Pe et. al vs. Pe

Pe et. al. vs. Pe

G.R. No. L-17396. 30 May 1962.

Bautista Angelo J.:

Appeal from a decision of the CFI Mla.

Facts: Plaintiffs are parents, brothers and sisters of Lolita Pe, an unmarried woman 24 years of

age. Defendant, a married man, frequently visited Lolitas house on the pretext that he wanted

her to teach him to pray the rosary. They fell in love and conducted clandestine trysts. When the

parents learned about this they prohibited defendant from going to their house. The affair

continued just the same. On April 14, 1957 Lolita disappeared from her brothers house where

she was living. A note in the handwriting of the defendant was found inside Lolitas aparador

The present action was instituted under Article 21 of the Civil Code. The lower court dismissed

the action and plaintiffs appealed.

Issue: W/N the defendant committed injury to Lolita's family in a manner contrary to morals,

good customs and public policy as contemplated in Article 21 of the New Civil Code.

Held: The circumstances under which defendant tried to win Lolitas affection cannot lead to

any other conclusion than that it was he who, thru an ingenious scheme or trickery, seduced the

latter to the extent of making her fall in love with him. Indeed, no other conclusion can be drawn

from this chain of events than that defendant not only deliberately, but through a clever strategy,

succeeded in winning the affection and love of Lolita to the extent of having illicit relations with

her. The wrong he has caused her and her family is indeed immeasurable considering the fact

that he is a married man. Verily, he has committed and injury to Lolitas family in a manner

contrary to morals, good customs and public policy as contemplated in Article 21 of the New

Civil Code.

University of the East vs. Jader G.R. No. 132344

UNIVERSITY OF THE EAST, petitioner vs. ROMEO A. JADER, respondent.

FACTS: Romeo Jader took his law proper at UE from 1984-88. During the first semester of his

last year in law school, he failed to take the examination for Practice Court I in which he

obtained an incomplete grade. He filed an application for removal of the incomplete grade given

by Prof. Carlos Ortega on February 1, 1988 which was approved by Dean Celedonio Tiongson

after the payment of required fees. He took the exam on March 28 and on May 30, the professor

gave him a grade of 5.

His name was still on the tentative list of candidates for graduation. Likewise, his

named appeared in the invitation for the commencement exercises which was held on April 16,

1988. When he learnt of his deficiency, he dropped from his Bar Review classes thereby made

him ineligible to take the bar exam.

He filed a civil suit against UE for damages because he suffered moral shock, mental

anguish, serious anxiety, besmirched reputation, wounded feelings, and sleepless nights due to

UEs negligence. The petitioner denied liability arguing that it never led respondent to believe

that he completed the requirements for an LlB degree when his name was included in the

tentative list of graduating students. The court ruled in favor of the respondent.

ISSUE: Whether or not UE be held liable for damages to the respondent.

HELD: The petition lacks merit.

The court ruled that the petitioners liability arose from its failure to promptly inform the

result of the examination and in misleading respondent into believing that the latter had satisfied

all the requirements for graduation. However, while petitioner was guilty of negligence and thus

liable to respondent for the latters actual damages, we hold that respondent should not have been

awarded moral damages. As a senior law student respondent should have been responsible

enough to ensure that all his affairs, specifically those pertaining to his academic achievement,

are in order.

WHEREFORE, the assailed decision of CA is AFFIRMED with MODIFICATION.

Petitioner is ordered to pay the sum of Php 35, 470 with legal interest of 6% per annum

computed from the date of filing of the complaint until fully paid; the amount of Php 5000 as

attorneys fees and the cost of the suit. The award of moral damages is deleted.

Tanjanco v CA 18 SCRA 994

Facts: Apolonio Tanjanco courted Araceli Santos. Since he promised her marriage, she consented to his pleas for carnal knowledge. As a result, she conceived a child, and due to her condition, she had to resign from her work. Because she was unable to support herself and the baby, and the Apolonio refused to marry her, she instituted an action for damages, compelling the defendant to recognize the unborn child, pay her monthly support, plus P100,000 in moral and exemplary damages. Issue: WON the acts of petitioner constitute seduction as contemplated in Art. 21. Held: No, it is not. Seduction is more than mere sexual intercourse or a breach of

promise to marry. It connotes essentially the idea of deceit, enticement superior power

or abuse of confidence on the part of the seducer to which the woman has yielded. In

this case, for 1 whole year, the woman maintained intimate sexual relations with the

defendant, and such conduct is incompatible with the idea of seduction. Plainly here

there is voluntariness and mutual passion, for had the plaintiff been deceived, she

would not have again yielded to his embraces for a year.

AMERICAN EXPRESS INTERNATIONAL, INC.,

Petitioner,

G.R. No. 138550

- versus -

NOEL CORDERO,

Defendant.

Present:

PANGANIBAN, J., Chairman,

SANDOVAL-GUTIERREZ,

CORONA,

CARPIO MORALES, and

GARCIA, JJ.

Promulgated:

October 14, 2005

x-------------------------------------------------------------------------------------------------x

D E C I S I O N

SANDOVAL-GUTIERREZ, J.:

This is a petition for review on certiorari of the Decision[1] of the Court of Appeals dated April 30, 1999 in CA-G.R. CV No. 51671,

entitled, Noel Cordero, Plaintiff-Appellee versus American Express International, Inc., Defendant-Appellant.

Petitioner is a foreign corporation that issues charge cards to its customers, which the latter then use to purchase goods and services at

accredited merchants worldwide. Sometime in 1988, Nilda Cordero, wife of respondent Noel Cordero, applied for and was issued an American

Express charge card with No. 3769-895901-010020. The issuance of the charge card was covered by an Amex Cardmember Agreement. As

cardholder, Nilda, upon signing the back portion of the card, manifested her acceptance of the terms of the Agreement.

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An extension charge card, with No. 3769-895901-01010, was likewise issued to respondent Noel Cordero which he also signed.[2]

On November 29, 1991, respondent, together with his wife, Nilda, daughter, sisters-in-law and uncle-in-law, went on a three-day holiday

trip to Hong Kong. In the early evening of November 30, 1991, at about 7:00 oclock, the group went to the Watsons Chemist Shop located at

277C Ocean Gallery, Kowloon, Hong Kong. Noel picked up some chocolate candies and handed to the sales clerk his American Express

extension charge card to pay for his purchases. The sales clerk verified the card by making a telephone call to the American Express Office in

Hong Kong. Moments later, Susan Chong, the store manager, emerged from behind the counter and informed respondent that she had to

confiscate the card. Thereupon, she cut respondents American Express card in half with a pair of scissors. This, according to respondent,

caused him embarrassment and humiliation considering that it was done in front of his family and the other customers lined up at the check-out

counter. Hence, Nilda had to pay for the purchases using her own American Express charge card.[3]

When they returned to the Excelsior Hotel, Nilda called up petitioners Office in Hong Kong. She was able to talk to Senior Authorizer

Johnny Chen, who informed her that on November 1, 1991, a person in Hong Kong attempted to use a charge card with the same number as

respondents card. The Hong Kong American Express Office called up respondent and after determining that he was in Manila and not in Hong

Kong, placed his card in the Inspect Airwarn Support System. This is the system utilized by petitioner as a protection both for the company

and the cardholders against the fraudulent use of their charge cards. Once a card suspected of unauthorized use is placed in the system, the

person to whom the card is tendered must verify the identity of the holder. If the true identity of the card owner is established, the card is honored

and the charges are approved. Otherwise, the card is revoked or confiscated.[4]

When the Watsons sales clerk called up petitioners Hong Kong Office, its representative said he wants to talk to respondent in order

to verify the latters identity, pursuant to the procedure observed under the Inspect Airwarn Support System. However, respondent refused.

Consequently, petitioners representative was unable to establish the identity of the cardholder.[5] This led to the confiscation of respondents

card.

On March 31, 1992, respondent filed with the Regional Trial Court, Branch V, Manila, a complaint for damages against petitioner,

docketed as Civil Case No. 92-60807. He prayed for the award of moral damages and exemplary damages, as well as attorneys fees as a result

of the humiliation he suffered.

