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DIGEST: SPECIAL TORTS ON HUMAN RELATIONS and Article 22 and 23 ARTICLE 19 PRINCIPLE OF ABUSE OF RIGHTS: CARPIO V VALMONTE 438 SCRA 38 September 9, 2004 FACTS - Respondent Valmonte is a wedding coordinator. Del Rosario and Sierra engaged her services for their church wedding on 10 October 1996. At about 4:30 p.m. on that day, Valmonte went to the Manila Hotel where the bride and her family were billeted. When she arrived at Suite 326-A, several persons were already there including the bride, the bride's parents and relatives, the make-up artist and his assistant, the official photographers, and the fashion designer. Among those present was petitioner Carpio, an aunt of the bride who was preparing to dress up for the occasion. - After reporting to the bride, Valmonte went out of the suite carrying the items needed for the wedding rites and the gifts from the principal sponsors. She proceeded to the Maynila Restaurant where the reception was to be held. She paid the suppliers, gave the meal allowance to the band, and went back to the suite. Upon entering the suite, Valmonte noticed the people staring at her. It was at this juncture that petitioner allegedly uttered the following words to Valmonte: Ikaw lang ang lumabas ng kwarto, nasaan ang dala mong bag? Saan ka pumunta? Ikaw lang ang lumabas ng kwarto, ikaw ang kumuha. Petitioner then ordered one of the ladies to search Valmonte's bag. It turned out that after Valmonte left the room to attend to her duties, petitioner discovered that the pieces of jewelry which she placed inside the comfort room in a paper bag were lost. The hotel security was called in to help in the search. The bags and personal belongings of all the people inside the room were searched. Valmonte was allegedly bodily searched, interrogated and trailed by a security guard throughout the evening. Later, police officers arrived and interviewed all persons who had access to the suite and fingerprinted them including Valmonte. During all the time Valmonte was being interrogated by the police officers, petitioner kept on saying the words Siya lang ang lumabas ng kwarto. Valmonte's car which was parked at the hotel premises was also searched but the search yielded nothing. - A few days after the incident, petitioner received a letter from Valmonte demanding a formal letter of apology which she wanted to be circulated to the newlyweds' relatives and guests to redeem her smeared reputation as a result of petitioner's imputations against her. Petitioner did not respond to the letter. Thus, Valmonte filed a suit for damages against her before the Regional Trial Court (RTC) of Pasig City, Branch 268. In her complaint, Valmonte prayed that petitioner be ordered to pay actual, moral and exemplary damages, as well as attorney's fees. - Responding to the complaint, petitioner denied having uttered words or done any act to confront or single out Valmonte during the investigation and claimed that everything that transpired after the theft incident was purely a police matter in which she had no participation. Petitioner prayed for the dismissal of the complaint and for the court to adjudge Valmonte liable on her counterclaim. - The trial court rendered its Decision dismissing Valmonte's complaint for damages. It ruled that when petitioner sought investigation for the loss of her jewelry, she was merely exercising her right and if damage results from a person exercising his legal right, it is damnum absque injuria. It added that no proof was presented by Valmonte to show that petitioner acted maliciously and in bad faith in pointing to her as the culprit. The court said that Valmonte failed to show that she suffered serious anxiety, moral shock, social humiliation, or that her reputation was besmirched due to petitioner's wrongful act. - Respondent appealed to the Court of Appeals alleging that the trial court erred in finding that petitioner did not slander her good name and reputation and in disregarding the evidence she presented. The Court of Appeals ruled differently. It opined that Valmonte has clearly established that she was singled out by petitioner as the one responsible for the loss of her jewelry. The appellate court held that Valmonte's claim for damages is not predicated on the fact that she was subjected to body search and interrogation by the police but rather petitioner's act of publicly accusing her of taking the missing jewelry. It categorized petitioner's utterance defamatory considering that it imputed upon Valmonte the crime of theft. The court concluded that petitioner's verbal assault upon Valmonte was done with malice and in bad faith since it was made in the presence of many people without any solid proof except petitioner's suspicion. Such unfounded accusation entitles Valmonte to an award of moral damages in the amount of P100,000.00 for she was publicly humiliated, deeply insulted, and embarrassed. However, the court found no sufficient evidence to justify the award of actual damages. - Hence, this petition. Petitioner contends that the appellate court's conclusion that she publicly humiliated respondent does not conform to the evidence presented. She adds that even on the assumption that she uttered the words complained of, it was not shown that she did so with malice and in bad faith. ISSUE WON petitioner had willfully caused injury to respondent in a manner that is contrary to morals and good customs HELD: YES - Petitioner's verbal reproach against respondent was certainly uncalled for considering that by her own account nobody knew that she brought such kind and amount of jewelry inside the paper bag. This being the case, she had no right to attack respondent with her innuendos which were not merely inquisitive but out rightly accusatory. By openly accusing respondent as the only person who went out of the room before the loss of the jewelry in the presence of all the guests therein, and ordering that she be immediately bodily searched, petitioner virtually branded respondent as the thief. True, petitioner had the right to ascertain the identity of the malefactor, but to malign respondent without an iota of proof that she was the one who actually stole the jewelry is an act which, by any standard or principle of law is impermissible. Petitioner had willfully caused injury to respondent in a manner which is contrary to morals and good customs. Her firmness and resolve to find her missing jewelry cannot justify her acts toward respondent. She did not act with justice and good faith for apparently, she had no other purpose in mind but to prejudice respondent. Certainly, petitioner transgressed the provisions of Article 19 in relation to Article 21 for which she should be held accountable. A person should be protected only when he acts in the legitimate exercise of his right, that is when he acts with prudence and good faith; but not when he acts with negligence and abuse. - Respondent is clearly entitled to an award of moral damages. Moral damages may be awarded whenever the defendant's wrongful act or omission is the proximate cause of the plaintiff's physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury in the cases specified or analogous to those provided in Article 2219 of the Civil Code. Though no proof of pecuniary loss is necessary in order that moral damages may be adjudicated, courts are mandated to take into account all the circumstances obtaining in the case and assess damages according to their discretion. Worthy of note is that moral damages are not awarded to penalize the defendant, or to enrich a complainant, but to enable the latter to obtain means, diversions or amusements that will serve to alleviate the moral suffering he has undergone, by reason of defendant's culpable action. In any case, award of moral damages must be proportionate to the sufferings inflicted. Considering respondent's social standing, and the fact that her profession is based primarily on trust reposed in her by her clients, the seriousness of the imputations made by petitioner has greatly tarnished her reputation and will in one way or the other, affect her future dealings with her clients, the award of P100,000.00 as moral damages appears to be a fair and reasonable assessment of respondent's damages. Disposition Petition denied ________________________ 229 Sea Commercial vs. CA | G.R. 122823 November 25, 1999 | FACTS 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 agreement whereby SEACOM appointed JII as its exclusive dealer in the City and Province of Iloilo. Tirso Jamandre executed a suretyship agreement binding himself jointly and severally with JII to pay for all obligations of JII to SEACOM. The agreement was subsequently amended to include Capiz in the territorial coverage and to make the dealership agreement on a non-exclusive basis. In the course of the business relationship arising from the dealership agreement, JII allegedly incurred a balance of P18,843.85 for unpaid deliveries, and SEACOM brought action to recover said amount plus interest and attorneys fees. JII filed an Answer denying the obligation and interposing a counterclaim for damages representing unrealized profits when JII sold to the Farm System Development Corporation (FSDC) twenty one (21) units of Mitsubishi power tillers. In the counterclaim, JII alleged that as a dealer in Capiz, JII contracted to sell in 1977 twenty-four (24) units of Mitsubishi power tillers to a group of farmers to be financed by said corporation, which fact JII allegedly made known to petitioner, but the latter taking advantage of said information and in bad faith, went directly to FSDC and dealt with it and sold twenty one (21) units of said tractors, thereby depriving JII of unrealized profit of eighty-five thousand four hundred fifteen and 61/100 pesos (P85,415.61).

