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Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-15526 December 28, 1963

ENRIQUE J. L. RUIZ and JOSE V. HERRERA, in their behalf and as minority stockholders
of the Allied Technologists, Inc., plaintiffs-appellants,
vs.
THE SECRETARY OF NATIONAL DEFENSE, COL. NICOLAS JIMENEZ, Head of the
Engineer Group, Office of the Secretary of National Defense, THE FINANCE OFFICER of
the Department of National Defense, THE AUDITOR of the Dept. of National Defense,
PABLO D. PANLILIO and ALLIED TECHNOLOGISTS, INC.,defendants-appellees.

Montenegro, Madayag, Viola and Hernandez for plaintiffs-appellants.


Office of the Solicitor General for defendant-appellee Secretary of National Defense.
Rosauro Alvarez for defendant-appellee Allied Technologists, Inc.
L. D. Panlilio for defendant-appellee Pablo Panlilio.

PAREDES, J.:

This is an appeal by plaintiffs Enrique J. L. Ruiz and Jose V. Herrera from an Order of the Court
of First Instance of Manila, in Civil Case No. 26601, dated February 25, 1959, dismissing
plaintiffs' complaint.

On September 11, 1950, a contract was executed between the defendant Allied Technologists,
Inc. (corporation, for short), and the Republic of the Philippines, for the construction of the
Veterans Memorial Hospital. Ruiz and Herrera were stockholders and officers of the
corporation. The construction of the hospital was terminated in 1955. On August 20, 1954, and
June 20, 1955, Civil Cases Nos. 23778 and 26601, respectively, were filed by same plaintiffs
herein, making as parties-defendants in both cases, the same defendants herein, the Secretary
of National Defense, Col. Nicolas Jimenez (Engineer), the Finance Officer, and the Auditor of
the Dept. of National Defense, Pablo D. Panlilio and Allied Technologists, Inc. Civil Case No.
23778 was dismissed by the CFI on October 12, 1954; and the dismissal was affirmed by this
Court on July 7, 1955, in G.R. No. L-8638. Civil Case No. 26601 was also dismissed on
September 13, 1955. On appeal, this Court reversed the order of dismissal, under the
impression that the real controversy was confined merely between defendant Panlilio and
plaintiffs Ruiz and Herrera over the 15% of the contract price, which was retained by the
Department of National Defense. The retention of the 15% of the contract price in the sum of
P34,740.00 was made to answer for any claim or lien that might arise, in the course of the
construction. The last case, however, was remanded to the court of origin, for further
proceedings. Panlilio and the corporation filed their amended answers, stating that the amount
retained by the Department of National Defense was already paid to defendant corporation, as
sought for by the plaintiffs in their complaint. In view of this development, the trial court invited
the parties to a conference, in which the plaintiffs indicated their conformity, to the dismissal of
the complaint with respect to the retention of the 15% of the contract price; but insisted upon the
hearing of the second question, which sought the declaration and recognition of plaintiffs Ruiz
and Herrera, as two of the three architects of the hospital. The trial court, nevertheless,
dismissed the complaint, for being already academic and moot. Hence, this appeal by plaintiffs-
appellants, who alleged in their lone assignment of error that "the lower court grievously erred in
ordering the dismissal of the case, with costs against the plaintiffs".

Plaintiffs-appellants contend that the only ground relied upon by the lower court to dismiss the
case without any trial is the allegation contained in pars. 4 and (e) of the answers of the
appellees Panlilio and Allied Technologists, Inc., respectively; that the amount retained by the
Department of National Defense had already been paid; that except for this bare allegation of
the appellees, no evidence was adduced to prove the truth of the same; that even assuming, for
the sake of argument, that the same is true, nevertheless the first part of the first cause of action
still remains, for which they had insisted upon a hearing in order to establish their right to be
recognized as two of the three architects of the hospital; that because the pleadings do not
show any ground which might legally justify the action taken by the lower court, the latter should
not have ordered the dismissal of the entire case but should have ordered only the striking out
of the moot portion of appellants' first cause of action, citing Pacal v. Ramos, 81 Phil. 30, 33; 27
C.J.S. 209-210; Bush v. Murray, 205 N.Y.S. 21, 26, 209 App. Div. 563; Bearden v. Longino. 190
S.E. 12, 183 Ga. 819. Appellants further argue in their brief that they base their cause of action
on article 21, New Civil Code.

The appeal has no merit. The order appealed from, states —

Considering the manifestation of counsel for plaintiffs that the latter would insist on the
hearing of the above-entitled case for the purpose of establishing their right to be
recognized as the architects of the Veterans Hospital together with defendant Pablo D.
Panlilio, and it appearing that plaintiffs' Amended Complaint with Injunction prays,
among others, "That this Honorable Court order defendants Secretary of National
Defense, Col. Nicolas Jimenez, and the Finance Officer and Auditor of the Department
of National Defense to pay the Allied Technologists, Inc., the balance unpaid by virtue of
the contract executed on September 11, 1950 (Annex "C" hereof) for services rendered
under Title I and to be rendered under Title II of said contract; that paragraph 4 of
defendant Pablo Panlilio's Amended Answer to said complaint alleges "That whatever
amounts were retained by the Dept. of National Defense on the contract price, which
retention was authorized by the contract, was paid by the Dept. of National Defense to
the Allied Technologists Inc. as sought by the plaintiffs; that paragraph (e) of the
ANSWER TO THE AMENDED COMPLAINT of defendant Allied Technologists, Inc.,
also alleges "That whatever amounts were retained by the Department of National
Defense, per the stipulations contained in the contract, have already been paid by the
Allied Technologists, Inc. and, therefore, the present action seeking to compel the
aforementioned Department of National Defense to pay to defendant Allied
Technologists, Inc. the amounts retained by the Department of National Defense is
academic, groundless, unfounded and malicious"; that the said allegations of the
separate answers of defendants Pablo Panlilio and Allied Technologists, Inc., are not
and can not be denied by plaintiffs, and that it is this Court's understanding that
defendant has no objection to the dismissal of this case — it is ordered that this case be,
as it is hereby DISMISSED, with costs against plaintiffs.

A cursory reading of pars. 18 and 19 of the amended complaint with injunction and prayers (1)
and (2) thereof, reveals that appellants' first cause of action is composed of two parts, as
follows:
(a) A judicial declaration or recognition that appellants Ruiz and Herrera, together with appellee
Panlilio, were the architects of the Veterans Hospital; and

(b) An injunction restraining the appellee government officials paying their co-appellee Panlilio
the sum retained by the former, as per stipulation contained in the contract for the construction
of the hospital because "they will not only be deprived of the monetary value of the services
legally due them, but that their professional prestige and standing will be seriously
impaired".lawphil.net

As appellants admitted, they no longer consider the Secretary and other officials of the
Department of National Defense, as parties-defendants in the case, said officials can no longer
be compelled to recognize the appellants, Ruiz and Herrera, as co-architects with appellee
Panlilio of the Veterans Hospital. And, as the amount retained by the Department on the
contract price, which retention was authorized by the contract, was, as sought by the appellants,
already paid to the Allied Technologists, Inc., there is nothing more for the trial court to decide,
even without first ruling on the special defenses of appellees Panlilio and the corporation.

Moreover, by discarding the Secretary and other officials of the Department of National
Defense, as parties-defendants, appellants could not expect the trial court to order them to
recognize and declare appellants as co-architects in the construction of the hospital. And this
must be so, because the construction agreement expressly provides that the architect being
contracted by the Government was appellee Pablo Panlilio. The said agreement states that the
same was entered into by the government, party of the first part and "Allied Technologists, Inc. .
. . and Mr. Pablo D. Panlilio, architect, hereinafter called the party of the second part" and "The
Allied Technologists, Inc. for rendering engineering services and Mr. Pablo D. Panlilio, architect,
for rendering architectural services". And the contract was signed for the Government by
"Ramon Magsaysay, Secretary of National Defense (party of the first part," and "Allied
Technologists, Inc., by Enrique J. L. Ruiz, President, Contractor, Pablo D. Panlilio, Architect".

Appellants maintain that their claim for recognition is divisible and separable from their
allegations regarding the non-payment by the government of a portion of the architectural fees;
thereby concluding that what the lower court should have done, should have been merely to
order the striking out of the moot portion of appellants' cause of action, and should have
proceeded with hearing their claim for recognition. But the allegations in pars. 18 and 19 of the
amended complaint, show otherwise. There is an indivisible and single cause of action which is
primarily to prevent payment exclusively to defendant Panlilio of the amount of P34,740.00,
which said appellants contend should be paid to appellee Allied Technologists, Inc.; the matter
recognizing them together with Pablo Panlilio as architects of the hospital, being merely
incidental thereto. The case of Pacal v. Ramos, 81 Phil. 30, cited by appellants is not applicable.
In this case, the grounds for quo warranto are separable from the grounds for election
irregularities which are distinct and separate causes of action, entitling the petitioner to separate
and unrelated reliefs. These two grounds were alleged under separate paragraphs and they
were two independent actions improperly joined in one proceeding. In the case at bar, in one
paragraph (par. 19 of the amended complaint), as first cause of action, the claim for recognition
is inseparably linked with their allegations regarding alleged threatened payment of P34,740.00
to Panlilio alone, because "they will not only be deprived of the monetary value of the services
legally due them, but that their professional prestige and standing will be seriously impaired".
When the very defendant Allied Technologists, Inc. itself asserted in its answer the amended
complaint, that the amount was paid to it, an assertion which was not at all denied, plaintiffs-
appellants' cause of action under said par. 19 dissipated entirely.
There is a veiled insinuation that appellants, thesis would fall under the provisions of the Rules
on declaratory relief, because appellants wanted merely a declaration of their rights in a contract
in which they were interested. The trial court, however, was correct in refusing to make such
declaration, because it was not necessary and proper under the circumstances (sec. 6, Rule
66). Appellants were not parties to the construction agreement. The sole object the appeal is
only to secure for them a recognition, that they were allegedly the co-architects of Panlilio, in the
construction of the hospital, so as to enhance their professional prestige and not to impair their
standing. If this is the goal of appellants, a judicial declaration to the effect would seem
unnecessary. Let us ponder over the thought that a brilliant professional enjoys the respect and
esteem of his fellowmen, even without any court declaration of such fact, and that an
incompetent one may summon all the tribunals in the world, to proclaim his genius in vain.

But appellants invoke Article 21 of the Civil Code, which 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 the damages.

contending that the word "injury" in the said article, refers not only to any indeterminate right or
property, but also to honor or credit (I Tolentino Civil Code, p. 67). It may be added, however,
that this article also envisions a situation where a person has a legal right, and such right is
violated by another in a manner contrary to morals, good customs or public policy; it
presupposes losses or injuries, material or otherwise, which one may suffer as a result of said
violation. The pleadings do not show that damages were ever asked or alleged, in connection
with this case, predicated upon the article aforecited. And under the facts and circumstances
obtaining in this case, one cannot plausibly sustain the contention that the failure or refusal to
extend the recognition was an act contrary to morals, good customs or public policy.

IN VIEW HEREOF, the order appealed from is affirmed, with costs against plaintiffs-appellants.

Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Barrera, Dizon,
Regala and Makalintal, JJ., concur.

Republic of the Philippines


SUPREME COURT
Manila

EN BANC

G.R. No. L-20089 December 26, 1964

BEATRIZ P. WASSMER, plaintiff-appellee,


vs.
FRANCISCO X. VELEZ, defendant-appellant.

Jalandoni & Jamir for defendant-appellant.


Samson S. Alcantara for plaintiff-appellee.

BENGZON, J.P., J.:


The facts that culminated in this case started with dreams and hopes, followed by appropriate
planning and serious endeavors, but terminated in frustration and, what is worse, complete
public humiliation.

Francisco X. Velez and Beatriz P. Wassmer, following their mutual promise of love, decided to
get married and set September 4, 1954 as the big day. On September 2, 1954 Velez left this
note for his bride-to-be:

Dear Bet —

Will have to postpone wedding — My mother opposes it. Am leaving on the


Convair today.

Please do not ask too many people about the reason why — That would only
create a scandal.

Paquing

But the next day, September 3, he sent her the following telegram:

NOTHING CHANGED REST ASSURED RETURNING VERY SOON


APOLOGIZE MAMA PAPA LOVE .

PAKING

Thereafter Velez did not appear nor was he heard from again.

Sued by Beatriz for damages, Velez filed no answer and was declared in default. Plaintiff
adduced evidence before the clerk of court as commissioner, and on April 29, 1955, judgment
was rendered ordering defendant to pay plaintiff P2,000.00 as actual damages; P25,000.00 as
moral and exemplary damages; P2,500.00 as attorney's fees; and the costs.

On June 21, 1955 defendant filed a "petition for relief from orders, judgment and proceedings
and motion for new trial and reconsideration." Plaintiff moved to strike it cut. But the court, on
August 2, 1955, ordered the parties and their attorneys to appear before it on August 23, 1955
"to explore at this stage of the proceedings the possibility of arriving at an amicable settlement."
It added that should any of them fail to appear "the petition for relief and the opposition thereto
will be deemed submitted for resolution."

On August 23, 1955 defendant failed to appear before court. Instead, on the following day his
counsel filed a motion to defer for two weeks the resolution on defendants petition for relief. The
counsel stated that he would confer with defendant in Cagayan de Oro City — the latter's
residence — on the possibility of an amicable element. The court granted two weeks counted
from August 25, 1955.

Plaintiff manifested on June 15, 1956 that the two weeks given by the court had expired on
September 8, 1955 but that defendant and his counsel had failed to appear.
Another chance for amicable settlement was given by the court in its order of July 6, 1956
calling the parties and their attorneys to appear on July 13, 1956. This time. however,
defendant's counsel informed the court that chances of settling the case amicably were nil.