The trial court found that the inexcusable failure of defendant (petitioner herein) to inform plaintiff (respondent herein) of the

November 1, 1991 incident despite sufficient time was the proximate cause of the confiscation and cutting of plaintiffs extension card which

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exposed the latter to public humiliation for which defendant should be held liable.[6] On February 20, 1995, the trial court promulgated its

Decision, the dispositive portion of which reads:

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

ordering the latter to pay the former the following amounts, namely: a) The sum of P300,000.00 as and by way of moral damages; b) The sum of P200,000.00 as exemplary damages; c) The sum of P100,000.00 as and for reasonable attorneys fees; and d) The costs of the suit. SO ORDERED.[7]

Upon appeal, the Court of Appeals rendered the assailed Decision affirming the trial courts Decision with modification in the sense

that the amounts of damages awarded were reduced, thus:

WHEREFORE, in view of the foregoing, the appealed decision dated February 20, 1995 of the

Regional Trial Court of Manila, Branch V, in Civil Case No. 92-60807 is hereby AFFIRMED, subject to modifications with respect to the amount of damages awarded, which are reduced as follows:

(a) Moral damages from P300,000.00 to P150,000.00; and (b) Exemplary damages from P200,000.00 to P100,000.00. No pronouncement as to costs. SO ORDERED.

Hence, the instant petition raising the following issues:

A. Whether the lower courts gravely erred in attributing the public humiliation allegedly suffered by

Cordero to Amex.

B. Whether the lower courts gravely erred in holding Amex liable to Cordero for moral damages, exemplary

damages and attorneys fees.[8]

Respondent filed his comment contending in the main that the petition raises questions of fact beyond this Courts domain.

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While it is true that under Rule 45 of the 1997 Rules of Civil Procedure, as amended, this Court may review only errors of law,

however, this rule admits of well-known recognized exceptions, thus:

. . . (1) the conclusion is a finding grounded entirely on speculation, surmise and conjecture; (2) the

inference made is manifestly mistaken; (3) there is grave abuse of discretion; (4) the judgment is based on a misapprehension of facts; (5) the findings of fact are conflicting; (6) the Court of Appeals went beyond the issues of the case and its findings are contrary to the admissions of both parties; (7) the findings of fact of the Court of Appeals are contrary to those of the trial court; (8) said findings of fact are conclusions without citation of specific evidence on which they are based; (9) the facts set forth in the petition are not disputed by the respondents; and (10) the findings of fact of the Court of Appeals are premised on the supposed absence of evidence and contradicted by the evidence on record.[9]

In this case, the inference made by the courts below is manifestly mistaken. Therefore, we are justified in reviewing the records of

this case and rendering judgment based on our own findings.

In his complaint, respondent claimed that he suffered embarrassment and humiliation because his card was unceremoniously

confiscated and cut in half by Susan Chong of Watsons Chemist Shop.

Respondent anchors his cause of action on the following provision of the Civil Code:

Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter.[10]

In order that an obligation based on quasi-delict may arise, there must be no pre-existing contractual relation between the parties. But

there are exceptions. There may be an action for quasi-delict notwithstanding that there is a subsisting contract between the parties. A liability

for tort may arise even under a contract, where tort is that which breaches the contract. Stated differently, when an act which constitutes a breach

of contract would have itself constituted the source of a quasi-delictual liability, the contract can be said to have been breached by tort, thereby

allowing the rules on tort to apply.[11]

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Furthermore, to constitute quasi-delict, the fault or negligence must be the proximate cause of the damage or injury suffered by the

plaintiff. Proximate cause is that cause which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces the

injury and without which the result would not have occurred. Proximate cause is determined by the facts of each case upon mixed considerations

of logic, common sense, policy and precedent.[12]

According to the trial court, petitioner should have informed respondent that on November 1, 1991, a person in Hong Kong attempted

to use a charge card bearing similar number to that of respondents card; and that petitioners inexcusable failure to do so is the proximate cause

of the confiscation and cutting of [respondents] extension card which exposed the latter to public humiliation for which [petitioner] should be

held liable.[13]

We cannot sustain the trial courts conclusion.

As explained by respondent himself, he could have used his card upon verification by the sales clerk of Watson that indeed he is the

authorized cardholder. This could have been accomplished had respondent talked to petitioners representative, enabling the latter to determine

that respondent is indeed the true holder of the card. Clearly, no negligence which breaches the contract can be attributed to petitioner. If at all,

the cause of respondents humiliation and embarrassment was his refusal to talk to petitioners representative.

That respondent refused to talk to petitioners representative can be gleaned from the testimony of Mr. Chen Heng Kun a.k.a. Johnny

Chen during the deposition in Hong Kong,[14] thus:

Question No 9 : Was AEII required under its existing policies and/or membership agreement with its cardholders to advise said cardholders of their card have been put under the support INSPECT Strictly Question (for identification) cardmembers before approving any charge?

Mr. Johnny Chen : Under the existing policies of AEII, we dont have to inform the cardholders if they have to pass the INSPECT Strictly Questions (for identification).

Question No 10 : If the answer to Q9 is in the negative, please explain why not? Mr. Johnny Chen : The reason why we dont have to are because, first, we are not

terminating the service to the cardholder. Second, it doesnt mean that we are going to limit the service to the cardholder. Third, as long as the cardholder can present an identification card of his membership, we allow him to use the card. He can show this by telephoning the company or by presenting us his passport or travel document. When Watson Company called AEII for authorization, AEII representative requested that he talk to Mr. Cordero but he refused to talk to any representative of AEII. AEII could not prove then that he is really the real card holder.

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Mr. Chen Heng Kun was briefly cross-examined by respondents counsel, thus:

Question No 10 : Question 9 is objected to since the best evidence would be the

membership agreement between plaintiffs and AEII.

Significantly, paragraph 16 of the Cardmember Agreement signed by respondent provides:

16. THE CARD REMAINS OUR PROPERTY The Card remains our property and we can revoke your right and the right of ay Additional

Cardmember to use it at any time, we can do this with or without giving you notice. If we have revoked the Card without cause, we will refund a proportion of your annual Card Account fee. We may list revoked Cards in our Cancellation Bulletin, or otherwise inform Establishments that the Card issued to you and, if you are the basic Cardmember, any Additional Cards have been revoked or cancelled.

If we revoke the card or it expires, you must return it to us if we request. Also, if any Establishment

asks you to surrender an expired or revoked Card, you must do so. You may not use the Card after it has expired or after it has been revoked.

The revocation, repossession or request for the return of the Card is not, and shall not constitute any

reflection of your character or credit-worthiness and we shall not be liable in any way for any statement made by any person requesting the return or surrender of the Card.[15]

To be sure, pursuant to the above stipulation, petitioner can revoke respondents card without notice, as was done here. It bears

reiterating that the subject card would not have been confiscated and cut had respondent talked to petitioners representative and identified

himself as the genuine cardholder. It is thus safe to conclude that there was no negligence on the part of petitioner and that, therefore, it cannot

be held liable to respondent for damages.

WHEREFORE, the petition is GRANTED. The assailed Decision of the Court of Appeals in CA-G.R. CV No. 51671 is

REVERSED.

SO ORDERED.

Socorro Ramirez vs. CA and Garcia [G.R. No. 93833. September 28, 1995] 15 Aug

Ponente: KAPUNAN, J.

FACTS:

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Petitioner made a secret recording of the conversation that was part of a civil case filed in the

Regional Trial Court of Quezon City alleging that the private respondent, Ester S. Garcia, vexed,

insulted and humiliated her in a hostile and furious mood and in a manner offensive to

petitioners dignity and personality, contrary to morals, good customs and public policy..

Private respondent filed a criminal case before the Regional Trial Court of Pasay City for

violation of Republic Act 4200, entitled An Act to prohibit and penalize wire tapping and other

related violations of private communication, and other purposes. Petitioner filed a Motion to

Quash the Information. The trial court granted the said motion. The private respondent filed a

Petition for Review on Certiorari with the Supreme Court, which referred the case to the Court

of Appeals in a Resolution. Respondent Court of Appeals promulgated its decision declaring the

trial courts order as null and void, after subsequently denied the motion for reconsideration by

the petitioner.

ISSUE:

Whether or not the applicable provision of Republic Act 4200 does not apply to the taping of a

private conversation by one of the parties to the conversation.

HELD:

NO. Petition denied. Costs against petitioner.

RATIO:

Legislative intent is determined principally from the language of the statute.

The unambiguity of the express words of the provision, taken together with the above-quoted

deliberations from the Congressional Record, therefore plainly supports the view held by the

respondent court that the provision seeks to penalize even those privy to the private

communications. Where the law makes no distinctions, one does not distinguish.

[P]etitioners contention that the phrase private communication in Section 1 of R.A. 4200 does

not include private conversations narrows the ordinary meaning of the word communication

to a point of absurdity.

ITLE: Tenchavez vs. Escano

CITATION: 15 SCRA 355

FACTS: 27 years old Vicenta Escano who belong to a prominent Filipino Family of Spanish ancestry got

married on Feburary 24, 1948 with Pastor Tenchavez, 32 years old engineer, and ex-army officer

before Catholic chaplain Lt. Moises Lavares. The marriage was a culmination of the love affair

of the couple and was duly registered in the local civil registry. A certain Pacita Noel came to be

their match-maker and go-between who had an amorous relationship with Tenchavez as written

by a San Carlos college student where she and Vicenta are studying. Vicenta and Pastor are

supposed to renew their vows/ marriage in a church as suggested by Vicentas parents. However

after translating the said letter to Vicentas dad , he disagreed for a new marriage. Vicenta

continued leaving with her parents in Cebu while Pastor went back to work in Manila.