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ISSUES & ARGUMENTS W/N SEACOM acted in bad faith when it competed with its own dealer as regards the sale of farm machineries to FSDC HOLDING & RATIO DECIDENDI "Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due and observe honesty and good faith. Article 19 was intended to expand the concept of torts by granting adequate legal remedy for the untold number of moral wrongs which is impossible for human foresight to provide specifically in statutory law. If mere fault or negligence in ones acts can make him liable for damages for injury caused thereby, with more reason should abuse or bad faith make him liable. The absence of good faith is essential to abuse of right. Good faith is an honest intention to abstain from 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 transaction unconscientious. In business relations, it means good faith as understood by men of affairs. While Article 19 may have been intended as a mere declaration of principle, the cardinal law on human conduct expressed in said article has given rise to certain rules, e.g. that where a person exercises his rights but does so arbitrarily or unjustly or performs his duties in a manner that is not in keeping with honesty and good faith, he opens himself to liability. The elements of an abuse of rights under Article 19 are: (1) there is a legal right or duty; (2) which is exercised in bad faith; (3) for the sole intent of prejudicing or injuring another. Clearly, the bad faith of SEACOM was established. By appointing as a dealer of its agricultural equipment, SEACOM recognized the role and undertaking of JII to promote and sell said equipment. Under the dealership agreement, JII was to act as a middleman to sell SEACOMs products, in its area of operations, i.e. Iloilo and Capiz provinces, to the exclusion of other places, to send its men to Manila for training on repair, servicing and installation of the items to be handled by it, and to comply with other personnel and vehicle requirements intended for the benefit of the dealership After being informed of the demonstrations JII had conducted to promote the sales of SEACOM equipment, including the operations at JIIs expense conducted for five months, and the approval of its facilities (service and parts) by FSDC, SEACOM participated in the bidding for the said equipment at a lower price, placing itself in direct competition with its own dealer. The actuations of SEACOM are tainted by bad faith. Even if the dealership agreement was amended to make it on a non-exclusive basis, SEACOM may not exercise its right unjustly or in a manner that is not in keeping with honesty or good faith; otherwise it opens itself to liability under the abuse of right rule embodied in Article 19 of the Civil Code above-quoted. This provision, together with the succeeding article on human relation, was intended to embody certain basic principles that are to be observed for the rightful relationship between human beings and for the stability of the social order. What is sought to be written into the law is the pervading principle of equity and justice above strict legalism. ________________________ City Trust Banking vs Villanueva 361 SCRA 446 _____________________ TITLE: Nikko Hotel Manila vs. Reyes February 28, 2005 FACTS: Petitioners Nikko Hotel Manila and Ruby Lim assailed the decision of the Court of Appeals in reversing the decision of RTC of Quezon City. CA held petitioner liable for damages to Roberto Reyes aka Amang Bisaya, an entertainment artist. There are two versions of the story: Mr. Reyes: On the eve of October 13, 1994, Mr. Reyes while having coffee at the lobby of Nikko Hotel was approached by Dr. Violet Filart, a friend several years back. According to Mr. Reyes, Dr. Filart invited him to join a birthday party at the penthouse for the hotels former General Manager, Mr. Tsuruoka. Plaintiff agreed as Dr. Filart agreed to vouch for him and carried a basket of fruits, the latters gift. He He lined up at the buffet table as soon as it was ready but to his great shock, shame and embarrassment, Ruby Lim, Hotels Executive Secretary, asked him to leave in a loud voice enough to be heard by the people around them. He was asked to leave the party and a Makati policeman accompanied him to step-out the hotel. All these time, Dr Filart ignored him adding to his shame and humiliation. Ms. Ruby Lim: She admitted asking Mr. Reyes to leave the party but not in the manner claimed by the plaintiff. Ms. Lim approached several people including Dr. Filarts sister, Ms. Zenaida Fruto, if Dr. Filart did invite him as the captain waiter told Ms. Lim that Mr. Reyes was with Dr. Filarts group. She wasnt able to ask it personally with Dr. Filart since the latter was talking over the phone and doesnt want to interrupt her. She asked Mr. Reyes to leave because the celebrant specifically ordered that the party should be intimate consisting only of those who part of the list. She even asked politely with the plaintiff to finish his food then leave the party. During the plaintiffs cross-examination, he was asked how close was Ms. Lim when she approached him at the buffet table. Mr. Reyes answered very close because we nearly kissed each other. Considering the close proximity, it was Ms. Lims intention to relay the request only be heard by him. It was Mr. Reyes who made a scene causing everybody to know what happened. ISSUE: Whether or not petitioners acted abusively in asking Mr. Reyes to leave the party. HELD: Supreme Court held that petitioners did not act abusively in asking Mr. Reyes to leave the party. Plaintiff failed to establish any proof of ill-motive on the part of Ms. Lim who did all the necessary precautions to ensure that Mr. Reyes will not be humiliated in requesting him to leave the party. Considering almost 20 years of experience in the hotel industry, Ms. Lim is experienced enough to know how to handle such matters. Hence, petitioners will not be held liable for damages brought under Article 19 and 20 of the Civil Code. Topic: DEFENSES: ASSUMPTION OF RISK G.R. No. 154259 February 28, 2005NIKKO HOTEL MANILA GARDEN and RUBY LIM, petitioners,vs. ROBERTO REYES, a.k.a. "AMAY BISAYA," respondent. Facts: The cause of action before the trial court was one for damages brought under the human relations provisions of the New Civil Code. Respondent Reyes Version: Mrs. Filart invited and assured that she can vouched for him in the birthday party of the hotels manager, Mr. Masakazu at the penthouse. When the buffet dinner was ready, Reyes lined up but, to his great shock, shame and embarrassment, he was stopped by Lim (Exec. Sec. of Nikko Hotel), and in a loud voice w/in the presence and hearing of the other guests, told him to leave the party. Reyes tried to explain that he was invited by Dr. Filart, but the latter completely ignored him adding to his shame and humiliation. Not long after, policemen approached him and asked him to step out of the hotel. He now claims P1M for actual damages, P1M moral and/or exemplary damages and P200k for attys fees. Lims version: At the party she noticed Reyes at the bar counter ordering a drink. Mindful of Mr. Tsuruokas wishes to keep the party intimate, she approached the captain waiter to inquire as to the presence of Reyes who was uninvited. The waiter said that he saw Reyes came in w/ the group of Dr. Filart. Lim inquired Dr Filarts sister about Reyes and the sister said the latter was not invited by Dr. Filart. Lim requested the sister to tell Reyes to leave but the latter just lingered. The same happened when one Capt. Batung asked Reyes to leave. When Lim spotted Reyes by the buffet table, she decided to speak to him herself as there were no guest in the immediate vicinity. However, as Reyes was already helping himself to the food, she decided to wait. When Reyes went to a corner and started to eat, Lim approached him and said: " alam ninyo, hindo ho kayodapat nandito. Pero total nakakuha na ho kayo ng pagkain, ubusin na lang ninyo at pagkatapos kung pwede lang po umalisna kayo." She then turned around trusting that Reyes would show enough decency to leave, but to her surprise, he began screaming and making a big scene, and even threatened to dump food on her.Dr. Filarts version: According to her, it was Reyes who volunteered to carry the basket of fruits intended for the celebrant as he was likewise going to take the elevator, not to the penthouse but to Altitude 49. When they reached the penthouse, she reminded Reyes to go down as he was not properly dressed and was not invited. All the while, she thought that Reyes already left the place. Then there was a commotion and she saw Reyes shouting. She ignored Reyes. She was embarrassed and didnot want the celebrant to think that she invited him.RTC Ruling: After trial on the merits, the court a quo dismissed the complaint, giving more credence to the testimony of Ms.Lim that she was discreet in asking Mr. Reyes to leave the party. The trial court likewise ratiocinated that Mr. Reyes assumed the risk of being thrown out of the party as he was uninvited.CA Ruling: On appeal, CA reversed the ruling of the trial court as it found more commanding of belief the testimony of Reyes that Lim ordered him to leave in a loud voice within hearing distance of several guests. It likewise ruled that the actuation of Lim in approaching several people to inquire into the presence of Reyes exposed the latter to ridicule and was uncalled for as she should have approached Dr. Filart first and both of them should have talked to Reyes in private.

