with such discovery,showed her a letter which he wrote breaking off hisengagement with Tan. As a counterclaim defendantasks P50,000 as moral damages for the deceit, fraudand insidious machinations committed upon her byplaintiff.

On February 19, 1958, after had filed Civil Case No. R-5387 defendant Elizabeth Ceasar filed a criminalcomplaint for bigamy 39 3 against plaintiff AbundioMerced with the office of the City Fiscal of Cebu. OnApril 7, 1958 the Assistant City Fiscal filed CriminalCase No. V-6520, charging Merced with bigamy for thesecond marriage. The information reads.

The undersigned Assistant Fiscal of City of Cebu accuses Abundio Merced of the crime of bigamy, committed as follows:

That on or about the 21st day of August, 1957,in the City of Cebu, Philippines, and within the

jurisdiction of this Honorable Court, the saidaccused Abundio Merced, being previouslyunited in lawful marriage with Eufrocina Tan,and without the said marriage having beenlegally dissolved did then and there wilfullyunlawfully, feloniously contract a secondmarriage with Elizabeth Ceasar.

Contrary to Article 349 of the Revised PenalCode. (Annex "2".)

Abundio Merced filed a motion to hold to trial of saidcriminal case in abeyance until final termination of CivilCase No. R- 5387. Reason alleged for the motion isthat the Civil Action involves facts which if proved willdetermine the innocence of the accused. After anopposition thereto was filed by the assistant provincialfiscal, the court granted the motion. However, uponmotion for reconsideration filed by the fiscal, the orderwas set aside and another entered denying the motionof accused for suspension of the criminal proceedings,which last order is the one sough herein to beannulled. The court held in its last order that inasmuchas by virtue of the decision of the Supreme Court inthe case of People vs. Mendoza , 95 Phil., 50 Off. Gaz.[10], 4767, judicial declaration of nullity of a secondand bigamous marriage is not necessary, there is noneed in this case to decide the nullity of the secondmarriage, or to determine and declare the existence of the grounds for annulling the same, but that saidgrounds should be used as a defense in the criminalaction. A motion to reconsider the second order of thecourt having been denied, petition herein was filed.

When the petition for certiorari with prohibition wasfiled, the petitioner secured from this Court a writ of preliminary injunction to enjoin respondent judge fromproceeding further in the criminal case.


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Before this Court the sole question raised is whetheran action to annul the second marriage is a prejudicialquestion in a prosecution for bigamy.

The definition and the elements of a prejudicialquestion have been set forth by us as follows:

Prejudicial question has been defined to bethat which arises in a case, the resolution of which (question) is a logical antecedent of theissue involved in said case, and the cognizanceof which pertains to another Tribunal (Cuestionprejudicial, es 3o 3 la que surge en un pleito ocausa cuya resolucion sean antecedente logicode la cuestion-objeto del pleito o causa y cuyoconocimiento corresponda a los Tribunales deotro orden o jurisdiccion. EnciclopediaJuridica Espaola, p. 228). The prejudicialquestion must be determinative of the casebefore the court; this is its first element.Jurisdiction to try said question must be lodgedin another tribunal; this is the second element.In an action for bigamy for example, if theaccused claims that the first marriage is nulland void and the right to decide such validity isvested in another tribunal, the civil action fornullity must be first decided before the actionfor bigamy can proceed, hence, the validity of the first marriage is a prejudicial question.(People vs. Aragon, 94 Phil., 357; 50 Off. Gaz.,No. 10, 4863).

In order that a person may be held guilty of the crimeof bigamy, the second and subsequent marriage musthave all the essential elements of a valid marriage,were it not for the subsistence of the first marriage.This was the ruling of this Court in People vs. Dumpo ,

62 Phil., 246, where we said:It is an essential element of the crime of bigamy that the alleged second marriage,having all the essential requisites, would bevalid were it not for the subsistence of the firstmarriage. It appearing that the marriagealleged to have been contracted by theaccused with Sabdapal, her former marriagewith Hassan being undissolved, can not beconsidered as such, according to Mohameddanrites, there is no justification to hold her guiltyof the crime charged in the information.(People vs. Dumpo, 62 Phil. 246).

One of the essential elements of a valid marriage isthat the consent thereto of the contracting partiesmust be freely and voluntarily given. Without theelement of consent a marriage would be illegal andvoid. (Section 29, Act No. 3613, otherwise known asthe Marriage Law.) But the question of invalidity cannot ordinarily be decided in the criminal action forbigamy but in a civil action for annulment. Since thevalidity of the second marriage, subject of the action

for bigamy, cannot be determined in the criminal caseand since prosecution for bigamy does not lie unlessthe elements of the second marriage appear to exist, itis necessary that a decision in a civil action to theeffect that the second marriage contains all theessentials of a marriage must first be secured.

We have, therefore, in the case at bar, the issue of thevalidity of the second marriage, which must bedetermined before hand in the civil action, before thecriminal action can proceed. We have a situation wherethe issue of the validity of the second marriage can bedetermined or must be determined in the civil actionbefore the criminal action for bigamy can beprosecuted. The question of the validity of the secondmarriage is, therefore, a prejudicial question, becausedetermination of the validity of the second marriage isdeterminable in the civil action and must precede thecriminal action for bigamy.

Spanish jurisprudence, from which the principle of prejudicial question has been taken, requires that theessential element determinative of the criminal actionmust be cognizable by another court. This requirementof a different court is demanded in Spanish

jurisprudence because Spanish courts are dividedaccording to their jurisdictions, some courts beingexclusively of civil jurisdiction, others of criminal

jurisdiction. In the Philippines, where our courts arevested with both civil and criminal jurisdiction, theprinciple of prejudicial question is to be applied even if there is only one court before which the civil actionand the criminal action are to be litigated. But in thiscase the court when exercising its jurisdiction over thecivil action for the annulment of marriage is consideredas a court distinct and different from itself when tryingthe criminal action for bigamy.

Our conclusion that the determination of the validity of the marriage in the civil action for annulment is aprejudicial question, insofar as the criminal action forbigamy is concerned, is supported by Mr. JusticeMoran in his dissenting opinion in De Leon vs.Mabanag, 70 Phil., 207 thus:

La regla general es que cuando hay unacuestion civil y otra criminal sobre un mismodelito u ofensa, la segunda debe verse antesque la primera, por la razon de que las formasde un juicio criminal son las mas a pro

civil law assigned cases (1st meeting)

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