G.R. No.

175256 August 23, 2012 IN VIEW OF THE FOREGOING, the

appeal is DISMISSED.
LILY LIM, Petitioner,
vs. SO ORDERED.4
KOU CO PING a.k.a. CHARLIE
CO, Respondent. On the other hand, Charlie Co’s (Co) Petition
for Review5 assails the April 10, 2007
x-----------------------x Decision6 of the Seventeenth Division in CA-
G.R. SP No. 93395 for ruling on the same
G.R. No. 179160 issue in the negative:

KOU CO PING a.k.a. CHARLIE We find no grave abuse of discretion

CO, Petitioner, committed by respondent judge. The elements
vs. of litis pendentiaand forum-shopping were not
LILY LIM, Respondent. met in this case.7

LEONARDO-DE CASTRO,* xxxx

PERLAS-BERNABE,** WHEREFORE, in view of the foregoing, the

DECISION
DEL CASTILLO, J.:
Is it forum shopping for a private complainant
to pursue a civil complaint for specific
performance and damages, while appealing
the judgment on the civil aspect of a criminal
case for estafa?
Before the Court are consolidated Petitions for
Review assailing the separate Decisions of the
Second and Seventeenth Divisions of the
Court of Appeals (CA) on the above issue.
Lily Lim’s (Lim) Petition for Review1 assails the
October 20, 2005 Resolution2 of the Second
Division in CA-G.R. CV No. 85138, which ruled
on the above issue in the affirmative:
Due to the filing of the said civil complaint (Civil
Case No. 5112396), Charlie Co filed the instant
motion to dismiss [Lily Lim’s] appeal, alleging
that in filing said civil case, Lily Lim violated the
rule against forum shopping as the elements
of litis pendentia are present.
This Court agrees.3
xxxx
instant petition is DENIED. This case
is REMANDED to the court of origin for further
proceedings.
SO ORDERED.8
Factual Antecedents
In February 1999, FR Cement Corporation
(FRCC), owner/operator of a cement
manufacturing plant, issued several withdrawal
authorities9 for the account of cement dealers
and traders, Fil-Cement Center and Tigerbilt.
These withdrawal authorities state the number
of bags that the dealer/trader paid for and can
withdraw from the plant. Each withdrawal
authority contained a provision that it is valid
for six months from its date of issuance, unless
revoked by FRCC Marketing Department.
Fil-Cement Center and Tigerbilt, through their
administrative manager, Gail Borja (Borja),
sold the withdrawal authorities covering 50,000
bags of cement to Co for the amount of ₱ 3.15
million or ₱ 63.00 per bag.10 On February 15,
1999, Co sold these withdrawal authorities to
Lim allegedly at the price of ₱ 64.00 per bag or
a total of ₱ 3.2 million.11
Using the withdrawal authorities, Lim withdrew
the cement bags from FRCC on a staggered
basis. She successfully withdrew 2,800 bags of
cement, and sold back some of the withdrawal
authorities, covering 10,000 bags, to Co.
Sometime in April 1999, FRCC did not allow
Lim to withdraw the remaining 37,200 bags
covered by the withdrawal authorities. Lim
clarified the matter with Co and Borja, who
explained that the plant implemented a price
increase and would only release the goods
once Lim pays for the price difference or
agrees to receive a lesser quantity of cement.
Lim objected and maintained that the
withdrawal authorities she bought were not
subject to price fluctuations. Lim sought legal
recourse after her demands for Co to resolve
the problem with the plant or for the return of
her money had failed.
The criminal case
An Information for Estafa through
Misappropriation or Conversion was filed
against Co before Branch 154 of the Regional
Trial Court (RTC) of Pasig City. The accusatory
portion thereof reads:
On or about between the months of February
and April 1999, in San Juan, Metro Manila and
within the jurisdiction of this Honorable Court,
the accused, with intent to defraud Lily Lim,
with grave abuse of confidence, with
unfaithfulness, received in trust from Lily Lim
cash money in the amount of ₱ 2,380,800.00
as payment for the 37,200 bags of cement,
under obligation to deliver the 37,200 bags of
cement to said Lily Lim, but far from complying
with his obligation, misappropriated, misapplied
and converted to his own personal use and
benefit the said amount of ₱ 2,300,800.00 [sic]
and despite demands, the accused failed and
refused to return said amount, to the damage
and prejudice of Lily Lim in the amount of ₱
2,380,800.00.
Contrary to Law.12
The private complainant, Lily Lim, participated
in the criminal proceedings to prove her
damages. She prayed for Co to return her
money amounting to ₱ 2,380,800.00, foregone
profits, and legal interest, and for an award of
moral and exemplary damages, as well as
attorney’s fees.13
On November 19, 2003, the RTC of Pasig City,
Branch 154, rendered its Order14 acquitting Co
of the estafa charge for insufficiency of
evidence. The criminal court’s Order reads:
The first and second elements of the crime of
estafa [with abuse of confidence under Article
315, paragraph 1(b)] for which the accused is
being charged and prosecuted were not
established by the prosecution’s evidence.
xxxx
In view of the absence of the essential
requisites of the crime of estafa for which the
accused is being charged and prosecuted, as
above discussed, the Court has no alternative
but to dismiss the case against the accused for
insufficiency of evidence.15
WHEREFORE, in view of the foregoing,
the Demurrer to Evidence is GRANTED, and
the accused is hereby ACQUITTED of the
crime of estafa charged against him under the
present information for insufficiency of
evidence.
Insofar as the civil liability of the accused is
concerned, however, set this case for the
reception of his evidence on the matter on
December 11, 2003 at 8:30 o’clock [sic] in the
morning.
SO ORDERED.16
After the trial on the civil aspect of the criminal
case, the Pasig City RTC also relieved Co of
civil liability to Lim in its December 1, 2004
Order.17 The dispositive portion of the Order
reads as follows:
WHEREFORE, premises considered, judgment
is hereby rendered holding the
accused CHARLIE COnot civilly liable to the
private complainant Lily Lim.
SO ORDERED.18
Lim sought a reconsideration of the above
Order, arguing that she has presented
preponderant evidence that Co committed
estafa against her.19
The trial court denied the motion in its
Order20 dated February 21, 2005.
On March 14, 2005, Lim filed her notice of
appeal21 on the civil aspect of the criminal
case. Her appeal was docketed as CA-G.R.
CV No. 85138 and raffled to the Second
Division of the CA.
The civil action for specific performance
On April 19, 2005, Lim filed a complaint for
specific performance and damages before
Branch 21 of the RTC of Manila. The
defendants in the civil case were Co and all
other parties to the withdrawal authorities,
Tigerbilt, Fil-Cement Center, FRCC, Southeast
Asia Cement, and La Farge Corporation. The
complaint, docketed as Civil Case No. 05-
112396, asserted two causes of action: breach
of contract and abuse of rights. Her allegations
read:
ALLEGATIONS COMMON
TO ALL CAUSES OF ACTION
xxxx
23. Charlie Co obligated himself to deliver to
Lily Lim 50,000 bags of cement of ₱ 64.00 per
bag on an x-plant basis within 3 months from
the date of their transaction, i.e. February 15,
1999. Pursuant to said agreement, Lily Lim
paid Charlie Co ₱ 3.2 Million while Charlie Co
delivered to Lily Lim FR Cement Withdrawal
Authorities representing 50,000 bags of
cement.
24. The withdrawal authorities issued by FR
Cement Corp. allowed the assignee or holder
thereof to withdraw within a six-month period
from date a certain amount of cement indicated
therein. The Withdrawal Authorities given to
Lily Lim were dated either 3 February 1999 or
23 February 1999. The Withdrawal Authorities
were first issued to Tigerbilt and Fil-Cement
Center which in turn assigned them to Charlie
Co. Charlie Co then assigned the Withdrawal
Authorities to Lily Lim on February 15, 1999.
Through these series of assignments, Lily Lim
acquired all the rights (rights to withdraw
cement) granted in said Withdrawal Authorities.
25. That these Withdrawal Authorities are valid
is established by the fact that FR Cement
earlier allowed Lily Lim to withdraw 2,800 bags
of cement on the basis thereof.
26. However, sometime 19 April 1999 (within
the three (3)-month period agreed upon by
Charlie Co and Lily Lim and certainly within the
six (6)-month period indicated in the
Withdrawal Authorities issued by FR Cement
Corp.), Lily Lim attempted but failed to
withdraw the remaining bags of cement on
account of FR Cement’s unjustified refusal to
honor the Withdrawal Authorities. x x x
xxxx
FIRST CAUSE OF ACTION:
BREACH OF CONTRACT
30. Charlie Co committed and is therefore
liable to deliver to Lily Lim 37,200 bags of
cement. If he cannot, then he must pay her the
current fair market value thereof.
31. FR Cement Corporation is also liable to
deliver to Lily Lim the amount of cement as
indicated in the Withdrawal Authorities it
issued. xxx FR Cement Corporation has no
right to impose price adjustments as a
qualification for honoring the Withdrawal
Authorities.
32. Fil-Cement Center, Tigerbilt and Gail Borja
as the original holders/ assignees of the
Withdrawal Authorities repeatedly assured Lily
Lim that the same were valid and would be
honored. They are liable to make good on their
assurances.
SECOND CAUSE OF ACTION:
ABUSE OF RIGHTS AND UNJUST
ENRICHMENT
33. Charlie Co’s acts of falsely representing to
Lily Lim that she may be able to withdraw the
cement from FR Cement Corp. caused Lily Lim
to incur expenses and losses. Such act was
made without justice, without giving Lily Lim
what is due her and without observing honesty
and good faith, all violative of the law, more
specifically Articles 19 and 20 of the Civil
Code. Such willful act was also made by
Charlie Co in a manner contrary to morals,
good customs or public policy, in violation of
Article 21 of the Civil Code.
34. FR Cement Corporation’s unjust refusal to
honor the Withdrawal Authorities they issued
also caused damage to Lily Lim. Further, FR
Cement Corporation’s act of withholding the
37,200 bags of cement despite earning income
therefor constitutes as an unjust enrichment
because FR Cement Corporation acquired
income through an act or performance by
another or any other means at the expense of
another without just or legal ground in violation
of Article 22 of the Civil Code.
35. Fil-Cement Center, Tigerbilt and Gail
Borja’s false assurances that Lily Lim would be
able to withdraw the remaining 37,200 bags of
cement caused Lily Lim to incur expenses and
losses. x x x Moreover, Fil-Cement Center
admitted receiving payment for said amount of
cement, thus they are deemed to have come
into possession of money at the expense of
Lily Lim without just or legal ground, in violation
of Article 22 of the Civil Code.
THIRD CAUSE OF ACTION:
MORAL AND EXEMPLARY DAMAGES and
ATTORNEY’S FEES AND COSTS OF SUIT22
Lim prayed for Co to honor his contractual
commitments either by delivering the 37,200
bags of cement, making arrangements with
FRCC to allow Lim to withdraw the cement, or
to pay for their value. She likewise asked that
the defendants be held solidarily liable to her
for the damages she incurred in her failed
attempts to withdraw the cement and for the
damages they inflicted on her as a result of
their abuse of their rights.23
Motions to dismiss both actions
In reaction to the filing of the civil complaint for
specific performance and damages, Co filed
motions to dismiss the said civil case24 and
Lim’s appeal in the civil aspect of the estafa
case or CA-G.R. CV No. 85138.25 He
maintained that the two actions raise the same
issue, which is Co’s liability to Lim for her
inability to withdraw the bags of cement,26 and
should be dismissed on the ground of lis
pendens and forum shopping.
Ruling of the Court of Appeals Second
Division in CA-G.R CV No. 85138
The appellate court (Second Division)
favorably resolved Co’s motion and dismissed
Lim’s appeal from the civil aspect of the estafa
case. In its Resolution dated October 20, 2005,
the CA Second Division held that the parties,
causes of action, and reliefs prayed for in Lim’s
appeal and in her civil complaint are identical.
Both actions seek the same relief, which is the
payment of the value of the 37,200 bags of
cement.27 Thus, the CA Second Division
dismissed Lim’s appeal for forum
shopping.28 The CA denied29 Lim’s motion for
reconsideration.30
Lim filed the instant petition for review, which
was docketed as G.R. No. 175256.
Ruling of the Manila Regional Trial Court in
Civil Case No. 05-112396
Meanwhile, the Manila RTC denied Co’s
Motion to Dismiss in an Order31 dated
December 6, 2005. The Manila RTC held that
there was no forum shopping because the
causes of action invoked in the two cases are
different. It observed that the civil complaint
before it is based on an obligation arising from
contract and quasi-delict, whereas the civil
liability involved in the appeal of the criminal
case arose from a felony.
Co filed a petition for certiorari,32 docketed as
CA-G.R. SP No. 93395, before the appellate
court. He prayed for the nullification of the
Manila RTC’s Order in Civil Case No. 05-
112396 for having been issued with grave
abuse of discretion.33
Ruling of the Court of Appeals Seventeenth
Division in CA-G.R. SP No. 93395
The CA Seventeenth Division denied Co’s
petition and remanded the civil complaint to the
trial court for further proceedings. The CA
Seventeenth Division agreed with the Manila
RTC that the elements of litis pendentia and
forum shopping are not met in the two
proceedings because they do not share the
same cause of action.34
The CA denied35 Co’s motion for
reconsideration.36
Co filed the instant Petition for Review, which
was docketed as G.R. No. 179160.
Upon Co’s motion,37 the Court resolved to
consolidate the two petitions.38
Kou Co Ping’s arguments
Co maintains that Lim is guilty of forum
shopping because she is asserting only one
cause of action in CA-G.R. CV No. 85138 (the
appeal from the civil aspect of Criminal Case
No. 116377) and in Civil Case No. 05-112396,
which is for Co’s violation of her right to receive