On July 20, 1956 the court issued an order denying defendant's aforesaid petition. Defendant
has appealed to this Court. In his petition of June 21, 1955 in the court a quo defendant alleged
excusable negligence as ground to set aside the judgment by default. Specifically, it was stated
that defendant filed no answer in the belief that an amicable settlement was being negotiated.

A petition for relief from judgment on grounds of fraud, accident, mistake or excusable
negligence, must be duly supported by an affidavit of merits stating facts constituting a valid
defense. (Sec. 3, Rule 38, Rules of Court.) Defendant's affidavit of merits attached to his
petition of June 21, 1955 stated: "That he has a good and valid defense against plaintiff's cause
of action, his failure to marry the plaintiff as scheduled having been due to fortuitous event
and/or circumstances beyond his control." An affidavit of merits like this stating mere
conclusions or opinions instead of facts is not valid. (Cortes vs. Co Bun Kim, L-3926, Oct. 10,
1951; Vaswani vs. P. Tarrachand Bros., L-15800, December 29, 1960.)

Defendant, however, would contend that the affidavit of merits was in fact unnecessary, or a
mere surplusage, because the judgment sought to be set aside was null and void, it having
been based on evidence adduced before the clerk of court. In Province of Pangasinan vs.
Palisoc, L-16519, October 30, 1962, this Court pointed out that the procedure of designating the
clerk of court as commissioner to receive evidence is sanctioned by Rule 34 (now Rule 33) of
the Rules of Court. Now as to defendant's consent to said procedure, the same did not have to
be obtained for he was declared in default and thus had no standing in court (Velez vs. Ramas,
40 Phil. 787; Alano vs. Court of First Instance, L-14557, October 30, 1959).

In support of his "motion for new trial and reconsideration," defendant asserts that the judgment
is contrary to law. The reason given is that "there is no provision of the Civil Code authorizing"
an action for breach of promise to marry. Indeed, our ruling in Hermosisima vs. Court of
Appeals (L-14628, Sept. 30, 1960), as reiterated in Estopa vs. Biansay (L-14733, Sept. 30,
1960), is that "mere breach of a promise to marry" is not an actionable wrong. We pointed out
that Congress deliberately eliminated from the draft of the new Civil Code the provisions that
would have it so.

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 said Code provides that "any person
who wilfully 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."

The record reveals that on August 23, 1954 plaintiff and defendant applied for a license to
contract marriage, which was subsequently issued (Exhs. A, A-1). Their wedding was set for
September 4, 1954. Invitations were printed and distributed to relatives, friends and
acquaintances (Tsn., 5; Exh. C). The bride-to-be's trousseau, party drsrses and other apparel
for the important occasion were purchased (Tsn., 7-8). Dresses for the maid of honor and the
flower girl were prepared. A matrimonial bed, with accessories, was bought. Bridal showers
were given and gifts received (Tsn., 6; Exh. E). And then, with but two days before the wedding,
defendant, who was then 28 years old,: simply left a note for plaintiff stating: "Will have to
postpone wedding — My mother opposes it ... " He enplaned to his home city in Mindanao, and
the next day, the day before the wedding, he wired plaintiff: "Nothing changed rest assured
returning soon." But he never returned and was never heard from again.

Surely this is not a case of mere breach of promise to marry. As stated, mere breach of promise
to marry is not an actionable wrong. But to formally set a wedding and go through all the above-
described preparation and publicity, only to walk out of it when the matrimony is about to be
solemnized, is quite different. This is palpably and unjustifiably contrary to good customs for
which defendant must be held answerable in damages in accordance with Article 21 aforesaid.

Defendant urges in his afore-stated petition that the damages awarded were excessive. No
question is raised as to the award of actual damages. What defendant would really assert
hereunder is that the award of moral and exemplary damages, in the amount of P25,000.00,
should be totally eliminated.

Per express provision of Article 2219 (10) of the New Civil Code, moral damages are
recoverable in the cases mentioned in Article 21 of said Code. As to exemplary damages,
defendant contends that the same could not be adjudged against him because under Article
2232 of the New Civil Code the condition precedent is that "the defendant acted in a wanton,
fraudulent, reckless, oppressive, or malevolent manner." The argument is devoid of merit as
under the above-narrated circumstances of this case defendant clearly acted in a "wanton ... ,
reckless [and] oppressive manner." This Court's opinion, however, is that considering the
particular circumstances of this case, P15,000.00 as moral and exemplary damages is deemed
to be a reasonable award.

PREMISES CONSIDERED, with the above-indicated modification, the lower court's judgment is
hereby affirmed, with costs.

Bengzon, C.J., Bautista Angelo, Reyes, J.B.L., Barrera, Paredes, Dizon, Regala, Makalintal,
and Zaldivar, JJ.,concur.

Republic of the Philippines


SUPREME COURT
Manila

EN BANC

G.R. No. L-18630 December 17, 1966

APOLONIO TANJANCO, petitioner,


vs.
HON. COURT OF APPEALS and ARACELI SANTOS, respondents.

P. Carreon and G. O. Veneracion, Jr. for petitioner.


Antonio V. Bonoan for respondents.

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


Appeal from a decision of the Court of Appeals (in its Case No. 27210-R) revoking an order of
the Court of First Instance of Rizal (in Civil Case No. Q-4797) dismissing appellant's action for
support and damages.

The essential allegations of the complaint are to the effect that, from December, 1957, the
defendant (appellee herein), Apolonio Tanjanco, courted the plaintiff, Araceli Santos, both being
of adult age; that "defendant expressed and professed his undying love and affection for plaintiff
who also in due time reciprocated the tender feelings"; that in consideration of defendant's
promise of marriage plaintiff consented and acceded to defendant's pleas for carnal knowledge;
that regularly until December 1959, through his protestations of love and promises of marriage,
defendant succeeded in having carnal access to plaintiff, as a result of which the latter
conceived a child; that due to her pregnant condition, to avoid embarrassment and social
humiliation, plaintiff had to resign her job as secretary in IBM Philippines, Inc., where she was
receiving P230.00 a month; that thereby plaintiff became unable to support herself and her
baby; that due to defendant's refusal to marry plaintiff, as promised, the latter suffered mental
anguish, besmirched reputation, wounded feelings, moral shock, and social humiliation. The
prayer was for a decree compelling the defendant to recognize the unborn child that plaintiff was
bearing; to pay her not less than P430.00 a month for her support and that of her baby, plus
P100,000.00 in moral and exemplary damages, plus P10,000.00 attorney's fees.

Upon defendant's motion to dismiss, the court of first instance dismissed the complaint for
failure to state a cause of action.

Plaintiff Santos duly appealed to the Court of Appeals, and the latter ultimately decided the
case, holding with the lower court that no cause of action was shown to compel recognition of a
child as yet unborn, nor for its support, but decreed that the complaint did state a cause of
action for damages, premised on Article 21 of the Civil Code of the Philippines, prescribing as
follows:

ART. 21. Any person who wilfully 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.

The Court of Appeals, therefore, entered judgment setting aside the dismissal and directing the
court of origin to proceed with the case.

Defendant, in turn, appealed to this Court, pleading that actions for breach of a promise to marry
are not permissible in this jurisdiction, and invoking the rulings of this Court in Estopa vs.
Piansay, L-14733, September 30, 1960; Hermosisima vs. Court of Appeals, L-14628, January
29, 1962; and De Jesus vs. SyQuia, 58 Phil. 886.

We find this appeal meritorious.

In holding that the complaint stated a cause of action for damages, under Article 21 above
mentioned, the Court of Appeals relied upon and quoted from the memorandum submitted by
the Code Commission to the Legislature in 1949 to support the original draft of the Civil Code.
Referring to Article 23 of the draft (now Article 21 of the Code), the Commission stated:

But the Code Commission has gone farther than the sphere of wrongs defined or
determined by positive law. Fully sensible that there are countless gaps in the statutes,
which leave so many victims of moral wrongs helpless, even though they have actually
suffered material and moral injury, the Commission has deemed it necessary, in the
interest of justice, to incorporate in the proposed Civil Code the following rule:

"ART. 23. Any person who wilfully 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."

An example will illustrate the purview of the foregoing norm: "A" seduces the nineteen-
year old daughter of "X". A promise of marriage either has not been made, or can not be
proved. The girl becomes pregnant. Under the present laws, there is no crime, as the girl
is above eighteen years of age. Neither can any civil action for breach of promise of
marriage be filed. Therefore, though the grievous moral wrong has been committed, and
though the girl and her family have suffered incalculable moral damage, she and her
parents cannot bring any action for damages. But under the proposed article, she and
her parents would have such a right of action.

The Court of Appeals seems to have overlooked that the example set forth in the Code
Commission's memorandum refers to a tort upon a minor who has been seduced. The essential
feature is seduction, that in law is more than mere sexual intercourse, or a breach of a promise
of marriage; 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 (U.S. vs. Buenaventura,
27 Phil. 121; U.S. vs. Arlante, 9 Phil. 595).

It has been ruled in the Buenaventura case (supra) that —

To constitute seduction there must in all cases be some sufficient promise or


inducement and the woman must yield because of the promise or other inducement. If
she consents merely from carnal lust and the intercourse is from mutual desire, there is
no seduction (43 Cent. Dig. tit. Seduction, par. 56). She must be induced to depart from
the path of virtue by the use of some species of arts, persuasions and wiles, which are
calculated to have and do have that effect, and which result in her ultimately submitting
her person to the sexual embraces of her seducer (27 Phil. 123).

And in American Jurisprudence we find:

On the other hand, in an action by the woman, the enticement, persuasion or deception
is the essence of the injury; and a mere proof of intercourse is insufficient to warrant a
recover.

Accordingly it is not seduction where the willingness arises out of sexual desire or
curiosity of the female, and the defendant merely affords her the needed opportunity for
the commission of the act. It has been emphasized that to allow a recovery in all such
cases would tend to the demoralization of the female sex, and would be a reward for
unchastity by which a class of adventuresses would be swift to profit." (47 Am. Jur. 662)

Bearing these principles in mind, let us examine the complaint. The material allegations there
are as follows:
I. That the plaintiff is of legal age, single, and residing at 56 South E. Diliman, Quezon
City, while defendant is also of legal age, single and residing at 525 Padre Faura,
Manila, where he may be served with summons;

II. That the plaintiff and the defendant became acquainted with each other sometime in
December, 1957 and soon thereafter, the defendant started visiting and courting the
plaintiff;

III. That the defendant's visits were regular and frequent and in due time the defendant
expressed and professed his undying love and affection for the plaintiff who also in due
time reciprocated the tender feelings;

IV. That in the course of their engagement, the plaintiff and the defendant as are wont of
young people in love had frequent outings and dates, became very close and intimate to
each other and sometime in July, 1958, in consideration of the defendant's promises of
marriage, the plaintiff consented and acceded to the former's earnest and repeated
pleas to have carnal knowledge with him;

V. That subsequent thereto and regularly until about July, 1959 except for a short period
in December, 1958 when the defendant was out of the country, the defendant through
his protestations of love and promises of marriage succeeded in having carnal
knowledge with the plaintiff;

VI. That as a result of their intimate relationship, the plaintiff started conceiving which
was confirmed by a doctor sometime in July, 1959;

VII. That upon being certain of her pregnant condition, the plaintiff informed the
defendant and pleaded with him to make good his promises of marriage, but instead of
honoring his promises and righting his wrong, the defendant stopped and refrained from
seeing the plaintiff since about July, 1959 has not visited the plaintiff and to all intents
and purposes has broken their engagement and his promises.

Over and above the partisan allegations, the facts stand out that for one whole year, from 1958
to 1959, the plaintiff-appellee, a woman of adult age, maintained intimate sexual relations with
appellant, with repeated acts of intercourse. Such conduct is incompatible with the idea of
seduction. Plainly there is here voluntariness and mutual passion; for had the appellant been
deceived, had she surrendered exclusively because of the deceit, artful persuasions and wiles
of the defendant, she would not have again yielded to his embraces, much less for one year,
without exacting early fulfillment of the alleged promises of marriage, and would have cut chart
all sexual relations upon finding that defendant did not intend to fulfill his promises. Hence, we
conclude that no case is made under Article 21 of the Civil Code, and no other cause of action
being alleged, no error was committed by the Court of First Instance in dismissing the
complaint.

Of course, the dismissal must be understood as without prejudice to whatever actions may
correspond to the child of the plaintiff against the defendant-appellant, if any. On that point, this
Court makes no pronouncement, since the child's own rights are not here involved.

FOR THE FOREGOING REASONS, the decision of the Court of Appeals is reversed, and that
of the Court of First Instance is affirmed. No costs.
Concepcion, C.J., Barrera, Dizon, Regala, Makalintal, Bengzon, J.P., Zaldivar, Sanchez and
Castro, JJ., concur.

Republic of the Philippines


SUPREME COURT
Manila

THIRD DIVISION

G.R. No. L-39013 February 29,1988

FRANCISCO BUNAG, petitioner,


vs.
COURT OF APPEALS, ESTRUDES BAUTISTA Vda. de BITUIN and BRUNO
BAUTISTA, respondents.

CORTES, J.:

The core of the controversy in this case is a thumb-marked. non-notarized and non-witnessed
deed of sale of a parcel of unregistered land, which on its face cannot but cause a prudent man
to doubt its due execution and authenticity.

The facts are briefly summarized in the decision of the Court of Appeals:

The evidence of the plaintiff consisting of the sole testimony of said plaintiff is to
the effect that the property in question was originally owned by his father
Apolonio Bunag Aguas as shown by Tax Declaration Nos. 546 for 1941 and 320
for 1960 (Exhs. B & E), located at San Nicolas, Betis, Pampanga; that he had
been living in their house thereon with his father until 1920 when they transferred
their residence to Tarlac; that in 1925 their house thereon was demolished as it
was old; that they planted bamboos on the land; that Jose Bautista Santiago, a
nephew-in-law, erected a house on said lot and lived therein for sometime until
he became a widower when he transferred to another house; that said Jose
Bautista Santiago one day accompanied his sister Estrudes Bautista to stay in
that house; and that Santiago was allowed by his father to build a house on said
lot on condition that he would pay for the land taxes as compensation for the use
of the land. He admitted, however, that be only learned about this agreement
from his father. On September 15,1962, and September 24,1962 he sent written
demands to defendant Bruno Bautista, thru his lawyer, to vacate the lot and
remove the houses thereon, (Exhs. A & B). The testimony of the other witness
Juan Bunag was stricken from the records as he failed to return to court for
cross-examination.

