Vinzons-Chato v Fortune Tobacco, 525 SCRA 11

GR No. 141309 June 19, 2007

Ynares-Santiago, J

SUMMARY:

CIR issued RMC 37-93 which effectively reclassified Fortune’s products from 20-45% ad valorem tax to 55%. CTA declared the
issuance defective. Fortune filed with the RTC complaint for damages against Vinzons-Chato in her private capacity. Chato filed
a motion to dismiss. On motion to dismiss, RTC denied. CA affirmed, SC held that Vinzons Chato liable under Art 32 and no
need to prove bad faith to be liable. Petition denied

However, in the 2008 MR decision, the SC reversed their decision. SC held that petitioner should not be held liable. For a public
officer with a duty owing to the public, officer can only be liable IF when the complaining individual suffers a particular or
special injury on account of the public officer’s improper performance or non-performance of his public duty. He must show a
wrong which he specially suffers, and damage alone does not constitute a wrong. Petition granted

DOCTRINE:

*see article 32 and sec 38 and 39 at the end part

Article 32 is that the wrong may be civil or criminal. It is not necessary therefore that there should be malice or bad faith.

When what is involved is a duty owing to the public in general, an individual cannot have a cause of action for damages against
the public officer, even though he may have been injured by the action or inaction of the officer. Exception to this rule occurs
when the complaining individual suffers a particular or special injury on account of the public officers improper performance
or non-performance of his public duty. He must show a wrong which he specially suffers, and damage alone does not
constitute a wrong

2 Kinds of Duties exercised by the public officers:

a. Of Duties to the Public – a duty owing primarily to the public in general, not to any particular individual.

b. Of Duties to Individuals – While they owe to the public in general duty of a proper administration of their respective
offices, yet by reason of their employment by a particular individual to do some act for him in an official capacity are
under a special and particular obligation to him as an individual (in his personal capacity).
FACTS

Petitioner: Liwayway Vinzons-Chato -Commissioner of Internal Revenue

Respondent: Fortune Tobacco Corporation

Respondent Fortune Tobacco manufactures “Champion,” “Hope,” and “More” cigarettes. Before the effectivity of RA 7654, the
brands were considered local brands subject to an ad valorem tax at 20-45%.

Two days before the effectivity of RA 7654 the petitioner, as CIR, issued RMC 37-93 reclassifying the 3 brands as locally
manufactured cigarettes bearing a foreign brand subject to the 55% ad valorem tax.

Fortune filed a petition for review with the Court of Tax Appeals. CTA ruled that RMC 37-93 is defective, invalid, and
unenforceable and further enjoined petitioner from collecting the deficiency tax assessment issued pursuant to RMC No. 37-93
(not unconstitutional)

Fortune filed before the RTC a complaint for damages against petitioner in her private capacity. Respondent contended that
the latter should be held liable for damages under Article 32 of the Civil Code considering that the issuance of RMC 37-93
violated its constitutional right against deprivation of property without due process of law and the right to equal protection of
the laws.

Petitioner Vinzons-Chato filed a motion to dismiss contending that, in issuing the RMC as CIR, she acted merely as an agent of
the Republic and therefore she cannot be held liable in her personal capacity.

RTC denied motion, CA affirmed.

Petitioner filed the instant recourse contending that the suit is grounded on her acts done in the performance of her functions
as a public officer, hence, it is Section 38, Book I of the Administrative Code which should be applied. Under this provision,
liability will attach only when there is a clear showing of bad faith, malice, or gross negligence. She further averred that the Civil
Code, specifically, Article 32 which allows recovery of damages for violation of constitutional rights, is a general law on the
liability of public officers; while Section 38, Book I of the Administrative Code is a special law on the superior public officers’
liability, such that, if the complaint, as in the instant case, does not allege bad faith, malice, or gross negligence, the same is
dismissible for failure to state a cause of action

ISSUE/S:

(1) May a public officer be validly sued in his/her private capacity for acts done in connection with the discharge of the functions
of his/her office? (Y)

(2) Which as between Article 32 of the Civil Code and Section 38, Book I of the Administrative Code should govern in determining
whether the instant complaint states a cause of action? Art 32 NCC

HELD:

1. General rule: a public officer is not liable for damages which a person may suffer arising from the just performance of his
official duties and within the scope of his assigned tasks.

Exception: a public officer is by law not immune from damages in his/her personal capacity for acts done in bad faith
which, being outside the scope of his authority, are no longer protected by the mantle of immunity for official actions.