37,200 bags of cement. Likewise, the reliefs
sought in both cases are the same, that is, for
Co to deliver the 37,200 bags of cement or its
value to Lim. That Lim utilized different
methods of presenting her case – a criminal
action for estafa and a civil complaint for
specific performance and damages – should
not detract from the fact that she is attempting
to litigate the same cause of action twice.39
Co makes light of the distinction between civil
liability ex contractu and ex delicto. According
to him, granting that the two civil liabilities are
independent of each other, nevertheless, the
two cases arising from them would have to be
decided using the same evidence and going
over the same set of facts. Thus, any judgment
rendered in one of these cases will constitute
res judicata on the other.40
In G.R. No. 179160, Co prays for the
annulment of the CA Decision and Resolution
in CA-G.R. SP No. 93395, for a declaration
that Lim is guilty of forum shopping, and for the
dismissal of Civil Case No. 05-112396.41
In G.R. No. 175256, Co prays for the
affirmation of the CA Decision in CA-G.R. CV
No. 85138 (which dismissed Lim’s appeal from
the trial court’s decision in Criminal Case No.
116377).42
Lily Lim’s arguments
Lim admits that the two proceedings involve
substantially the same set of facts because
they arose from only one transaction.43 She is
quick to add, however, that a single act or
omission does not always make a single cause
of action.44 It can possibly give rise to two
separate civil liabilities on the part of the
offender – (1) ex delicto or civil liability arising
from crimes, and (2) independent civil liabilities
or those arising from contracts or intentional
torts. The only caveat provided in Article 2177
of the Civil Code is that the offended party
cannot recover damages twice for the same
act or omission.45 Because the law allows her
two independent causes of action, Lim
contends that it is not forum shopping to
pursue them.46
She then explains the separate and distinct
causes of action involved in the two cases. Her
cause of action in CA-G.R CV No. 85138 is
based on the crime of estafa. Co violated Lim’s
right to be protected against swindling. He
represented to Lim that she can withdraw
37,200 bags of cement using the authorities
she bought from him. This is a fraudulent
representation because Co knew, at the time
that they entered into the contract, that he
could not deliver what he promised.47 On the
other hand, Lim’s cause of action in Civil Case
No. 05-112396 is based on contract. Co
violated Lim’s rights as a buyer in a contract of
sale. Co received payment for the 37,200 bags
of cement but did not deliver the goods that
were the subject of the sale.48
In G.R. No. 179160, Lim prays for the denial of
Co’s petition.49 In G.R. No. 175256, she prays
for the reversal of the CA Decision in CA-G.R.
CV No. 85138, for a declaration that she is not
guilty of forum shopping, and for the
reinstatement of her appeal in Criminal Case
No. 116377 to the CA.50
Issue
Did Lim commit forum shopping in filing the
civil case for specific performance and
damages during the pendency of her appeal on
the civil aspect of the criminal case for estafa?
Our Ruling
A single act or omission that causes damage to
an offended party may give rise to two
separate civil liabilities on the part of the
offender51 - (1) civil liability ex delicto, that is,
civil liability arising from the criminal offense
under Article 100 of the Revised Penal
Code,52 and (2) independent civil liability, that
is, civil liability that may be pursued
independently of the criminal proceedings. The
independent civil liability may be based on "an
obligation not arising from the act or omission
complained of as a felony," as provided in
Article 31 of the Civil Code (such as for breach
of contract or for tort53 ). It may also be based
on an act or omission that may constitute
felony but, nevertheless, treated independently
from the criminal action by specific provision of
Article 33 of the Civil Code ("in cases of
defamation, fraud and physical injuries").
The civil liability arising from the offense or ex
delicto is based on the acts or omissions that
constitute the criminal offense; hence, its trial is
inherently intertwined with the criminal action.
For this reason, the civil liability ex delicto is
impliedly instituted with the criminal offense.54 If
the action for the civil liability ex delicto is
instituted prior to or subsequent to the filing of
the criminal action, its proceedings are
suspended until the final outcome of the
criminal action.55 The civil liability based on
delict is extinguished when the court hearing
the criminal action declares that "the act or
omission from which the civil liability may arise
did not exist."56
On the other hand, the independent civil
liabilities are separate from the criminal action
and may be pursued independently, as
provided in Articles 31 and 33 of the Civil
Code, which state that:
ART. 31. When the civil action is based on an
obligation not arising from the act or omission
complained of as a felony, such civil action
may proceed independently of the criminal
proceedings and regardless of the result of the
latter. (Emphasis supplied.)
ART. 33. In cases of defamation, fraud, and
physical injuries a civil action for damages,
entirely separate and distinct from the criminal
action, may be brought by the injured party.
Such civil action shall proceed independently
of the criminal prosecution, and shall require
only a preponderance of evidence. (Emphasis
supplied.)
Because of the distinct and independent nature
of the two kinds of civil liabilities, jurisprudence
holds that the offended party may pursue the
two types of civil liabilities simultaneously or
cumulatively, without offending the rules on
forum shopping, litis pendentia, or res
judicata.57 As explained in Cancio, Jr. v. Isip:58
One of the elements of res judicata is identity
of causes of action. In the instant case, it must
be stressed that the action filed by petitioner is
an independent civil action, which remains
separate and distinct from any criminal
prosecution based on the same act. Not being
deemed instituted in the criminal action based
on culpa criminal, a ruling on the culpability of
the offender will have no bearing on said
independent civil action based on an entirely
different cause of action, i.e., culpa contractual.
In the same vein, the filing of the collection
case after the dismissal of the estafa cases
against the offender did not amount to forum-
shopping. The essence of forum shopping is
the filing of multiple suits involving the same
parties for the same cause of action, either
simultaneously or successively, to secure a
favorable judgment. Although the cases filed
by [the offended party] arose from the same
act or omission of [the offender], they are,
however, based on different causes of action.
The criminal cases for estafa are based on
culpa criminal while the civil action for
collection is anchored on culpa contractual.
Moreover, there can be no forum-shopping in
the instant case because the law expressly
allows the filing of a separate civil action which
can proceed independently of the criminal
action.59
Since civil liabilities arising from felonies and
those arising from other sources of obligations
are authorized by law to proceed
independently of each other, the resolution of
the present issue hinges on whether the two
cases herein involve different kinds of civil
obligations such that they can proceed
independently of each other. The answer is in
the affirmative.
The first action is clearly a civil action ex
delicto, it having been instituted together with
the criminal action.60
On the other hand, the second action, judging
by the allegations contained in the
complaint,61 is a civil action arising from a
contractual obligation and for tortious conduct
(abuse of rights). In her civil complaint, Lim
basically alleges that she entered into a sale
contract with Co under the following terms: that
she bought 37,200 bags of cement at the rate
of ₱ 64.00 per bag from Co; that, after full
payment, Co delivered to her the withdrawal
authorities issued by FRCC corresponding to
these bags of cement; that these withdrawal
authorities will be honored by FRCC for six
months from the dates written thereon. Lim
then maintains that the defendants breached
their contractual obligations to her under the
sale contract and under the withdrawal
authorities; that Co and his co-defendants
wanted her to pay more for each bag of
cement, contrary to their agreement to fix the
price at ₱ 64.00 per bag and to the wording of
the withdrawal authorities; that FRCC did not
honor the terms of the withdrawal authorities it
issued; and that Co did not comply with his
obligation under the sale contract to deliver the
37,200 bags of cement to Lim. From the
foregoing allegations, it is evident that Lim
seeks to enforce the defendants’ contractual
obligations, given that she has already
performed her obligations. She prays that the
defendants either honor their part of the
contract or pay for the damages that their
breach has caused her.
Lim also includes allegations that the actions of
the defendants were committed in such
manner as to cause damage to Lim without
regard for morals, good customs and public
policy. These allegations, if proven, would
constitute tortious conduct (abuse of rights
under the Human Relations provisions of the
Civil Code).
Thus, Civil Case No. 05-112396 involves only
the obligations arising from contract and from
tort, whereas the appeal in the estafa case
involves only the civil obligations of Co arising
from the offense charged. They present
different causes of action, which under the law,
are considered "separate, distinct, and
independent"62 from each other. Both cases
can proceed to their final adjudication, subject
to the prohibition on double recovery under
Article 2177 of the Civil Code.63
WHEREFORE, premises considered, Lily Lim’s
Petition in G.R. No. 175256 is GRANTED. The
assailed October 20, 2005 Resolution of the
Second Division of the Court of Appeals in CA-
G.R. CV No. 85138 is REVERSED and SET
ASIDE. Lily Lim’s appeal in CA-G.R. CV No.
85138 is ordered REINSTATED and the Court
of Appeals is DIRECTED to RESOLVE the
same with DELIBERATE DISPATCH.
Charlie Co’s Petition G.R. No. 179160
is DENIED. The assailed April 10, 2007
Decision of the Seventeenth Division of the
Court of Appeals in CA-G.R. SP No. 93395
is AFFIRMED in toto.
SO ORDERED.
ERMELINDA C. MANALOTO, AURORA
J. CIFRA, FLORDELIZA J. ARCILLA,
LOURDES J. CATALAN, ETHELINDA J.
HOLT, BIENVENIDO R. JONGCO,
ARTEMIO R. JONGCO, JR. and JOEL
JONGCO,
Petitioners,
- versus -
ISMAEL VELOSO III,
Respondent.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - -x
DECISION
LEONARDO-DE CASTRO, J.:
Before Us is a Petition for Review
[1]
on Certiorari of the Decision dated January 31,
2006 of the Court Appeals in CA-G.R. CV No.
82610, which affirmed with modification the
[2]
Resolution dated September 2, 2003 of Branch
227 of the Regional Trial Court (RTC-Branch 227)
of Quezon City in Civil Case No. Q-02-48341.
We partly reproduce below the facts of the
case as culled by the Court of Appeals from the
records:
This case is an off-shoot of
an unlawful detainer case filed by
[herein petitioners] Ermelinda C.
Manaloto, Aurora J. Cifra, Flordeliza
J. Arcilla, Lourdes J. Catalan,
Ethelinda J. Holt, Bienvenido R.
Jongco, Artemio R. Jongco, Jr. and
Joel Jongco against
respondent]. In said complaint for
G.R. No. 171365
unlawful detainer, it was alleged that
they are the lessors of a residential
house located at No. 42 Big
Present: Horseshoe Drive, Horseshoe
Village, Quezon City [subject
CORONA, C.J., property] which was leased to
Chairperson, [respondent] at a monthly rental
VELASCO, JR., of P17,000.00. The action was
NACHURA,* instituted on the ground of
LEONARDO-DE [respondents]
CASTRO, and failure to pay rentals
PEREZ, JJ. from May 23, 1997 to December 22,
1998 despite repeated
demands. [Respondent] denied the
Promulgated: non-payment of rentals and alleged
that he made an advance payment
October 6, 2010
of P825,000.00 when he paid for the
repairs done on the leased property.
After trial, the Metropolitan
Trial Court (MeTC) decided in favor
of [petitioners] by ordering
[respondent] to (a) vacate the
premises at No. 42 Big Horseshoe
Drive, Horseshoe Village, Quezon
City; (b) pay [petitioners] the sum
of P306,000.00 corresponding to the
rentals due from May 23, 1997 to
November 22, 1998, and the sum
of P17,000.00 a month thereafter
until [respondent] vacates the
premises; and (c) pay [petitioners]
the sum of P5,000.00 as attorneys
fees.
On appeal to the Regional
Trial Court (RTC) [Branch 88,
Quezon City], the MeTC decision
was reversed. [Respondent] was
ordered to pay arrearages from May
23, 1997 up to the date of the
decision but he was also given an
option to choose between staying in
the leased property or vacating the
same, subject to the reimbursement
by [petitioners] of one-half of the
value of the improvements which it
found to be in the amount
of P120,000.00. [Respondent] was
also given the right to remove said
improvements pursuant to Article
1678 of the Civil Code, should
[petitioners] refuse to
pay P60,000.00.
[herein When both parties moved for
the reconsideration of the RTC
 decision, the RTC issued petitioners] and in favor of the [herein
an Order dated February 23, 2001 respondent] by
modifying its previous ruling by
increasing the value of the 1. Ordering [petitioners] to pay [respondent]
improvements from P120,000.00 the following amounts:
to P800,000.00.
a) P1,500,000.00 as moral damages and
After successive appeals to consequential damages;
the Court of Appeals and the
Supreme Court, the decision of the b) P500,000.00 as exemplary damages;
RTC dated November 29, 2000
which reversed the decision of the c) P425,000.00 representing the difference
MeTC, became final and of the expenses of the improvements
executory.[3] of P825,000.00 and P400,000.00 pursuant
to Art. 1678 of the Civil Code;