Vicenta applied for a passport indicating that she was single and when it was approved she left

for the United States and filed a complaint for divorce against Pastor which was later on

approved and issued by the Second Judicial Court of the State of Nevada. She then sought for

the annulment of her marriage to the Archbishop of Cebu. Vicenta married Russell Leo Moran,

an American, in Nevada and has begotten children. She acquired citizenship on August 8, 1958.

Petitioner filed a complaint against Vicenta and her parents whom he alleged to have dissuaded

Vicenta from joining her husband.

ISSUE: Whether the divorce sought by Vicenta Escano is valid and binding upon courts of the

Philippines.

HELD: Civil Code of the Philippines does not admit divorce. Philippine courts cannot give recognition

on foreign decrees of absolute divorce between Filipino citizens because it would be a violation

of the Civil Code. Such grant would arise to discrimination in favor of rich citizens who can

afford divorce in foreign countries. The adulterous relationship of Escano with her American

husband is enough grounds for the legal separation prayed by Tenchavez. In the eyes of

Philippine laws, Tenchavez and Escano are still married. A foreign divorce between Filipinos

sought and decreed is not entitled to recognition neither is the marriage of the divorcee entitled to

validity in the Philippines. Thus, the desertion and securing of an invalid divorce decree by one

spouse entitled the other for damages.

WHEREFORE, the decision under appeal is hereby modified as follows;

(1) Adjudging plaintiff-appellant Pastor Tenchavez entitled to a decree of legal separation from

defendant Vicenta F. Escao;

(2) Sentencing defendant-appellee Vicenta Escao to pay plaintiff-appellant Tenchavez the

amount of P25,000 for damages and attorneys' fees;

(3) Sentencing appellant Pastor Tenchavez to pay the appellee, Mamerto Escao and the estate of

his wife, the deceased Mena Escao, P5,000 by way of damages and attorneys' fees.

Lagon vs. Court of AppealsCorona, J.March 18, 2005

Keywords: Sultan Kudarat property; Oblicon case on tortuous interference

Nature: Petition for review on certiorari

FACTS:

Jose Lagon purchased from the estate of Bai Tonina Sepi two parcels of land located at Tacurong, Sultan Kudarat, which covers commercial buildings.

Said commercial buildings were constructed by the unnamed respondent pursuant to a contract of lease between the respondent and the late Bai Tonina Sepi Mengelen Guibar wherein it was stipulated that the private respondent would put up a commercial building which would be leased to new tenants. The rentals to be paid by those tenants would answer for the rent private respondent was obligated to pay Bai Tonina Sepi for the lease of the land. It was alleged by the unnamed respondent that the lease contract ended in 1974, but it was renewed since the construction of the commercial buildings had yet to be completed.

When Bai Tonina Sepi died, respondent started remitting his rent to the administrator of the deceaseds estate until he was advised to stop collecting rentals from the tenants because the property had been sold to Jose Lagon, and Jose Lagon had been collecting the same.

Respondent thus filed a complaint against Lagon, accusing Lagon of inducing the heirs of Bai Tonina Sepi to sell the property to him, thereby violating his leasehold rights over it. Lagon denied that he induced the heirs to sell him the property, contending that the heirs were in dire need of money to pay off the obligations of the deceased and this was what led the heirs to sell him the property. Lagon also maintained that he didnt interfere with private respondents leasehold rights as there was no lease contract covering the property when he purchased it; that his personal investigation and inquiry revealed no claims or encumbrances on the subject lots.

Lagon further alleged that before he bought the property, he went to Atty. Fajardo who allegedly notarized the renewed lease contract but the contract shown to him was unsigned. To refute the existence of a lease contract, petitioner presented in court a certification from the Office of the Clerk of Court confirming that no record of any lease contract had been entered into their files. Petitioner added that he only learned of the alleged lease contract when he was informed that private respondent was collecting rent from the tenants of the buildings.

Finding the complaint for tortuous interference to be unwarranted, Lagon filed his counterclaim for actual and moral damages.

Lower Court: ruled in favor of unnamed private respondent, holding the lease contract authentic and genuine.

Court of Apeals: affirmed Lower Courts decision with modifications.

ISSUE:

WON the purchase by Lagon of the subject property, during the supposed existence of the private

respondents lease contract with the late Bai Tonina Sepi, constituted tortuous interference for which Lagon

should be held liable for damages.

HELD:

No, the interference of Lagon was with a legal justification (in furtherance of a personal financial interest) and

without bad faith.

RATIO:

Elements of Tortuous Interference with contractual relations (So Ping Bun v. CA):

1. Existence of a valid contract 2. Knowledge on the part of the third person of the existence of the contract 3. Interference of the third person without legal justification or excuse

1. Existence of a valid contract: The Court declared that absent a clear, strong and convincing evidence, a notarized document continues to be a prima facie evidence of the facts that gave rise to its execution and delivery. This brought the Court to rule that the notarized copy of lease contract presented in court appeared to be an incontestable proof that Bai Tonin Sepi and private respondent renewed their contract.

2. Knowledge on the part of the interfere that the contract exists: The Court ruled that Lagon had no knowledge of the lease contract as he even conducted his own personal investigation and inquiry, and unearthed no suspicious circumstance that would have made a cautious man probe deeper and watch out for any conflicting claim over the property; that an examination of the entire property title bore no indication of the leasehold interest of private respondent and that even the registry of property had no record of the same.

3. Interference without legal justification or excuse: According to So Ping Bun v. CA, petitioner may be held liable only when there was no legal justification or excuse for his action or when his conduct was stirred by a wrongful motive. To sustain a case for tortuous interference, the defendant must have acted with malice or must have been driven by purely impious reasons to injure the plaintiff.

Even assuming that private respondent was able to prove the renewal of his lease contract

with Bai Tonina Sepi, the fact was that he was unable to prove malice or bad faith on the part of

petitioner in purchasing the property. Therefore, the claim of tortuous interference was never

established.

The disquisition in So Ping Bun applies squarely in this case. Lagons purchase of the subject

property was merely an advancement of his financial or economic interests, absent any proof that he

was enthused by improper motives. In the very early case of Gilchrist v. Cuddy, the Court declared that

a person is not a malicious interferer if his conduct is impelled by a proper business interest. In other

words, a financial or profit motivation will not necessarily make a person an officious interferer liable

for damages as long as there is no malice or bad faith involved.

This case is one of damnum absque injuria or damage without injury. Injury- legal invasion of a legal right

Damage- the hurt, loss or harm which results from the injury

BPI Card Corp vs CA: There can be damage without injury where the loss or harm is not the result

of a violation of a legal duty.

Attorneys Fees, Actual and Moral Damages cannot be awarded.

Dispositive: Petition is GRANTED. CAs decision is REVERSED and SET ASIDE.

G.R. No. 106341 September 2, 1994

DELFIN G. VILLARAMA, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION AND GOLDEN DONUTS, INC., respondents.

Rogelio R. Udarbe for petitioner.

Armando V. Ampil for private respondent.

PUNO, J.:

Sexual harassment abounds in all sick societies. It is reprehensible enough but more so when inflicted by those with moral ascendancy over their victims. We rule that it is a valid cause for separation from service.

First, the facts. On November 16, 1987, petitioner DELFIN VILLARAMA was employed by private respondent GOLDEN DONUTS, INC., as its Materials Manager. His starting salary was P6,500.00 per month, later increased to P8,500.00.

On July 15, 1989, petitioner Villarama was charged with sexual harassment by Divina Gonzaga, a clerk-typist assigned in his department. The humiliating experience compelled her to resign from work. Her letter-resignation, dated July 15, 1989, reads:

MR. LEOPOLDO H. PRIETO President Golden Donuts, Inc.

Dear Sir:

I would like to tender my resignation from my post as Clerk Typist of Materials Department effective immediately.

It is really my regret to leave this company which has given me all the opportunity I long desired. My five (5) months stay in the company have been very gratifying professionally and financially and I would not entertain the idea of resigning except for the most shocking experience I have had in my whole life.