Specifically, under Sec. 38, Book I, Administrative Code, civil liability may arise where there is bad faith, malice, or gross
negligence on the part of a superior public officer. And, under Sec. 39 of the same Book, civil liability may arise where the
subordinate public officer’s act is characterized by willfulness or negligence. In Cojuangco, Jr. V. CA, a public officer who
directly or indirectly violates the constitutional rights of another, may be validly sued for damages under Article 32 of the Civil
Code even if his acts were not so tainted with malice or bad faith.

Thus, the rule in this jurisdiction is that a public officer may be validly sued in his/her private capacity for acts done in the
course of the performance of the functions of the office, where said public officer: (1) acted with malice, bad faith, or
negligence; or (2) where the public officer violated a constitutional right of the plaintiff.

2. SC held that the complaint filed by respondent stated a cause of action and that the decisive provision thereon is Article 32
of the Civil Code.

The rationale for its enactment was explained by Dean Bocobo of the Code Commission, as follows:

"The very nature of Article 32 is that the wrong may be civil or criminal. It is not necessary therefore that
there should be malice or bad faith. To make such a requisite would defeat the main purpose of Article 32
which is the effective protection of individual rights. Public officials in the past have abused their powers
on the pretext of justifiable motives or good faith in the performance of their duties. Precisely, the object
of the Article is to put an end to official abuse by the plea of good faith. In the United States this remedy is
in the nature of a tort.

Sections 38 and 39, Book I of the Administrative Code, laid down the rule on the civil liability of superior and subordinate public
officers for acts done in the performance of their duties. For both superior and subordinate public officers, the presence of bad
faith, malice, and negligence are vital elements that will make them liable for damages.

Contrarily, Article 32 of the Civil Code specifies in clear and unequivocal terms a particular specie of an "act" that may give rise
to an action for damages against a public officer, and that is, a tort for impairment of rights and liberties. Indeed, Article 32 is
the special provision that deals specifically with violation of constitutional rights by public officers.

Also, special law prevails over a general law:

Compared thus with Section 38 of the Admin Code, which broadly deals with civil liability arising from errors in the
performance of duties, NCC 32 is the specific provision which must be applied in the instant case precisely filed to seek
damages for violation of constitutional rights.

Petition DENIED, Judgment Affirmed

LIWAYWAY VINZONS-CHATO V. FORTUNE TIBACCO CO. (2008 MR) NACHURA,J

Facts:

1. This is a reconsideration of the June 19, 2007 decision that directed the trial court to continue with the civil case filed
against Comm. Chato in her personal capacity.
2. July 20, 2007 pet. moved for the reconsideration of the decision, MR Denied in April 14, 2008.
3. Undaunted April 29, 2008 Motion to Refer case to the Honorable Court En Banc 1
4. June 25, 2008 Resolution- The Court Referred the case to the En Banc.

Issue: WON petitioner may be held liable in her personal capacity for an act done in her duty as the Commission of Internal
Revenue commissioner? NO

HELD: No, civil case based on CC 32, the act/omission must be in the nature of a duty to the individual that violates a
constitutional right and results in a particular wrong or injury. Here her duty was to the public in general, and the act did
not result in a violation of Fortune’s right to due process nor equal protection.

2 Kinds of Duties exercised by the public officers:

c. Of Duties to the Public – a duty owing primarily to the public in general, not to any particular individual.
Ex. Governor owes a duty to the public in general to see the laws are properly executed.
Members of the legislature, to pass only wise and proper laws.

d. Of Duties to Individuals – While they owe to the public in general duty of a proper administration of their respective
offices, yet by reason of their employment by a particular individual to do some act for him in an official capacity are
under a special and particular obligation to him as an individual (in his personal capacity).
Ex. Recorder of Deeds in recording the deed or mortgage of an individual.
Clerk of Court in entering up a private judgment.
Notary public in protesting a negotiable paper.

RULE: An individual can hold a public officer personally liable for damages on account of an act or omission that violates a
constitutional right only if it results in a particular wrong or injury to the former

In this case, Commissioner’s duty is to the public in general. Her rule making powers is a duty to the public to
promulgate rules which are compliant with the requirements of valid admin regulations. But it is a duty not to the
respondent alone but to the entire body politic who would be affected.

No particular injury is alleged to have been sustained by the respondent. Thus there is no delict or wrongful act or
omission. Complaint fails to state a cause of action.