d) P594,000.00 representing interest for

Whilst respondents appeal of the three (3) years from 1998 to 2000 on
Metropolitan Trial Court (MeTC) judgment in the the P825,000.00 advanced by the
[respondent] at the rate of 24% per annum;
unlawful detainer case was pending before the
e) P250,000.00 as compensation for the
RTC-Branch 88, respondent filed before the RTC-
[respondents] labor and efforts in
Branch 227 on November 26, 2002 a Complaint for overseeing and attending the needs of
contractors the repair/renovation of the
Breach of Contract and Damages[4] against the leased premises;
petitioners, docketed as Civil Case No. Q-02-
f) P250,000.00, plus 20% of all recoveries
48341. The said complaint alleged two causes of from [petitioners] and P2,500.00 per hearing
as attorneys fees;
action. The first cause of action was for damages
because the respondent supposedly suffered g) Cost of suit.

embarrassment and humiliation when petitioners [Respondent] further prays for such other
reliefs and remedies which are just and
distributed copies of the above-mentioned MeTC
equitable under the premises.[5]
decision in the unlawful detainer case to the
The petitioners filed an Omnibus
homeowners of Horseshoe Village while Motion[6] on February 18, 2003 praying for,
respondents appeal was still pending before the among other reliefs, the dismissal of
respondents complaint in Civil Case No. Q-
Quezon City RTC-Branch 88. The second cause of 02-48341.Petitioners argued that
respondent had no cause of action against
action was for breach of contract since petitioners, them because the MeTC decision in the
as lessors, failed to make continuing repairs on the unlawful detainer case was a matter of
public record and its disclosure to the public
subject property to preserve and keep it violated no law or any legal right of the
respondent. Moreover, petitioners averred
tenantable. Thus, respondent sought the following
that the respondents present Complaint for
from the court a quo: Breach of Contract and Damages was
barred by prior judgment since it was a
mere replication of respondents Answer
PRAYER with Compulsory Counterclaim in the
unlawful detainer case before the
WHEREFORE, premises considered, it is MeTC. The said unlawful detainer case was
respectfully prayed that after hearing the already judicially decided with finality.
court render a decision against the [herein

On September 2, 2003, the RTC-Branch 227
issued a Resolution dismissing respondents
complaint in Civil Case No. Q-02-48341 for
violating the rule against splitting of cause of action,
lack of jurisdiction, and failure to disclose the
pendency of a related case. The RTC-Branch 227
adjudged that Civil Case No. Q-02-48341 involved
the same facts, parties, and causes of action as
those in the unlawful detainer case, and the MeTC
had already properly taken cognizance of the latter
case.
Respondent received a copy of the RTC-Branch
227 decision in Civil Case No. Q-02-48341 on
September 26, 2003. He filed a Motion for
Reconsideration[7] of said judgment on October 10,
2003, which RTC-Branch 227 denied in an
Order[8] dated December 30, 2003.
Respondent received a copy of the RTC-
Branch 227 order denying his Motion for
Reconsideration on February 20, 2004, and he filed
his Notice of Appeal[9] on March 1, 2004. However,
the RTC-Branch 227, in an Order[10] dated March
23, 2004, dismissed respondents appeal for being
filed out of time.
Respondent received a copy of the RTC-
Branch 27 order dismissing his appeal on April 30,
2004 and he filed a Motion for Reconsideration[11] of
the same on May 3, 2004. The RTC-Branch 227, in
another Order[12] dated May 31, 2004, granted
respondents latest motion because it was
convinced that it is but appropriate and fair to both
parties that this matter of whether or not the Appeal
was filed on time, be resolved by the appellate
court rather than by this Court. The RTC-Branch
227 then ordered that the records of the case be
forwarded as soon as possible to the Court of
Appeals for further proceedings.
The Court of Appeals, in a
Resolution[13] dated February 8, 2005, resolved to
give due course to respondents appeal. Said
appeal was docketed as CA-G.R. CV No. 82610.
On January 31, 2006, the Court of Appeals
rendered its Decision in CA-G.R. CV No.
82610. The Court of Appeals fully agreed with the
RTC-Branch 227 in dismissing respondents second
cause of action (i.e., breach of contract) in Civil
Case No. Q-02-48341. The appellate court,
however, held that RTC-Branch 227 should have
proceeded with the trial on the merits of the first
cause of action (i.e., damages) in Civil Case No. Q-
02-48341, because [a]lthough [herein respondent]
may have stated the same factual antecedents that
transpired in the unlawful detainer case, such
allegations were necessary to give an overview of
the facts leading to the institution of another case
between the parties before the RTC acting in its
original jurisdiction.[14]
The Court of Appeals then went on to find
that petitioners were indeed liable to respondent for
damages:
No doubt, distributing the copies was
primarily intended to embarrass [herein
respondent] in the community he mingled
in. We are not unmindful of the fact that
court decisions are public documents and
the general public is allowed access thereto
to make inquiries thereon or to secure a
copy thereof. Nevertheless, under the
circumstances of this case, although court
decisions are public documents, distribution
of the same during the pendency of an
appeal was clearly intended to cause
[respondent] some form of harassment
and/or humiliation so that [respondent]
would be ostracized by his neighbors. The
appeal may have delayed the attainment of
finality of the determination of the rights of
the parties and the execution in the unlawful
detainer case but it did not justify [herein
petitioners] pre-emption of the outcome of
the appeal. By distributing copies of the
MeTC decision, [petitioners] appeared to
have assumed that the MeTC decision
would simply be affirmed and therefore they
tried to cause the early ouster of
[respondent] thinking that a humiliated
[respondent] would scurry out of the leased
premises.Clearly, there was evident bad
faith intended to mock [respondents] right to
appeal which is a statutory remedy to
correct errors which might have been
committed by the lower court.
Thus, moral damages may be awarded
since [petitioners] acted in bad faith. Bad
faith does not simply connote bad judgment
or negligence, it imports a dishonest
purpose or some moral obliquity and
conscious doing of a wrong, a breach of
known duty through some motive or interest
or ill will that partakes of the nature of
fraud. However, an award of moral
damages would require certain conditions to
be met, to wit: (1) first, there must be an
injury, whether physical, mental or
psychological, clearly sustained by the
claimant; (2) second, there must be
culpable act or omission factually
established; (3) third, the wrongful act or
omission of the defendant is the proximate
cause of the injury sustained by the
claimant; and (4) fourth, the award of
damages is predicated on any of the cases
stated in Article 2219 of the Civil Code.
But it must again be stressed that moral
damages are emphatically not intended to
enrich a plaintiff at the expense of the
defendant. When awarded, moral damages
must not be palpably and scandalously
excessive as to indicate that it was the
result of passion, prejudice or corruption on
the part of the trial court judge. For this
reason, this Court finds an award
of P30,000.00 moral damages sufficient
under the circumstances.
On the other hand, to warrant the award of
exemplary damages, the wrongful act must
be accompanied by bad faith, and an award
of damages would be allowed only if the
guilty party acted in a wanton, fraudulent,
reckless or malevolent manner. Accordingly,
exemplary damages in the amount
of P10,000.00 is appropriate.[15]
In the end, the Court of Appeals decreed:
WHEREFORE, the decision of the Regional
Trial Court is AFFIRMED with the
MODIFICATION that the case is dismissed
only as to the second cause of action. As to
the first cause of action, [herein petitioners]
are ordered to pay [herein respondent]
moral damages of P30,000.00 and
[16]
exemplary damages of P10,000.00.
Hence, the instant Petition for Review.
Petitioners assert that respondents appeal
of the RTC-Branch 227 Resolution dated
September 2, 2003, which dismissed the latters
complaint in Civil Case No. Q-02-48341, was filed
out of time. Respondent received a copy of the said
resolution on September 26, 2003, and he only
had 15 days from such date to file his appeal, or
until October 11, 2003. Respondent, instead, filed
a Motion for Reconsideration of the resolution
on October 10, 2003, which left him with only one
more day to file his appeal. The RTC-Branch 227
subsequently denied respondents Motion for
Reconsideration in an Order dated December 30,
2003, which the respondent received on February
20, 2004.Respondent only had until the following
day, February 21, 2004, to file the
appeal. However, respondent filed his Notice of
Appeal only on March 1, 2004. Hence, petitioners
conclude that the dismissal of respondents
complaint in Civil Case No. Q-02-48341 already
attained finality.
Petitioners argue in the alternative that the
award of damages in respondents favor has no
factual and legal bases. They contend that the
Court of Appeals erred in awarding moral and
exemplary damages to respondent based on the
bare and unproven allegations in the latters
complaint and without the benefit of any hearing or
trial. While the appellate court declared that RTC-
Branch 227 should have proceeded with the trial on
the merits involving the action for damages, it
surprisingly went ahead and ruled on petitioners
liability for said damages even without trial. Even
assuming for the sake of argument that
respondents allegations in his complaint are true,
he still has no cause of action for damages against
petitioners, for the disclosure of a court decision,
which is part of public record, did not cause any
legal and compensable injury to respondent.
Respondent, on the other hand, maintains
that his appeal of the September 2, 2003
Resolution of the RTC-Branch 227 to the Court of
Appeals was timely filed and that the same was
aptly given due course. In addition, respondent
asserts that the appellate court was correct in
holding petitioners liable for damages even without
any hearing or trial since petitioners, in filing their
omnibus motion praying for the dismissal of
respondents complaint on the ground of no cause
of action, were deemed to have hypothetically
admitted as true the allegations in said complaint.
The petition is partly meritorious.
We note, at the outset, that the propriety of
the dismissal by the RTC-Branch 227 of
respondents second cause of action against
petitioners (e.g., for breach of contract) was no
longer disputed by the parties. Thus, the present
appeal pertains only to respondents first cause of
action (e.g., for damages), and in connection
therewith, we are called upon to resolve the
following issues: (1) whether respondent timely filed
his appeal of the Resolution dated September 2,
2003 of the RTC-Branch 227 before the Court of
Appeals; and (2) whether respondent is entitled to
the award of moral and exemplary damages.
We answer the first issue on the timeliness
of respondents appeal affirmatively.
Jurisprudence has settled the fresh period
rule, according to which, an ordinary appeal from
the RTC to the Court of Appeals, under Section 3 of
Rule 41 of the Rules of Court, shall be taken within
fifteen (15) days either from receipt of the original
judgment of the trial court or from receipt of the
final order of the trial court dismissing or denying
the motion for new trial or motion for
reconsideration. In Sumiran v. Damaso,[17] we
presented a survey of the cases applying the fresh
period rule:

As early as 2005, the Court
categorically declared in Neypes v. Court
of Appeals that by virtue of the power of
the Supreme Court to amend, repeal and
create new procedural rules in all courts, the
Court is allowing a fresh period of 15 days
within which to file a notice of appeal in
the RTC, counted from receipt of the
order dismissing or denying a motion for
new trial or motion for reconsideration.
This would standardize the appeal periods
provided in the Rules and do away with the
confusion as to when the 15-day appeal
period should be counted. Thus, the Court
stated:
To recapitulate, a party-litigant
may either file his notice of appeal
within 15 days from receipt of the
Regional Trial Court's decision or
file it within 15 days from receipt
of the order (the "final order")
denying his motion for new trial
or motion for reconsideration.
Obviously, the new 15-day period
may be availed of only if either
motion is filed; otherwise, the
decision becomes final and
executory after the lapse of the
original appeal period provided in
Rule 41, Section 3.
The foregoing ruling of the Court was
reiterated in Makati Insurance Co., Inc. v.
Reyes, to wit:
Propitious to petitioner is Neypes v. Court of
Appeals, promulgated on 14 September
2005 while the present Petition was already
pending before us. x x x.
xxxx
With the advent of the "fresh
period rule" parties who availed
themselves of the remedy of
motion for reconsideration are
now allowed to file a notice of
appeal within fifteen days from
the denial of that motion.
The "fresh period rule" is not
inconsistent with Rule 41, Section
3 of the Revised Rules of Court
which states that the appeal shall be
taken "within fifteen (15) days from
notice of judgment or final order
appealed from." The use of the
disjunctive word "or" signifies
disassociation and independence of
one thing from another. It should, as
a rule, be construed in the sense
which it ordinarily implies.
Hence, the use of "or" in the
above provision supposes that
the notice of appeal may be filed
within 15 days from the notice of
judgment or within 15 days from
notice of the "final order," x x x.
xxxx
The "fresh period rule" finally
eradicates the confusion as to when
the 15-day appeal period should be
counted from receipt of notice of
judgment or from receipt of notice of
"final order" appealed from.
Taking our bearings from Neypes,
in Sumaway v. Urban Bank, Inc., we
set aside the denial of a notice of
appeal which was purportedly filed
five days late. With the fresh period
rule, the 15-day period within which
to file the notice of appeal was
counted from notice of the denial of
the therein petitioner's motion for
reconsideration.
We followed suit in Elbia v. Ceniza,
wherein we applied the principle
granting a fresh period of 15 days
within which to file the notice of
appeal, counted from receipt of the
order dismissing a motion for new
trial or motion for reconsideration or
any final order or resolution.
Thereafter, in First Aqua Sugar
Traders, Inc. v. Bank of the
Philippine Islands, we held that a
party-litigant may now file his notice
of appeal either within fifteen days
from receipt of the original decision
or within fifteen days from the receipt
of the order denying the motion for
reconsideration.
In De los Santos v. Vda. de
Mangubat, we applied the same
principle of "fresh period rule,"
expostulating that procedural law
refers to the adjective law which
prescribes rules and forms of In the case before us, respondent received
procedure in order that courts may a copy of the Resolution dated September 2, 2003
be able to administer justice.
Procedural laws do not come within of the RTC-Branch 227 dismissing his complaint in
the legal conception of a retroactive
Civil Case No. Q-02-48341 on September 26,
law, or the general rule against the
retroactive operation of statutes. The 2003. Fourteen days thereafter, on October 10,
"fresh period rule" is irrefragably
procedural, prescribing the manner 2003, respondent filed a Motion for
in which the appropriate period for Reconsideration of said resolution. The RTC-
appeal is to be computed or
determined and, therefore, can be Branch 227 denied respondents Motion for
made applicable to actions pending
upon its effectivity, such as the Reconsideration in an Order dated December 30,
present case, without danger of 2003, which the respondent received on February
violating anyone else's
rights.[18] (Emphases supplied.) 20, 2004. On March 1, 2004, just after nine
daysfrom receipt of the order denying his Motion
Also in Sumiran, we recognized the
retroactive application of the fresh for Reconsideration, respondent already filed his
period rule to cases pending and
undetermined upon its effectivity: Notice of Appeal. Clearly, under the fresh period
rule, respondent was able to file his appeal well-
The retroactivity of the Neypes rule in cases within the prescriptive period of 15 days, and the
where the period for appeal had lapsed prior
to the date of promulgation of Neypes Court of Appeals did not err in giving due course to
on September 14, 2005, was clearly
explained by the Court in Fil-Estate said appeal in CA-G.R. CV No. 82610.
Properties, Inc. v. Homena-
Valencia, stating thus:
We likewise agree with the Court of Appeals
The determinative issue is whether
that the RTC-Branch 227 should not have
the "fresh period" rule announced in
Neypes could retroactively apply in dismissed respondents complaint for damages on
cases where the period for appeal
had lapsed prior to 14 September the ground of failure to state a cause of action.
2005 when Neypes was
promulgated. That question may
be answered with the guidance of According to Rule 2, Section 2 of the Rules
the general rule that procedural
laws may be given retroactive of Court, a cause of action is the act or omission by
effect to actions pending and which a party violates a right of another.
undetermined at the time of their
passage, there being no vested
rights in the rules of
When the ground for dismissal is that the
procedure. Amendments to
procedural rules are procedural or complaint states no cause of action, such fact can
remedial in character as they do not
create new or remove vested rights, be determined only from the facts alleged in the
but only operate in furtherance of the complaint and from no other, and the court cannot
remedy or confirmation of rights
already existing.[19] (Emphases consider other matters aliunde. The test, therefore,
supplied.)
is whether, assuming the allegations of fact in the

complaint to be true, a valid judgment could be
rendered in accordance with the prayer stated
therein.[20]
Respondent made the following allegations
in support of his claim for damages against
petitioners:
FIRST CAUSE OF ACTION
28. After the promulgation of
the Metropolitan Trial Court of its
Decision dated August 3, 1999,
ordering the [herein respondent] and
all person claiming rights under him
to
(a) Vacate the leased premises;
(b) pay the [herein petitioners] the
sum of P306,000.00 as unpaid rentals from
May 23, 1997 to November 22, 1998; and
(c) pay the sum of P5,000.00 as
attorneys fees;
But while said Decision was still pending
appeal with the Regional Trial Court, the
[petitioners], through [petitioner] Manaloto,
already distributed copies of said Decision
to some of the homeowners of Horseshoe
Village, who personally know the
[respondent]. This act is a direct assault or
character assassination on the part of the
[respondent] because as stated in the said
decision, [respondent] has been staying in
the premises but did not or refused to pay
his monthly rentals for a long period of time
when in truth and in fact was untrue.
29. That from the time the said decision was
distributed to said members homeowners,
the [respondent] became the subject of
conversation or talk of the town and by
virtue of which [respondents] good name
within the community or society where he
belongs was greatly damaged; his
reputation was besmirched; [respondent]
suffered sleepless night and serious
anxiety.[Respondent], who is the grandson
of the late Senator Jose Veloso and
Congressman Ismael Veloso, was deprived
of political career and to start with was to
run as candidate for Barangay Chairman
within their area which was being offered to
him by the homeowners but this offer has
started to fade and ultimately totally
vanished after the distribution of said
Decision. Damages to his good names and
reputations and other damages which he
suffered as a consequence thereof, may be
reasonably compensated for at
least P1,500,000.00 as moral and
consequential damages.
30. In order to deter [petitioners] and others
from doing as abovementioned, [petitioners]
should likewise be assessed exemplary
damages in the amount of P500,000.00.[21]
A cause of action (for damages) exists if the
following elements are present: (1) a right in
favor of the plaintiff by whatever means and
under whatever law it arises or is created;
(2) an obligation on the part of the named
defendant to respect or not to violate such
right; and (3) an act or omission on the part
of such defendant violative of the right of the
plaintiff or constituting a breach of the
obligation of defendant to the plaintiff for
which the latter may maintain an action for
recovery of damages.[22] We find that all
three elements exist in the case at
bar. Respondent may not have specifically
identified each element, but it may be
sufficiently determined from the allegations
in his complaint.
First, respondent filed the complaint to
protect his good character, name, and
reputation. Every man has a right to build, keep,
and be favored with a good name. This right is
protected by law with the recognition of slander and
libel as actionable wrongs, whether as criminal
offenses or tortuous conduct.[23]
Second, petitioners are obliged to respect
respondents good name even though they are
opposing parties in the unlawful detainer case. As
Article 19 of the Civil Code requires, [e]very person
must, in the exercise of his rights and in the
performance of his duties, act with justice, give
everyone his due, and observe honesty and good
faith. A violation of such principle constitutes an
abuse of rights, a tortuous conduct. We expounded
in Sea Commercial Company, Inc. v. Court of
Appeals[24] that:
The principle of abuse of rights stated in the
above article, departs from the classical
theory that he who uses a right injures no
one. The modern tendency is to depart from
the classical and traditional theory, and to
grant indemnity for damages in cases where
there is an abuse of rights, even when the
act is not illicit.
Article 19 was intended to expand the
concept of torts by granting adequate legal
remedy for the untold number of moral
wrongs which is impossible for human
foresight to provide specifically in statutory
law. If mere fault or negligence in ones acts
can make him liable for damages for injury
caused thereby, with more reason should
abuse or bad faith make him liable. The
absence of good faith is essential to abuse
of right. Good faith is an honest intention to
abstain from taking any unconscientious
advantage of another, even through the
forms or technicalities of the law, together
with an absence of all information or belief
of fact which would render the transaction
unconscientious. In business relations, it
means good faith as understood by men of
affairs.
While Article 19 may have been intended as
a mere declaration of principle, the cardinal
law on human conduct expressed in said
article has given rise to certain rules, e.g.
that where a person exercises his rights but
does so arbitrarily or unjustly or performs
his duties in a manner that is not in keeping
with honesty and good faith, he opens
himself to liability. The elements of an
abuse of rights under Article 19 are: (1)
there is a legal right or duty; (2) which is
exercised in bad faith; (3) for the sole intent
of prejudicing or injuring another.[25]
Petitioners are also expected to respect
respondents dignity, personality, privacy and peace
of mind under Article 26 of the Civil Code, which
provides:
ART. 26. Every person shall respect the
dignity, personality, privacy and peace of
mind of his neighbors and other
persons. The following and similar acts,
though they may not constitute a criminal
offense, shall produce a cause of action for
damages, prevention and other relief:
(1) Prying into the privacy of
anothers residence;
(2) Meddling with or disturbing the
private life or family relations of another;
(3) Intriguing to cause another to
be alienated from his friends;
(4) Vexing or humiliating another
on account of his religious beliefs, lowly
station in life, place of birth, physical defect,
or other personal condition.
Thus, Article 2219(10) of the Civil Code
allows the recovery of moral damages for
acts and actions referred to in Article 26,
among other provisions, of the Civil Code.
In Concepcion v. Court of Appeals,[26] we
explained that:
The philosophy behind Art. 26 underscores
the necessity for its inclusion in our civil
law. The Code Commission stressed in no
uncertain terms that the human personality
must be exalted. The sacredness of human
personality is a concomitant consideration
of every plan for human amelioration. The
touchstone of every system of law, of the
culture and civilization of every country, is
how far it dignifies man. If the statutes
insufficiently protect a person from being
unjustly humiliated, in short, if human
personality is not exalted - then the laws are
indeed defective. Thus, under this article,
the rights of persons are amply protected,
and damages are provided for violations of
a persons dignity, personality, privacy and
peace of mind.
It is petitioners position that the act imputed
to him does not constitute any of those
enumerated in Arts. 26 and 2219. In this
respect, the law is clear. The violations
mentioned in the codal provisions are not
exclusive but are merely examples and do
not preclude other similar or analogous
acts. Damages therefore are allowable for
actions against a persons dignity, such as
profane, insulting, humiliating, scandalous
or abusive language. Under Art. 2217 of the
Civil Code, moral damages which include
physical suffering, mental anguish, fright,
serious anxiety, besmirched reputation,
wounded feelings, moral shock, social
humiliation, and similar injury, although
incapable of pecuniary computation, may be
recovered if they are the proximate result of
the defendants wrongful act or omission.[27]
And third, respondent alleged that the distribution
by petitioners to Horseshoe Village homeowners of
copies of the MeTC decision in the unlawful
detainer case, which was adverse to respondent
and still on appeal before the RTC-Branch 88, had
no apparent lawful or just purpose except to
humiliate respondent or assault his character. As a
result, respondent suffered damages becoming the
talk of the town and being deprived of his political
career.
Petitioners reason that respondent has no
cause of action against them since the MeTC
decision in the unlawful detainer case was part of
public records.
It is already settled that the public has a
right to see and copy judicial records and
documents.[28] However, this is not a case of the
public seeking and being denied access to judicial
records and documents. The controversy is rooted
in the dissemination by petitioners of the MeTC
judgment against respondent to Horseshoe Village
homeowners, who were not involved at all in the
unlawful detainer case, thus, purportedly affecting
negatively respondents good name and reputation
among said homeowners. The unlawful detainer
case was a private dispute between petitioners and
respondent, and the MeTC decision against
respondent was then still pending appeal before the
RTC-Branch 88, rendering suspect petitioners
intentions for distributing copies of said MeTC
decision to non-parties in the case. While
petitioners were free to copy and distribute such
copies of the MeTC judgment to the public, the
question is whether they did so with the intent of
humiliating respondent and destroying the latters
good name and reputation in the community.
Nevertheless, we further declare that the
Court of Appeals erred in already awarding moral
and exemplary damages in respondents favor
when the parties have not yet had the chance to
present any evidence before the RTC-Branch
227. In civil cases, he who alleges a fact has the
burden of proving it by a preponderance of
evidence. It is incumbent upon the party claiming
affirmative relief from the court to convincingly
prove its claim. Bare allegations, unsubstantiated
by evidence are not equivalent to proof under our
Rules. In short, mere allegations are not
evidence.[29]
At this point, the finding of the Court of
Appeals of bad faith and malice on the part of
petitioners has no factual basis. Good faith is
presumed and he who alleges bad faith has the
duty to prove the same. Good faith refers to the
state of the mind which is manifested by the acts of
the individual concerned. It consists of the intention
to abstain from taking an unconscionable and
unscrupulous advantage of another. Bad faith, on
the other hand, does not simply connote bad
judgment to simple negligence. It imports
dishonest purpose or some moral obliquity and
conscious doing of a wrong, a breach of known
duty due to some motive or interest or ill will that
partakes of the nature of fraud. Malice connotes ill
will or spite and speaks not in response to duty. It
implies an intention to do ulterior and unjustifiable
harm.[30]
Decision dated January 31, 2006 of the Court of
Appeals in CA-G.R. CV No. 82610 is AFFIRMED
WITH MODIFICATIONS. The award of moral and
exemplary damages made by the Court of Appeals
in favor of respondent Ismael Veloso III
is DELETED. The complaint of respondent Ismael
Veloso III in Civil Case No. Q-02-48341 is
hereby REINSTATED before Branch 227 of the
a Regional Trial Court of Quezon City only in so far
as the first cause of action is concerned. The said
court is DIRECTED to hear and dispose of the case
with dispatch.
SO ORDERED.