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Consequently, CA imposed upon Hotel Nikko, Lim and Dr. Filart the solidary obligation to pay Reyes (1) exemplary damages in the amount of Two Hundred Thousand Pesos (P200,000); (2) moral damages in the amount of Two Hundred Thousand Pesos (P200,000); and (3) attorneys fees in the amount of Ten Thousand Pesos (P10,000). On motion for reconsideration, the Court of Appeals affirmed its earlier decision as the argument raised in the motion had "been amply discussed and passed upon in the decision sought to be reconsidered. Hotel Nikko and Ruby Lim contend that the Court of Appeals seriously erred in not applying the Doctrine of Volenti Non Fit Injuria considering that by its own findings, Reyes was a great crasher. Issue and Ruling:1) Won the Doctrine of Volenti Non Fit Injuria is applicable in the case at bar. Petitioners Lim and Hotel Nikko contend that pursuant to the doctrine of volenti non fit injuria, they cannot be made liable for damages as respondent Reyes assumed the risk of being asked to leave (and being embarrassed and humiliated in the process) as he was a "gate-crasher." The doctrine of volenti non fit injuria ("to which a person assents is not esteemed in law as injury" ) refers to self-inflicted injury or to the consent to injury which precludes the recovery of damages by one who has knowingly and voluntarily exposed himself to danger, even if he is not negligent in doing so. As formulated by petitioners, however, this doctrine does not find application to the case at bar because even if respondent Reyes assumed the risk of being asked to leave the party, petitioners, under Articles 19 and 21 of the New Civil Code, were still under obligation to treat him fairly in order not to expose him to unnecessary ridicule and shame. 2) Won Lim acted abusively in asking Reyes, a.k.a. "Amay Bisaya," to leave the party where he was not invited by the celebrant thereof thereby becoming liable under Articles 19 and 21 of the Civil Code.No. In the absence of any proof of motive on the part of Ms. Lim to humiliate Mr. Reyes and expose him to ridicule and shame, it is highly unlikely that she would shout at him from a very close distance. Ms. Lim having been in the hotel business for twenty years wherein being polite and discreet are virtues to be emulated, the testimony of Mr. Reyes that she acted to the contrary does not inspire belief and is indeed incredible. Thus, the lower court was correct in observing that Considering the closeness of defendant Lim to plaintiff when the request for the latter to leave the party was made such that they nearly kissed each other, the request was meant to be heard by him only and there could have been no intention on her part to cause embarrassment to him. It was plaintiffs reaction to the request that must have made the other guests aware of what transpired between them. Had plaintiff simply left the party as requested, there was no need for the police to take him out. Moreover, another problem with Reyess version of the story is that it is unsupported. It is a basic rule in civil cases that he who alleges proves. Reyes, however, had not presented any witness to back his story up. All his witnesses Danny Rodinas, Pepito Guerrero and Alexander Silva - proved only that it was Dr. Filart who invited him to the party. Lim, not having abused her right to ask Mr. Reyes to leave the party to which he was not invited, cannot be made liable to pay for damages under Articles 19 and 21 of the Civil Code. Necessarily, neither can her employer, Hotel Nikko, be held liable as its liability springs from that of its employee. Article 19, known to contain what is commonly referred to as the principle of abuse of rights, is not a panacea for all human hurts and social grievances. Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith. The object of this article, therefore, is to set certain standards which must be observed not only in the exercise of ones rights but also in the performance of ones duties. These standards are the following: act with justice, give everyone his due and observe honesty and good faith. Its antithesis, necessarily, is any act evincing bad faith or intent to injure. Its elements are the following: (1) There is a legal right or duty; (2) which is exercised in bad faith; (3) for the sole intent of prejudicing or injuring another. When Article 19 is violated, an action for damages is proper under Articles 20 or 21 of the Civil Code. Article20 pertains to damages arising from a violation of law which does not obtain herein as Lim was perfectly within her right to ask Mr. Reyes to leave. Parenthetically, the manner by which Lim asked Reyes to leave was likewise acceptable and humane under the circumstances. In this regard, we cannot put our imprimatur on the appellate courts declaration that Lims act of personally approaching Mr. Reyes (without first verifying from Filart if indeed she invited. Reyes) gave rise to a cause of action" predicated upon mere rudeness or lack of consideration of one person, which calls not only protection of human dignity but respect of such dignity." Without proof of any ill-motive on her part, Lims act of by-passing Filart cannot amount to abusive conduct especially because she did inquire from Mrs. Filarts companion who told her that Filart did not invite Reyes. If at all, Lim is guilty only of bad judgment which, if done with good intentions, cannot amount to bad faith. Not being liable for both actual and moral damages, neither can petitioners Lim and Hotel Nikko be made answerable for exemplary damages especially for the reason stated by the CA ______________________ ARTICLE 21 RUIZ V SECRETARY FACTS - Enrique Ruiz and Jose Herrera, both shareholders of Allied Technilogists, Inc. filed an action against the Secretary of National Defense and also against their own company (together with Pablo Panlilio who is also a shareholder of the company) in connection with the 15% retention fund withheld by the DND relating to the construction of the Veterans Hospital. It turned out that said retention was already released by the DND to the Company. The Court then proceeded with the other cause of action which was deemed to be the controversy between Ruiz and Panlilio over the said 15%. - As it turned out, the real issue was the credit as to the architects of the building were. Under the contract and all other documents relating to the construction of the Veterans Hospital, the named architect was only Panlilio. Ruiz and Herrera want to be recognized as architects of the building also citing Article 21 of the Civil Code as their base for he cause of action. - The amended complaint of appellants claimed that the non inclusion of their names as architects resulted in their professional prestige and standing being seriously impaired. Hence, they claim that even if the retention fund was in act released, their pleas for recognition as architects should have been heard by the lower court. ISSUE WON the lower court erred in dismissing the case HELD NO - The sole object of the appellants was to secure for themselves recognition that they were co-architects of the Veterans Hospital, together with Panlilio, so as to enhance their standing and prestige. If this is so, there is no need or necessity for a judicial declaration. Prestige and recognition are bestowed on the deserving even if there is no judicial declaration. On the other hand no amount of declaration will help an incompetent person achieve prestige and recognition. Article 21, which was used as basis of the action, states; Any person who willfully causes loss or injury to another in a manner that is contrary to morals, good customs, or public policy shall compensate the latter for damages. - While the word injury may also refer to honor or credit, the article envisions a situation where a person has a legal right which was violated by another in a manner contrary to morals, good custom, or public policy. Hence it presupposes losses or injuries which are suffered as a result of said violation. The pleadings in this case do not show damages were ever asked or alleged. - And under the facts and circumstances obtaining, one cannot sustain the contention that the failure or refusal to extend recognition was an act contrary to morals, good custom, or public policy. Disposition Petition denied. Order appealed from is affirmed. he modified award of attorneys fees. ______________ 260 Tenchavez vs. Ecano| JBL Reyes G.R. No. L-19671 November 29, 1965| 15 SCRA 355 FACTS Direct appeal, on factual and legal questions, from the judgment of the Court of First Instance of Cebu, denying the claim of the plaintiff-appellant, Pastor B. Tenchavez, for legal separation and one million pesos in damages against his wife and parents-in-law, the defendants-appellees, Vicente, Mamerto and Mena, all surnamed "Escao," respectively Missing her late afternoon classes on 24 February 1948 in the University of San Carlos, Cebu City, where she was then enrolled as a second year student of commerce, Vicenta Escao, 27 years of age (scion of a well-to-do and socially prominent Filipino family of Spanish ancestry and a "sheltered colegiala"), exchanged marriage vows with Pastor Tenchavez, 32 years of age, an engineer, ex-army officer and of undistinguished stock, without the knowledge of her parents, before a Catholic chaplain, Lt. Moises Lavares, in the house of one Juan Alburo in the said city. The marriage was the culmination of a previous love affair and was duly registered with the local civil register. Her parents were disgusted when they found out about the marriage and considered a Re-celebration of the marriage as they believed it to be invalid. The re-celebration never took place.