On the other hand, the evidence for the defendant consist of the testimony of
defendant Bruno Bautista who testified that he is the owner of the land in
question by virtue of a deed of sale, of January 3, 1941, signed by Apolonio
Bunag with his thumbmark; that Bunag first offered it for sale to his brother Jose
Bautista, but as the latter had no money, he referred the matter to his father; that
after he was contacted in Baguio by his father, he sent the P100.00 as
consideration of the sale and so the sale was consummated between his father
and Bunag; that he came down from Baguio and had the house repaired and he
stayed there with his family until liberation when they left the house and allowed
his sister Estrudes Bautista to live therein; that he planted bananas, chicos,
trees, calamansi, eggplants, thereon; that he had been paying the land taxes
thereon (Exhs. 5 to 5-M); that the property is declared in his name (Exh. 6); and
he denies that her sister Estrudes requested Apolonio Bunag to allow her to stay
on the property as her sister had a house of her own then.

Brigida Bautista testified that her brother bought the said property from Apolonio
Bunag and that she was present when Bunag affixed Ms thumbmark on the
document (Exh. 1); that aside from this deed, there were other documents
supporting the sale as the note (Exh. 2) containing the consideration and the
parties. Assessor's Field Sheet of the property (Exh. 3) and the letter of the
assessor to Bunag in 1941 informing him of the revision of the assessment.
(Rollo, pp. 15-18).

The trial court decided in favor of petitioner, the dispositive portion of the decision reading as
follows:

IN VIEW OF THE FOREGOING, judgment is rendered in favor of the plaintiff.


The defendants, Bruno Bautista and Estrudes Bautista vda. de Bituin, are hereby
ordered to vacate the property herein described and to deliver possession
thereof to the plaintiff, Francisco Bunag; ordering the said defendants, jointly and
severally, to pay the land taxes of the property up to and including the year 1968;
and to pay the plaintiff the sum of P15.00 per month as reasonable rentals
thereof from the date of this judgment until the property is delivered to the
plaintiff; to pay the plaintiff the sum of P200.00 as expenses of litigation and
costs. For lack of merit, the counterclaim of the defendants are dismiss (Rollo,
pp. 14-15)

The Court of Appeals, finding the deed of sale (Exhibit 1) to have been validly executed and,
thus, concluding that "the preponderance of evidence leans heavily in favor of the claim of the
ownership of defendant Bruno Bautista" [Rollo p. 18], set aside the decision of the trial court and
dismissed the complaint. The motion for reconsideration was subsequently denied by the Court
of Appeals in a minute resolution for lack of merit.

Consequently, resolution of the instant petition primarily revolves around the issue of the due
execution authenticity of the deed of sale (Exhibit 1). The petitioner assigned the following
errors:

THE COURT OF APPEALS ERRED IN HOLDING THAT THE DEED OF SALE (EXHIBIT "1")
WAS DULY EXECUTED AND AUTHENTICATED.

II
THE COURT OF APPEALS ERRED IN MAKING CONCLUSION (SIC) NOT IN ACCORDANCE
WITH THE EVIDENCE ON RECORD.

At the outset, it must be emphasized that the deed of sale (Exhibit 1) was not acknowledged
before a notary public and neither are there any signatures in the blank spaces for the
signatures of attesting witnesses. The document is typewritten in English and over the similarly
typewritten words "APOLONIO BUNIAG" is a thumbprint.

The deed of sale (Exhibit 1) is not notarized and is, therefore, a private writing (U.S. v. Orera, 11
Phil. 596 (1908)], whose due execution and authenticity must be proved before it can be
received in evidence (Nolan v. Sales, 7 Phil. 1 (1906); U.S. v. Evangelists, 29 Phil. 215 (1915);
Antillon v. Barcelon, 37 Phil. 148 (1917)].

Proof of the due execution and authenticity of private writings is required under Section 21, Rule
132 of the Revised Rules of Court, to wit:

Sec. 21. Private writing, its execution and authenticity, how proved. — Before
any private writing may be received in evidence, its due execution and
authenticity must be proved either:

(a) By anyone who saw the writing executed;

(b) By evidence of the genuineness of the handwriting of the maker; or

(c) By a subscribing witness.

To support its conclusion as to the due execution and authenticity of the deed of sale (Exhibit 1),
the Court of Appeals relied on the testimony of Brigida Bautista, a sister of private respondents.
She testified as follows:

Q. Who is the owner of the property?

A My brother Bruno Bautista.

Q. Do you know how your brother, Bruno Bautista, came to own


the same property?

A. Yes, sir. He bought it from Apolonio Bunag.

Q. Do you know if there is any document evidencing the purchase


of the said property from Apolonio Bunag.?

A. Yes, sir.

Q. Showing to you this document already marked as Exhibit 1, do


you recognize this?

A. Yes, sir, this is the document showing the purchase and sale of
the lot in litigation.
Q. At the bottom portion thereof, appears a thumbmark above the
typewritten name Apolonio Bunag, do you know whose
thumbmark this is?

A. That is the thumbmark of Apolonio Bunag, sir, and I know that


is his because I saw him affixed (sic) his thumbmark. TSN, March
25,1967, pp. 1-2).

However, the trial court found proof of the due execution and authenticity of the deed of sale
(Exhibit 1) wanting, reasoning that:

The testimony of this witness (Brigida Bautista) has to be received with caution,
coming as it does from a sister of the defendants. The circumstances other
alleged presence during the "execution" of the deed of sale was not related.
Neither does she give any light as to whether Apolonio Bunag understood the
document. It should be noted that (Exhibit "1") was written in English. Since it
appears that said document was merely thumb-marked, it could reasonably be
inferred that Apolonio Bunag, the supposed vendor, was illiterate. Under the
stances, the minimum proof necessary to establish due authenticity should, in the
least, include evidence that the document (Exhibit "1") was duly read, explained
and translated to Apolonio Bunag. Unfortunately, no such evidence was
presented. Another fact which compels this Court to proceed with caution is the
fact that there are no instrumental witnesses in the document. The mischief that
lurks behind accepting at face value a document that is merely thumb-marked.
without any witnesses to it, and not acknowledged before a notary public could
be one of the reasons behind the requirement of the rules on evidence that a
private writing must be shown to be duly executed and authenticated. The
probative value of the testimony of Brigida Bautista, who did not furnish us with
any details surrounding the execution of Exhibit "l," coming as it does from a
person whose partisanship can not, and should not, be overlook (sic), fags short
from (sic) the minimum requirements of credibility. Indeed it has been said that
the testimony of an eye-witness as to the execution of a private document must
be positive. He must state that the document was actually executed by the
person whose name is subscribed thereto. It is not sufficient if he states in a
general manner that such person made the writing (Nolan vs. Salas, Bail. More
so if the document was merely thumb-marked.

Regretably, this Court can not accept, for failure of proof as to its due execution
and authenticity, the probative value of Exhibit "1". (Record on Appeal, pp.38-39).

The Court sustains and adopts the trial court's findings and its conclusion that private
respondents have failed to prove the due execution and authenticity of the deed of sale (Exhibit
1).

The due execution and authenticity of the deed of sale, (Exhibit 1) not having been satisfactorily
proven, such private document should be excluded [Paz v. Santiago, 47 Phil. 334 (1925);
Alejandrino v. Reyes, 53 Phil. 973 (1929); Chapman v. Garcia, 64 Phil. 618 (1937); General
Enterprises v. Lianga Bay Logging Co., G.R. No. L-18487, August 31, 1964, 11 SCRA 733].
2. Petitioner contends that the Court of Appeals erred in arriving at a conclusion not supported
by the record, when it said:

The pretension of the plaintiff that the defendant bound himself to pay the taxes
for the use of the land is belied by the fact that the defendant paid the taxes in his
own name and not in the name of Bunag, and the defendant kept the receipts of
payment and did not deliver even one of those receipts to Bunag. (Rollo, p. 19.)

Petitioner argues that this finding is grossly erroneous, considering that in the stipulation of facts
submitted by both parties before the trial court, it is expressly provided:

3. That the parties hereto hereby stipulate and agree that the defendant, Bruno
Bautista, has been paying the land taxes due on the aforesaid property,
personally or thru his wife, Consolacion Capati, for the period from 1940 to 1964,
as shown by the corresponding official land tax receipts duly issued by the
Municipal Treasurer of Guagua, Pampanga; however, under the column NAME
OF DECLARED OWNER thereof, the name Bunag Aguas Apolonio is written.

As this fact was stipulated by the parties, it need not be proven, it cannot be contradicted by
evidence to the contrary, and it is conclusive upon the parties, unless it is shown that the
admission was made through a palpable mistake [Irlanda v. Pitargue, 22 Phil. 383 (1912); Board
of Administrators, Philippine Veterans Administration v. Agcaoili, G.R. No. L-38129, July
23,1974, 58 SCRA 72].

There being no allegation of a palpable mistake that would relieve private respondents from the
stipulation of facts, the stipulated fact above-quoted is conclusive upon the parties.

The Court of Appeals cannot arbitrarily disregard the statement of facts agreed upon by the
parties [Siping v. Cacob, 10 Phil. 717 (1908)]. It is duty bound to render judgment strictly in
accordance with the stipulation of facts [Cabrera v. Lacson, 71 Phil. 182 (1940)].

It may also be added that, indeed, in the Real Estate Tax Receipts (Exhibits 5-5-M) covering the
years 1947 to 1964 presented by private respondents as their evidence, under the column
entitled "NAME OF DECLARED OWNER" the name "Bunag Aguas Apolonio" is written. This
assumes greater significance considering that the payors in these receipts were either private
respondent Bruno Bautista, his wife Consolacion Capati or Ambrosio Bautista.

Thus, this Court finds merit in petitioner's contention that the Court of Appeals's conclusion is
not supported by the record, for said conclusion is contrary to the stipulated fact and the
evidence offered by private respondents, which support petitioner's contention that his father did
not sen the disputed property to private respondents' father, but merely allowed their brother to
build a house on the land on the condition that the latter would pay for the realty taxes due.

With the exclusion of the deed of sale (Exhibit 1), the conclusiveness of the stipulation regarding
the payment of realty taxes and the declaration of Apolonio Bunag Aguas as the owner in the
Real Estate Tax Receipts (Exhibits 5-5-M) it becomes apparent that petitioner's father never
ceased to own the disputed property.

At this juncture, it would be opportune to address private respondent's submission that the
questions raised in petitioner's petition for review are questions of fact and not of law and,
therefore, this Court should not disturb the findings of fact of the Court of Appeals. While the
Court agrees with private respondents that, ordinarily, the Supreme Court should not review
questions of fact in appeals of this nature, the Court finds, however, that an exception obtains in
the instant case, for clearly evident is a misapprehension of facts [De la Cruz v. Sosing, 94 Phil.
26 (1953); Castillo v. Court of Appeals, G.R. No. 1,48290, September 29, 1983, 124 SCRA
808]. As summarized by the Court in a recent decision:

The jurisdiction of this Court in cases brought to us from the Court of Appeals
(now Intermediate Appellate Court) is limited to the review of errors of law, said
appellate court's findings of fact being conclusive upon us except (1) when the
conclusion is a finding grounded entirely on speculation, surmises or conjectures;
(2) when the inference made is manifestly absurd, mistaken or impossible; (3)
when there is grave abuse of discretion in the appreciation of facts; (4) when the
judgment is premised on a misapprehension of facts; (5) when the findings of fact
are conflicting; and (6) when the Court of Appeals, in making its findings went
beyond the issues of the case and the same is contrary to the admissions of both
appellant and appellee ... [Rizal Cement Co., Inc. v. Villareal, G.R. No. L-30272,
February 28, 1985, 135 SCRA 151].

WHEREFORE, the petition is hereby GRANTED, the decision of the Court of Appeals is set
aside and the decision of the trial court is affirmed in toto. This Decision is immediately
executory.

SO ORDERED.

Fernan (Chairman), Gutierrez, Jr., Feliciano and Bidin, JJ., concur.

Republic of the Philippines


SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 57227 May 14, 1992

AMELITA CONSTANTINO and MICHAEL CONSTANTINO, the latter represented herein by


the former, his mother and natural guardian, petitioners,
vs.
IVAN MENDEZ and the HONORABLE COURT OF APPEALS, respondents.

Roberto M. Sarenas for petitioners.

Bienvinido D. Cariaga for private respondent.

BIDIN, J.:
This is a petition for review on certiorari questioning the decision1 dated April 30, 1981 of the
Court of Appeals in CA-G.R. No. 61552-R which dismissed petitioner's complaint and set aside
the resolution2 dated October 21, 1976 of the then Court of First Instance of Davao, 16th
Judicial District, amending the dispositive portion of its decision dated June 21, 1976 and
ordering private respondent Ivan Mendez: (1) to acknowledge the minor Michael Constantino as
his illegitimate child; (2) to give a monthly support of P300.00 to the minor child; (3) to pay
complainant Amelita Constantino the sum of P8,200.00 as actual and moral damages; and (4)
to pay attorney's fees in the sum of P5,000 plus costs.