Last Friday, July 7, 1989, Mr. Delfin Villarama and Mr. Jess de Jesus invited all the girls of Materials Department for a dinner when in (sic) the last minute the other three (3) girls decided not to join the groupp anymore. I do (sic) not have second thought(s) in accepting their invitation for they are my colle(a)gues and I had nothing in mind that would in any manner prompt me to refuse to what appeared to me as a simple and cordial invitation. We went to a restaurant along Makati Avenue where we ate our dinner. Mr. Villarama, Mr. Olaybar and Mr. Jess de Jesus were drinking while we were eating and (they) even offered me a few drinks and when we were finished, they decided to bring me home. While on my way, I found out that Mr. Villarama was not driving the way to my house. I was wondering why we were taking the wrong way until I found out that we were entering a motel. I was really shock(ed). I did not expect that a somewhat reputable person like Mr. Villarama could do such a thing to any of his subordinates. I should have left the company without any word but I feel that I would be unfair to those who might be similarly situated. I hope that you would find time to investigate the veracity of my allegations and make each (sic) responsible for is own deed. (emphasis ours)

Thank you very much and more power.

Very respectfully yours,

DIVINA GONZAGA

The letter prompted Mr. Leopoldo Prieto, President of Golden Donuts, Inc., to call petitioner to a meeting on August 4, 1989. Petitioner was then required to explain the letter against him. It appears that petitioner agreed to tender his resignation. Private respondent moved swiftly to separate petitioner. Thus, private respondent approved petitioner's application for leave of absence with pay from August 5-28, 1989. It also issued an inter-office memorandum, dated August 4, 1989, advising "all concerned" that petitioner was no longer connected with the

company effective August 5, 1989. 1 Two (2) days later, or on August 7, 1989, Mr. Prieto sent a letter to petitioner

confirming their agreement that petitioner would be officially separated from the private respondent. The letter reads:

Dear Mr. Villarama:

This is to officially confirm our discussion last Friday, August 4, 1989, regarding your employment with us. As per our agreement, you will be officially separated from the company effective August 23, 1989.

May I, therefore, request you to please submit or send us your resignation letter on or before the close of business hours of August 22, 1989.

Please see the Personnel & Industrial Relations Office for your clearance.

Very truly yours,

(SGD). LEOPOLDO H. PRIETO, JR. President

In the interim, petitioner had a change of mind. In a letter dated August 16, 1989, petitioner sought reconsideration of the management's decision to terminate him, viz.:

DEAR SIR:

MAY I REQUEST FOR A RECONSIDERATION ON THE DECISION HANDED DURING OUR MEETING OF AUGUST 4, 1989, TERMINATING MY SERVICES WITH THE COMPANY EFFECTIVE AUGUST 5, 1989.

THE SIGNIFICANT CONTRIBUTION OF THE MATERIALS DEPARTMENT, WHICH I HAD BEEN HEADING FOR THE PAST 21 MONTHS, TO THE PERFORMANCE OF THE COMPANY FAR OUTWEIGHS THE ERROR THAT I HAD COMMITTED. AN ERROR THAT MUST NOT BE A BASIS FOR SUCH A DRASTIC DECISION.

AS I AM STILL OFFICIALLY ON LEAVE UNTIL THE 29th, OF THIS MONTH, MAY I EXPECT THAT I WILL RESUME MY REGULAR DUTY ON THE 29th?

ANTICIPATING YOUR FAVORABLE REPLY.

VERY TRULY YOURS,

(SGD.) DELFIN G. VILLARAMA

For his failure to tender his resignation, petitioner was dismissed by private respondent on August 23, 1989. Feeling aggrieved, petitioner filed an illegal dismissal case

2 against private respondent.

In a decision dated January 23, 1991, Labor Arbiter Salimar V. Nambi held that due process was not observed in the dismissal of petitioner and there was no valid cause for dismissal. Private respondent GOLDEN DONUTS, INC. was ordered to: (1) reinstate petitiner DELFIN G. VILLARAMA to his former position, without loss of seniority rights, and pay his backwages at the rate of P8,500.00 per month from August 1989, until actual reinstatement; (2) pay petitioner the amount of P24,866.66, representing his unused vacation leave and proportionate 13th month pay; (3) pay petitioner P100,000.00, as moral damages, and P20,000.00, as exemplary damages; and (3) pay the attorney's fees equivalent to ten percent of the entire monetary award.

Private respondent appealed to the National Labor Relations Commission. On July 16, 1992, public respondent reversed the decision of the labor arbiter. The dispositive portion of its Resolution reads:

WHEREFORE, premises considered, the decision appealed from is hereby set aside and a new one entered declaring the cause of dismissal of complainant as valid; however, for the procedural lapses, respondent (Golden Donuts, Inc.) is hereby ordered to indemnify complainant (petitioner) in the form of separation pay equivalent to two month's (sic) pay (for his two years of service, as appears (sic) in the records), or the amount of P17,000.00.

SO ORDERED.

Hence, this petition where the following arguments are raised:

THE ALLEGED IMMORALITY CHARGED AGAINST PETITIONER IS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE ON RECORD.

THE MERE ADMISSION OF THE VIOLATION OF DUE PROCESS ENTITLES PETITIONER TO REINSTATEMENT.

IN ANY EVENT, PETITIONER IS ENTITLED TO HIS SALARIES FROM RECEIPT BY PRIVATE RESPONDENT OF THE DECISION OF THE LABOR ARBITER ON 4 FEBRUARY 1991 TO (sic) AT LEAST THE PROMULGATION OF THE ASSAILED RESOLUTION ON (sic) 16 JULY 1992.

IN ANY EVENT, PETITIONER IS ALSO ENTITLED TO HIS UNUSED VACATION LEAVE AND PROPORTIONATE 13TH MONTH PAY IN THE TOTAL AMOUNT OF P24,866.66, ADJUDGED BY THE LABOR ARBITER.

THE AWARD OF MORAL AND EXEMPLARY DAMAGES AND ATTORNEY'S FEES BY THE LABOR ARBITER IS JUSTIFIED.

We affirm with modification the impugned Resolution.

At the outset, we note that the Petition was not accompanied by a certified true copy of the assailed July 16, 1992 NLRC Resolution,

3 in violation of Revised Circular No. 1-88. Neither was there any certification

under oath that "petitioner has not commenced any other action or proceeding involving the same issues in the Supreme Court, the Court of Appeals or different Divisions thereof, or any other tribunal or agency, and that to the best of his knowledge, no such action or proceeding is pending in the Supreme Court, the Court of Appeals, or different Divisions thereof or any other tribunal or agency," as required under Circular No. 28-91. It is settled that non-compliance with the provisions of Revised Circular No. 1-88 and Circular No. 28-91, would result in the outright dismissal of the petition.

4

In addition, under Rule 65 of the Revised Rules of Court, the special civil action for certiorari is available in cases where the concerned "tribunal, board or officer exercising judicial functions had acted without or in excess of its jurisdiction, or with grave abuse of discretion and there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law." In Antonio v. National Labor Relations Commission,

5 we held that the plain and adequate remedy expressly provided by law is a motion for

reconsideration of the assailed decision, and the resolution thereof, which is not only expected to be but would actually have provided adequate and more speedy remedy than a petition for certiorari. The rationale for this requirement is to enable the court or agency concerned to pass upon and correct its mistakes without the intervention of a higher court.

6 In this case, the assailed July 16, 1992 Resolution of

the National Labor Relations Commission was received by petitioner's counsel on July 23, 1992. 7

Petitioner did not file a motion for reconsideration, instead, he commenced this special civil action for certiorari. Be that as it may, we allowed the petition to enable us to rule on the significant issues raised before us, viz.: (1) whether or not petitioner's right to procedural due process was violated, and (2) whether or not he was dismissed for a valid or just cause.

The procedure for terminating an employee is found in Article 277 (b) of the Labor Code, viz.:

xxx xxx xxx

(b) Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized cause and without prejudice to the requirement of notice under Article 283 of this Code the employer shall furnish the worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his counsel if he so desires in

accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment. Any decision taken by the employer shall be without prejudice to the right of the worker to contest the validity or legality of his dismissal by filing a complaint with the regional branch of the National Labor Relations Commission. The burden of proving that the termination was for a valid or authorized cause shall rest on the employer. . . . (emphasis supplied)

This procedure protects not only rank-and-file employees but also managerial employees. Both have the right to security of tenure as provided for in Section 3, Article XIII of the 1987 Constitution. In the case at bench, petitioner decided to seek reconsideration of the termination of his service thru his August 16, 1989 letter. While admitting his error, he felt that its gravity did not justify his dismissal. Considering this stance, and in conformity with the aforequoted Article 277 (b) of the Labor Code, petitioner should have been formally charged and given an opportunity to refute the charges. Under the facts in field, we hold that petitioner was denied procedural due process.

We now come to the more important issue of whether there was valid cause to terminate petitioner.