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On 24 June 1950, without informing her husband, Vicenta applied for a passport, indicating in her application that she was single, that her purpose was to study, and she was domiciled in Cebu City, and that she intended to return after two years. The application was approved, and she left for the United States. On 22 August 1950, she filed a verified complaint for divorce against the herein plaintiff in the Second Judicial District Court of the State of Nevada in and for the County of Washoe, on the ground of "extreme cruelty, entirely mental in character." On 21 October 1950, a decree of divorce, "final and absolute", was issued in open court by the said tribunal. In 1951 Mamerto and Mena Escao filed a petition with the Archbishop of Cebu to annul their daughter's marriage to Pastor (Exh. "D"). On 10 September 1954, Vicenta sought papal dispensation of her marriage (Exh. "D"-2). On 13 September 1954, Vicenta married an American, Russell Leo Moran, in Nevada. She now lives with him in California, and, by him, has begotten children. She acquired American citizenship on 8 August 1958. But on 30 July 1955, Tenchavez had initiated the proceedings at bar by a complaint in the Court of First Instance of Cebu, and amended on 31 May 1956, against Vicenta F. Escao, her parents, Mamerto and Mena Escao, whom he charged with having dissuaded and discouraged Vicenta from joining her husband, and alienating her affections, and against the Roman Catholic Church, for having, through its Diocesan Tribunal, decreed the annulment of the marriage, and asked for legal separation and one million pesos in damages. Vicenta claimed a valid divorce from plaintiff and an equally valid marriage to her present husband, Russell Leo Moran; while her parents denied that they had in any way influenced their daughter's acts, and counterclaimed for moral damages. The appealed judgment did not decree a legal separation, but freed the plaintiff from supporting his wife and to acquire property to the exclusion of his wife. It allowed the counterclaim of Mamerto Escao and Mena Escao for moral and exemplary damages and attorney's fees against the plaintiff-appellant, to the extent of P45,000.00, and plaintiff resorted directly to this Court. ISSUES & ARGUMENTS W/N Vicentas parents are liable for damages HOLDING & RATIO DECIDENDI No. There is no evidence that the parents of Vicenta, out of improper motives, aided and abetted her original suit for annulment, or her subsequent divorce; she appears to have acted independently, and being of age, she was entitled to judge what was best for her and ask that her decisions be respected. Her parents, in so doing, certainly cannot be charged with alienation of affections in the absence of malice or unworthy motives, which have not been shown, good faith being always presumed until the contrary is proved. Plaintiff Tenchavez, in falsely charging Vicenta's aged parents with racial or social discrimination and with having exerted efforts and pressured her to seek annulment and divorce, unquestionably caused them unrest and anxiety, entitling them to recover damages. While this suit may not have been impelled by actual malice, the charges were certainly reckless in the face of the proven facts and circumstances. Court actions are not established for parties to give vent to their prejudices or spleen. ________________ Pe vs Pe 5 SCRA 200 FACTS: Alfonso Pe, the defendant, was a married man, agent of La Perla Cigar and Cigarette Factory in Gasan Marinduque who was treated like a son by Cecilio Pe, one of the petitioners. Cecilio introduced Alfonso to his children and was given access to visit their house. Alfonso got fond of Lolita, 24 year old single, daughter of Cecilio. The defendant frequented the house of Lolita sometime in 1952 on the pretext that he wanted her to teach him how to pray the rosary. Eventually they fell in love with each other. Plaintiff brought action before lower court of Manila and failed to prove Alfonso deliberately and in bad faith tried to win Lolitas affection. The case on moral damages was dismissed. ISSUE: Whether or not defendant is liable to Lolitas family on the ground of moral, good custom and public policy due to their illicit affair. HELD: Alfonso committed an injury to Lolitas family in a manner contrary to morals, good customs and public policy contemplated in Article 20 of the civil code. The defendant took advantage of the trust of Cecilio and even used the praying of rosary as a reason to get close with Lolita. The wrong caused by Alfonso is immeasurable considering the fact that he is a married man. WHEREFORE, the decision appealed from is reversed. Defendant is hereby sentenced to pay the plaintiffs the sum of P5,000.00 as damages and P2,000.00 as attorney's fees and expenses of litigations. Costs against appellee. _______________ 244 Wassmer vs. Velez December 26, 1964 FACTS Velez and Wassmer decided to get married and set the wedding day for September 4, 1954. On September 2, 1954, Velez left a note for Wassmer stating that the wedding would have to be postponed because his mother opposes it, and that he was leaving for his hometown. The next day, however, he sent her a telegram stating that nothing changed and that he would be returning very soon. But then, Velez did not appear nor was he heard from again. Wassmer sued him, and he was declared in default. Judgment was rendered ordering Velez to pay actual damages, moral and exemplary damages, and attorneys fees. Velez filed a petition for relief from judgment and motion for new trial and reconsideration. Since he still failed to appear during the hearings set by the lower court, and because his counsel had declared that there was no possibility for an amicable settlement between the parties, the court issued an order denying his petition. Hence this appeal. Dante Capuno was a member of the Boy Scouts organization and a student of the Balintawak Elementary School. He attended a parade in honor of Jose Rizal upon instruction of the city schools supervisor. He boarded a jeep, took hold of the wheel and drove it. ISSUES & ARGUMENTS W/N Velez is liable to pay damages to Wassmer. HOLDING & RATIO DECIDENDI VELEZ LIABLE TO PAY DAMAGES. In support of his motion for new trial and reconsideration, Velez asserts that the judgment is contrary to law because there is no provision in the Civil Code authorizing an action for breach of a promise to marry. Moreover, the same thing was declared by this court in the cases of Hermosisima and Estopa. It must not be overlooked, however, that the extent to which acts not contrary to law may be perpetrated with impunity, is not limitless for Article 21 of the NCC provides that any person who willfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage. Here, the invitations had already been printed out and distributed, and numerous things had been purchased for the bride and for wedding. Bridal showers were given and gifts had been received. Surely this is not a case of mere breach of promise to marry. To formally set a wedding and go through all the preparation and publicity, only to walk out of it at the last minute, is quite different. This is palpably and unjustifiably contrary to good customs for which defendant must be held answerable for damages. Petition DENIED. Lower courts decision AFFIRMED. ___________________ ARTICLES 22 AND 23 (DIGEST: SPECIAL TORTS ON HUMAN RELATIONS) VICENTE PEREZ, plaintiff-appellee, vs. EUGENIO POMAR, Agent of the Compaia General de Tabacos, On August 27, 1902, Don Vicente Perez filed in the Court of First Instance of Laguna a complaint, which was amended on the 17th of January of this year, asking that the court determine the amount due the plaintiff, at the customary rate of compensation for interpreting in these Islands, for services rendered in the Tabacalera Company, and that, in view of the circumstances of the case, judgment be rendered in his favor for such sum. The complaint also asked that the defendant be condemned to the payment of damages in the sum of $3,200, gold, together with the costs of suit. In this complaint it was alleged that Don Eugenio Pomar, as general agent of the Compaia General de Tabacos in the said province, verbally requested the plaintiff on the 8th of December, 1901, to act as interpreter between himself and the military authorities; that after the date mentioned the plaintiff continued to render such services up to and including May 31, 1902; that he had accompanied the defendant, Pomar, during that time at conferences between the latter and the colonel commanding the local garrison, and with various officers and doctors residing in the capital, and at conferences with Captain Lemen in the town of Pilar, and with the major in command at the town of Pagsanjan, concerning the shipment of goods from Manila, and with respect to Pagsanjan to this city; that the plaintiff during this period held himself in readiness to render services whenever required; that on this account his private business, and especially a soap factory established in the capital, was entirely abandoned; that to the end that such services might be punctually rendered, the agent, Pomar, assured him that the Tabacalera Company always generously repaid services rendered