It appears on record that on June 5, 1975, petitioner Amelita Constantino filed an action for
acknowledgment, support and damages against private respondent Ivan Mendez. The case was
filed with the then CFI of Davao, 10th Judicial District and docketed as Civil Case No. 8881. In
her complaint, Amelita Constantino alleges, among others, that sometime in the month of
August, 1974, she met Ivan Mendez at Tony's Restaurant located at Sta. Cruz, Manila, where
she worked as a waitress; that the day following their first meeting, Ivan invited Amelita to dine
with him at Hotel Enrico where he was billeted; that while dining, Ivan professed his love and
courted Amelita; that Amelita asked for time to think about Ivan's proposal; that at about 11:00
o'clock in the evening, Amelita asked Ivan to bring her home to which the latter agreed, that on
the pretext of getting something, Ivan brought Amelita inside his hotel room and through a
promise of marriage succeeded in having sexual intercourse with the latter; that after the sexual
contact, Ivan confessed to Amelita that he is a married man; that they repeated their sexual
contact in the months of September and November, 1974, whenever Ivan is in Manila, as a
result of which Amelita got pregnant; that her pleas for help and support fell on deaf ears; that
Amelita had no sexual relations with any other man except Ivan who is the father of the child yet
to be born at the time of the filing of the complaint; that because of her pregnancy, Amelita was
forced to leave her work as a waitress; that Ivan is a prosperous businessman of Davao City
with a monthly income of P5,000 to P8,000. As relief, Amelita prayed for the recognition of the
unborn child, the payment of actual, moral and exemplary damages, attorney's fees plus costs.

In his answer dated August 5, 1975, Ivan admitted that he met Amelita at Tony's Cocktail
Lounge but denied having sexual knowledge or illicit relations with her. He prayed for the
dismissal of the complaint for lack of cause of action. By way of counterclaim, he further prayed
for the payment of exemplary damages and litigation expense including attorney's fees for the
filing of the malicious complaint.

On September 1, 1975, Amelita Constantino filed a motion for leave to amend the complaint
impleading as co-plaintiff her son Michael Constantino who was born on August 3, 1975. In its
order dated September 4, 1975, the trial court admitted the amended complaint.

On September 11, 1975, Ivan Mendez filed his answer to the amended complaint reiterating his
previous answer denying that Michael Constantino is his illegitimate son.

After hearing, the trial court rendered a decision dated June 21, 1976, the dispositive portion of
which reads, viz:

WHEREFORE, in view of the foregoing, judgment is hereby rendered in favor of


plaintiff Amelita Constantino and against defendant Ivan Mendez, ordering the
latter to pay Amelita Constantino the sum of P8,000.00 by way of actual and
moral damages; and, the sum of P3,000.00, as and by way of attorney's fees.
The defendant shall pay the costs of this suit.
SO ORDERED.

From the above decision, both parties filed their separate motion for reconsideration. Ivan
Mendez anchored his motion on the ground that the award of damages was not supported by
evidence. Amelita Constantino, on the other hand, sought the recognition and support of her
son Michael Constantino as the illegitimate son of Ivan Mendez.

In its resolution dated October 21, 1976, the trial court granted Amelita Constantino's motion for
reconsideration, and amended the dispositive portion of its decision dated June 21, 1976 to
read as follows, viz:

WHEREFORE, in view of the foregoing, judgment is hereby rendered in favor of


plaintiff Amelita Constantino and plaintiff-minor Michael Constantino, and against
defendant Ivan Mendez ordering the latter to pay Amelita Constantino the sum of
P8,000.00 by way of actual and moral damages and the sum of P200.00 as and
by way of payment of the hospital and medical bills incurred during the delivery of
plaintiff-minor Michael Constantino; to recognize as his own illegitimate child the
plaintiff-minor Michael Constantino who shall be entitled to all the rights,
privileges and benefits appertaining to a child of such status; to give a permanent
monthly support in favor of plaintiff Michael Constantino the amount of P300.00;
and the sum of P5,000.00 as and by way of attorney's fees. The defendant shall
pay the costs of this suit.

Let this Order form part of the decision dated June 21, 1976.

SO ORDERED.

On appeal to the Court of Appeals, the above amended decision was set aside and the
complaint was dismissed. Hence, this petition for review.

Basically, the issue to be resolved in the case at bar is whether or not the Court of Appeals
committed a reversible error in setting aside the decision of the trial court and in dismissing the
complaint.

Petitioners contend that the Court of Appeals erred in reversing the factual findings of the trial
and in not affirming the decision of the trial court. They also pointed out that the appellate court
committed a misapprehension of facts when it concluded that Ivan did not have sexual access
with Amelita during the first or second week of November, 1976 (should be 1974), the time of
the conception of the child.

It must be stressed at the outset that factual findings of the trial court have only a persuasive
and not a conclusive effect on the Court of Appeals. In the exercise of its appellate jurisdiction, it
is the duty of the Court of Appeals to review the factual findings of the trial court and rectify the
errors it committed as may have been properly assigned and as could be established by a re-
examination of the evidence on record. It is the factual findings of the Court of Appeals, not
those of the trial court, that as a rule are considered final and conclusive even on this Court
(Hermo v. Hon. Court of Appeals, et al., 155 SCRA 24 [1987]). This being a petition
for certiorari under Rule 45 of the Rules of Court, this Court will review only errors of law
committed by the Court of Appeals. It is not the function of this Court to re-examine all over
again the oral and documentary evidence submitted by the parties unless the findings of facts of
the Court of Appeals is not supported by the evidence on record or the judgment is based on
misapprehension of facts (Remalante v. Tibe, et al., 158 SCRA 138 [1988]; Hernandez v. Court
of Appeals, et al., 149 SCRA 97 [1987]).

It is the conclusion of the Court of Appeals, based on the evidence on record, that Amelita
Constantino has not proved by clear and convincing evidence her claim that Ivan Mendez is the
father of her son Michael Constantino. Such conclusion based on the evaluation of the evidence
on record is controlling on this Court as the same is supported by the evidence on record. Even
the trial court initially entertained such posture. It ordered the recognition of Michael as the
illegitimate son of Ivan only when acting on the motions for reconsideration, it reconsidered, on
October 21, 1976, its earlier decision dated June 21, 1976. Amelita's testimony on cross-
examination that she had sexual contact with Ivan in Manila in the first or second week of
November, 1974 (TSN, December 8, 1975, p. 108) is inconsistent with her response that she
could not remember the date of their last sexual intercourse in November, 1974 (Ibid, p. 106).
Sexual contact of Ivan and Amelita in the first or second week of November, 1974 is the crucial
point that was not even established on direct examination as she merely testified that she had
sexual intercourse with Ivan in the months of September, October and November, 1974.

Michael Constantino is a full-term baby born on August 3, 1975 (Exhibit 6) so that as correctly
pointed out by private respondent's counsel, citing medical science (Williams Obstetrics, Tenth
Ed., p. 198) to the effect that "the mean duration of actual pregnancy, counting from the day of
conception must be close to 267 days", the conception of the child (Michael) must have taken
place about 267 days before August 3, 1975 or sometime in the second week of November,
1974. While Amelita testified that she had sexual contact with Ivan in November, 1974,
nevertheless said testimony is contradicted by her own evidence (Exh. F), the letter dated
February 11, 1975, addressed to Ivan Mendez requesting for a conference, prepared by her
own counsel Atty. Roberto Sarenas to whom she must have confided the attendant
circumstances of her pregnancy while still fresh in her memory, informing Ivan that Amelita is
four (4) months pregnant so that applying the period of the duration of actual pregnancy, the
child was conceived on or about October 11, 1974.

Petitioner's assertion that Ivan is her first and only boyfriend (TSN, December 8, 1975, p. 65) is
belied by Exhibit 2, her own letter addressed to Mrs. Mendez where she revealed the reason for
her attachment to Ivan who possessed certain traits not possessed by her boyfriend. She also
confided that she had a quarrel with her boyfriend because of gossips so she left her work. An
order for recognition and support may create an unwholesome atmosphere or may be an irritant
in the family or lives of the parties so that it must be issued only if paternity or filiation is
established by clear and convincing evidence. The burden of proof is on Amelita to establish her
affirmative allegations that Ivan is the father of her son. Consequently, in the absence of clear
and convincing evidence establishing paternity or filiation, the complaint must be dismissed.

As regards Amelita's claim for damages which is based on Articles 193 & 214 of the Civil Code
on the theory that through Ivan's promise of marriage, she surrendered her virginity, we cannot
but agree with the Court of Appeals that more sexual intercourse is not by itself a basis for
recovery. Damages could only be awarded if sexual intercourse is not a product of voluntariness
and mutual desire. At the time she met Ivan at Tony's Restaurant, Amelita was already 28 years
old and she admitted that she was attracted to Ivan (TSN, December 3, 1975, p. 83). Her
attraction to Ivan is the reason why she surrendered her womanhood. Had she been induced or
deceived because of a promise of marriage, she could have immediately severed her relation
with Ivan when she was informed after their first sexual contact sometime in August, 1974, that
he was a married man. Her declaration that in the months of September, October and
November, 1974, they repeated their sexual intercourse only indicates that passion and not the
alleged promise of marriage was the moving force that made her submit herself to Ivan.

WHEREFORE, the instant petition is Dismissed for lack of merit.

SO ORDERED.

Gutierrez, Jr., Feliciano, Davide, Jr. and Romero, JJ., concur.

THIRD DIVISION

[G.R. No. 47013. February 17, 2000]

ANDRES LAO, petitioner, vs. COURT OF APPEALS, THE ASSOCIATED


ANGLO-AMERICAN TOBACCO CORPORATION and ESTEBAN
CO, respondents.

[G.R. No. 60647. February 17, 2000]

ESTEBAN CO, petitioner, vs. COURT OF APPEALS and ANDRES


LAO, respondents. Esmsc

[G.R. No. 60958-59. February 17, 2000]

THE ASSOCIATED ANGLO-AMERICAN TOBACCO


CORPORATION, petitioner, vs. COURT OF APPEALS, ANDRES LAO,
JOSE LAO, and TOMAS LAO, respondents.

DECISION

PURISIMA, J.: PURISIMA

These consolidated petitions for review on certiorari under Rule 45 of the Rules of Court
revolve around discrepant statements of accountability between a principal and its
agent in the sale of cigarettes.

The common factual background at bar follows:

On April 6, 1965, The Associated Anglo-American Tobacco Corporation (Corporation for


brevity) entered into a "Contract of Sales Agent" with Andres Lao. Under the contract,
Lao agreed to sell cigarettes manufactured and shipped by the Corporation to his
business address in Tacloban City. Lao would in turn remit the sales proceeds to the
Corporation. For his services, Lao would receive commission depending on the kind of
cigarettes sold, fixed monthly salary, and operational allowance. As a guarantee to Laos
compliance with his contractual obligations, his brother Jose and his father Tomas
executed a deed of mortgage[1] in favor of the Corporation in the amount of P200,000.00

In compliance with the contract, Lao regularly remitted the proceeds of his sales to the
Corporation, generating, in the process, a great deal of business. Thus, the Corporation
awarded him trophies and plaques in recognition of his outstanding performance from
1966 to 1968. However, in February 1968 and until about seven (7) months later, Lao
failed to accomplish his monthly sales report. In a conference in Cebu, Ching Kiat Kam,
the President of the Corporation, reminded Lao of his enormous accounts and the
difficulty of obtaining a tally thereon despite Laos avowal of regular remittances of his
collections.

Sometime in August and September 1969, Esteban Co, the vice-president and general
manager of the Corporation, summoned Lao to Pasay City for an accounting. It was
then and there established that Laos liability amounted to P525,053.47. And so, Lao
and his brother Lao Y Ka, enlisted the services of the Sycip Gorres and Velayo
Accounting Firm (SGV) to check and reconcile the accounts. Esmmis

Ching Kiat Kam allowed Lao to continue with the sales agency provided Lao would
reduce his accountability to P200,000.00, the amount secured by the mortgage. The
Corporation thereafter credited in favor of Lao the amount of P325,053.47 representing
partial payments he had made but without prejudice to the result of the audit of
accounts. However, the SGV personnel Lao had employed failed to conclude their
services because the Corporation did not honor its commitment to assign two of its
accountants to assist them. Neither did the Corporation allow the SGV men access to
its records.

Subsequently, the Corporation discovered that Lao was engaging in the construction
business so much so that it suspected that Lao was diverting the proceeds of his sales
to finance his business. In the demand letter of April 15, 1979,[2] counsel for the
Corporation sought payment of the obligations of Lao, warning him of the intention of
the Corporation to foreclose the mortgage. Attached to said letter was a statement of
account indicating that Laos total obligations duly supported by receipts amounted to
P248,990.82.

Since Lao appeared to encounter difficulties in complying with his obligations under the
contract of agency, the Corporation sent Ngo Kheng to supervise Laos sales operations
in Leyte and Samar. Ngo Kheng discovered that, contrary to Laos allegation that he still
had huge collectibles from his customers, nothing was due the Corporation from Laos
clients. From then on, Lao no longer received shipments from the Corporation which
transferred its vehicles to another compound controlled by Ngo Kheng. Shipments of
cigarettes and the corresponding invoices were also placed in the name of Ngo Kheng.

On May 21, 1970, Andres, Jose and Tomas Lao brought a complaint for accounting and
damages with writ of preliminary injunction[3] against the Corporation, docketed as Civil
Case No. 4452 before the then Court of First Instance of Leyte, Branch I in Tacloban
City, which court[4] came out with its decision[5] on March 26, 1975, disposing as follows:

"IN VIEW OF ALL THE FOREGOING PREMISES, and upon a clear


preponderance of evidence in favor of the plaintiffs, the court hereby
renders judgment as follows: Esmso

1........Ordering both the plaintiffs and defendant corporation to undergo a


Court supervised accounting of their respective account with the view of
establishing once and for all, by a reconciliation of their respective books
of accounts, the true and correct accountability of Andres Lao to the
defendant corporation. Pursuant thereto, both plaintiff Andres Lao and the
defendant The Associated Anglo-American Tobacco Corporation are
directed to make available all their records pertainting [sic] to their
business transactions with each other under the contract of sales agent,
from 1965 up to the time Andres Lao ceased being the agent of the
defendant. A Committee on Audit is hereby formed to be composed of
three (3) members, one member to be nominated by the plaintiffs, another
to be nominated by the defendant corporation and the third member who
shall act as the Committee Chairman to be appointed by this Court. As
Committee Chairman, the Court hereby appoints the Branch Clerk of
Court of this Court, Atty. Victorio Galapon, who shall immediately convene
the Committee upon appointment of the other two members, and
undertake to finish their assigned task under his decision within two (2)
months.