We cannot subscribe to respondents

argument that there is no more need for the
presentation of evidence by the parties since
petitioners, in moving for the dismissal of
respondents complaint for damages, hypothetically
admitted respondents allegations. The hypothetical
admission of respondents allegations in the
complaint only goes so far as determining whether
said complaint should be dismissed on the ground
of failure to state a cause of action. A finding that
the complaint sufficiently states a cause of action
does not necessarily mean that the complaint is
meritorious; it shall only result in the reinstatement
of the complaint and the hearing of the case for
presentation of evidence by the parties.

WHEREFORE, in view of all the foregoing,

the petition is PARTIALLY GRANTED. The
 NAVIDA et. al., vs. Dizon et.al
The factual antecedents of the petitions are as follows:
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - -x Proceedings before the Texas Courts

DECISION Beginning 1993, a number of personal injury suits were

filed in different Texas state courts by citizens of twelve

LEONARDO-DE CASTRO, J.: foreign countries, including the Philippines. The

thousands of plaintiffs sought damages for injuries they

Before the Court are consolidated Petitions for Review allegedly sustained from their exposure

on Certiorari under Rule 45 of the Rules of Court, which to dibromochloropropane (DBCP), a chemical used to kill

arose out of two civil cases that were filed in different nematodes (worms), while working on farms in 23

courts but whose factual background and issues are foreign countries. The cases were eventually transferred

closely intertwined. to, and consolidated in, the Federal District Court for the

Southern District of Texas, Houston Division.The cases

The petitions in G.R. Nos. therein that involved plaintiffs from

125078[1] and 125598[2] both assail the Order[3] dated the Philippines were Jorge Colindres Carcamo, et al. v.

May 20, 1996 of the Regional Trial Court (RTC) Shell Oil Co., et al., which was docketed as Civil Action

of General Santos City, Branch 37, in Civil Case No. No. H-94-1359, and Juan Ramon Valdez, et al. v. Shell

5617. The said Order decreed the dismissal of the case Oil Co., et al., which was docketed as Civil Action No. H-

in view of the perceived lack of jurisdiction of the RTC 95-1356. The defendants in the consolidated cases

over the subject matter of the complaint. The petition in prayed for the dismissal of all the actions under the

G.R. No. 125598 also challenges the Orders dated June doctrine of forum non conveniens.

4, 1996[4] and July 9, 1996,[5] which held that the RTC of

General Santos City no longer had jurisdiction to In a Memorandum and Order dated July 11, 1995,

proceed with Civil Case No. 5617. the Federal District Court conditionally granted the

defendants motion to dismiss. Pertinently, the court

ordered that:
Delgado, Jorge
On the other hand, the petitions in G.R. Nos. Carcamo, Valdez and Isae Carcamo will
be dismissed 90 days after the entry of
126654,[6] 127856,[7] and 128398[8] seek the reversal of this Memorandum and Order provided
the Order[9] dated October 1, 1996 of the RTC of Davao that defendants and third- and fourth-
party defendants have:
City, Branch 16, in Civil Case No. 24,251-96, which also
(1) participated in expedited discovery in
dismissed the case on the ground of lack of jurisdiction. the United States xxx;
G.R. Nos. 125078, 125598, 126654, 127856,
and 128398 were consolidated in the Resolutions dated (2) either waived or accepted service of
process and waived any other jurisdictional
February 10, 1997,[10] April 28, 1997[11] and March 10, defense within 40 days after the entry of this
1999.[12] Memorandum and Order in any action
commenced by a plaintiff in these actions in his
home country or the country in which his injury
occurred. Any plaintiff desiring to bring such an
action will do so within 30 days after the entry of NAVIDA, et al., prayed for the payment of damages in
this Memorandum and Order;
view of the illnesses and injuries to the reproductive
(3) waived within 40 days after the entry of this systems which they allegedly suffered because of their
Memorandum and Order any limitations-based
defense that has matured since the exposure to DBCP. They claimed, among others, that
commencement of these actions in the courts
of Texas; they were exposed to this chemical during the early

(4) stipulated within 40 days after the entry of 1970s up to the early 1980s when they used the same in
this Memorandum and Order that any discovery
the banana plantations where they worked at; and/or
conducted during the pendency of these actions
may be used in any foreign proceeding to the when they resided within the agricultural area where
same extent as if it had been conducted in
proceedings initiated there; and such chemical was used. NAVIDA, et al., claimed that

(5) submitted within 40 days after the entry of
this Memorandum and Order an agreement
binding them to satisfy any final judgment
rendered in favor of plaintiffs by a foreign court.
xxxx
their illnesses and injuries were due to the fault or
negligence of each of the defendant companies in that
they produced, sold and/or otherwise put into the stream
of commerce DBCP-containing products.According to

Notwithstanding the dismissals that may result NAVIDA, et al., they were allowed to be exposed to the
from this Memorandum and Order, in the event
that the highest court of any foreign country said products, which the defendant companies knew, or
finally affirms the dismissal for lack of jurisdiction
of an action commenced by a plaintiff in these ought to have known, were highly injurious to the
actions in his home country or the country in formers health and well-being.
which he was injured, that plaintiff may return to
this court and, upon proper motion, the court will
resume jurisdiction over the action as if the case
had never been dismissed for [forum non Instead of answering the complaint, most of the
conveniens].[13]
defendant companies respectively filed their Motions for

Bill of Particulars.[15] During the pendency of the motions,

Civil Case No. 5617 before the RTC on March 13, 1996, NAVIDA, et al., filed an Amended
of General Santos City and G.R. Nos. 125078
and 125598 Joint Complaint,[16] excluding Dead Sea Bromine Co.,

Ltd., Ameribrom, Inc., Bromine Compounds, Ltd. and

In accordance with the above Memorandum and Order,
a total of 336 plaintiffs from General Santos City (the Amvac Chemical Corp. as party defendants.
petitioners in G.R. No. 125078, hereinafter referred to as
NAVIDA, et al.) filed a Joint Complaint[14] in the RTC of Again, the remaining defendant companies filed
General Santos City on August 10, 1995. The case was
their various Motions for Bill of Particulars.[17] On May
docketed as Civil Case No. 5617. Named as defendants
therein were: Shell Oil Co. (SHELL); Dow Chemical Co. 15, 1996, DOW filed an Answer with Counterclaim.[18]
(DOW); Occidental Chemical Corp. (OCCIDENTAL);
Dole Food Co., Inc., Dole Fresh Fruit Co., Standard Fruit On May 20, 1996, without resolving the motions
Co., Standard Fruit and Steamship Co. (hereinafter
collectively referred to as DOLE); Chiquita Brands, Inc. filed by the parties, the RTC of General Santos City
and Chiquita Brands International, Inc. (CHIQUITA); Del
Monte Fresh Produce N.A. and Del Monte Tropical Fruit issued an Order dismissing the complaint. First, the trial
Co. (hereinafter collectively referred to as DEL MONTE); court determined that it did not have jurisdiction to hear
Dead Sea Bromine Co., Ltd.; Ameribrom, Inc.; Bromine
Compounds, Ltd.; and Amvac Chemical Corp. (The the case, to wit:
aforementioned defendants are hereinafter collectively
referred to as defendant companies.)