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it, and that he therefore did not trouble himself about his inability to devote the necessary amount of time to his business, the defendant going so far as to make him flattering promises of employment with the company, which he did not accept; that these statements were made in the absence of witnesses and that therefore his only proof as to the same was Mr. Pomars word as a gentleman; that the employees of the company did not understand English, and by reason of the plaintiffs mediation between the agent, and the military authorities large profits were obtained, as would appear from the account and letterpress books of the agency corresponding to those dates. In the amended complaint it was added that the defendant, on behalf of the company, offered to renumerate the plaintiff for the services rendered in the most advantageous manner in which such services are compensated, in view of the circumstances under which they were requested; and that the plaintiff, by rendering the company such services, was obliged to abandon his own business, the manufacture of soap, and thereby suffered damages in the sum of $3,200, United States currency. The defendant, on the 25th of September, 1902, filed an answer asking for the dismissal of the complaint, with costs to the plaintiff. In his answer the defendant denied the allegation in the first paragraph of the complaint, stating that it was wholly untrue that the company, and the defendant as its agent, had solicited the services of the plaintiff as interpreter before the military authorities for the period stated, or for any other period, or that the plaintiff had accompanied Pomar at the conferences mentioned, concerning shipments from Manila and exports from some of the towns of the province to this capital. He stated that he especially denied paragraphs 2 of the complaint, as it was absolutely untrue that the plaintiff had been at the disposal of the defendant for the purpose of rendering such services; that he therefore had not been obliged to abandon his occupation or his soap factory, and that the statement that an offer of employment with the company had been made to him was false. The defendant also denied that through the mediation of the plaintiff the company and himself had obtained large profits. The statements in paragraphs 6, 7, 8, and 9 of the complaint were also denied. The defendant stated that, on account of the friendly relations which sprang up between the plaintiff and himself, the former borrowed from him from time to time money amounting to $175 for the purposes of his business, and that he had also delivered to the plaintiff 36 arrobas of oil worth $106, and three packages of resin for use in coloring his soap; that the plaintiff accompanied the defendant to Pagsanjan, Pilar, and other towns when the latter made business trips to them for the purpose of extending his business and mercantile relations therein; that on these excursions, as well as on private and official visits which he had to make, the plaintiff occasionally accompanied him through motives of friendship, and especially because of the free transportation given him, and not on behalf of the company of which he was never interpreter and for which he rendered no services; that the plaintiff in these conferences acted as interpreter of his own free will, without being requested to do so by the defendant and without any offer of payment or compensation; that therefore there existed no legal relation whatever between the company and the plaintiff, and that the defendant, when accepting the spontaneous, voluntary and officious services of the plaintiff, did so in his private capacity and not as agent of the company, and that it was for this reason that he refused to enter into negotiations with the plaintiff, he being in no way indebted to the latter. The defendant concluded by saying that he answered in his individual capacity. A complaint having been filed against the Compaia General de Tabacos and Don Eugenio Pomar, its agent in the Province of Laguna, the latter, having been duly summoned, replied to the complaint, which was subsequently amended, and stated that he made such reply in his individual capacity and not as agent of the company, with which the plaintiff had had no legal relations. The suit was instituted between the plaintiff and Pomar, who, as such, accepted the issue and entered into the controversy without objection, opposed the claim of the plaintiff, and concluded by asking that the complaint be dismissed, with the costs to the plaintiff. Under these circumstances and construing the statutes liberally, we think it proper to decide the case pending between both parties in accordance with law and the strict principles of justice. From the oral testimony introduced at the trial, it appears that the plaintiff, Perez, did on various occasions render Don Eugenio Pomar services as interpreter of English; and that he obtained passes and accompanied the defendant upon his journeys to some of the towns in the Province of Laguna. It does not appear from the evidence, however, that the plaintiff was constantly at the disposal of the defendant during the period of six months, or that he rendered services as such interpreter continuously and daily during that period of time. It does not appear that any written contract was entered into between the parties for the employment of the plaintiff as interpreter, or that any other innominate contract was entered into; but whether the plaintiffs services were solicited or whether they were offered to the defendant for his assistance, inasmuch as these services were accepted and made use of by the latter, we must consider that there was a tacit and mutual consent as to the rendition of the services. This gives rise to the obligation upon the person benefited by the services to make compensation therefor, since the bilateral obligation to render services as interpreter, on the one hand, and on the other to pay for the services rendered, is thereby incurred. (Arts. 1088, 1089, and 1262 of the Civil Code). The supreme court of Spain in its decision of February 12, 1889, holds, among other things, that not only is there an express and tacit consent which produces real contract but there is also a presumptive consent which is the basis of quasi contracts, this giving rise to the multiple juridical relations which result in obligations for the delivery of a thing or the rendition of a service. Notwithstanding the denial of that defendant, it is unquestionable that it was with his consent that the plaintiff rendered him services as interpreter, thus aiding him at a time when, owing to the existence of an insurrection in the province, the most disturbed conditions prevailed. It follows, hence, that there was consent on the part of both in the rendition of such services as interpreter. Such service not being contrary to law or to good custom, it was a perfectly licit object of contract, and such a contract must necessarily have existed between the parties, as alleged by the plaintiff. (Art. 1271, Civil Code.) The consideration for the contract is also evident, it being clear that a mutual benefit was derived in consequence of the service rendered. It is to be supposed that the defendant accepted these services and that the plaintiff in turn rendered them with the expectation that the benefit would be reciprocal. This shows the concurrence of the three elements necessary under article 1261 of the Civil Code to constitute a contract of lease of service, or other innominate contract, from which an obligation has arisen and whose fulfillment is now demanded. Article 1254 of the Civil Code provides that a contract exists the moment that one or more persons consent to be bound, with respect to another or others, to deliver some thing or to render some service. Article 1255 provides that the contracting parties may establish such covenants, terms, and conditions as they deem convenient, provided they are not contrary to law, morals or public policy. Whether the service was solicited or offered, the fact remains that Perez rendered to Pomar services as interpreter. As it does not appear that he did this gratuitously, the duty is imposed upon the defendant, having accepted the benefit of the service, to pay a just compensation therefor, by virtue of the innominate contract of facio ut des implicitly established. The obligations arising from this contract are reciprocal, and, apart from the general provisions with respect to contracts and obligations, the special provisions concerning contracts for lease of services are applicable by analogy. In this special contract, as determined by article 1544 of the Civil Code, one of the parties undertakes to render the other a service for a price certain. The tacit agreement and consent of both parties with respect to the service rendered by the plaintiff, and the reciprocal benefits accruing to each, are the best evidence of the fact that there was an implied contract sufficient to create a legal bond, from which arose enforceable rights and obligations of a bilateral character. In contracts the will of the contracting parties is law, this being a legal doctrine based upon the provisions of articles 1254, 1258, 1262, 1278, 1281, 1282, and 1289 of the Civil Code. If it is a fact sufficiently proven that the defendant, Pomar, on various occasions consented to accept an interpreters services, rendered in his behalf and not gratuitously, it is but just that he should pay a reasonable remuneration therefor, because it is a well-known principle of law that no one should be permitted to enrich himself to the damage of another. With respect to the value of the services rendered on different occasions, the most important of which was the first, as it does not appear that any salary was fixed upon by the parties at the time the services were accepted, it devolves upon the court to determine, upon the evidence presented, the value of such services, taking into consideration the few occasions on which they were rendered. The fact that no fixed or determined consideration for the rendition of the services was agreed upon does not necessarily involve a violation of the provisions of article 1544 of the Civil Code, because at the time of the agreement this consideration was capable of being made certain. The discretionary power of the court, conferred upon it by the law, is also supported by the decisions of the supreme court of Spain, among which may be cited that of October 18, 1899, which holds as follows: That as stated in the article of the Code cited, which follows the provisions of law 1, title 8, of the fifth partida, the contract for lease of services is one in which one of the parties undertakes to make some thing or to render some service to the other for a certain price, the existence of such a price being understood, as this court has held not only when the price has been expressly agreed upon but also when it may be determined by the custom and frequent use of the place in which such services were rendered. No exception was taken to the judgment below by the plaintiff on account of the rejection of his claim for damages. The decision upon this point is, furthermore, correct. Upon the supposition that the recovery of the plaintiff should not exceed 200 Mexican pesos, owing to the inconsiderable number of times he acted as interpreter, it is evident that the contract thus implicitly entered into was not required to be in writing and that therefore it does not fall within article 1280 of the Civil Code;