2........Ordering the defendant corporation to pay Plaintiffs the amount of


P180,000 representing actual loss of earnings.

3........Ordering the defendant to pay plaintiffs moral damages in the amount


of P130,000.00.

4........Ordering the defendant to pay to the plaintiffs, exemplary damages in


the amount of P50,000.00.

5........Ordering the defendant to pay to the plaintiffs, attorneys fees in the


amount of P40,000.00.

6........Ordering the plaintiffs and the defendant to pay the compensation of


the commissioners pro-rata.

7........Finally ordering the defendant to pay the cost of this suit.

SO ORDERED."
The Committee of Audit that was eventually constituted was composed of Atty. Victorio
L. Galapon, Jr., as chairman, Wilfredo Madarang, Jr. and Cesar F.P. Corcuera, as
representatives of the Corporation, and Lao himself. On September 16, 1976, said
committee submitted a report[6] with the following findings: Msesm

"Total remittances made by Mr. Andres


Lao in favor of Associated from April 10,
1965 to November 1969 which are P13,686,148.80
substantially supported by official receipt
.....................................................
Shipments by Associated to Mr. Andres
Lao duly supported by bills of lading,
factory consignment invoices and 9,110,777.00
delivery receipts..................................
Shipments by Associated to Mr. Andres
Lao, covered by bills of lading and
factory consignment invoices but with no
supporting delivery receipts purported to
have been delivered to Mr. Lao on the 4,018,927.60
basis of sales made by him as reported
in his monthly sales reports (except for
sales in December, 1968 and November
and December 1968 where the sales
reports were not available to the Audit
Committee)...............................................
Shipments covered by bills of lading and
factory consignment invoices but with no
supporting delivery receipts 597,239.40
......................................................
Shipments with covering factory
consignment invoices but not covered by
bills of lading and delivery receipts 126,950.00"
......................................................

On February 28, 1977, the trial court[7] promulgated a supplemental decision wherein it
dismissed Laos claim that he had made an overpayment of P556,444.20. The alleged
overpayment was arrived at after deducting the total payment made by Lao in the
amount of P13,686,148.80 from the total volume of shipments made by the Corporation
in the amount of P13,129,704.60, without including the amount of P597,239.40,
representing alleged shipments covered by bills of lading and factory consignment
invoices but with no supporting delivery receipts, and the amount of P126,950.00,
representing shipments with factory consignment invoices but not covered by bills of
lading and delivery receipts. The trial court, in rejecting the claim of overpayment, held
that "when he (referring to Lao) made partial payments amounting to P325,053.47
subsequent to the demand in September, 1969, he is deemed to have admitted his
liability and his claim of overpayment is not only preposterous but devoid of logic."
Therefore, with the sums of P597,239.40 and P126,950.00 included in the total volume
of shipments made by the Corporation in the amount of P13,129,704.60, Laos total
remittances of P13,686,248.80 were short of P167,745.20. Thus, the trial court held:

"WHEREFORE, judgment is hereby rendered declaring plaintiff Andres


Laos accountability to defendant Corporation in the amount of
P167,745.20 and ordering him to pay said amount of P167,745.20 to
defendant The Associated Anglo-American Tobacco Corporation." Exsm

The Corporation appealed the decision, dated March 26, 1975, just as Lao appealed the
supplemental decision, dated February 28, 1977, to the Court of Appeals. Docketed as
CA-G.R. No. 62532-R, the appeal was resolved in the Decision of the Court of Appeals
dated October 26, 1981,[8] disposing thus:

"WHEREFORE, in connection with the decision of March 26, 1975,


defendant corporation is hereby ordered to pay plaintiffs P150,000.00
actual damages for loss of earnings, P30,000.00 by way of moral
damages and P10,000.00 for exemplary damages. As modified, the
decision is AFFIRMED in all other respects.

As for the supplemental decision of February 28, 1977, the same is


hereby reversed and set aside, and defendant-appellant corporation
sentenced to reimburse Andres Laos overpayment in the amount of
P556,444.20. Costs against defendant-appellant corporation."

The Corporation presented a motion for reconsideration[9] of the said Decision but the
same was denied in a Resolution dated May 18, 1982.[10] A motion for leave to file a
second motion for reconsideration was likewise denied.[11] Kylex

Meanwhile, on June 24, 1974 and during the pendency of Civil Case No. 4452, Esteban
Co, representing the Corporation as its new vice-president, filed an affidavit of
complaint[12] with the Pasay City Fiscals Office under I.S. No. 90994; alleging that Lao
failed to remit the amount of P224,585.82 which he allegedly misappropriated and
converted to his personal use. Although the amount supposedly defalcated was put up
as a counterclaim in Civil Case No. 4452 for accounting, the Corporation averred that it
reserved the right to institute a criminal case against Lao.

On July 31, 1974, after finding a prima facie case against Lao, the Pasay City Fiscal
filed an information[13] for estafa against Lao, docketed as Criminal Case No. 2650-P
before the then Court of First Instance of Rizal, Branch XXVII. Lao sought a
reinvestigation[14] of the case, contending that he was never served a subpoena or notice
of preliminary investigation that was considered mandatory in cases cognizable by
Court of First Instance, now Regional Trial Court. Apparently, the preliminary
investigation proceeded ex-parte because Esteban Co made it appear that Lao could
not be located. Kycalr
On December 17, 1974, without awaiting the termination of the criminal case, Lao
lodged a complaint[15] for malicious prosecution against the Corporation and Esteban Co,
praying for an award of damages for violation of Articles 20 and 21 of the Civil Code.
The case was docketed as Civil Case No. 5528 before Branch I of the then Court of
First Instance in Cotabato City.

In his resolution dated January 3, 1975,[16] then Pasay City Fiscal Jose Flaminiano found
merit in the petition for reinvestigation of the estafa case. He opined that Lao had not
committed estafa as his liability was essentially civil in nature. The Fiscal entertained
doubts about the motive of the Corporation in instituting the criminal case against Lao
because of the undue delay in its filing, aside from the fact that the estafa case involved
the same subject matter the Corporation sued upon by way of counterclaim in Civil
Case No. 4452. Eventually, on May 13, 1976, the Court of First Instance of Rizal,
Branch XXVII, in Pasay City, promulgated a decision[17] acquitting Lao of the crime
charged and adopting in toto the said Resolution of Fiscal Flaminiano.

On March 18, 1977, the Court of First Instance of Samar[18] handed down a decision in
Civil Case No. 5528, the action for damages arising from malicious prosecution,
disposing thus:

"WHEREFORE, the Court declares that the defendants filed Criminal


Case No. 2650-P against the plaintiff for estafa before the Court of First
Instance of Rizal, Branch XXVII, Pasay City, without probable cause and
with malice and therefore orders the defendants Associated Anglo-
American Tobacco Corporation and Esteban Co to jointly and severally
pay the plaintiff:

a........P30,000 as actual damages; Calrky

b........P150,000.00 as moral damages;

c........P100,000.00 as exemplary damages;

d........P50,000.00 as attorneys fees and costs.

SO ORDERED."

The Corporation and Esteban Co both appealed the aforesaid decision to the Court of
Appeals under CA-G.R. No. 61925-R.

On April 18, 1977, Lao presented a motion for execution pending appeal [19] before the
trial court. The opposition of the Corporation notwithstanding, on June 8, 1977 the trial
court issued a special order granting the motion for execution pending appeal, [20] and on
the following day, the corresponding writ of execution issued.[21]
On June 10, 1977, the Court of Appeals issued a Restraining Order enjoining the
execution of subject judgment.[22] The said order was issued on account of a petition for
certiorari, prohibition and mandamus with preliminary injunction[23] filed by the
Corporation and Esteban Co with the said appellate court. Docketed as CA-G.R. No.
06761, the petition was received by the Court of Appeals on June 9, 1977. A
supplemental to the petition and a "compliance" were also received on the same time
and date.[24] On June 21, 1977, Lao moved to lift the restraining order.

On September 14, 1977, the Court of Appeals resolved in CA-G.R. No. 06761 thus:

"WHEREFORE, the petition for certiorari is hereby granted, the special


order granting execution pending appeal is annulled and the restraining
order heretofore issued is made permanent.

No pronouncement as to costs."

On October 21, 1981, the Court of Appeals likewise rendered a Decision [25] in CA-G.R.
No. 62532-R, affirming the trial courts finding that Criminal Case No. 2650-P was filed
without probable cause and with malice; and held the Corporation and Esteban Co
solidarily liable for damages, attorneys fees and costs.

The Corporation and Esteban Co moved to reconsider[26] the said decision in CA-G.R.
No. 61925-R but to no avail. The motion for reconsideration was denied in a Resolution
promulgated on May 18, 1992. A motion for leave of court to file a second motion for
reconsideration[27] met the same fate. It was likewise denied in a Resolution[28] dated June
23, 1982.

From the said cases sprung the present petitions which were ordered consolidated in
the Resolutions of December 15, 1982 and November 11, 1985. [29] Subject petitions are
to be passed upon in the order they were filed. Mesm

G.R. No. 47013

A petition for review on certiorari of the Decision of the Court of Appeals in CA-G.R. No.
06761 that Lao filed, contending that:

1........The Court of Appeals cannot validly give due course to an original


action for certiorari, prohibition and mandamus where the petition is fatally
defective for not being accompanied by a copy of the trial courts
questioned process/order.

2........The Court of Appeals, cannot, in a petition for certiorari, prohibition


and mandamus, disregard, disturb and substitute its own judgment for the
findings of facts of the trial court, particularly as in the present case, where
the trial court did not exceed nor abuse its discretion.
3........The Court of Appeals did not act in accordance with established
jurisprudence when it overruled the trial courts holding that the posting of
a good and solvent bond is a good or special reason for execution
pending appeal.

For clarity, the petition for review on certiorari questioning the Decision of the Court of
Appeals that nullified the special order granting execution pending appeal is anchored
on the antecedent facts as follows: Slx

After the Court of First Instance of Samar had decided in favor of Lao in the action for
damages by reason of malicious prosecution, Lao filed a motion for execution pending
appeal[30] even as the Corporation and Co had interposed an appeal from the said
decision. In that motion, Lao theorized that the appeal had no merit and the judgment in
his favor would be rendered ineffectual on account of losses incurred by the Corporation
in the 1972 floods in Luzon and in a fire that cost the Corporation P5 million, as well as
the fact that the properties of the Corporation were heavily encumbered as it had even
incurred an overdraft with a bank; for which reasons, Lao evinced his willingness to post
a bond although Section 2, Rule 39 of the Rules of Court does not require such bond.
Lao thereafter sent in a supplemental motion[31] asserting that the Corporations
properties were mortgaged in the total amount of Seven Million (P7,000,000.00) Pesos.
The Corporation and Co opposed both motions.

On June 8, 1977, after hearing and presentation of evidence by both parties, the Court
of First Instance of Samar issued a special order granting the motion for execution
pending appeal.[32] The following day, June 9, 1977, the corresponding writ of execution
pending appeal issued.[33] At 8:00 a.m. on the same day, the Corporation and Co filed a
petition for certiorari, prohibition and mandamus with preliminary injunction with the
Court of Appeals, the filling of which petition was followed by the filing of a supplement
to the petition and a "compliance" with each pleading bearing the docket stamp showing
that the Court of Appeals also received the same at 8:00 a.m.[34] Scslx

In the petition under consideration, petitioner Lao contends that the supplemental
petition and "compliance" could not have been filed with the Court of Appeals at the
same time as the original petition; pointing out that the supplemental petition contains
an allegation to the effect that the special order granting execution pending appeal was
then still "being flown to Manila" and would be attached to the petition "as soon as it
arrives in Manila which is expected tomorrow, June 10, 1977 or Saturday." [35] Petitioner
Lao thus expressed incredulity on the fact that both the supplemental petition and the
"compliance" submitted to the appellate court a copy of the special order bearing the
same time of receipt. He theorized that the writ of execution could have been issued by
the Court of First Instance of Samar at the earliest, at 8:30 a.m. on July 9, 1977.
Petitioner Lao then noted that, the restraining order enjoining execution pending appeal
did not mention the date of issuance of the writ subsequently issued and the names of
the special sheriffs tasked to execute it simply because when the restraining order was
issued the copy of the writ of execution was not yet filed with the Court of Appeals.
Petitioner Lao also averred that because his counsel was furnished a copy of the
restraining order through the mail, he was deprived of the opportunity to take immediate
"remedial steps in connection with the improvident issuance of the restraining order." [36]

In their comment on the petition, respondent Corporation and Co assail petitioner Laos
insinuation of irregularity in the filing of their pleadings. They aver that in view of
petitioner Laos allegation, they, made inquiries in the Docket Section of the Court of
Appeals, and they were informed that the receiving machine of said section was out of
order when the pleadings were received "as the time of receipt appearing therein is
always 8:00 a.m."[37]

This Court cannot gloss over, as it has never glossed over allegations of irregularity in
the handling of pleadings filed in the Court. However, in the absence of concrete proof
that there was malicious intent to derail the propriety of procedure, this Court has no
basis on which to arrive at a conclusion thereon. The documentary evidence of
simultaneous receipt of pleadings that should ordinarily be received one after another is
simply insufficient to warrant any conclusion on irregularity of procedure.