Petitioner claims that his alleged immoral act was unsubstantiated, hence, he could not be dismissed. We hold otherwise. The records show that petitioner was confronted with the charge against him. Initially, he voluntarily agreed to be separated from the company. He took a leave of absence preparatory to this separation. This agreement was confirmed by the letter to him by Mr. Prieto dated August 7, 1989. A few days after, petitioner reneged on the agreement. He refused to be terminated on the ground that the seriousness of his offense would not warrant his separation from service. So he alleged in his letter to Mr. Prieto dated August 16, 1989. But even in this letter, petitioner admitted his "error" vis-a-vis Miss Gonzaga. As a manager, petitioner should know the evidentiary value of his admissions. Needless to stress, he cannot complain there was no valid cause for his separation.

Moreover, loss of trust and confidence is a good ground for dismissing a managerial employee. It can be proved by substantial evidence which is present in the case at bench. As further observed by the Solicitor General:

. . . assuming arguendo that De Jesus and Gonzaga were sweethearts and that petitioner merely acceded to the request of the former to drop them in the motel, petitioner acted in collusion with the immoral designs of De Jesus and did not give due regard to Gonzaga's feeling on the matter and acted in chauvinistic disdain of her honor, thereby justifying public respondent's finding of sexual harassment. Thus, petitioner not only failed to act accordingly as a good father of the family because he was not able to maintain his moral ascendancy and authority over the group in the matter of morality and discipline of his subordinates, but he actively facilitated the commission of immoral conduct of his subordinates by driving his car into the motel.

(Comment, April 29, 1993, p. 9)

As a managerial employee, petitioner is bound by a more exacting work ethics. He failed to live up to this higher standard of responsibility when he succumbed to his moral perversity. And when such moral perversity is perpetrated against his subordinate, he provides justifiable ground for his dismissal for lack of trust and confidence. It is the right, nay, the duty of every employer to protect its employees from over sexed superiors.

To be sure, employers are given wider latitude of discretion in terminating the employment of managerial employees on the ground of lack of trust and confidence.

8

We next rule on the monetary awards due to petitioner. The public respondent erred in awarding separation pay of P17,000.00 as indemnity for his dismissal without due process of law. The award of

separation pay is proper in the cases enumerated under Articles 283 and 284 of the Labor Code, 9 and in

cases where there is illegal dismissal (for lack of valid cause) and reinstatement is no longer feasible. But this is not to state that an employer cannot be penalized for failure to give formal notice and conduct the necessary investigation before dismissing an employee.

10 Thus, in Wenphil vs. NLRC

11 and Pacific Mills,

Inc. vs. Alonzo, 12

this Court awarded P1,000.00 as penalty for non-observance of due process.

Petitioner is not also entitled to moral and exemplary damages. There was no bad faith or malice on the part of private respondent in terminating the services of petitioner.

13

Petitioner is entitled, however, to his unused vacation/sick leave and proportionate 13th month pay, as held by the labor arbiter. These are monies already earned by petitioner and should be unaffected by his separation from the service.

WHEREFORE, premises considered, the assailed resolution of public respondent is hereby AFFIRMED WITH MODIFICATION that the award of separation pay is DELETED. Private respondent is ordered to pay petitioner the amount of P1,000.00 for non-observance of due process, and the equivalent amount of his unused vacation/sick leave and proportionate 13th month pay. No pronouncement as to costs.

SO ORDERED.

Liwayway Vinzons-Chato vs. Fortune Tobacco, Corp.

G.R. No. 141309, June 19, 2007

FACTS:

This is a case for damages under Article 32 of the Civil Code filed by Fortune against Liwayway as CIR.

On June 10, 1993, the legislature enacted RA 7654, which provided that locally manufactured cigarettes

which are currently classified and taxed at 55% shall be charged an ad valorem tax of 55% provided

that the maximum tax shall not be less than Five Pesos per pack. Prior to effectivity of RA 7654,

Liwayway issued a rule, reclassifying Champion, Hope, and More (all manufactured by Fortune) as

locally manufactured cigarettes bearing foreign brand subject to the 55% ad valorem tax. Thus, when RA

7654 was passed, these cigarette brands were already covered.

In a case filed against Liwayway with the RTC, Fortune contended that the issuance of the rule violated

its constitutional right against deprivation of property without due process of law and the right to equal

protection of the laws.

For her part, Liwayway contended in her motion to dismiss that respondent has no cause of action

against her because she issued RMC 37-93 in the performance of her official function and within the

scope of her authority. She claimed that she acted merely as an agent of the Republic and therefore the

latter is the one responsible for her acts. She also contended that the complaint states no cause of

action for lack of allegation of malice or bad faith.

http://scire-licet.blogspot.com/2008/08/liwayway-vinzons-chato-vs-fortune.html

The order denying the motion to dismiss was elevated to the CA, who dismissed the case on the ground

that under Article 32, liability may arise even if the defendant did not act with malice or bad faith.

Hence this appeal.

ISSUES:

Whether or not a public officer may be validly sued in his/her private capacity for acts done in connection with the discharge of the functions of his/her office

Whether or not Article 32, NCC, should be applied instead of Sec. 38, Book I, Administrative Code

HELD:

On the first issue, the general rule is that a public officer is not liable for damages which a person may

suffer arising from the just performance of his official duties and within the scope of his assigned tasks.

An officer who acts within his authority to administer the affairs of the office which he/she heads is not

liable for damages that may have been caused to another, as it would virtually be a charge against the

Republic, which is not amenable to judgment for monetary claims without its consent. However, a

public officer is by law not immune from damages in his/her personal capacity for acts done in bad faith

which, being outside the scope of his authority, are no longer protected by the mantle of immunity for

official actions.

Specifically, under Sec. 38, Book I, Administrative Code, civil liability may arise where there is bad faith,

malice, or gross negligence on the part of a superior public officer. And, under Sec. 39 of the same Book,

civil liability may arise where the subordinate public officers act is characterized by willfulness or

negligence. In Cojuangco, Jr. V. CA, a public officer who directly or indirectly violates the constitutional

rights of another, may be validly sued for damages under Article 32 of the Civil Code even if his acts

were not so tainted with malice or bad faith.

Thus, the rule in this jurisdiction is that a public officer may be validly sued in his/her private capacity for

acts done in the course of the performance of the functions of the office, where said public officer: (1)

acted with malice, bad faith, or negligence; or (2) where the public officer violated a constitutional right

of the plaintiff.

On the second issue, SC ruled that the decisive provision is Article 32, it being a special law, which

prevails over a general law (the Administrative Code).

Article 32 was patterned after the tort in American law. A tort is a wrong, a tortious act which has

been defined as the commission or omission of an act by one, without right, whereby another receives

some injury, directly or indirectly, in person, property or reputation. There are cases in which it has been

stated that civil liability in tort is determined by the conduct and not by the mental state of the

tortfeasor, and there are circumstances under which the motive of the defendant has been rendered

immaterial. The reason sometimes given for the rule is that otherwise, the mental attitude of the

alleged wrongdoer, and not the act itself, would determine whether the act was wrongful. Presence of

good motive, or rather, the absence of an evil motive, does not render lawful an act which is otherwise

an invasion of anothers legal right; that is, liability in tort in not precluded by the fact that defendant

acted without evil intent.

Silahis International Hotel, Inc vs Soluta

G.R. No. 163087 February 20, 2006

SILAHIS INTERNATIONAL HOTEL, INC. and JOSE MARCEL PANLILIO,

Petitioners,

vs.

ROGELIO S. SOLUTA, JOSELITO SANTOS, EDNA BERNATE, VICENTA DELOLA,

FLORENTINO MATILLA, and GLOWHRAIN-SILAHIS UNION CHAPTER,

Respondents.

FACTS: Loida Somacera (Loida), a laundrywoman of the hotel, stayed overnight at the female

locker room at the basement of the hotel. At dawn, she heard pounding sounds outside, she saw

five men in barong tagalog whom she failed to recognize but she was sure were not employees of

the hotel, forcibly opening the door of the union office. In the morning, as union officer Soluta

was trying in vain to open the door of the union office, Loida narrated to him what she had

witnessed at dawn.

Soluta immediately lodged a complaint before the Security Officer. And he fetched a locksmith.

At that instant, men in barong tagalog armed with clubs arrived and started hitting Soluta and his

companions. Panlilio thereupon instructed Villanueva to force open the door, and the latter did.

Once inside, Panlilio and his companions began searching the office, over the objection of Babay

who even asked them if they had a search warrant. A plastic bag was found containing marijuana

flowering tops.

As a result of the discovery of the presence of marijuana in the union office and after the police

conducted an investigation of the incident, a complaint against the 13 union officers was filed

before the Fiscals Office of Manila. RTC acquitted the accused. On appeal, the CA affirmed

with modification the decision of the trial court.

ISSUE: Whether respondent individual can recover damages for violation of constitutional

rights.