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nor is it included within the provisions of section 335 of the Code of Civil Procedure, as this innominate contract is not covered by that section. The contract of lease of services is not included in any of the cases expressly designated by that section of the procedural law, as affirmed by the appellant. The interpretation of the other articles of the Code alleged to have been infringed has also been stated fully in this opinion. For the reasons stated, we are of the opinion that judgment should be rendered against Don Eugenio Pomar for the payment to the plaintiff of the sum of 200 Mexican pesos, from which will be deducted the sum of 50 pesos is made as to the costs of this instance. The judgment below is accordingly affirmed in so far as it agrees with this opinion, and reversed in so far as it may be in conflict therewith. Judgment will be entered accordingly twenty days after this decision is filed. _____________ G.R. No. L-30204 October 29, 1976 PACIFIC MERCHANDISING CORPORATION, plaintiffappellee, vs. CONSOLACION INSURANCE & SURETY CO., INC., defendant-appellee, vs GREGORIO V. PAJARILLO, third party defendant-appellant. In Civil Case No. 117811, which was an action instituted by Pacific Merchandising Corporation (plaintiff-appellee) to collect the sum of P2,562.88 from Consolacion Insurance & Surety Co., Inc., (defendant- appellee) who in turn filed a third-party complaint against Gregorio V. Pajarillo (third-party defendant-appellant). the City Court of Manila rendered judgment on April 6, 1964, the dispositive portion of which reads, in part, thus: WHEREFORE, in view of the foregoing, judgment is hereby rendered in favor of the plaintiff and against the defendant, ordering the latter to pay the former the sum of P2,562.88 with interest thereon at the rate of 12% per annum from May 30, 1963 until fully paid, P100.00 as for attorney's fees, plus the costs of suit; condemning third defendant to pay third-party plaintiff for whatever sums or amounts tlie latter paid the plaintiff on account of this judgment. By virtue of the appeal interposed by the third-party defendant Gregorio V. Pajarillo, the case was elevated, on May 12, 1964, to the Court of First Instance of Manila. On July 21, 1964, the parties, through their respective counsel, submitted the following Stipulation of Facts: 1. That on the 19th day of October, 1962, a Writ of Execution as isstica Iy the Court of First Instance of Manila under Civil Case No. 49691, entitled Pacific Merchandising Corporation vs. Leo Enterprises, Inc., a copy of the said Writ of Execution is attached as ANNEX Ato the complaint; 2. That by virtue of the aforesaid Writ of Execution, the Sheriff of Manila levied and attached the following: 'l. Second Hand AUTOMATICKET Machine No. MG-31833;and '2. Cinema Projectors Complete, trademark SIMPLEX PEERLESS MAGNARC NOS. 52625 and 62387' which items were advertised for sale on March 2, 1963, copy of Notice of sale attached as ANNEX 'B' to the Complaint; 3. That Atty. Greg V. Pajarillo was appointed on March 2, 1963 as Receiver of all the assets, properties and equipment of Paris Theatre, olwrated by Leo Enterprises, Inc. under Civil Case No. 50201 entitled Gregorio V. Pajarillo vs. Leo Enterprises, Inc.; 4. That the sale at public auction of the above described properties was postponed and was later cancelled due to thc representation of Atty. Greg V. Pajarillo as Receiver of Paris Theatre operated by Leo Enterprises, Inc. in which he undertook the 1anient of the judgment rendered in favor of the plaintiff against Leo Enterprises, Inc. as Ier undertaking dated March 11, 1963, copy of which is attached as ANNEX 'C' to the complaint; 5. That on or about hie third of March, 1963, third-party defendant Pajarillo approached the third-party plaintiff and applied for a surety bond in the amount of P5,000.00 to be rated in favor of the abovenamed plaintiff in order to guarantee to said plaintiff the payment of obligations in its favor by the Leo Enterprises, Inc.; 6. That the bond applied for was in fact executed in favor of the pIaintiff rith third-party defendant Pajarillo as principal and thirdparty plaintiff as surety in the context of the allegations of the preceding paragraph and a copy of the said bond is attached a ANNEX 'A' to the third party complaint; 7. That to protect thirrd party plaintiff against damage and injury, the third party defendant Pajarillo executed in favor of the former an INDEMNITY AGREEMENT, copy of which is attached as ANNEX 'B' to third party complaint; tlie trms of which aie incorporated by reference; 8. That the plaintiff received from hie aid principal, Greg V. Pajarillo the sum of P2,000.00 leaving a balance of P2,562.88 still unpaid aside from interest at the rate of 1% per month and atto lnen s f cluiaient to 25% of tht amount due as provided for in said undertaking (ANNEX 'C' to tlie complaint); 9. That on July 1, 1963, a decision was rendered tne court of First Instance of Manila in Civil case No. 50201, copy of' which is attached its ANNEX 'A' to Answer to Third Party Complaint, by virtue of which Greg V. Pajarillo, as said Received stololcl making payments to plaintiff; 10. That the said decision in Civl Case No. 50201 dated July 1, 1963 was appealed lix defendant Leo Enterprises, Inc. to the court of Appeals and that the records kere eleattd to the aid ApiIiat court on August 27, 1963; 11. That on October 9, 1963, plaintiff's counsel demanded from the said principal, Greg V. Paiarillo, the payment of the installments corresponding to the months of May, June, July, August and September, 1963, which remain unpaid in spite of said demand, copy of said letter being, attached as ANNEX 'E' to the complaint; 12. That the defendant was duly notified of the demand made on the principal, Greg V. Pajarillo and in spite of said notice the defendant has failed and refused to pay the unpaid obligation; 13. That on December 19, 1963, plaintiff's counsel demanded from the defendant the payment of the unpaid obligation of the principal, Greg V. Pajarillo but refused and failed to pay the same in spite of said demand; 14. That when reminded by third-party plaintiff regarding his obligations in favor of the plaintiff, the third-party defendant, Greg V. Pajarillo replied that he no longer was bound to pay because he had ceased to be the receiver of Paris Theatre operated by Leo Enterprises, Inc. by virtue of the decision of the Court in Civil Case No. 50201 cited above, and for this reason, third- party plaintiff refused to pay the demand of the plaintiff 2 On the basis of the foregoing Stipulation of Facts, the Court of First Instance rendered judgment on August 8, 1964, which judgment was amended on August 25, 1964, affirming the appealed decision of the City Court . 2* The trial court predicated its judgment on the following considerations: (1) Since the unpaid claim represents the cost of certain materials used in the construction of the Paris Theatre, the possession of which reverted to Gregorio V. Pajarillo as owner of said property by virtue of the judgment in Civil Case No. 50201, "it is only simple justice that Pajarillo should pay for the said claim. otherwise he would be enriching himself by having the said building without paying plaintiff for the cost of certain materials that went into its construction"; (2) "under Section 7 of Rule 61 of the former Rules of Court, one of the powers of a receiver i8 to pay outstanding debts, and since the said plaintiff's claim has been outstanding since August 27, 1962, if not before, Pajarillo should have paid the same long before the alleged termination of the receivership on July 1, 1963"; (3) the procedure outlined in Section 8 of the Rule, namely, that whenever the court "shall determine that the necessity for a receiver no longer exists, it shall, after due notice to all interested parties and hearing, settle the accounts of the receiver, direct the delivery of the funds and other property in his hands to the persons adjudged entitled to receive them, and order the discharge of the receiver from further duty as such," has not been followed; and (4) when Gregorio V. Pajarillo undertook to pay the amount owed to plaintiff (Annex "C") and executed the surety bond (Annex "D") in favor of plaintiff, he 4 6 stepped into the shoes" of the dr Leo Enterprises, Inc., .4 and the properties of the said debtor having all subsequently passed on to Pajarillo, there is no reason, legal or otherwise, for relieving defendants of their said undertaking." The court a quo likewise declared that (1) "the receivership was not terminated by virtue of the appeal interposed by Leo Enterprises, Inc., one of the defendants in Civil Case No. 50201, because a decision which is appealed cannot be the subject of execution"; (2) "granting arguendo that the decision is final and executory, the said decision cannot bind nor can it be enforced against the plaintiff in the present case because it is not a party in Civil Case No. 50201"; and (3) "when Atty. Pajarillo assumed the obligation of Leo Enterprises, Inc., as a Receiver, there was a subrogation of the party liable and, therefore, the plaintiff cannot enforce the judgment in Civil Case No. 49691 against Leo Enterprises, Inc." From the foregoing judgment, third-party defendant Gregorio V. Pajarillo interposed an appeal to the Court of Appeals. The aforesaid Appellate Court, in turn certified the same to this Court on the ground that there is no question of fact involved, but only one of law. The legal question is whether or not third party defendantappellant Gregorio V. Pajarillo is, under the facts and circumstances obtaining, liable to plaintiff for the unpaid amount claimed. Upon the resolution of this issue will in turn depend the liability of defendant-third-party plaintiff Consolacion Insurance & surety Co., Inc. under the Surety Bond, on the basis of which it was ordered by the court a quo to pay the amount involved to plaintiff-appellee. 1. A receiver is not an agent or representative of any party to the action. He is an officer of the court exercising his functions in the interest of neither plaintiff nor defendant, but for the common benefit of all the parties in interest. 3He performs his duties "subject to the control of the Court," and every question involved in the receivership may be determined by the court taking cognizance of the receivership proceedings. 4 Thus, "a receiver, strictly speaking, has no right or power to make any contract binding the property or fund in his custody or to pay out funds in his hands without the authority or approval of the court ... . 5 As explained by Justice Moran, speaking for the Court in a 1939 case 6 ... The custody of the receiver is the custody of the court. His acts and possession are the acts and possession of the court, and his contracts and liabilities are, in contemplation of law,