All court personnel are enjoined to do their jobs properly and according to law. Should
they notice anything in the performance of their duties that may generate even a mere
suspicion of irregularity, they are duty-bound to correct the same. In this case, more
diligence on the part of the personnel handling the receiving machine could have
prevented the stamping on the pleadings with erroneous date and time of receipt and
would have averted suspicion of an anomaly in the filing of pleadings. Persons
responsible for the negligence should be taken to task. However, since this is not the
proper forum for whatever administrative measures may be taken under the premises,
the Court opts to discuss the merits of the petition for review on certiorari at bar rather
than tarry more on an administrative matter that is fundamentally extraneous to the
petition. Slxsc

Petitioner Lao maintains that the Court of Appeals should not have been given due
course to the petition for certiorari, prohibition and mandamus considering that it was
fatally defective for failure of the petitioners to attach thereto a copy of the questioned
writ of execution. On their part, private respondents concede the mandatory character of
the requirement of Section 1, Rule 65 of the Rules of Court - that the petition "shall be
accompanied by a certified true copy of the judgment or order subject thereof, together
with copies of all pleadings and documents relevant and pertinent thereto." However,
private respondents asked that their submission of a certified true copy of the special
order granting execution pending appeal attached to their "compliance" dated June 9,
1977[38] be taken as substantial compliance with the rule.

The Court gives due consideration to private respondents stance. Strict adherence to
procedural rules must at all times be observed. However, it is not the end-all and be-all
of litigation. As this Court said:

"xxx adjective law is not to be taken lightly for, without it, the enforcement
of substantive law may not remain assured. The Court must add,
nevertheless, that technical rules of procedure are not ends in themselves
but primarily devised and designed to help in the proper and expedient
dispensation of justice. In appropriate cases, therefore, the rules may
have to be so construed liberally as to meet and advance the cause of
substantial justice."[39]

Thus, in holding that the Court of Appeals may entertain a second motion for
reconsideration of its decision although the filing of such motion violates a prohibition
thereof, the Court said:

"xxx (I)t is within the power of this Court to temper rigid rules in favor of
substantial justice. While it is desirable that the Rules of Court be faithfully
and even meticulously observed, courts should not be so strict about
procedural lapses that do not really impair the proper administration of
justice. If the rules are intended to ensure the orderly conduct of litigation,
it is because of the higher objective they seek which is the protection of
substantive rights of the parties."[40] Slxmis

In the case under consideration, private respondents substantially complied with the
Rules of Court when they submitted a copy of the writ of execution sought to be
enjoined on the same day they filed the petition for certiorari, prohibition
and mandamus. Petitioner Cos allegation of irregularity as to the time of receipt of the
"compliance" to which copy of the writ was attached being unsubstantiated, the
presumption of regularity of its receipt on the day the original petition was filed should
prevail.

Petitioner Co argues that the Court of Appeals cannot disturb the factual findings of the
trial court and substitute its own in a petition for certiorari, prohibition and mandamus
where the basic issue is one of jurisdiction or grave abuse of discretion. It is well-settled,
however, that in a petition for certiorari and mandamus, the Court of Appeals, when
inevitable, may examine the factual merits of the case.[41] In the present case, it was
necessary and inevitable for the Court of Appeals to look into the diverse factual
allegations of the parties. It is worthy to note that petitioners motion for execution
pending appeal was premised on his contention that the award of damages in his favor
would be meaningless on account of respondent Corporations precarious financial
status. On the other hand, respondent Corporation countered that it was operating at a
profit, an assurance that at the time, it was a stable business entity that could answer
for its obligations. In the face of these contradictory allegations, the appellate court
correctly opted to make its own finding of facts on the issue of the propriety of the
issuance of the writ of execution pending appeal. It should be stressed that what was at
issue was not the award of damages itself but the issuance of said writ.

Petitioner Laos position that the posting of a good and solvent bond is a special reason
for the issuance of the writ of execution pending appeal is utterly barren of merit. Mere
posting of a bond to answer for damages does not suffice as a good reason for the
granting of execution pending appeal, within the context of "good reasons" under
Section 2, Rule 39 of the Rules of Court.[42] In Roxas v. Court of Appeals,[43] the Court
held: Missdaa

"It is not intended obviously that execution pending appeal shall issue as a
matter of course. Good reasons, special, important, pressing reasons
must exist to justify it; otherwise, instead of an instrument of solicitude and
justice, it may well become a tool of oppression and inequity. But to
consider the mere posting of a bond a good reason would precisely make
immediate execution of a judgment pending appeal routinary, the rule
rather than the exception. Judgments would be executed immediately, as
a matter of course, once rendered, if all that the prevailing party needed to
do was to post a bond to answer for damages that might result therefrom.
This is a situation, to repeat, neither contemplated nor intended by law."[44]

G.R. No. 60647

From the decision of the Court of First Instance of Samar in Civil Case No. 5528, finding
that they are liable for malicious prosecution and therefore, they must pay Lao
damages, the Corporation and Co appealed to the Court of Appeals. In affirming the
lower courts decision, the Court of Appeals deduced from the facts established that the
Corporation knew all along that Laos liability was civil in nature. However, after around
four (4) years had elapsed and sensing that Civil Case No. 4452 would result in a
decision against them, they instituted the criminal case for estafa. In awarding damages
in the total amount of P330,000, the Court of Appeals took into account Laos social and
business standing.[45] Sdaadsc

From the Decision of the Court of Appeals in CA-G.R. No. 61925-R, Co filed the instant
petition for review on certiorari; contending that the Court of Appeals erred in affirming
the decision of the Samar Court of First Instance because when the case for malicious
prosecution was commenced there was as yet no cause of action as the criminal case
was still pending decision. Co also asserted that he should not be held jointly and
severally liable with the Corporation because in filing the affidavit-complaint against
respondent Lao, he was acting as the executive vice-president of the Corporation and
his action was within the scope of his authority as such corporate officer.

The issue of whether the Court of Appeals correctly ruled that the Corporation and
petitioner Co should be held liable for damages on account of malicious prosecution
shall be ratiocinated upon and resolved with the issues submitted for resolution in G.R.
Nos. 60958-59. What should concern the Court here is whether petitioner Co should be
held solidarily liable with the Corporation for whatever damages would be imposed upon
them for filing the complaint for malicious prosecution.

Petitioner Co argues that following the dictum in agency, the suit should be against his
principal unless he acted on his own or exceeded the limits of his agency.
A perusal of his affidavit-complaint reveals that at the time he filed the same on June
24, 1974, petitioner Co was the vice-president of the Corporation. As a corporate officer,
his power to bind the Corporation as its agent must be sought from statute, charter, by-
laws, a delegation of authority to a corporate officer, or from the acts of the board of
directors formally expressed or implied from a habit or custom of doing business.[46] In
this case, no such sources of petitioners authority from which to deduce whether or not
he was acting beyond the scope of his responsibilities as corporate vice-president are
mentioned, much less proven. It is thus logical to conclude that the board of directors or
by laws- of the corporation vested petitioner Co with certain executive duties [47]one of
which is a case for the Corporation.

That petitioner Co was authorized to institute the estafa case is buttressed by the fact
that the Corporation failed to make an issue out of his authority to file said case. Upon
well-established principles of pleading, lack of authority of an officer of a corporation to
bind it by contract executed by him in its name, is a defense which should have been
specially pleaded by the Corporation.[48]The Corporations failure to interpose such a
defense could only mean that the filing of the affidavit-complaint by petitioner Co was
with the consent and authority of the Corporation. In the same vein, petitioner Co may
not be held personally liable for acts performed in pursuance of an authority and
therefore, holding him solidarily liable with the Corporation for the damages awarded to
respondent Lao does accord with law and jurisprudence. Rtcspped

G.R. No. 606958-59

In this petition for review on certiorari of the Decisions of the Court of Appeals in CA-
G.R. No. 61925-R, regarding Laos claim for damages on account of malicious
prosecution, and in CA-G.R. No. 62532-R that arose from Laos complaint for
accounting and damages, petitioner Corporation assigns as errors, that:

1........The respondent Court of Appeals erred and/or committed a grave


abuse of discretion in affirming the erroneous decision of the lower court.
The civil case for malicious prosecution was filed during the pendency of
the criminal case upon which the civil suit was based. There is as yet no
cause of action. xxx.

2........The respondent Court of Appeals erred and/or committed a grave


abuse of discretion when it reversed or set aside the supplemental
decision of the lower court in Civil Case No. 4452, which reversal was
merely based on surmises and conjectures. xxx.

3........The respondent Court of Appeals erred and/or committed grave


abuse of discretion when it awarded moral damages in Civil Case No.
4452 which was not prayed for because Andres Lao prayed for moral
damages and was already awarded in Civil Case No. 5528. Moral
damages must be specifically prayed for. xxx.[49]
Petitioner Corporation contends that the complaint for malicious prosecution brought by
Lao during the pendency of subject criminal case for estafa, states no cause of action
as it was prematurely filed when the criminal case that resulted in the acquittal of Lao
was not yet terminated. On the other hand, respondent Lao countered that the elements
supportive of an action for malicious prosecution are evidentiary in nature and their
existence or non-existence cannot be the subject of evaluation and conclusion upon the
filing of the complaint. For Lao, those elements must be determined at the time the
plaintiff has offered all his evidence and rested his case. Kortex

Malicious prosecution has been defined as an action for damages brought by one
against whom a criminal prosecution, civil suit or other legal proceeding has been
instituted maliciously and without probable cause, after the termination of such
prosecution, suit or other proceeding in favor of the defendant therein.[50] As thus
defined, the fact of termination of the criminal prosecution, civil suit or legal proceeding
maliciously filed and without probable cause, should precede the complaint for
malicious prosecution. Such a complaint states a cause of action if it alleges: (a) that
the defendant was himself the prosecutor or at least instigated the prosecution; (b) that
the prosecution finally terminated in the acquittal of the plaintiff; (c) that in bringing the
action the prosecutor acted without probable cause, and (d) that the prosecutor was
actuated by malice, i.e., by improper and sinister motives.[51]

Ocamp v. Buenaventura[52] demonstrates the importance of the requirement that the


case maliciously commenced should be terminated before a claim for damages arising
from the filing of such case should be presented. In that case, a complaint for damages
arising from the alleged malicious filing of an administrative case for serious
misconduct, grave abuse of authority and commission of a felony, was held to be
premature during the pendency of said administrative case before the then Police
Commission (POLCOM). Observing that the complaint for damages was based on the
claim that the administrative case brought before the POLCOM was malicious,
unfounded and aimed to harass the respondents, the Court there held:

"xxx. The veracity of this allegation is not for us to determine, for if We rule
and allow the civil case for damages to proceed on that ground, there is
the possibility that the court a quo in deciding said case might declare the
respondents victims of harassment and thereby indirectly interfere with the
proceedings before the POLCOM. The respondents case for damages
before the lower court is, therefore, premature as it was filed during the
pendency of the administrative case against the respondents before the
POLCOM. The possibility cannot be overlooked that the POLCOM may
hand down a decision adverse to the respondents, in which case the
damage suit will become unfounded and baseless for wanting in cause of
action. Of persuasive force is the ruling in William H. Brown vs. Bank of
the Philippine Islands and Santiago Freixas, 101 Phil. 309, 312, where this
Court said: Sclaw
"xxx. In effect, plaintiff herein seeks to recover damages
upon the ground that the detainer case has been filed, and is
being maintained, maliciously and without justification; but
this pretense affects the merits of said detainer case. Should
final judgment be eventually rendered in that case in favor of
the plaintiffs therein, such as the one rendered in the
municipal court, the validity of the cause of action of said
lessors against Brown, would thereby be conclusively
established, and necessarily, his contention in the present
case would have to be rejected. Similarly, we cannot sustain
the theory of Brown in the case at bar, without prejudging the
issue in the detainer case, which is still pending. Until final
determination of said case, plaintiff herein cannot, and does
not, have, therefore, a cause of action - if any, on which we
do not express our opinion - against the herein defendants.
In short, the lower court has correctly held that the present
action is premature, and, that, consequently, the complain
herein does not set forth a cause of action against the
defendants."[53]

A similar ruling was laid down in Cabacungan v. Corrales[54] where the Court sustained
the dismissal of an action for damages on the ground of prematurity. The records
disclosed that the alleged false and malicious complaint charging plaintiffs with
malicious mischief was still pending trial when the action for damages based on the
subject complaint was brought.

Premises studiedly viewed in proper perspective, the contention of Lao that the
elements of an action for malicious prosecution are evidentiary in nature and should be
determined at the time the plaintiff offers evidence and rests his case, is untenable. To
rule otherwise would, in effect, sanction the filing of actions without a cause of action.
The existence of a cause of action is determined solely by the facts alleged in the
complaint. Consideration of other facts is proscribed and any attempt to prove
extraneous circumstances is not allowed.[55] As this Court said in Surigao Mine
Exploration Co., Inc. v. Harris,[56] "unless the plaintiff has a valid and subsisting cause of
action at the time his action is commenced, the defect cannot be cured or remedied by
the acquisition or accrual of one while the action is pending, and a supplemental
complaint or an amendment setting up such after-accrued cause of action is not
permissible."[57] Thus, the circumstance that the estafa case concluded in respondent
Laos acquittal during the pendency of the complaint for malicious prosecution did not
cure the defect of lack of cause of action at the time of filing of the complaint.Sclex

Neither does the Court find merit in respondent Laos submission that the complaint for
malicious prosecution is viable inasmuch as it is also anchored on Articles 20 and 21 of
the Civil Code. This may appear to be a persuasive argument since there is no hard and
fast rule which can be applied in the determination of whether or not the principle of
abuse of rights has been violated, resulting in damages under the said articles of the
Civil Code on Human Relations. Indeed, a party injured by the filing of a court case
against him, even if he is later on absolved, may file a case for damages grounded
either on the principle of abuse of rights or on malicious prosecution.[58] However,
whether based on the principle of abuse of rights or malicious prosecution, a reading of
the complaint here reveals that it is founded on the mere filing of the estafa charge
against respondent Lao. As such, it was prematurely filed and it failed to allege a cause
of action. Should the action for malicious prosecution be entertained and the estafa
charge would result in respondent Laos conviction during the pendency of the damage
suit, even if it is based on Articles 20 and 21, such suit would nonetheless become
groundless and unfounded. To repeat; that the estafa case, in fact, resulted in
respondent Laos acquittal would not infuse a cause of action on the malicious
prosecution case already commenced and pending resolution.