RULING: Article 32, in relation to Article 2219(6) and (10) of the Civil Code, allows so.

ART. 32. Any public officer or employee, or any private individual, who directly or indirectly

obstructs, defeats, violates or in any manner impedes or impairs any of the following rights and

liberties of another person shall be liable to the latter for damages: x x x x

In the present case, petitioners had, by their own claim, already received reports in late 1987 of

illegal activities and Maniego conducted surveillance. Yet, in the morning of January 11, 1988,

petitioners and their companions barged into and searched the union office without a search

warrant, despite ample time for them to obtain one.

The course taken by petitioners and company stinks in illegality. Petitioners violation of

individual respondents constitutional right against unreasonable search thus furnishes the basis

for the award of damages under Article 32 of the Civil Code. For respondents, being the lawful

occupants of the office had the right to raise the question of validity of the search and seizure.

Article 32 speaks of an officer or employee or person "directly or indirectly" responsible for the

violation of the constitutional rights and liberties of another. Hence, it is not the actor alone who

must answer for damages under Article 32; the person indirectly responsible has also to answer

for the damages or injury caused to the aggrieved party. Such being the case, petitioners, together

with Maniego and Villanueva, the ones who orchestrated the illegal search, are jointly and

severally liable for actual, moral and exemplary damages to herein individual respondents in

accordance with the earlier-quoted pertinent provision of Article 32, in relation to Article

2219(6) and (10) of the Civil Code which provides:

Art. 2219. Moral damages may be recovered in the following and analogous cases, among

others, (6) Illegal search and (10) Acts and action referred to in Articles 21, 26, 27, 28, 29, 30,

32, 34 and 35.

DECISION: Denied.

MVRS Publications vs. Islamic Dawah Council of the Philippines, G.R. No. 135306, Jan. 28,

2003

FACTS: Islamic DaWah Council of the Philippines, Inc., a local federation of more than 70

Muslim religious organizations, filed a complaint for damages against MVRS Publications, Inc.,

arising from an article, which reads:

"ALAM BA NINYO?

Na ang mga baboy at kahit anong uri ng hayop sa Mindanao ay hindi kinakain ng mga Muslim?

Para sa kanila ang mga ito ay isang sagradong bagay. Hindi nila ito kailangang kainin kahit na

sila pa ay magutom at mawalan ng ulam sa tuwing sila ay kakain. Ginagawa nila itong Diyos at

sinasamba pa nila ito sa tuwing araw ng kanilang pangingilin lalung-lalo na sa araw na tinatawag

nilang 'Ramadan'."

ISSUE:

W/N this is an action for defamation (libel) or an emotional distress tort action

HELD:

The Supreme Court held that there is no cause of action for defamation.

DEFAMATION DEFINED:

Defamation, which includes libel and slander, means the offense of injuring a person's character,

fame or reputation through false and malicious statements. It is that which tends to injure

reputation or to diminish the esteem, respect, good will or confidence in the plaintiff or to excite

derogatory feelings or opinions about the plaintiff. It is the publication of anything which is

injurious to the good name or reputation of another or tends to bring him into disrepute.

Defamation is an invasion of a relational interest since it involves the opinion which others in the

community may have, or tend to have, of the plaintiff.

GROUP LIBEL/DEFAMATION:

where the defamation is alleged to have been directed at a group or class, it is essential that the

statement must be so sweeping or all-embracing as to apply to every individual in that group or class, or

sufficiently specific so that each individual in the class or group can prove that the defamatory

statement specifically pointed to him, so that he can bring the action separately, if need be.

The statements published by petitioners in the instant case did not specifically identify nor refer to any

particular individuals who were purportedly the subject of the alleged libelous publication. Respondents

can scarcely claim to having been singled out for social censure pointedly resulting in damages.

The action likewise is not for emotional distress.

EMOTIONAL DISTRESS v. DEFAMATION:

Primarily, an "emotional distress" tort action is personal in nature, i.e., it is a civil action filed by an

individual to assuage the injuries to his emotional tranquility due to personal attacks on his character. It

has no application in the instant case since no particular individual was identified in the disputed article

of Bulgar. Also, the purported damage caused by the article, assuming there was any, falls under the

principle of relational harm which includes harm to social relationships in the community in the form of

defamation; as distinguished from the principle of reactive harm which includes injuries to individual

emotional tranquility in the form of an infliction of emotional distress. In their complaint, respondents

clearly asserted an alleged harm to the standing of Muslims in the community, especially to their

activities in propagating their faith in Metro Manila and in other non-Muslim communities in the

country. It is thus beyond cavil that the present case falls within the application of the relational harm

principle of tort actions for defamation, rather than the reactive harm principle on which the concept of

emotional distress properly belongs.

WHEN PLAINTIFF MAY RECOVER:

To recover for the intentional infliction of emotional distress the plaintiff must show that: (a) The

conduct of the defendant was intentional or in reckless disregard of the plaintiff; (b) The conduct was

extreme and outrageous; (c) There was a causal connection between the defendant's conduct and the

plaintiff's mental distress; and, (d) The plaintiff's mental distress was extreme and severe.

"Extreme and outrageous conduct" means conduct that is so outrageous in character, and so extreme in

degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly

intolerable in civilized society. The defendant's actions must have been so terrifying as naturally to

humiliate, embarrass or frighten the plaintiff.

"Emotional distress" means any highly unpleasant mental reaction such as extreme grief, shame,

humiliation, embarrassment, anger, disappointment, worry, nausea, mental suffering and anguish,

shock, fright, horror, and chagrin. "Severe emotional distress," in some jurisdictions, refers to any type

of severe and disabling emotional or mental condition which may be generally recognized and

diagnosed by professionals trained to do so, including posttraumatic stress disorder, neurosis, psychosis,

chronic depression, or phobia. The plaintiff is required to show, among other things, that he or she has

suffered emotional distress so severe that no reasonable person could be expected to endure it; severity

of the distress is an element of the cause of action, not simply a matter of damages.

Any party seeking recovery for mental anguish must prove more than mere worry, anxiety, vexation,

embarrassment, or anger. Liability does not arise from mere insults, indignities, threats, annoyances,

petty expressions, or other trivialities. In determining whether the tort of outrage had been committed,

a plaintiff is necessarily expected and required to be hardened to a certain amount of criticism, rough

language, and to occasional acts and words that are definitely inconsiderate and unkind; the mere fact

that the actor knows that the other will regard the conduct as insulting, or will have his feelings hurt, is

not enough.

CHIANG YIA MIN, petitioner, vs. COURT OF APPEALS, RIZAL COMMERCIAL

BANKING CORPORATION, PAPERCON (PHILIPPINES), INC. and TOM PEK, respondents.

D E C I S I O N

GONZAGA-REYES, J.:

The instant petition concerns the recovery of a sum of money and damages, initiated by herein

petitioner, a Chinese national based in Taiwan, against Rizal Commercial Banking Corporation

(hereafter, RCBC or respondent bank) before Branch 151i[1] of the Regional Trial Court of

Pasig City. The case, docketed as Civil Case No. 54694, sought the collection of

US$100,000.00, or its equivalent per Central Bank rates, legal interest, moral and exemplary

damages, and attorneys fees.

Petitioners version of the case, which was upheld by the trial court, alleges that the said

US$100,000.00 was sent by Hang Lung Bank Ltd. of Hong Kong on February 7, 1979 through

the Pacific Banking Corporation to respondent banks head office.ii[2] The remittance was for

petitioners own account and was intended to qualify him as a foreign investor under Philippine

laws. As found by the trial court, it was sent by petitioner himself prior to his arrival in the

Philippines.iii[3]

When petitioner checked on his money sometime in mid-1985, he found out that that the dollar

deposit was transferred to the Shaw Boulevard branch of respondent bank and converted to a

peso account, which had a balance of only P1,362.10 as of October 29, 1979. A letter of

respondent bank dated August 9, 1985 stated that petitioners Current Account No. 12-2009 was

opened on February 8, 1979, with an initial deposit of P729,752.20; a total of P728,390.00 was

withdrawn by way of five checks respectively dated February 13, 19 and 23, 1979 and October 5

and 29, 1979, apparently issued by petitioner in favor of Papercon (Phils.), Inc., (hereafter,

Papercon) one of the herein private respondents and a business venture of Tom Pek.iv[4] Thus,

the balance of the account was reduced to P1,362.10 as of October 29, 1979 and no transactions

were made on the account since.v[5] In the same letter, the bank stated that it was no longer able

to locate the microfilm copies of the issued checks, specimen signature cards, and other records

related to the questioned account, since the account had been inactive for more than five years.

Petitioner insisted that he did not cause the transfer of his money to the Shaw Boulevard branch

of RCBC, as his instructions in the telegraphic transfer were for the money to be remitted to the

RCBC head office in Makati, nor its conversion to pesos and the subsequent withdrawals. Nor

did he authorize anyone to perform these acts.