Fortune has no Cause of Action. Two grounds as cause of action: (1) CIR v. CA and (2) the issuance was done without
due process of law and in violation of the right of plaintiff to the equal protection of the laws.

a. CIR v. CA as a cause of action would depend upon the constitutionality of her issuance. The court ruled that it had
“fallen short of a valid and effective administration of justice” BUT this did not declare the issuance as
unconstitutional. Neither did the case make an express finding.
b. On violation of the right to due process and equal protection, CIR v. CA said “Not insignificantly RMC 37-93 might have
likewise infringed on uniformity of taxation” however this is also not a positive indictment of the petitioner for
violation of fortune’s constitutional rights.

DISPOSITIVE: MR by petitioner of 2007 decision GRANTED. Civil case against petitioner is DISMISSED. Petitioner NOT LIABLE
in her personal capacity.

So what’s the difference?

 2007 Decision
SC denied the petition- liable
Based on Art 32- no need to allege that there was malice or
bad faith in the performance of duty as public officer
2008 MR
SC granted petition- not liable
Based on Art 32, however:
For a public officer with a duty owing to the public, officer
can only be liable IF when the complaining individual suffers
a particular or special injury on account of the public officer’s
improper performance or non-performance of his public
duty. He must show a wrong which he specially suffers, and
damage alone does not constitute a wrong

Articles

Article 32. Any public officer or employee, or any private individual, who directly or indirectly obstructs, defeats, violates or
in any manner impedes or impairs any of the following rights and liberties of another person shall be liable to the latter for
damages:

(1) Freedom of religion;

(2) Freedom of speech;
(3) Freedom to write for the press or to maintain a periodical publication;
(4) Freedom from arbitrary or illegal detention;
(5) Freedom of suffrage;
(6) The right against deprivation of property without due process of law;
(7) The right to a just compensation when private property is taken for public use;
(8) The right to the equal protection of the laws;
(9) The right to be secure in one's person, house, papers, and effects against unreasonable searches and seizures;
(10) The liberty of abode and of changing the same;
(11) The privacy of communication and correspondence;
(12) The right to become a member of associations or societies for purposes not contrary to law;
(13) The right to take part in a peaceable assembly to petition the Government for redress of grievances;
(14) The right to be a free from involuntary servitude in any form;
(15) The right of the accused against excessive bail;
(16) The right of the accused to be heard by himself and counsel, to be informed of the nature and cause of the
accusation against him, to have a speedy and public trial, to meet the witnesses face to face, and to have compulsory
process to secure the attendance of witness in his behalf;
(17) Freedom from being compelled to be a witness against one's self, or from being forced to confess guilt, or from
being induced by a promise of immunity or reward to make such confession, except when the person confessing
becomes a State witness;
(18) Freedom from excessive fines, or cruel and unusual punishment, unless the same is imposed or inflicted in
accordance with a statute which has not been judicially declared unconstitutional; and
(19) Freedom of access to the courts.

In any of the cases referred to in this article, whether or not the defendant's act or omission constitutes a criminal
offense, the aggrieved party has a right to commence an entirely separate and distinct civil action for damages, and for
other relief. Such civil action shall proceed independently of any criminal prosecution (if the latter be instituted), and
may be proved by a preponderance of evidence.

The indemnity shall include moral damages. Exemplary damages may also be adjudicated.

The responsibility herein set forth is not demandable from a judge unless his act or omission constitutes a violation of the
Penal Code or other penal statute.

ADMINISTRATIVE CODE BOOK 1

Sec. 38. Liability of Superior Officers. –

(1) A public officer shall not be civilly liable for acts done in the performance of his official duties, unless there is a clear
showing of bad faith, malice or gross negligence.
 (2) Any public officer who, without just cause, neglects to perform a duty within a period fixed by law or regulation, or
within a reasonable period if none is fixed, shall be liable for damages to the private party concerned without prejudice to such
other liability as may be prescribed by law.

(3) A head of a department or a superior officer shall not be civilly liable for the wrongful acts, omissions of duty, negligence,
or misfeasance of his subordinates, unless he has actually authorized by written order the specific act or misconduct
complained of.

Sec. 39. Liability of Subordinate Officers. -No subordinate officer or employee shall be civilly liable for acts done by him in good
faith in the performance of his duties. However, he shall be liable for willful or negligent acts done by him which are contrary
to law, morals, public policy and good customs even if he acted under orders or instructions of his superiors.