The complaint for damages based on malicious prosecution and/or on Articles 20 and
21 should have been dismissed for lack of cause of action and therefore, the Court of
Appeals erred in affirming the decision of the trial court of origin. It should be stressed,
however, that the dismissal of subject complaint should not be taken as an adjudication
on the merits, the same being merely grounded on the failure of the complaint to state a
cause of action.[59]

As regards the Decision in CA-G.R. No. 62532-R which was spawned by respondent
Laos complaint for accounting, petitioner contends that the appellate court erred when it
reversed and set aside the supplemental decision in Civil Case No. 4452 and directed
the corporation to reimburse the amount of P556,444.20, representing Laos
overpayment to the Corporation. The Court would normally have restricted itself to
questions of law and shunned away from questions of fact were it not for the conflicting
findings of fact by the trial court and appellate court on the matter. The Court is
therefore constrained to relax the rule on conclusiveness of factual findings of the Court
of Appeals and, on the basis of the facts on record, make its own findings.[60]

It is significant to note that as per decision of the trial court dated March 26, 1975, a
court-supervised accounting was directed so as to ascertain the true and correct
accountability of Andres Lao to the defendant corporation. Thus, a three-man audit
committee was formed with the branch of clerk of court, Atty. Victorio Galapon, as
chairman, and two other certified public accountants respectively nominated by the
parties, as members.

On September 16, 1976, the said Audit Committee submitted its report[61] and in the
hearing of November 25, 1976, the parties interposed no objection thereto and
unanimously accepted the Audit Committee Report. The Committee found that Andres
Lao has made a total overpayment to defendant corporation in the amount
of P556,444.20. Xlaw

Trial by commissioners is allowed by the Rules of Court when a) the trial of an issue of
fact requires the examination of a long account on either side, in which case the
commissioner may be directed to hear and report upon the whole issue or any specific
question involved therein; b) when the taking of an account is necessary for the
information of the court before judgment, or for carrying a judgment or order into effect;
and c) when a question of fact, other than upon the pleadings, arises upon motion or
otherwise, at any stage of a case, or for carrying a judgment or order into
effect.[62]Ultimately, the trial court, in the exercise of its sound discretion, may either
adopt, modify, or reject in whole or in part, the commissioners report or it may recommit
the same with instructions, or require the parties to present additional evidence before
the commissioners or before the court.[63]

In the case under consideration, it is thus within the power of the trial court to refer the
accounting to court-appointed commissioners because a true and correct accounting is
necessary for the information of the court before it can render judgment. Moreover, the
technical nature of the audit procedure necessitates the assistance of a certified public
accountant. And since both parties offered no objection to the commissioners report,
they are deemed to have accepted and admitted the findings therein contained.

There is no discernible cause for veering from the findings of the Audit Committee. In
arriving at its conclusion, the Audit Committee subtracted the total remittances of Lao in
the amount of P13,686,148.80 from the entire volume of shipments made by the
corporation. In determining the total volume of shipments made by the corporation, the
Audit Committee did not include the shipments covered by bills of lading and factory
consignment invoices but without the corresponding delivery receipts. These included
shipments in the amount of P597, 239.40 covered by bills of lading and factory
consignment invoices but with no supporting delivery receipts, and shipments
worth P126, 950.00 with factory consignment invoices but not covered by bills of lading
and delivery receipts. However, the Audit Committee considered shipments made by
the corporation to Lao in the amount of P9,110,777.00 covered by bills of lading and
factory invoices but without the corresponding delivery receipts because subject
shipments were duly reported in Laos monthly sales report. Xsc

The Audit Committee correctly excluded the shipments not supported by delivery
receipts, albeit covered by bills of lading and factory consignment invoices. Under
Article 1497 of the Civil Code, a thing sold shall be understood as delivered when it is
placed in the control or possession of the vendee. Unless possession or control has
been transferred to the vendee, the thing or goods sold cannot be considered as
delivered. Thus, in the present case, the Audit Committee was correct when it adopted
as guideline that accountability over the goods shipped was transferred from the
corporation to Andres Lao only upon actual delivery of the goods to him. For it is only
when the goods were actually delivered to and received by Lao, did Lao have control
and possession over subject goods, and only when he had control and possession over
said goods could he sell the same.

Delivery is generally evidenced by a written acknowledgement of a person that he or


she has actually received the thing or the goods, as in delivery receipts. A bill of lading
cannot substitute for a delivery receipt. This is because it is a written acknowledgement
of the receipt of the goods by the carrier and an agreement to transport and deliver
them at a specific place to a person named or upon his order.[64] It does not evidence
receipt of the goods by the consignee or the person named in the bill of lading; rather, it
is evidence of receipt by the carrier of the goods from the shipper for transportation and
delivery.

Likewise, a factory consignment invoice is not evidence of actual delivery of the goods.
An invoice is nothing more than a detailed statement of the nature, quantity and cost of
the thing sold.[65] It is not proof that the thing or goods were actually delivered to the
vendee or the consignee. As admitted by the witness for the corporation:

A: Factory consignment invoices represents what the company billed the


plaintiff Mr. Lao and the bill of lading represents the goods which were
supposed to have been shipped.

xxx.......xxx.......xxx

A: Shipments covered by factory consignment invoices simply meant


these are billings made again by the Associated Anglo-American Tobacco
Corporation to plaintiff Andres Lao. (t.s.n., November 25, 1976, pp. 45-47
as cited in Respondent Laos Comment, Rollo, p. 259)

Thus, in the absence of proof that the goods were actually received by Lao as
evidenced by delivery receipts, the shipments allegedly made by the corporation in the
amount of P597,239.40 and P126,950.00 covered only by bills of lading and factory
consignment invoices cannot be included in Laos accountability. Sc

However, as to the shipments worth P4,018,927.60 likewise covered only by bills of


lading and factory consignment invoices, the Audit Committee correctly considered
them in Laos account because such shipments were reported in the latters sales
reports. The fact that Lao included them in his sales reports is an implied admission that
subject goods were actually delivered to him, and that he received the said goods for
resale.

As regards the award of moral damages, petitioner Corporation faults the Court of
Appeals for awarding such damages not specifically prayed for in the complaint for
accounting and damages in Civil Case No. 4452. Petitioner Corporation argues that
moral damages were prayed for and duly awarded in Civil Case No. 5528 and therefore,
it would be unfair and unjust to allow once again, recovery of moral damages on similar
grounds.

Contrary to the allegation of the petitioner Corporation, the award of moral damages
was specifically prayed for in the complaint albeit it left the amount of the same to the
discretion of the court.[66] Moreover, Civil Case Nos. 4452 and 5528 were on varied
causes of action. While the award for moral damages in Civil Case No. 4452 was based
on the evident bad faith of the petitioner Corporation in unilaterally rescinding
respondent Laos sales agency through his immediate replacement by Ngo Kheng, the
claim for moral damages in Civil Case No. 5528 was anchored on the supposed malice
that attended the filing of the criminal case for estafa.

Petitioner Corporation also opposes for being conjectural, the award of P150,000.00 in
Civil Case No. 4452, representing actual damages for loss of earnings. True, damages
cannot be presumed or premised on conjecture or even logic. A party is entitled to
adequate compensation only for duly substantiated pecuniary loss actually suffered by
him or her.[67] In this case, however, the trial court correctly found that an award for
actual damages was justified because several months before their contract of agency
was due to expire in 1969, the petitioner Corporation replaced Lao with Ngo Kheng as
sales agent for the areas of Leyte and Samar. This, despite the fact that they had
already agreed that Lao would continue to act as the corporations sales agent provided
that he would reduce his accountability to P200,000.00, the amount covered by his
bond, and engaged the services of an independent accounting firm to do an audit to
establish Laos true liability. Due to his ouster as sales agent, Lao failed to realize a net
income from his sales agency in the amount of P30,000.00 a year. Scmis

However, the amount of actual damages should be reduced to P30,000.00 only instead
of the P150,000.00 awarded by the appellate court. Since the contract of sales agency
was on a yearly basis, the actual damages Lao suffered should be limited to the annual
net income he failed to realize due to his unjust termination as sales agent prior to the
expiration of his contract in 1969. Unrealized income for the succeeding years cannot
be awarded to Lao because the corporation is deemed to have opted not to renew the
contract with Lao for the succeeding years.

As to the award of exemplary damages, suffice it to state that in contracts and quasi-
contracts, the court may award exemplary damages if the defendant acted in a wanton,
fraudulent, reckless, oppressive, or malevolent manner.[68] In the case under scrutiny, the
Court finds the award of exemplary damages unjustified or unwarranted in the absence
of any proof that the petitioner Corporation acted in a wanton, fraudulent, reckless,
oppressive, and malevolent manner. For the same reasons, the award for attorneys
fees should be deleted.

WHEREFORE,

In G.R. No. L-47013, the petition for review on certiorari is DENIED for lack of merit;

In G.R. No. 60647, the petition is GRANTED and the assailed decision is SET ASIDE;
and the Decision of the Court of Appeals in CA-G.R. No. 61925-R, finding Esteban Co
solidarily liable with the respondent Associated Anglo-American Tobacco Corporation
for damages, is REVERSED AND SET ASIDE. As above ratiocinated, the respondent
corporation cannot be held liable for damages.

In G.R. Nos. 60958-59, the Decision in CA-G.R. No. 61925-R is REVERSED AND SET
ASIDE; the respondent corporation is adjudged not liable for malicious prosecution due
to the prematurity of the action; while the Decision in CA-G.R. No. 62532-R is
AFFIRMED, insofar as it ordered respondent corporation to reimburse Andres Laos
overpayment in the amount of P556,444.20, but MODIFIED, in that only an award
of P30,000.00 for actual damages is GRANTED, and all the other monetary awards are
deleted. No pronouncement as to costs.

SO ORDERED.

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

Gonzaga-Reyes, J., no part. Spouse is with counsel for respondents.

FIRST DIVISION

[G.R. No. 107019. March 20, 1997]

FRANKLIN M. DRILON, AURELIO C. TRAMPE, GREGORIO A. ARIZALA,


CESAR M. SOLIS and FERDINAND R. ABESAMIS, petitioners,
vs. COURT OF APPEALS, HON. GEORGE C. MACLI-ING, in his
capacity as Presiding Judge of Branch 100 of the Regional Trial
Court of Quezon City, and HOMOBONO ADAZA, respondents.

DECISION
HERMOSISIMA, JR., J.:

Petitioners seek the reversal of the Resolutions of respondent Court of Appeals in


CA-G.R. SP No. 25080 dated January 31, 1992 and September 2, 1992 affirming the
Orders, dated February 8, 1991 and May 14, 1991, of respondent Judge George C. Macli-
ing which denied herein petitioners Motion to Dismiss the complaint filed in Civil Case No.
Q-90-6073 by respondent Homobono Adaza.
The facts are not in dispute.
In a letter-complaint to then Secretary of Justice Franklin Drilon[1] dated March 20,
1990, General Renato de Villa,[2] who was then the Chief of Staff of the Armed Forces of
the Philippines, requested the Department of Justice to order the investigation of several
individuals named therein, including herein private respondent Homobono Adaza, for their
alleged participation in the failed December 1989 coup detat. The letter-complaint was
based on the affidavit of Brigadier General Alejandro Galido, Captain Oscarlito Mapalo,
Colonel Juan Mamorno, Colonel Hernani Figueroa and Major Eduardo Sebastian.
Gen. de Villas letter-complaint with its annexes was referred for preliminary inquiry to
the Special Composite Team of Prosecutors created pursuant to Department of Justice
Order No. 5 dated January 10, 1990. Petitioner then Assistant Chief State Prosecutor
Aurelio Trampe,[3] the Team Leader, finding sufficient basis to continue the inquiry, issued
a subpoena to the individuals named in the letter-complaint, Adaza included, and
assigned the case for preliminary investigation to a panel of investigators composed of
prosecutors George Arizala, as Chairman, and Ferdinand Abesamis and Cesar Solis as
members. The case was docketed as I.S. No. DOJ-SC-90-013.
On April 17, 1990, the panel released its findings, thru a Resolution, which reads:

PREMISES CONSIDERED, we find and so hold that there is probable cause to hold
herein respondents for trial for the crime of REBELLION WITH MURDER AND
FRUSTRATED MURDER. Hence we respectfully recommend the filing of the
corresponding information against them in court. [4]