In its Answer, respondent bank alleged that there is no indication from its records of the transfer

of US$100,000.00 for petitioners account from Hang Lung Bank Ltd. through the Pacific

Banking Corporation. However, after plaintiff-petitioner had adduced his evidence, it filed a

third-party complaint against Papercon and Tom Pek, admitting that plaintiff conclusively

appeared to have deposited the sum of US$100,000.00 with the bank and said foreign currency

deposit was converted, adopting the prevailing rate of interest at the time, to P730,000.00 and

deposited to plaintiffs Current Account No. 12-2009 which he opened with Shaw Boulevard

branch, after which plaintiff issued Check No. 492327 to third-party defendant Papercon (Phils.),

Inc. for the amount of P700,000.00 and Check No. 492328 to third-party defendant Tom Pek for

the amount of P12,700.00.vi[6] Respondent bank thus contended that should it be made liable to

petitioner, said third-party defendants as payees and beneficiaries of the issued checks should be

held solidarily liable with it.

Tom Pek and Papercon did not deny receiving the checks worth P712,700.00 but argued that

unless proven otherwise, the said checks should be presumed to have been issued in their favor

for a sufficient and valuable consideration.

Based on the evidence and arguments before it, the trial court determined that the withdrawals

were not made by petitioner nor authorized by him, and held respondent bank liable for the

US$100,000.00 (and the interest thereon from date of filing of the complaint), damages,

attorneys fees, and costs.

It is not disputed that petitioner did not personally go to respondent bank to open the account; it

was Catalino Reyes, an employee of Tom Pek, who obtained the blank application forms from

the Shaw Boulevard branch and returned them bearing petitioners signature; and, the application

forms were not completely filled out. The trial court found the actuations of the banks officers

of allowing Reyes to take out the forms, approving the scarcely-completed application form,

validating petitioners signature thereon even when they have not met petitioner, and permitting

the hefty withdrawals made from the account to be in contravention with sound and well-

recognized banking procedures, and contrary to its (the banks) primordial duty of safeguarding

the interest of its depositors, because for having allowed the same, it enabled an unscrupulous

person to open an account for the plaintiff without the latters consent.vii[7]

The trial court also took against respondent bank its inability to present in evidence the

depositors card showing petitioners specimen signatures and the requisition slip for the

issuance of a checkbook, and disregarded the banks contention that they could not anymore be

located. From this, the trial court concluded that petitioner did not submit any card showing his

specimen signature since he did not open the said current account, and that the withdrawals made

on the said account were unauthorized and in fraud of petitioner.viii[8]

The trial court further concluded that the withdrawals from petitioners account could not have

been made possible without the collusion of the officers and employees of respondent bank. In

its decision dated May 24, 1991, it held respondent bank solely culpable and fully exonerated the

other private respondents. It also upheld petitioners claims for moral damages, for the mental

anguish that he suffered, and exemplary damages, to remind respondent bank "that it should

always act with care and caution in handling the money of its depositors in order to uphold the

faith and confidence of its depositors to banking institutions xxx".ix[9] Thus, the dispositive part

of the said decision read:

WHEREFORE, judgment is hereby rendered in favor of plaintiff and against defendant and

third-party plaintiff, Rizal Commercial Banking Corporation, ordering the latter to pay plaintiff

the following sums:

1) US$100,000.00, or its equivalent according to Central Bank rate at the time payment is

actually made with interest thereon at 12% per annum from June 26, 1987, when the complaint

was filed, until fully paid;

2) P30,000.00 as moral damages;

3) P20,000.00 as exemplary damages; and

4) 20% of the total amount due to the plaintiff as attorneys fees and litigation expenses, all three

foregoing items with interest at 12% per annum from date hereof.

The defendant banks counterclaims and third-party complaint are dismissed.

The third-party defendants counterclaims are likewise dismissed.

Costs against defendant.

SO ORDERED.x[10]

Respondent bank and third-party defendants sought reconsideration of the above decision and on

September 2, 1991, Judge Migrio amended his decision to hold Papercon and Tom Pek

solidarily liable with respondent bank. He also changed the interest rate for the US$100,000

from 12% to 6% per annum, charged interest for the awards of moral damages and exemplary

damages until they are paid, and reduced the award of attorneys fees from 20% to 10% of the

total monetary awards. Following is the dispositive portion of the RTC decision, as modified:

WHEREFORE, judgment is hereby rendered:

On the Main Action

1. Ordering the defendant Rizal Commercial Banking Corporation to pay the plaintiff Chiang

Yia Min the following sums:

a) US$100,000.00, or its equivalent in Philippine currency at the time of actual

payment, with interest thereon at the legal rate of 6% per annum from June 26, 1987,

the date of filing of the complaint, until fully paid;

b) P30,000.00 as moral damages;

c) P20,000.00 as exemplary damages;

d) 10% of the total amount due for and as attorneys fees, all three foregoing items with

interest at 6% per annum from date hereof; and

e) the costs of the suit.

On the Third-Party Complaint

Judgment is hereby rendered in favor of the defendant-third-party plaintiff and against third-

party defendants, ordering the latter, jointly and severally, to pay and reimburse the third-party

plaintiff the aforeadjudged amounts which it is ordered to pay to the plaintiff in accordance with

this decision.

The defendant banks counterclaims are hereby dismissed.

The counterclaims of the third-party defendants are likewise dismissed.

SO ORDERED.xi[11]

The Court of Appeals, on the other hand, found that the opening of the current account and the

withdrawals therefrom were authorized by petitioner; accordingly, it reversed the decision of the

RTC and absolved private respondents of liability.

Respondent court gave credence to the statements of Catalino Reyes, an accountant of Pioneer

Business Forms, Inc., another business venture of Tom Pek, who testified that petitioner and

Tom Pek were close friends and business partners. Sometime in January or February 1979

Reyes was instructed by petitioner to withdraw the US$100,000.00 from Pacific Banking

Corporation and to deposit the peso equivalent of the same in the Shaw Boulevard branch of

RCBC. These were undertaken to facilitate petitioners change of visa from tourist to foreign

investor. Respondent court also accepted Reyess testimony that he was instructed by petitioner

to prepare two of the checks drawn against the questioned account, and that he witnessed

petitioner sign these checks and hand them over to Tom Pek. It declared that Reyess testimony

that petitioner caused the opening of the said account was more believable than petitioners mere

denial of the same.xii[12] Moreover, Reyess testimony was supported by a memorandum of the

Board of Special Inquiry, Bureau of Immigration which stated that the peso equivalent of the

US$100,000.00 had been tendered and delivered to applicant Chiang Yia Min as evidenced by a

cashiers check dated February 8, 1979 and issued to the latter.xiii[13] According to the Court of

Appeals, this coincides with Catalino Reyess testimony that petitioners money was deposited

by him in respondent bank, and was contrary to petitioners contention that the money was

transferred by Pacific Banking Corporation to respondent bank through a bank-to-bank

transaction.

Respondent court was also not convinced by petitioners allegation that the conversion of the

US$100,000.00 and its being deposited in the Shaw Boulevard branch of respondent bank was

made without his knowledge and consent. It pointed out that it was petitioner himself who wrote

the Shaw Boulevard branch inquiring about the status of his current account; thus, he could not

later be heard to maintain that he thought his money was deposited with the head office of

respondent bank in Makati.

Further contrary to the findings of the trial court, the Court of Appeals determined that the

inward remittance of US$100,000.00 was made while petitioner was already in the Philippines.

Based on the records of the Bureau of Immigration, petitioner arrived in the country as a tourist

on or about January 25, 1979,xiv[14] but subsequently applied for a change of status of admission

to special non-immigrant as a foreign investor.xv[15] Because of this, petitioners initial argument

--- that he could not have authorized the deposit in the Shaw Boulevard branch and the

withdrawals therefrom because he was not yet in the country at the time --- could not be

believed.

Moreover, respondent court found it incredible that petitioner checked on his dollar remittance

only in 1985, long after it was sent into the country. As for respondent banks inability to

produce the depositors card bearing petitioners specimen signatures, the checkbook requisition

slip, and other documents requested by petitioner, respondent court found plausible the

explanation of respondent bank that it only holds records for a period of five years after the last

transaction on an account was made. It also noted several other inconsistencies in the testimony

of petitioner, such as his inability to recall his date of arrival in the country,xvi[16] the date or

even the year when he made inquiries with respondent bank,xvii[17] or his presence before the

Commission on Immigration and Deportation when he applied for a change of status.xviii[18]

Thus, petitioner lost credibility with respondent court which found his testimony to be false on

material points and applied the principle of falsus in uno, falsus in omnibus.