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the contractsand liabilities of the court. As a necessary consequence, receiver is f subject to the control and supervision of the court at every step in his management of the property or funds placed in his hands. ... 7 He cannot operate independently of the court, and cannot enter into any contract without its approval. ... El depositario no puede obrar independientemente del jusgado; contrata bajo el control del mismo; sin su autorizacion o aprobaci6n expresa, el depositario no puede perfeccionar ningun contrato. ... 8 2. In the case at bar, appellant Pajarillo does not dispute the fact that he never secured the court's approal of either the agreement of March 11, 1963, with Pacific Merchandising Corporation or of his Indemnity Agreement with the Consolacion Insurance & Surety Co., Inc. on March 14, 1963, in consideration of the performance bond submitted by the latter to Pacific Merchandising Corporation to guarantee the payment of the obligation. As the person to whom the possession of the theater and its equipment was awarded by the court in Civil Case No. 50201, it was certainly to his personal profit and advantage that the sale at public auction of the liquipment of the theater was prevented by his execution of the aforesaid agreement and submission of the afore-mentioned bond. In order to bind the property or fund in his hands as receiver, he should have applied for and obtained from the court authority to enter into the aforesaid contract. 9 Unauthorized contracts of a receiver do not bind the court in charge of receivership. They are the receiver's own contracts and are not recognized by the courts as contracts of the receivership. 10 Consequently, the aforesaid agreement and undertaking entered into by appellant Pajarillo not having been approved or authorized by the receivership court should, therefore, be considered as his personal undertaking or obligation. Certainly, if such agreements were known by the receivership court, it would not have terminated the receivership without due notice to the judgment creditor as required by Section 8 of Rule 59 of the Rules of Court. This must be assumed because of the legal presumption that official duty has been regularly performed. 11 Indeed, if it were true that he entered into the agreement and undertaking as a receiver, he should have, as such receiver, submitted to the court an account of the status of the properties in his hands including the outstanding obligations of the receivership. 12 Had he done so, it is reasonable to assume that the judgment creditor would have opposed the termination of the receivership, unless its claim was paid. Having failed to perform his duty, to the prejudice of the creditor, appellant should not be permitted to take advantage of his own wrong. The judgment creditor having been induced to enter into the aforesaid agreement by appellant Pajarillo it was the duty of the latter to comply with is end of the bargain. He not only failed to perform his undertaking, but now attempts to evade completely his liability. Under such circumstances, appellant is not entitled to equitable relief. No ground for equitable relief can be found in a case where a party has not only failed to perform the conditions upon which he alone obtained the execution of the contract, but where it is clear that he never, at any time, intended to perform them. 13 3. Moreover, it will be recalled that the obligation due the Pacific Merchandising Corporation represented the cost of materials used in the construction of the Paris Theatre. There can not be any question that such improvements, in the final analysis, redounded to the advantage and personal profit of appellant Pajarillo because the judgment in Civil Case No. 50201, which was in substance affirmed by the Appellate Court, ordered that the "possession of the lands, building equipment, furniture, and accessories ..." of the theater be transferred to said appellant as owner thereof. As the trial court aptly observed "... it is only simple justice that Pajarillo should pay for the said claim, otherwise he would be enriching himself without paying plaintiff for the cost of certain materials that went into its construction. ... It is argLicd however, that he did so only as a receiver of Leo Pajarillo by virtue of the judgment in Civil Case No. 50201 all of the properties of Leo Enterprises, Inc. passed on to Pajarillo by virtue of the judgment in Civil Case No. %201 ...". This Roman Law principle of "Nemo Cum alterious detrimento locupletari protest" is embodied in Article 22 (Human Relations), 14 and Articles 2142 to 2175 (QuasiContracts) of the New Civil Code. Long before the enactment of this Code, however, the principle of unjust enrichment which is basic in every legal system, was already expressly recognized in this jurisdiction. As early as as 1903, in Perez v. Pomar, 15 this Court ruled that where one has rendered services to another, and these services are accepted by the latter, in the absence of proof that the service ",as rendered gratuitously, it is but just that he should pay a reasonable remuneration therefore because "it is a wellknown principle of law, that no one should be permitted to enrich himself to the damage of another." Similarly in 1914, this Court declared that in this jurisdiction, even in the absence of statute," ... under the general principle that one person may not enrich himself at the expense of another, a judgment creditor would not be permitted to retain the purchase price of land sold as the property of the judgment debtor after it has been made to appear that the judgment debtor had no title to the land and that the purchaser had failed to secure title thereto ... 16 The foregoing equitable principle which springs from hie fountain of good conscience are applicable to the case at bar. ACCORDINGLY, in view of the foregoing, the judgment unirilleal is httcf AFFIRMED. Costs against appellant. ____________________ CIR vs. Firemans Fund Insurance [G.R. No. L-30644. March 9, 1987.] Facts: Firemans Fund Insurance Company is a resident foreign insurance corporation organized under the laws of the United States, authorized and duly licensed to do business in the Philippines. It is a member of the American Foreign Insurance Association, through which its business is cleared. From January 1952 to December 1958, Firemans Fund entered into various insurance contracts involving casualty, fire and marine risks, for which the corresponding insurance policies were issued. From January 1952 to 1956, documentary stamps were bought and affixed to the monthly statements of policies issued; and from 1957 to 1958 documentary stamps were bought and affixed to the corresponding pages of the policy register, instead of on the insurance policies issued. On 3 July 1959, the company discovered that its monthly statements of business and policy register were lost. The loss was reported to the Building Administration of Ayala Building and the National Bureau of Investigation on 6 July 1959. The Commissioner of Internal Revenue was also informed of such loss by the company, through the latters auditors, Sycip, Gorres and Velayo, in a letter dated 14 July 1959. After conducting an investigation of said loss, the companys examiners examiner ascertained that the company failed to affix the required documentary stamps to the insurance policies issued by it and failed to preserve its accounting records within the time prescribed by Section 337 of the Revenue Code by using loose leaf forms as registers of documentary stamps without written authority from the Commissioner as required by Section 4 of Revenue Regulations V-1. As a consequence of these findings, the Commissioner, in a letter dated 7 December 1962, assessed and demanded from petitioner the payment of documentary stamp taxes for the years 1952 to 1958 in the total amount of P79,806.87 and plus compromise penalties, a total of P81,406.87. The compromise penalties consisted of the sum of P1,000.00 as penalty for the alleged failure to affix documentary stamps and the further sum of P600.00 as penalty for an alleged violation of Revenue Regulations V-1 otherwise known as the Bookkeeping Regulations. In a letter dated 14 January 1963, the company contested the assessment. After the Commissioner denied the protest in a decision dated 17 March 1965, the company appealed to the Court of Tax Appeals on 8 May 1965 (CTA Case 1629). After hearing the court rendered its decision dated 24 May 1969 reversing the decision of the Commissioner of Internal Revenue. Hence, the petition filed on 26 June 1969. The Supreme Court resolved to dismiss the petition and to affirm the assailed decision of the Court of Tax Appeals. 1. CTA Ruling: affixture of documentary stamps to paper other those authorized by law not tantamount to failure to pay the same The affixture of documentary stamps to papers other than those authorized by law is not tantamount to failure to pay the same. It is true that the mode of affixing the stamps as prescribed by law was not followed, but the fact remains that the documentary stamps corresponding to the various insurance policies were purchased and paid by the company. There is no legal justification for the Commissioner to require the company to pay again the documentary stamp tax which it had already paid. To sustain the Commissioners stand would require the company to pay the same tax twice. If at all, the company should be proceeded against for failure to comply with the requirement of affixing the documentary stamps to the taxable insurance policies and not for failure to pay the tax. (See Sec. 239 and 332, Rev. Code). 2. CTA Ruling: Compromise penalties cannot be imposed if the company has not consented thereto With respect to the compromise penalties in the total sum of P1,600.00, the penalties cannot be imposed in the absence of a showing that the company consented thereto. A compromise implies agreement. If the offer is rejected by the taxpayer, the Commissioner cannot enforce it except through a criminal action. (See Comm. of Int. Rev. vs. Abad, L-19627, 27 June 1968.) 3. Documentary taxes, when deemed paid Documentary tax is deemed paid by: (a) the purchase of documentary stamps; (b) affixture of documentary stamps to the document or instrument taxed or to such other paper as may be indicated by law or regulations; and (c) cancellation of the stamps as required by law.