The above Resolution became the basis for the filing of an Information,[5] dated April
18, 1990, charging private respondent with the crime of rebellion with murder and
frustrated murder before the Regional Trial Court of Quezon City, with no
recommendation as to bail.[6]
Feeling aggrieved by the institution of these proceedings against him, private
respondent Adaza filed a complaint for damages,[7] dated July 11, 1990, before Branch
100 of the Regional Trial Court of Quezon City. The complaint was docketed as Civil Case
No. Q-90-6073 entitled, Homobono Adaza, plaintiff versus Franklin Drilon, et al.,
respondents. In his complaint, Adaza charged petitioners with engaging in a deliberate,
willful and malicious experimentation by filing against him a charge of rebellion complexed
with murder and frustrated murder when petitioners, according to Adaza, were fully aware
of the non-existence of such crime in the statute books.
On October 15, 1990, petitioners filed a Motion to Dismiss Adazas complaint on the
ground that said complaint states no actionable wrong constituting a valid cause of action
against petitioners.
On February 8, 1991, public respondent judge issued an Order [8] denying petitioners
Motion to Dismiss. In the same Order, petitioners were required to file their answer to the
complaint within fifteen (15) days from receipt of the Order.
Petitioners moved for a reconsideration of the Order of denial, but the same was
likewise denied by respondent Judge in another Order dated May 14, 1991. [9] The
subsequent Order reiterated that petitioners file their responsive pleading within the
prescribed reglementary period.
Instead of filing their answer as ordered, petitioners filed on June 5, 1991 a petition
for certiorariunder Rule 65 before the Court of Appeals, docketed as CA-G.R. No. 25080,
alleging grave abuse of discretion on the part of the respondent Judge in ruling that
sufficient cause of action exists to warrant a full-blown hearing of the case filed by Adaza
and thus denying petitioners Motion to Dismiss.
In its Resolution promulgated on January 31, 1992, the appellate court dismissed the
petition for lack of merit and ordered respondent Judge to proceed with the trial of Civil
Case No. Q-90-6073.[10] A Motion for Reconsideration having been subsequently filed on
February 28, 1992, the court a quo denied the same in a Resolution dated September 2,
1992.[11]
Hence, this petition, dated October 9, 1992, pleading this Court to exercise its power
of review under Rule 45 of the Revised Rules of Court.
On January 13, 1993, however, this Court, thru the Second Division, dismissed the
petition for failure to comply with Revised Circular No. 1-88, particularly the requirement
on the payment of the prescribed docketing fees.[12]
On March 8, 1993,[13] we reinstated the petition and required the respondents to
comment on the aforesaid petition. In the same Resolution, a temporary restraining order
was issued by this Court enjoining respondent Judge from further proceeding with Civil
Case No. Q-90-6073 until further orders from this Court.
The petition has merit.
In his Comment,[14] dated March 23, 1993, respondent Adaza maintains that his claim
before the trial court was merely a suit for damages based on tort by reason of petitioners
various malfeasance, misfeasance and nonfeasance in office, as well as for violation by
the petitioners of Section 3 (e) of Republic Act No. 3019, otherwise known as the Anti-
Graft and Corrupt Practices Act. It was not a suit for malicious prosecution.
Private respondent is taking us for a ride. A cursory perusal of the complaint filed by
Adaza before respondent Judge George Macli-ing reveals that it is one for malicious
prosecution against the petitioners for the latters filing of the charge against him of
rebellion with murder and frustrated murder. An examination of the records would show
that this latest posture as to the nature of his cause of action is only being raised for the
first time on appeal. Nowhere in his complaint filed with the trial court did respondent
Adaza allege that his action is one based on tort or on Section 3 (e) of Republic Act No.
3019. Such a change of theory cannot be allowed. When a party adopts a certain theory
in the court below, he will not be permitted to change his theory on appeal, for to permit
him to do so would not only be unfair to the other party but it would also be offensive to
the basic rules of fair play, justice and due process.[15] Any member of the Bar, even if not
too schooled in the art of litigation, would easily discern that Adazas complaint is no doubt
a suit for damages for malicious prosecution against the herein petitioners. Unfortunately,
however, his complaint filed with the trial court suffers from a fatal infirmity -- that of failure
to state a cause of action -- and should have been dismissed right from the start. We shall
show why.
The term malicious prosecution has been defined in various ways. In American
jurisdiction, it is defined as:

One begun in malice without probable cause to believe the charges can be sustained
(Eustace v. Dechter, 28 Cal. App. 2d. 706,83 P. 2d. 525). Instituted with intention of
injuring defendant and without probable cause, and which terminates in favor of the
person prosecuted. For this injury an action on the case lies, called the action of
malicious prosecution (Hicks v. Brantley, 29 S.E. 459, 102 Ga. 264; Eggett v. Allen,
96 N.W. 803, 119 Wis. 625). [16]
In Philippine jurisdiction, it has been defined as:

An action for damages brought by one against whom a criminal prosecution, civil suit,
or other legal proceeding has been instituted maliciously and without probable cause,
after the termination of such prosecution, suit, or other proceeding in favor of the
defendant therein. The gist of the action is the putting of legal process in force,
regularly, for the mere purpose of vexation or injury (Cabasaan v. Anota, 14169-R,
November 19, 1956). [17]

The statutory basis for a civil action for damages for malicious prosecution are found
in the provisions of the New Civil Code on Human Relations and on damages particularly
Articles 19, 20, 21, 26, 29, 32, 33, 35, 2217 and 2219 (8).[18] To constitute malicious
prosecution, however, there must be proof that the prosecution was prompted by a
sinister design to vex and humiliate a person, and that it was initiated deliberately by the
defendant knowing that his charges were false and groundless. Concededly, the mere
act of submitting a case to the authorities for prosecution does not make one liable for
malicious prosecution.[19] Thus, in order for a malicious prosecution suit to prosper, the
plaintiff must prove three (3) elements: (1) the fact of the prosecution and the further fact
that the defendant was himself the prosecutor and that the action finally terminated with
an acquittal; (2) that in bringing the action, the prosecutor acted without probable cause;
and (3) that the prosecutor was actuated or impelled by legal malice, that is by improper
or sinister motive.[20] All these requisites must concur.
Judging from the face of the complaint itself filed by Adaza against the herein
petitioners, none of the foregoing requisites have been alleged therein, thus rendering the
complaint dismissible on the ground of failure to state a cause of action under Section 1
(g), Rule 16 of the Revised Rules of Court.
There is nothing in the records which shows, and the complaint does not allege, that
Criminal Case No. Q-90-11855, filed by the petitioners against respondent Adaza for
Rebellion with Murder and Frustrated Murder, has been finally terminated and therein
accused Adaza acquitted of the charge. Not even Adaza himself, thru counsel, makes
any positive asseveration on this aspect that would establish his acquittal. Insofar as
Criminal Case No. Q-90-11855 is concerned, what appears clear from the records only is
that respondent has been discharged on a writ of habeas corpus and granted bail. [21] This
is not, however, considered the termination of the action contemplated under Philippine
jurisdiction to warrant the institution of a malicious prosecution suit against those
responsible for the filing of the informaion against him.
The complaint likewise does not make any allegation that the prosecution acted
without probable cause in filing the criminal information dated April 18, 1990 for rebellion
with murder and frustrated murder. Elementarily defined, probable cause is the existence
of such facts and circumstances as would excite the belief, in a reasonable mind, acting
on the facts within the knowledge of the prosecutor, that the person charged was guilty
of the crime for which he was prosecuted. It is well-settled that one cannot be held liable
for maliciously instituting a prosecution where one has acted with probable
cause. Elsewise stated, a suit for malicious prosecution will lie only in cases where a legal
prosecution has been carried on without probable cause. The reason for this rule is that
it would be a very great discouragement to public justice, if prosecutors, who had tolerable
ground of suspicion, were liable to be sued at law when their indictment miscarried.[22]
In the case under consideration, the decision of the Special Team of Prosecutors to
file the information for rebellion with murder and frustrated murder against respondent
Adaza, among others, cannot be dismissed as the mere product of whim or caprice on
the part of the prosecutors who conducted the preliminary investigation. Said decision
was fully justified in an eighteen (18)-page Resolution dated April 17, 1990.[23] While it is
true that the petitioners were fully aware of the prevailing jurisprudence enunciated
in People v. Hernandez,[24] which proscribes the complexing of murder and other common
crimes with rebellion, petitioners were of the honest conviction that the Hernandez Case
can be differentiated from the present case. The petitioners thus argued:

Of course we are aware of the ruling in People vs. Hernandez, 99 Phil. 515, which
held that common crimes like murder, arson, etc. are absorbed by rebellion. However,
the Hernandez case is different from the present case before us. In the Hernandez
case, the common crimes of murder, arson, etc. were found by the fiscal to have been
committed as a necessary means to commit rebellion, or in furtherance thereof. Thus,
the fiscal filed an information for rebellion alleging those common crimes as a
necessary means of committing the offense charged under the second part of Article
48, RPC.

We, however, find no occasion to apply the Hernandez ruling since as intimated
above, the crimes of murder and frustrated murder in this case were absolutely
unnecessary to commit rebellion although they were the natural consequences of the
unlawful bombing. Hence, the applicable provision is the first part of Article 48 of the
RPC. [25]

While the Supreme Court in the case of Enrile v. Salazar,[26] addressing the issue of
whether or not the Hernandez doctrine is still good law, in a 10-3 vote, did not sustain the
position espoused by the herein petitioners on the matter, three justices[27] felt the need to
re-study the Hernandez ruling in light of present-day developments, among whom was
then Chief Justice Marcelo Fernan who wrote a dissenting opinion in this wise:

I am constrained to write this separate opinion on what seems to be a rigid adherence


to the 1956 ruling of the Court. The numerous challenges to the doctrine enunciated in
the case of People vs. Hernandez, 99 Phil. 515 (1956), should at once demonstrate the
need to redefine the applicability of said doctrine so as to make it conformable with
accepted and well-settled principles of criminal law and jurisprudence.

To my mind, the Hernandez doctrine should not be interpreted as an all-embracing


authority for the rule that all common crimes committed on the occasion, or in
furtherance of, or in connection with, rebellion are absorbed by the latter. To that
extent, I cannot go along with the view of the majority in the instant case that
Hernandez remains binding doctrine operating to prohibit the complexing of rebellion
with any other offense committed on the occasion thereof, either as a means necessary
to its commission or as an unintended effect of an activity that constitutes rebellion (p.
9, Decision).

The Hernandez doctrine has served the purpose for which it was applied by the Court
in 1956 during the communist-inspired rebellion of the Huks. The changes in our
society in the span of 34 years since then have far-reaching effects on the all-
embracing applicability of the doctrine considering the emergence of alternative
modes of seizing the powers of the duly-constituted Government not contemplated in
Articles 134 and 135 of the Revised Penal Code and their consequent effects on the
lives of our people. The doctrine was good law then, but I believe that there is a
certain aspect of the Hernandez doctrine that needs clarification. [28]

Apparently, not even the Supreme Court then was of one mind in debunking the
theory being advanced by the petitioners in this case, some of whom were also the
petitioners in the Enrile case. Nevertheless, we held in Enrile that the Information filed
therein properly charged an offense -- that of simple rebellion --[29] and thereupon ordered
the remand of the case to the trial court for the prosecution of the named accused[30] in the
Information therein. Following this lead, the Information against Adaza in Criminmal Case
No. Q-90-11855 was not quashed, but was instead treated likewise as charging the crime
of simple rebellion.
A doubtful or difficult question of law may become the basis of good faith and, in this
regard, the law always accords to public officials the presumption of good faith and
regularity in the performance of official duties.[31] Any person who seeks to establish
otherwise has the burden of proving bad faith or ill-motive. Here, since the petitioners
were of the honest conviction that there was probable cause to hold respondent Adaza
for trial for the crime of rebellion with murder and frustrated murder, and since Adaza
himself, through counsel, did not allege in his complaint lack of probable cause, we find
that the petitioners cannot be held liable for malicious prosecution.Needless to say,
probable cause was not wanting in the institution of Criminal Case No. Q-90-11855
against Adaza.
As to the requirement that the prosecutor must be impelled by malice in bringing the
unfounded action, suffice it to state that the presence of probable cause signifies, as a
legal consequence, the absence of malice.[32] At the risk of being repetitious, it is evident
in this case that petitioners were not motivated by malicious intent or by a sinister design
to unduly harass private respondent, but only by a well-founded belief that respondent
Adaza can be held for trial for the crime alleged in the information.
All told, the complaint, dated July 11, 1990, filed by Adaza before Branch 100 of the
Regional Trial Court against the petitioners does not allege facts sufficient to constitute a
cause of action for malicious prosecution. Lack of cause of action, as a ground for a
motion to dismiss under Section 1 (g), Rule 16 of the Revised Rules of Court, must appear
on the face of the complaint itself, meaning that it must be determined from the allegations
of the complaint and from none other.[33] The infirmity of the complaint in this regard is only
too obvious to have escaped respondent judges attention. Paragraph 14 of the complaint
which states:
xxxxxxxxx

14. The malicious prosecution, nay persecution, of plaintiff for a non-existent crime
had severely injured and besmirched plaintiffs name and reputation and forever
stigmatized his stature as a public figure, thereby causing him extreme physical
suffering, serious anxiety, mental anguish, moral shock and social humiliation. [34]

is a mere conclusion of law and is not an averment or allegation of ultimate facts. It does
not, therefore, aid in any wise the complaint in setting forth a valid cause of action against
the petitioners.
It is worthy to note that this case was elevated to the public respondent Court of
Appeals and now to this Court because of respondent Judge Macli-ings denial of
petitioners motion to dismiss the Adaza complaint. The ordinary procedure, as a general
rule, is that petitioners should have filed an answer, go to trial, and if the decision is
adverse, reiterate the issue on appeal.[35] This general rule, however, is subject to certain
exceptions, among which are, if the court denying the motion to dismiss acts without or
in excess of jurisdiction or with grave abuse of discretion, in which case certiorari under
Rule 65 may be availed of. The reason is that it would be unfair to require the defendants
(petitioners in this case) to undergo the ordeal and expense of trial under such
circumstances, because the remedy of appeal then would then not be plain and
adequate.[36] Judge Macli-ing committed grave abuse of discretion in denying petitioners
motion to dismiss the Adaza complaint, and thus public respondent Court of Appeals
should have issued the writ of certiorari prayed for by the petitioners and annulled the
February 8, 1991 and May 14, 1991 Orders of respondent Judge. It was grievous error
on the part of the court a quo not to have done so. This has to be corrected. Respondent
Adazas baseless action cannot be sustained for this would unjustly compel the petitioners
to needlessly go through a protracted trial and thereby unduly burden the court with one
more futile and inconsequential case.
WHEREFORE, the petition is GRANTED. The Resolutions of respondent Court of
Appeals dated January 31, 1992 and September 2, 1992 affirming the February 8, 1991
and May 14, 1991 Orders of respondent Judge George C. Macli-ing are all hereby
NULLIFIED AND SET ASIDE.Respondent Judge is DIRECTED to take no further action
on Civil Case No. Q-90-6073 except to DISMISS the same.
SO ORDERED.
Padilla, (Chairman), Bellosillo, and Vitug, JJ., concur.
Kapunan, J., concurs in the result.

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