Hence, the dispositive portion of the Court of Appeals decision provides:

WHEREFORE, premises considered, the decision of the court a quo is hereby REVERSED and

SET ASIDE. Herein defendant/third-party plaintiff and third-party defendants are hereby

absolved of any liability arising out of this case. Likewise, the third-party complaint is hereby

DISMISSED.

Costs against plaintiff-appellant.

SO ORDERED.xix[19]

Petitioner is now before us seeking the reversal of the above decision, maintaining that the

evidence on record preponderated in his favor and was enough to sustain the finding that the

opening of Current Account No. 12-2009 and the withdrawals thereon were unauthorized by him

and that respondent bank connived with third persons to defraud petitioner. Private respondents,

for their part, ask that the petition be dismissed and the factual findings of the Court of Appeals

be sustained.

The grounds set out in the petition are:

1. The findings of facts of the trial court and the Court of Appeals are conflicting hence, an

examination by this Honorable Court of the evidence on record is in order. There is an

imperative need for this Honorable Court to exercise its power of supervision and review of the

questioned decision of the Court of Appeals as an exception to the rule (Solidbank vs. Court of

Appeals, G.R. No. 91494, July 14, 1995) because the Court of Appeals for no plausible reason at

all had completely substituted its findings of fact in place of the well-founded findings of fact

made by the trial court. It is a serious departure from the well-accepted rules of procedure.

2. There is preponderance of evidence to show that respondent bank connived with third persons

to defraud petitioner, hence, it should be held liable for reimbursement with interest and

damages.

3. The application of the maxim falsus in uno, falsus in omnibus by the Honorable Court of

Appeals is not in accord with law and the applicable decisions of the Supreme Court. The

Honorable Court of Appeals has so far departed from the accepted principles in the exercise of

judicial discretion as to call for an exercise of the power of review and supervision of this

Honorable Court.xx[20]

Settled is the rule that where the factual findings of the Court of Appeals and the trial court are at

variance this Court will review the evidence on record in order to arrive at the correct

findings.xxi[21] Our evaluation of the numerous testimonies and documentary evidence persuades

us that the findings of the Court of Appeals are well-founded and merit the dismissal of the

instant petition.

The determinative issue in this case, as phrased out in the instant petition, is whether petitioner

has proved, by a preponderance of the evidence, that respondent bank connived with private

respondents and third party defendants Papercon and Tom Pek in allowing the withdrawals from

Current Account No. 12-2009, knowing these to be unauthorized by petitioner, and with the

purpose of defrauding him.

A review of the complaint filed before the RTC, however, indicates that petitioner originally

sued upon an allegation of negligence on the part of respondent banks officers and employees in

allowing the said withdrawals.xxii[22]

Under either theory of fraud or negligence, it is incumbent upon petitioner to show that the

withdrawals were not authorized by him. If he is unable to do so, his allegations of fraud or

negligence are unsubstantiated and the presumption that he authorized the said withdrawals will

apply.

Petitioners allegation that he did not authorize the opening of the current account and the

issuance of the checks was countered by private respondents by presenting Catalino Reyes as a

witness. Reyes, the accountant of Pioneer Business Forms, Inc., another business venture of

Tom Pek, testified that the opening of Current Account No. 12-2009 and the issuance of the

questioned checks were all upon the instructions of petitioner. Reyes stated that he first met

petitioner in January or February 1979 when the latter was introduced to him by Tom

Pek.xxiii[23] He and his fellow employees were advised by Tom Pek to personally help (Chiang

Yia Min) in all his personal accounts.xxiv[24] Reyes, in particular, was charged with working on

the incorporation of Philippine Color Scanning, a new business venture where petitioner will be

the general manager.xxv[25] He also assisted petitioner when the latter applied for a change of

visa from tourist to special non-immigrant. Reyes testified that on the first week of February

1979, petitioner asked him to pick up the US$100,000.00 which he caused to be remitted in

compliance with the capital requirements for foreign investors at Pacific Banking

Corporation.xxvi[26] Bringing with him the letter of advise from the bank, Reyes did as he was

told and the bank released to him a cashiers check representing the peso equivalent of the

US$100,000.00. Reyes then showed the check to petitioner and upon the latters instructions, he

went to the Shaw Boulevard branch of respondent bank to open a checking account in

petitioners name, using the proceeds of the check as initial deposit.xxvii[27]

Reyes describes the opening of the current account as having been done in haste, since petitioner

was in a hurry to have the proceeds of the remittance credited to his checking account.xxviii[28]

Because Reyes was well-known to the officers and employees of RCBC-Shaw Boulevard, he

was allowed to bring out of the bank the application form, depositors card, and other forms

which required petitioners signature as depositor.xxix[29] He then filled out the forms,xxx[30] and

brought them to petitioner for signing. He witnessed petitioner sign the forms.xxxi[31] Then he

brought the signed forms, and petitioners passport, back to the bank, which approved the

opening of the current account upon a comparison of the signatures on the forms and the

passport.xxxii[32]

The documentary evidence accurately supports Reyess statements. Pacific Banking Corporation

confirmed receipt of the US$100,000.00 from Hang Lung Bank, Ltd. by telegraphic transfer on

February 7, 1979.xxxiii[33] It had instructions to transmit the money to Rizal Commercial

Banking Corporation, Head Office, for (the) account of Chiang Yia Min;xxxiv[34] however, the

records also show that on February 8, 1979 Pacific Banking Corporation released the money to

petitioner by way of Cashiers Check No. DD 244955, representing the peso equivalent of the

US$100,000.00, which check was in turn presented before the Board of Special Inquiry of the

Bureau of Immigration as proof of petitioners compliance with the requirements for change of

status from tourist to special non-immigrant, i.e., foreign investor.xxxv[35] On the same day,

February 8, 1979, Current Account No. 12-2009, in the name of Chiang Yia Min, was opened in

RCBC-Shaw Boulevard with an initial deposit of P729,752.20, representing proceeds of inward

remittance received from Pacific Banking Corporation.xxxvi[36]

As established by the records, there were five issued checks: two made payable to Papercon, and

three made payable to cash (these three checks were all negotiated to Tom Pek).xxxvii[37]

Catalino Reyes testified that on two separate instances, petitioner asked him to prepare two of the

five checks questioned in this case, specifically, the check for P700,000.00, dated February 19,

1979 and payable to Papercon, and the check for P12,700.00, dated February 23, 1979 and

payable to cash.xxxviii[38] He witnessed petitioner study the information typed on the checks,

sign the checks, and hand them over to Tom Pek.xxxix[39]

The microfilm copies of these checks were submitted in evidence.xl[40] They all bear the

signature of petitioner.

Confronted with such direct and positive evidence that he authorized the opening of the account

and signed the questioned checks, it is curious that petitioner did not take the witness stand to

refute Reyess testimony. He did present as his rebuttal witness a teller of Metrobank (in which

he also maintained a checking account) who testified that she had assisted petitioner in some

withdrawals with Metrobank and in these instances it was petitioner himself, unassisted, who

filled out his checks.xli[41] Thus, petitioner attempted to show that he prepared his own checks as

a matter of practice. However, we note that the Metrobank teller testified to checks issued on

December 1989, or long after the herein questioned checks were issued. It would neither be fair

nor accurate to compare the practice of petitioner in issuing checks in 1979, when admittedly he

was still unfamiliar with the English language, with the manner by which he prepared his checks

ten years later.

To our mind, the best witness to counter the testimony of Catalino Reyes would be petitioner

himself, simply because, based on the statements of Reyes, the only persons present when

petitioner allegedly instructed Reyes to open the account and signed the checks were Reyes,

petitioner himself, and Tom Pek. (Tom Pek died during the course of the proceedings.) Besides,

if indeed Catalino Reyes lied in saying that petitioner instructed the opening of the account and

issued the checks, we cannot imagine a more natural reaction of petitioner than wanting to set the

record right.

Moreover, petitioners signatures on the questioned checks amounts to prima facie evidence that

he issued those checks. By denying that he issued the said checks it is he who puts into question

the genuineness and authenticity of the signatures appearing thereon, and it is he who has the

burden of proving that those signatures were forgeries.

No shred of evidence was presented by petitioner to show that the signatures were not his. All

that this petition relies on insofar as concerning the authenticity of the signatures is the finding of

the trial court judge that there was a discrepancy between the signatures on the bank form and

petitioners passport. As stated in the RTC decision:

xxx An examination of the signatures of the plaintiff on the said documents will, however,

show to an ordinary person the discrepancy in the said signatures. The letter H in Chiang

as appearing in the application form is in script whereas the said letter appearing in his

passport is in print.xlii[42]

The Court, however, believes that since what is at issue here is whether petitioner issued the

question