THE COMPLAINT FOR DAMAGES FILED
WITH THE REGIONAL TRIAL COURT SHOULD BE
DISMISSED FOR LACK OF JURISDICTION
xxxx
The substance of the cause of action as stated
in the complaint against the defendant foreign
companies cites activity on their part which took
place abroad and had occurred outside and
beyond the territorial domain of
the Philippines. These acts of defendants cited
in the complaint included the manufacture of
pesticides, their packaging in containers, their
distribution through sale or other disposition,
resulting in their becoming part of the stream of
commerce.
Accordingly, the subject matter stated in the
complaint and which is uniquely particular to the
present case, consisted of activity or course of
conduct engaged in by foreign defendants
outside Philippine territory, hence, outside and
beyond the jurisdiction of Philippine Courts,
including the present Regional Trial Court.[19]
Second, the RTC of General Santos City declared that
the tort alleged by NAVIDA, et al., in their complaint is a
tort category that is not recognized in Philippine
laws. Said the trial court:
THE TORT ASSERTED IN THE PRESENT
COMPLAINT AGAINST DEFENDANT FOREIGN
COMPANIES IS NOT WITHIN THE SUBJECT MATTER
JURISDICTION OF THE REGIONAL TRIAL COURT,
BECAUSE IT IS NOT A TORT CATEGORY WITHIN
THE PURVIEW OF THE PHILIPPINE LAW
The specific tort asserted against defendant
foreign companies in the present complaint is
product liability tort. When the averments in the
present complaint are examined in terms of the
particular categories of tort recognized in the
Philippine Civil Code, it becomes stark clear that
such averments describe and identify the
category of specific tort known as product
liability tort.This is necessarily so, because it is
the product manufactured by defendant foreign
companies, which is asserted to be the
proximate cause of the damages sustained by
the plaintiff workers, and the liability of the
defendant foreign companies, is premised on
being the manufacturer of the pesticides.
It is clear, therefore, that the Regional Trial
Court has jurisdiction over the present case, if
and only if the Civil Code of the Philippines, or a
suppletory special law prescribes a product
liability tort, inclusive of and comprehending the
specific tort described in the complaint of the
plaintiff workers.[20]
Third, the RTC of General Santos City adjudged
that NAVIDA, et al., were coerced into
submitting their case to the Philippine
courts, viz:
FILING OF CASES IN THE PHILIPPINES -
COERCED AND ANOMALOUS
The Court views that the plaintiffs did not freely
choose to file the instant action, but rather were
coerced to do so, merely to comply with the U.S.
District Courts Order dated July 11, 1995, and in
order to keep open to the plaintiffs the
opportunity to return to the U.S. District Court.[21]
Fourth, the trial court ascribed little significance
to the voluntary appearance of the defendant
companies therein, thus:
THE DEFENDANTS SUBMISSION TO JURISDICTION
IS CONDITIONAL AS IT IS ILLUSORY
Defendants have appointed their agents
authorized to accept service of
summons/processes in the Philippines pursuant
to the agreement in the U.S. court that
defendants will voluntarily submit to the
jurisdiction of this court. While it is true that this
court acquires jurisdiction over persons of the
defendants through their voluntary appearance,
it appears that such voluntary appearance of the
defendants in this case is conditional. Thus in
the Defendants Amended Agreement Regarding
Conditions of Dismissal for Forum Non
Conveniens (Annex to the Complaint) filed with
the U.S. District Court, defendants declared that
(t)he authority of each designated representative
to accept service of process will become
effective upon final dismissal of these actions by
the Court. The decision of the U.S. District Court
dismissing the case is not yet final and
executory since both the plaintiffs and
defendants appealed therefrom (par. 3(h), 3(i),
Amended Complaint). Consequently, since the
authority of the agent of the defendants in
the Philippines is conditioned on the final
adjudication of the case pending with
the U.S. courts, the acquisition of jurisdiction by
this court over the persons of the defendants is
also conditional. x x x.
The appointment of agents by the defendants,
being subject to a suspensive condition, thus
produces no legal effect and is ineffective at the
moment.[22]
Fifth, the RTC of General Santos City ruled that
the act of NAVIDA, et al., of filing the case in the
Philippine courts violated the rules on forum
shopping and litis pendencia. The trial court
expounded:
THE JURISDICTION FROWNS UPON AND
PROHIBITS FORUM SHOPPING
This court frowns upon the fact that the
parties herein are both vigorously
pursuing their appeal of the decision of
the U.S. District court dismissing the
case filed thereat. To allow the parties to
litigate in this court when they are
actively pursuing the same cases in
another forum, violates the rule on
forum shopping so abhorred in this
jurisdiction. x x x.
xxxx
THE FILING OF THE CASE IN U.S. DIVESTED
THIS COURT OF ITS OWN JURISDICTION
Moreover, the filing of the case in
the U.S. courts divested this court of its
own jurisdiction. This court takes note
that the U.S. District Court did not
decline jurisdiction over the cause of
action.The case was dismissed on the
ground of forum non conveniens, which
is really a matter of venue. By taking
cognizance of the case, the U.S. District
Court has, in essence, concurrent
jurisdiction with this court over the
subject matter of this case. It is settled
that initial acquisition of jurisdiction
divests another of its own jurisdiction. x
x x.
xxxx
THIS CASE IS BARRED BY THE RULE
OF LITIS PENDENCIA
Furthermore, the case filed in the U.S. court
involves the same parties, same rights and
interests, as in this case. There exists litis
pendencia since there are two cases involving
the same parties and interests. The court would
like to emphasize that in accordance with the
rule on litis pendencia x x x; the subsequent
case must be dismissed. Applying the foregoing
[precept] to the case-at-bar, this court concludes
that since the case between the parties in
the U.S. is still pending, then this case is barred
by the rule on litis pendencia.[23]
In fine, the trial court held that:
It behooves this Court, then to dismiss this
case. For to continue with these proceedings,
would be violative of the constitutional provision
on the Bill of Rights guaranteeing speedy
disposition of cases (Ref. Sec. 16, Article III,
Constitution). The court has no other choice. To
insist on further proceedings with this case, as it
is now presented, might accord this court a
charming appearance. But the same insistence
would actually thwart the very ends of justice
which it seeks to achieve.
This evaluation and action is made not on
account of but rather with due consideration to
the fact that the dismissal of this case does not
necessarily deprive the parties especially the
plaintiffs of their possible remedies. The court is
cognizant that the Federal Court may resume
proceedings of that earlier case between the
herein parties involving the same acts or
omissions as in this case.
WHEREFORE, in view of the foregoing
considerations, this case is now considered
DISMISSED.[24]
On June 4, 1996, the RTC of General Santos
City likewise issued an Order,[25] dismissing DOWs
Answer with Counterclaim.
CHIQUITA, DEL MONTE and SHELL each filed
a motion for reconsideration[26] of the RTC Order dated
May 20, 1996, while DOW filed a motion for
reconsideration[27] of the RTC Order dated June 4,
1996. Subsequently, DOW and OCCIDENTAL also filed
a Joint Motion for Reconsideration[28] of the RTC Order
dated May 20, 1996.
In an Order[29] dated July 9, 1996, the RTC of
General Santos City declared that it had already lost its
jurisdiction over the case as it took into consideration the
Manifestation of the counsel of NAVIDA, et al., which
stated that the latter had already filed a petition for
review on certiorari before this Court.
CHIQUITA and SHELL filed their motions for
reconsideration[30] of the above order.
 On July 11, 1996, NAVIDA, et al., filed a
Petition for Review on Certiorari in order to assail the
RTC Order dated May 20, 1996, which was docketed
as G.R. No. 125078.
The RTC of General Santos City then issued
an Order[31] dated August 14, 1996, which merely noted
the incidents still pending in Civil Case No. 5617 and
reiterated that it no longer had any jurisdiction over the
case.
On August 30, 1996, DOW and OCCIDENTAL
filed their Petition for Review on Certiorari,[32] challenging
the orders of the RTC of General Santos City dated May
20, 1996, June 4, 1996 and July 9, 1996. Their petition
was docketed as G.R. No. 125598.
In their petition, DOW and OCCIDENTAL aver
that the RTC of General Santos City erred in ruling that it
has no jurisdiction over the subject matter of the case as
well as the persons of the defendant companies.
In a Resolution[33] dated October 7, 1996, this
Court resolved to consolidate G.R. No. 125598 with G.R.
No. 125078.
CHIQUITA filed a Petition for
on Certiorari,[34] which sought the reversal of the RTC
Orders dated May 20, 1996, July 9, 1996 and August 14,
1996. The petition was docketed as G.R. No. 126018. In
a Resolution[35] dated November 13, 1996, the Court
dismissed the aforesaid petition for failure of CHIQUITA
to show that the RTC committed grave abuse of
discretion. CHIQUITA filed a Motion
Reconsideration,[36] but the same was denied through a
Resolution[37] dated January 27, 1997.
Civil Case No. 24,251-96 before the RTC
of Davao City and G.R. Nos. 126654, 127856, and
128398
Another joint complaint for damages against SHELL,
DOW, OCCIDENTAL, DOLE, DEL MONTE, and
CHIQUITA was filed before Branch 16 of the RTC of
Davao City by 155 plaintiffs from Davao City. This case
was docketed as Civil Case No. 24,251-96. These
plaintiffs (the petitioners in G.R. No. 126654, hereinafter
referred to as ABELLA, et al.) amended their Joint-
Complaint on May 21, 1996.[38]
Similar to the complaint of NAVIDA, et al.,
ABELLA, et al., alleged that, as workers in the banana
plantation and/or as residents near the said plantation,
they were made to use and/or were exposed to
nematocides, which contained the chemical
DBCP. According to ABELLA, et al., such exposure
resulted in serious and permanent injuries to their health,
including, but not limited to, sterility and severe injuries
to their reproductive capacities.[39] ABELLA, et al.,
claimed that the defendant companies manufactured,
produced, sold, distributed, used, and/or made available
in commerce, DBCP without warning the users of its
hazardous effects on health, and without providing
instructions on its proper use and application, which the
defendant companies knew or ought to have known, had
they exercised ordinary care and prudence.
Except for DOW, the other defendant companies filed
their respective motions for bill of particulars to which
ABELLA, et al., filed their opposition. DOW and DEL
MONTE filed their respective Answers dated May 17,
1996 and June 24, 1996.
Review
The RTC of Davao City, however, junked Civil Case No.
24,251-96 in its Order dated October 1, 1996, which, in
its entirety, reads:
Upon a thorough review of the
Complaint and Amended Complaint For:
Damages filed by the plaintiffs against
the defendants Shell Oil Company,
DOW Chemicals Company, Occidental
Chemical Corporation, Standard Fruit
for Company, Standard Fruit and
Steamship, DOLE Food Company,
DOLE Fresh Fruit Company, Chiquita
Brands, Inc., Chiquita Brands
International, Del Monte Fresh Produce,
N.A. and Del Monte Tropical Fruits Co.,
 all foreign corporations with Philippine
Representatives, the Court, as correctly
pointed out by one of the defendants, is
convinced that plaintiffs would have this
Honorable Court dismiss the case to
pave the way for their getting an
affirmance by the Supreme Court (#10
of Defendants Del Monte Fresh
Produce, N.A. and Del Monte Tropical
Fruit Co., Reply to Opposition dated July
22, 1996). Consider these:
1) In the original Joint
Complaint, plaintiffs state that:
defendants have no properties in the
Philippines; they have no agents as well
(par. 18); plaintiffs are suing the
defendants for tortuous acts committed
by these foreign corporations on their
respective countries, as plaintiffs, after
having elected to sue in the place of
defendants residence, are now
compelled by a decision of a Texas
District Court to file cases under torts in
this jurisdiction for causes of actions
which occurred abroad (par. 19); a
petition was filed by same plaintiffs
against same defendants in the Courts
of Texas, USA, plaintiffs seeking for
payment of damages based on
negligence, strict liability, conspiracy
and international tort theories (par. 27);
upon defendants Motion to Dismiss on
Forum non [conveniens], said petition
was provisionally dismissed on condition
that these cases be filed in the
Philippines or before 11 August 1995
(Philippine date; Should the Philippine
Courts refuse or deny jurisdiction, the U.
S. Courts will reassume jurisdiction.)
11. In the Amended Joint Complaint,
plaintiffs aver that: on 11 July 1995,
the Federal District Court issued a in dismissing Civil Case No. 24,251-96 on the ground of
Memorandum and Order conditionally
dismissing several of the consolidated
actions including those filed by the Filipino
complainants. One of the conditions
imposed was for the plaintiffs to file actions
in their home countries or the countries in
which they were injured x x
x.Notwithstanding, the Memorandum and
[O]rder further provided that should the
highest court of any foreign country affirm
the dismissal for lack of jurisdictions over
these actions filed by the plaintiffs in their
home countries [or] the countries where they
were injured, the said plaintiffs may return to
that court and, upon proper motion, the
Court will resume jurisdiction as if the case
had never been dismissed for forum non
conveniens.
The Court however is constrained to dismiss the
case at bar not solely on the basis of the above
but because it shares the opinion of legal
experts given in the interview made by the
Inquirer in its Special report Pesticide Cause
Mass Sterility, to wit:
1. Former Justice Secretary Demetrio
Demetria in a May 1995 opinion said: The
Philippines should be an inconvenient forum to
file this kind of damage suit against foreign
companies since the causes of action alleged in
the petition do not exist under Philippine
laws. There has been no decided case in
Philippine Jurisprudence awarding to those
adversely affected by DBCP. This means there
is no available evidence which will prove and
disprove the relation between sterility and
DBCP.
2. Retired Supreme Court Justice Abraham
Sarmiento opined that while a class suit is
allowed in the Philippines the device has been
employed strictly. Mass sterility will not qualify
as a class suit injury within the contemplation of
Philippine statute.
3. Retired High Court Justice Rodolfo Nocom
stated that there is simply an absence of
doctrine here that permits these causes to be
heard. No product liability ever filed or tried here.
Case ordered dismissed.[40]
Docketed as G.R. No. 126654, the petition for review,
filed on November 12, 1996 by ABELLA, et al., assails
before this Court the above-quoted order of the RTC of
Davao City.
ABELLA, et al., claim that the RTC of Davao City erred
lack of jurisdiction.
According to ABELLA, et al., the RTC of Davao
City has jurisdiction over the subject matter of the case
since Articles 2176 and 2187 of the Civil Code are broad
enough to cover the acts complained of and to support
their claims for damages.
ABELLA, et al., further aver that the dismissal of
the case, based on the opinions of legal luminaries
reported in a newspaper, by the RTC of Davao City is
bereft of basis.According to them, their cause of action is
based on quasi-delict under Article 2176 of the Civil
Code. They also maintain that the absence of
jurisprudence regarding the award of damages in favor
of those adversely affected by the DBCP does not
preclude them from presenting evidence to prove their
allegations that their exposure to DBCP caused their
sterility and/or infertility.
SHELL, DOW, and CHIQUITA each filed their
respective motions for reconsideration of the Order
dated October 1, 1996 of the RTC of Davao City. DEL
MONTE also filed its motion for reconsideration, which
contained an additional motion for the inhibition of the
presiding judge.
The presiding judge of Branch 16 then issued an
[41]
Order dated December 2, 1996, voluntarily inhibiting
himself from trying the case. Thus, the case was re-
raffled to Branch 13 of the RTC of Davao City.
In an Order[42] dated December 16, 1996, the
RTC of Davao City affirmed the Order dated October 1,
1996, and denied the respective motions for
reconsideration filed by defendant companies.
Thereafter, CHIQUITA filed a Petition for Review
dated March 5, 1997, questioning the Orders dated
October 1, 1996 and December 16, 1996 of the RTC of
Davao City.This case was docketed as G.R. No.
128398.
In its petition, CHIQUITA argues that the RTC of
Davao City erred in dismissing the case motu proprio as
it acquired jurisdiction over the subject matter of the
case as well as over the persons of the defendant
companies which voluntarily appeared before
it. CHIQUITA also claims that the RTC of Davao City
cannot dismiss the case simply on the basis of opinions
of alleged legal experts appearing in a newspaper
article.
Resolution[43]
Initially, this Court in its dated July
28, 1997, dismissed the petition filed by CHIQUITA for
submitting a defective certificate against forum
shopping.CHIQUITA, however, filed a motion for
reconsideration, which was granted by this Court in the
Resolution[44] dated October 8, 1997.
On March 7, 1997, DEL MONTE also filed its
petition for review on certiorari before this Court
assailing the above-mentioned orders of the RTC of
Davao City. Its petition was docketed as G.R. No.
127856.
DEL MONTE claims that the RTC of Davao City
has jurisdiction over Civil Case No. 24,251-96, as
defined under the law and that the said court already
obtained jurisdiction over its person by its voluntary
appearance and the filing of a motion for bill of
particulars and, later, an answer to the
complaint. According to DEL MONTE, the RTC of Davao
City, therefore, acted beyond its authority when it
dismissed the case motu proprio or without any motion
to dismiss from any of the parties to the case.
In the Resolutions dated February 10, 1997,
April 28, 1997, and March 10, 1999, this Court
consolidated G.R. Nos. 125078, 125598, 126654,
127856, and 128398.
The Consolidated Motion to Drop DOW,
OCCIDENTAL, and SHELL as Party-Respondents
filed by NAVIDA, et al. and ABELLA, et al.
On September 26, 1997, NAVIDA, et al., and
ABELLA, et al., filed before this Court a Consolidated
Motion (to Drop Party-Respondents).[45] The plaintiff
claimants alleged that they had amicably settled their
cases with DOW, OCCIDENTAL, and SHELL sometime
in July 1997. This settlement agreement was evidenced
by facsimiles of the Compromise Settlement, Indemnity,
and Hold Harmless Agreement, which were attached to
the said motion. Pursuant to said agreement, the plaintiff
claimants sought to withdraw their petitions as against
DOW, OCCIDENTAL, and SHELL.
DOLE, DEL MONTE and CHIQUITA, however,
opposed the motion, as well as the settlement entered
into between the plaintiff claimants and DOW,
OCCIDENTAL, and SHELL.
The Memoranda of the Parties
Considering the allegations, issues, and
arguments adduced by the parties, this Court, in a
Resolution dated June 22, 1998,[46] required all the
parties to submit their respective memoranda.
CHIQUITA filed its Memorandum on August 28,
1998;[47] SHELL asked to be excused from the filing of a
memorandum alleging that it had already executed a
compromise agreement with the plaintiff
claimants.[48] DOLE filed its Memorandum on October
12, 1998[49] while DEL MONTE filed on October 13,
1998.[50] NAVIDA, et al., and ABELLA, et al., filed their
Consolidated Memorandum on February 3, 1999;[51] and
DOW and OCCIDENTAL jointly filed a Memorandum on
December 23, 1999.[52]
The Motion to Withdraw Petition for Review in G.R. intending to have the same dismissed and
No. 125598 returned to the Texas court.