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4. Purpose of the law is to collect tax; Documentary stamps paid for and cancelled The over-riding purpose of these provisions of law is the collection of taxes. The three steps involving documentary stamps are but the means to that end. Thus, the purchase of the stamps is the form of payment made; the affixture thereof on the document or instrument taxed is to insure that the corresponding tax has been paid for such document while the cancellation of the stamps is to obviate the possibility that said stamps will be reused for similar documents for similar purposes. In the present case, there appears to be no dispute on the fact that the documentary stamps corresponding to the various policies were purchased and paid for by the Company. Neither is there any argument that the same were cancelled as required by law. This conclusion are also the findings of the Commissioners examiner (Amando B. Melgar), and confirmed by the Memorandum of Acting Commissioner of Internal Revenue Jose B. Lingad, dated 7 November 1962 to the Chief of Business Tax Division. The purchase of documentary stamps and their being affixed to the monthly statements of business and policy registers were also admitted by counsel for the Government as could clearly be gleaned from his Memorandum submitted to the Court of Tax Appeals. Simply said, the purpose of imposing documentary stamp taxes is to raise revenue and the corresponding amount has already been paid by the company and has actually become part of the revenue of the government. 5. Evidence to prove payment of documentary stamp tax The insurance policies with the corresponding documentary stamps affixed are the best evidence to prove payment of said documentary stamp tax. This rule however does not preclude the admissibility of other proofs which are uncontradicted and of considerable weight, such as: copies of the applications for managers checks, copies of the managers check vouchers of the bank showing the purchases of documentary stamps corresponding to the various insurance policies issued, in the present case, during the years 1952-1958 duly and properly identified by the witnesses for the company during the hearing and admitted by the Court of Tax Appeals. 6. Statutes levying taxes or duties, in case of doubt, construed strongly against the government It is a general rule in the interpretation of statutes levying taxes or duties, that in case of doubt, such statutes are to be construed most strongly against the government and in favor of the subjects or citizens, because burdens are not to be imposed, nor presumed to be imposed beyond what statutes expressly and clearly import (Manila Railroad Co. v. Collector of Customs, 52 Phil. 950 [1929]). 7. Affixture of signature not attended by bad faith; Justification for the acts of agents claimed for the acts of the principal itself The affixture of the stamps on documents not authorized by law is not attended by bad faith as the practice was adopted from the authority granted to Wise & Company, one of the companys general agents. Indeed, the Commissioner argued that such authority was not given to the company specifically, but under the general principle of agency, where the acts of the agents bind the principal, the conclusion is inescapable that the justification for the acts of the agents may also be claimed for the acts of the principal itself. 8. Doctrine that no person shall unjustly enrich himself at the expense of another applies also to the Government There is no justification for the government which has already realized the revenue which is the object of the imposition of subject stamp tax, to require the payment of the same tax for the same documents. Enshrined in our basic legal principles is the time honored doctrine that no person shall unjustly enrich himself at the expense of another. It goes without saying that the government is not exempted from the application of this doctrine (Ramie Textiles, Inc. v. Mathay Sr., 89 SCRA 587 [1979]). ______________ Alfredo Velayo vs Shell Company Prior to 1948, Commercial Airlines (CALI) owed P170k (abt. $79k) to Shell and CAL offered its C-54 plane as payment to Shell Company (the plane was in California) but Shell at that time declined as it thought CALI had sufficient money to pay its debt. In 1948 however, CALI was going bankrupt so it called upon an informal meeting of its creditors. In that meeting, the creditors agreed to appoint representatives to a working 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 CALI did reserve that it will file insolvency proceedings should its assets be not enough to pay them up. Shell Company was represented by a certain Fitzgerald to the three man working committee. Later, the working committee convened to discuss how CALIs asset should be divided amongst the creditors but while such was pending, Fitzgerald sent a telegraph message to shell USA advising the latter that Shell Philippines is assigning its creditto Shell USA in the amount of $79k, thereby effectively collecting almost all if not the entire indebtedness of CALI to Shell Philippines. Shell USA got wind of the fact that CALI has a C-54 plane is California and so Shell USA petitioned before a Californiacourt to have the plane be the subject of a writ of attachment which was granted. Meanwhile, the stockholders of CALI were unaware of the assignment of credit made by Shell Philippines to Shell USA and they went on to approve the sale of CALIs asset to the Philippine Airlines. In September 1948, the other creditors learned of the assignment made by Shell. This prompted these other creditors to file their own complaint of attachment against CALIs assets. CALI then filed for insolvency proceedings to protect its assets in the Philippines from being attached. Velayos appointment as CALIs assignee was approved in lieu of the insolvency proceeding. In order for him to recover the C-54 plane in California, it filed for a writ of injunction against Shell Philippines in order for the latter to restrain Shell USA from proceeding with the attachment and in the alternative that judgment be awarded in favor of CALI for damages double the amount of the C-54 plane. The C-54 plane was not recovered. Shell Company argued it is not liable for damages because there is nothing in the law which prohibits a company from assigning its credit, it being a common practice. ISSUE: Whether or not Shell is liable for damages considering 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 injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage. Thus at one stroke, the legislator, if the forgoing rule is approved (as it was approved), would vouchsafe adequate legal remedy for that untold numbers of moral wrongs which is impossible for human foresight to provide for specifically in the statutes. A moral wrong or injury, even if it does not constitute a violation of a statute law, should be compensated by damages. Moraldamages (Art. 2217) may be recovered (Art. 2219). In Article 20, the liability for damages arises from a willful or negligent act contrary to law. In this article, the act is contrary to morals, good customs or public policy. _____________ St. Louis Realty Corp. vs. CA FACTS: Dr. Conrado Aramil, a neuropsychiatrist and member of the faculty of UE Ramon Magsaysay Medical Center, seek to recover damage for a wrongful advertisement in the Sunday Times where St Louis Realty Corp. misrepresented his house with Mr. Arcadio. St. Louis published an ad on December 15, 1968 with the heading where the heart is. This was republished on January 5, 1969. In the advertisement, the house featured was Dr Aramils house and not Mr. Arcadio with whom the company asked permission and the intended house to be published. After Dr Aramil noticed the mistake, he wrote a letter to St. Louis demanding an explanation 1 week after such receipt. No rectification or apology was published despite that it was received by Ernesto Magtoto, the officer in charge of the advertisement. This prompted Dr. Aramils counsel to demand actual, moral and exemplary damages. On March 18, 1969, St Louis published an ad now with Mr. Arcadios real house but nothing on the apology or explanation of the error. Dr Aramil filed a complaint for damages on March 29. During the April 15 ad, the notice of rectification was published. ISSUE: Whether St. Louis is liable to pay damages to Dr. Aramil. HELD: St Louis was grossly negligent in mixing up residences in a widely circulated publication. Furthermore, it never made any written apology and explanation of the mix-up. It just contented itself with a cavalier "rectification ". The trial court awarded Aramil P8,000 as actual damages, P20,000 as moral damages and P2,000 as attorney's fees. When St. Louis Realty appealed to the Court of Appeals, CA affirmed the

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judgement for the reason that St. Louis Realty committed an actionable quasi-delict under articles 21 and 26 of the Civil Code because the questioned advertisements pictured a beautiful house which did not belong to Arcadio but to Doctor Aramil who, naturally, was annoyed by that contretemps. WHEREFORE, the judgment of the Appellate Court is affirmed. Costs against the petitioner. ___________ NO DIGEST FOR DANAO VS CA