b) The court dismissed the case because it

was convinced that it did not have jurisdiction.
On July 13, 2004, DOW and OCCIDENTAL filed
a Motion to Withdraw Petition for Review in G.R. No. IN SUPPORT OF THE PETITION
125598, [53] explaining that the said petition is already
moot and academic and no longer presents a justiciable II. THE TRIAL COURT HAS
controversy since they have already entered into an JURISDICTION OVER THE SUBJECT
MATTER OF THE CASE.
amicable settlement with NAVIDA, et al. DOW and
OCCIDENTAL added that they have fully complied with a. The acts complained of occurred within
their obligations set forth in the 1997 Compromise Philippine territory.
Agreements.
b. Art. 2176 of the Civil Code of
the Philippines is broad enough to cover the acts
DOLE filed its Manifestation dated September 6,
complained of.
2004,[54] interposing no objection to the withdrawal of the
petition, and further stating that they maintain their c. Assumption of jurisdiction by the U.S.
position that DOW and OCCIDENTAL, as well as other District Court over petitioner[s] claims did not
settling defendant companies, should be retained as divest Philippine [c]ourts of jurisdiction over the
same.
defendants for purposes of prosecuting the cross-claims
of DOLE, in the event that the complaint below is d. The Compromise Agreement and the
reinstated. subsequent Consolidated Motion to Drop Party
Respondents Dow, Occidental and Shell does
NAVIDA, et al., also filed their Comment dated not unjustifiably prejudice remaining
September 14, 2004,[55] stating that they agree with the respondents Dole, Del Monte and Chiquita.[58]
view of DOW and OCCIDENTAL that the petition in G.R.
No. 125598 has become moot and academic because DISCUSSION
Civil Case No. 5617 had already been amicably settled
by the parties in 1997. On the issue of jurisdiction

On September 27, 2004, DEL MONTE filed its
Comment on Motion to Withdraw Petition for Review
Filed by Petitioners in G.R. No. 125598,[56] stating that it
has no objections to the withdrawal of the petition filed
by DOW and OCCIDENTAL in G.R. No. 125598.
In a Resolution[57] dated October 11, 2004, this
Court granted, among others, the motion to withdraw
petition for review filed by DOW and OCCIDENTAL.
THE ISSUES
In their Consolidated Memorandum, NAVIDA, et al., and
ABELLA, et al., presented the following issues for our
consideration:
Essentially, the crux of the controversy in the
petitions at bar is whether the RTC of General Santos
City and the RTC of Davao City erred in dismissing Civil
Case Nos. 5617 and 24,251-96, respectively, for lack of
jurisdiction.
Remarkably, none of the parties to this case
claims that the courts a quo are bereft of jurisdiction to
determine and resolve the above-stated cases. All
parties contend that the RTC of General Santos City and

the RTC of Davao City have jurisdiction over the action

IN REFUTATION
for damages, specifically for approximately P2.7 million
I. THE COURT DISMISSED THE
CASE DUE TO LACK OF JURISDICTION. for each of the plaintiff claimants.

a) The court did not simply dismiss the case

because it was filed in bad faith with petitioners
 NAVIDA, et al., and ABELLA, et al., argue that
the allegedly tortious acts and/or omissions of defendant
companies occurred within Philippine
territory. Specifically, the use of and exposure to DBCP
that was manufactured, distributed or otherwise put into
the stream of commerce by defendant companies
happened in the Philippines. Said fact allegedly
constitutes reasonable basis for our courts to assume
jurisdiction over the case. Furthermore, NAVIDA, et al.,
and ABELLA, et al., assert that the provisions of Chapter
2 of the Preliminary Title of the Civil Code, as well as
Article 2176 thereof, are broad enough to cover their
claim for damages. Thus, NAVIDA, et al., and
ABELLA, et al., pray that the respective rulings of the
RTC of General Santos City and the RTC of Davao City
in Civil Case Nos. 5617 and 24,251-96 be reversed and
that the said cases be remanded to the courts a quo for
further proceedings.
DOLE similarly maintains that the acts attributed
to defendant companies constitute a quasi-delict, which
falls under Article 2176 of the Civil Code. In addition,
DOLE states that if there were no actionable wrongs
committed under Philippine law, the courts a quo should
have dismissed the civil cases on the ground that the
Amended Joint-Complaints of NAVIDA, et al., and
ABELLA, et al., stated no cause of action against the
defendant companies. DOLE also argues that if indeed
there is no positive law defining the alleged acts of
defendant companies as actionable wrong, Article 9 of
the Civil Code dictates that a judge may not refuse to
render a decision on the ground of insufficiency of the
law. The court may still resolve the case, applying the
customs of the place and, in the absence thereof, the
general principles of law. DOLE posits that the
Philippines is the situs of the tortious acts allegedly
committed by defendant companies as NAVIDA, et al.,
and ABELLA, et al., point to their alleged exposure to
DBCP which occurred in the Philippines, as the cause of
the sterility and other reproductive system problems that
they allegedly suffered. Finally, DOLE adds that the RTC
of Davao City gravely erred in relying upon newspaper
reports in dismissing Civil Case No. 24,251-96 given that
newspaper articles are hearsay and without any
evidentiary value. Likewise, the alleged legal opinions
cited in the newspaper reports were taken judicial notice
of, without any notice to the parties. DOLE, however,
opines that the dismissal of Civil Case Nos. 5617 and
24,251-96 was proper, given that plaintiff claimants
merely prosecuted the cases with the sole intent of
securing a dismissal of the actions for the purpose of
convincing the U.S. Federal District Court to re-assume
jurisdiction over the cases.
In a similar vein, CHIQUITA argues that the
courts a quo had jurisdiction over the subject matter of
the cases filed before them. The Amended Joint-
Complaints sought approximately P2.7 million in
damages for each plaintiff claimant, which amount falls
within the jurisdiction of the RTC. CHIQUITA avers that
the pertinent matter is the place of the alleged exposure
to DBCP, not the place of manufacture, packaging,
distribution, sale, etc., of the said chemical. This is in
consonance with the lex loci delicti commisitheory in
determining the situs of a tort, which states that the law
of the place where the alleged wrong was committed will
govern the action. CHIQUITA and the other defendant
companies also submitted themselves to the jurisdiction
of the RTC by making voluntary appearances and
seeking for affirmative reliefs during the course of the
proceedings.None of the defendant companies ever
objected to the exercise of jurisdiction by the courts a
quo over their persons. CHIQUITA, thus, prays for the
remand of Civil Case Nos. 5617 and 24,251-96 to
the RTC of General Santos City and the RTC of Davao
City, respectively.
The RTC of General Santos City and the RTC of
Davao City have jurisdiction over Civil Case Nos.
5617 and 24,251-96, respectively
The rule is settled that jurisdiction over the
subject matter of a case is conferred by law and is
determined by the allegations in the complaint and the
character of the relief sought, irrespective of whether the
plaintiffs are entitled to all or some of the claims asserted
therein.[59] Once vested by law, on a particular court or
body, the jurisdiction over the subject matter or nature of
the action cannot be dislodged by anybody other than by
the legislature through the enactment of a law.
At the time of the filing of the complaints, the
jurisdiction of the RTC in civil cases under Batas
Pambansa Blg. 129, as amended by Republic Act No.
7691, was:
SEC. 19. Jurisdiction in civil cases.
Regional Trial Courts shall exercise
exclusive original jurisdiction:
xxxx
(8) In all other cases in which the
demand, exclusive of interest, damages
of whatever kind, attorneys fees,
litigation expenses, and costs or the
value of the property in controversy
exceeds One hundred thousand pesos
(P100,000.00) or, in such other cases in
Metro Manila, where the demand,
exclusive of the abovementioned items
exceeds Two hundred thousand pesos
(P200,000.00).[60]
Corollary thereto, Supreme Court Administrative
Circular No. 09-94, states:
2. The exclusion of the term damages of
whatever kind in determining the
jurisdictional amount under Section 19
(8) and Section 33 (1) of B.P. Blg. 129,
as amended by R.A. No. 7691, applies
to cases where the damages are merely
incidental to or a consequence of the
main cause of action. However, in cases
where the claim for damages is the main
cause of action, or one of the causes of
action, the amount of such claim shall
be considered in determining the
jurisdiction of the court.
Here, NAVIDA, et al., and ABELLA, et al.,
sought in their similarly-worded Amended Joint-
Complaints filed before the courts a quo, the following
prayer:
PRAYER
WHEREFORE, premises considered, it is most
respectfully prayed that after hearing, judgment
be rendered in favor of the plaintiffs ordering the
defendants:
a) TO PAY EACH PLAINTIFF moral
damages in the amount of One Million Five
Hundred Thousand Pesos (P1,500,00.00);
b) TO PAY EACH PLAINTIFF
nominal damages in the amount of Four
Hundred Thousand Pesos (P400,000.00) each;
c) TO PAY EACH PLAINTIFF
exemplary damages in the amount of Six
Hundred Thousand Pesos (P600,000.00);
d) TO PAY EACH PLAINTIFF
attorneys fees of Two Hundred Thousand Pesos
(P200,000.00); and
e) TO PAY THE COSTS of the suit.[61]
From the foregoing, it is clear that the claim for
damages is the main cause of action and that
the total amount sought in the complaints is
approximately P2.7 million for each of the
plaintiff claimants. The RTCs unmistakably have
jurisdiction over the cases filed in General
Santos City and Davao City, as both claims by
NAVIDA, et al., and ABELLA, et al., fall within
the purview of the definition of the jurisdiction of
the RTC under Batas Pambansa Blg. 129.
Moreover, the allegations in both Amended Joint-
Complaints narrate that:
THE CAUSES OF ACTION
4. The Defendants manufactured, sold,
distributed, used, AND/OR MADE AVAILABLE
IN COMMERCE nematocides containing the
chemical dibromochloropropane, commonly
known as DBCP. THE CHEMICAL WAS USED
AGAINST the parasite known as the nematode,
which plagued banana plantations, INCLUDING
THOSE in the Philippines. AS IT TURNED OUT,
DBCP not only destroyed nematodes. IT ALSO
CAUSED ILL-EFFECTS ON THE HEALTH OF
PERSONS EXPOSED TO IT AFFECTING the
human reproductive system as well.
5. The plaintiffs were exposed to DBCP in the
1970s up to the early 1980s WHILE (a) they
used this product in the banana plantations
WHERE they were employed, and/or (b) they
resided within the agricultural area WHERE
IT WAS USED. As a result of such exposure,
the plaintiffs suffered serious and permanent
injuries TO THEIR HEALTH, including, but not
limited to, STERILITY and severe injuries to
their reproductive capacities.
6. THE DEFENDANTS WERE AT FAULT OR
WERE NEGLIGENT IN THAT THEY
MANUFACTURED, produced, sold, and/or
USED DBCP and/or otherwise, PUT THE
SAME into the stream of commerce,
WITHOUT INFORMING THE USERS OF ITS
HAZARDOUS EFFECTS ON HEALTH AND/OR
WITHOUT INSTRUCTIONS ON ITS PROPER
USE AND APPLICATION. THEY allowed
Plaintiffs to be exposed to, DBCP-containing
materials which THEY knew, or in the exercise
of ordinary care and prudence ought to have
known, were highly harmful and injurious to the
Plaintiffs health and well-being.
7. The Defendants WHO MANUFACTURED,
PRODUCED, SOLD, DISTRIBUTED, MADE
AVAILABLE OR PUT DBCP INTO THE
STREAM OF COMMERCE were negligent OR
AT FAULT in that they, AMONG OTHERS:
a. Failed to adequately warn
Plaintiffs of the dangerous characteristics of
DBCP, or to cause their subsidiaries or affiliates
to so warn plaintiffs;
b. Failed to provide plaintiffs with
information as to what should be reasonably
safe and sufficient clothing and proper protective
equipment and appliances, if any, to protect
plaintiffs from the harmful effects of exposure to
DBCP, or to cause their subsidiaries or affiliates
to do so;
c. Failed to place adequate warnings,
in a language understandable to the worker, on
containers of DBCP-containing materials to warn
of the dangers to health of coming into contact
with DBCP, or to cause their subsidiaries or
affiliates to do so;
d. Failed to take reasonable
precaution or to exercise reasonable care to
publish, adopt and enforce a safety plan and a
safe method of handling and applying DBCP, or
to cause their subsidiaries or affiliates to do so;
e. Failed to test DBCP prior to
releasing these products for sale, or to cause
their subsidiaries or affiliates to do so; and
f. Failed to reveal the results of tests
conducted on DBCP to each plaintiff,
governmental agencies and the public, or to
cause their subsidiaries or affiliate to do so.
8. The illnesses and injuries of each plaintiff are
also due to the FAULT or negligence of
defendants Standard Fruit Company, Dole Fresh
Fruit Company, Dole Food Company, Inc.,
Chiquita Brands, Inc. and Chiquita Brands
International, Inc. in that they failed to exercise
reasonable care to prevent each plaintiffs
harmful exposure to DBCP-containing products
which defendants knew or should have known
were hazardous to each plaintiff in that they,
AMONG OTHERS:
a. Failed to adequately supervise
and instruct Plaintiffs in the safe and proper
application of DBCP-containing products;
b. Failed to implement proper
methods and techniques of application of said
products, or to cause such to be implemented;
c. Failed to warn Plaintiffs of the
hazards of exposure to said products or to
cause them to be so warned;
d. Failed to test said products for
adverse health effects, or to cause said products
to be tested;
e. Concealed from Plaintiffs
information concerning the observed effects of
said products on Plaintiffs;
f. Failed to monitor the health of
plaintiffs exposed to said products;
g. Failed to place adequate labels on
containers of said products to warn them of the
damages of said products; and
h. Failed to use substitute
nematocides for said products or to cause such
substitutes to [be] used.[62] (Emphasis supplied
and words in brackets ours.)
 Quite evidently, the allegations in the Amended
Joint-Complaints of NAVIDA, et al., and
ABELLA, et al., attribute to defendant
companies certain acts and/or omissions which
led to their exposure to nematocides containing
the chemical DBCP. According to NAVIDA, et
al., and ABELLA, et al., such exposure to the
said chemical caused ill effects, injuries and
illnesses, specifically to their reproductive
system.
Thus, these allegations in the complaints
constitute the cause of action of plaintiff claimants a
quasi-delict, which under the Civil Code is defined as an
act, or omission which causes damage to another, there
being fault or negligence. To be precise, Article 2176 of
the Civil Code provides:
Article 2176. Whoever by act or omission
causes damage to another, there being fault or
negligence, is obliged to pay for the damage
done. Such fault or negligence, if there is no pre-
existing contractual relation between the parties,
is called a quasi-delict and is governed by the
provisions of this Chapter.
As specifically enumerated in the amended
complaints, NAVIDA, et al., and ABELLA, et al., point to
the acts and/or omissions of the defendant companies in
manufacturing, producing, selling, using,
otherwise putting into the stream of commerce,
nematocides which contain DBCP, without informing the
users of its hazardous effects on health and/or without
instructions on its proper use and application. [63]
Verily, in Citibank, N.A. v. Court
Appeals,[64] this Court has always reminded
jurisdiction of the court over the subject matter of the
action is determined by the allegations of the complaint,
irrespective of whether or not the plaintiffs are entitled to
recover upon all or some of the claims asserted
therein. The jurisdiction of the court cannot be made to
depend upon the defenses set up in the answer or upon
the motion to dismiss, for otherwise, the question of
jurisdiction would almost entirely depend upon the
defendants. What determines the jurisdiction of the court
is the nature of the action pleaded as appearing from the
allegations in the complaint. The averments therein and
the character of the relief sought are the ones to be
consulted.
Clearly then, the acts and/or omissions
attributed to the defendant companies constitute a quasi-
delict which is the basis for the claim for damages filed
by NAVIDA, et al., and ABELLA, et al., with individual
claims of approximately P2.7 million for each plaintiff
claimant, which obviously falls within the purview of the
civil action jurisdiction of the RTCs.
Moreover, the injuries and illnesses, which
NAVIDA, et al., and ABELLA, et al., allegedly suffered
resulted from their exposure to DBCP while they were
employed in the banana plantations located in
the Philippines or while they were residing within the
and/or
agricultural areas also located in the Philippines. The
factual allegations in the Amended Joint-Complaints all
point to their cause of action, which
undeniably occurred in the Philippines. The RTC of
General Santos City and the RTC of Davao City
obviously have reasonable basis to assume jurisdiction
of
over the cases.
that
It is, therefore, error on the part of the courts a
quo when they dismissed the cases on the ground of
lack of jurisdiction on the mistaken assumption that the
cause of action narrated by NAVIDA, et al., and
ABELLA, et al., took place abroad and had occurred
outside and beyond the territorial boundaries of the
Philippines, i.e., the manufacture of the pesticides, their
packaging in containers, their distribution through sale or
other disposition, resulting in their becoming part of the
stream of commerce,[65] and, hence, outside
jurisdiction of the RTCs.
Certainly, the cases below are not criminal
cases where territoriality, or the situs of the act
complained of, would be determinative of jurisdiction and
venue for trial of cases. In personal civil actions, such as
claims for payment of damages, the Rules of Court allow
the action to be commenced and tried in the appropriate
court, where any of the plaintiffs or defendants resides,
or in the case of a non-resident defendant, where he
may be found, at the election of the plaintiff.[66]
the
Rule 14, Section 20 of the 1997 Rules of Civil Procedure
provides that [t]he defendants voluntary appearance in
the action shall be equivalent to service of summons. In
this connection, all the defendant companies designated
and authorized representatives to receive summons and
to represent them in the proceedings before the courts a
quo. All the defendant companies submitted themselves
to the jurisdiction of the courts a quo by making several
voluntary appearances, by praying for various affirmative
reliefs, and by actively participating during the course of
the proceedings below.

In a very real sense, most of the evidence
required to prove the claims of NAVIDA, et al., and
ABELLA, et al., are available only in
the Philippines. First, plaintiff claimants are all residents
of the Philippines, either in General Santos City or
in Davao City. Second, the specific areas where they
were allegedly exposed to the chemical DBCP are within
the territorial jurisdiction of the courts a quo wherein
NAVIDA, et al., and ABELLA, et al., initially filed their
claims for damages. Third, the testimonial and
documentary evidence from important witnesses, such
as doctors, co-workers, family members and other
members of the community, would be easier to gather in
the Philippines.Considering the great number of plaintiff
claimants involved in this case, it is not far-fetched to
assume that voluminous records are involved in the
presentation of evidence to support the claim of plaintiff
claimants. Thus, these additional factors, coupled with
the fact that the alleged cause of action of NAVIDA, et
al., and ABELLA, et al., against the defendant
companies for damages occurred in the Philippines,
demonstrate that, apart from the RTC of General Santos
City and the RTC of Davao City having jurisdiction over
the subject matter in the instant civil cases, they are,
indeed, the convenient fora for trying these cases.[67]
The RTC of General Santos City and the RTC
of Davao City validly acquired jurisdiction over the
persons of all the defendant companies
It is well to stress again that none of the parties claims
that the courts a quo lack jurisdiction over the cases filed
before them. All parties are one in asserting that the
RTC of General Santos City and the RTC of Davao City
have validly acquired jurisdiction over the persons of the
defendant companies in the action below. All parties
voluntarily, unconditionally and knowingly appeared and
submitted themselves to the jurisdiction of the courts a
quo.
In line herewith, this Court, in Meat Packing
Corporation of the Philippines v. Sandiganbayan,[68] held
that jurisdiction over the person of the defendant in civil
cases is acquired either by his voluntary appearance in
court and his submission to its authority or by service of
summons. Furthermore, the active participation of a
party in the proceedings is tantamount to an invocation
of the courts jurisdiction and a willingness to abide by
the resolution of the case, and will bar said party from
later on impugning the court or bodys jurisdiction.[69]
Thus, the RTC of General Santos City and the
RTC of Davao City have validly acquired jurisdiction over
the persons of the defendant companies, as well as over
the subject matter of the instant case. What is more, this
jurisdiction, which has been acquired and has been
vested on the courts a quo, continues until the
termination of the proceedings.
It may also be pertinently stressed that jurisdiction is
different from the exercise of jurisdiction. Jurisdiction
refers to the authority to decide a case, not the orders or
the decision rendered therein. Accordingly, where a
court has jurisdiction over the persons of the defendants
and the subject matter, as in the case of the courts a
quo, the decision on all questions arising therefrom is
but an exercise of such jurisdiction. Any error that the
court may commit in the exercise of its jurisdiction is
merely an error of judgment, which does not affect its
authority to decide the case, much less divest the court
of the jurisdiction over the case.[70]
Plaintiffs purported bad faith in filing the subject
civil cases in Philippine courts
Anent the insinuation by DOLE that the plaintiff
claimants filed their cases in bad faith merely to procure
a dismissal of the same and to allow them to return to
the forum of their choice, this Court finds such argument
much too speculative to deserve any merit.
 It must be remembered that this Court does not
rule on allegations that are unsupported by evidence on
record. This Court does not rule on allegations which are
manifestly conjectural, as these may not exist at all. This
Court deals with facts, not fancies; on realities, not
appearances. When this Court acts on appearances
instead of realities, justice and law will be short-
lived.[71] This is especially true with respect to allegations
of bad faith, in line with the basic rule that good faith is
always presumed and bad faith must be proved.[72]
In sum, considering the fact that the RTC of
General Santos City and the RTC of Davao City have
jurisdiction over the subject matter of the amended
complaints filed by NAVIDA, et al., and ABELLA, et al.,
and that the courts a quo have also acquired jurisdiction
over the persons of all the defendant companies, it
therefore, behooves this Court to order the remand of
Civil Case Nos. 5617 and 24,251-96 to the RTC of
General Santos City and the RTC of Davao City,
respectively.On the issue of the dropping of DOW,
OCCIDENTAL and SHELL as respondents in view of
their amicable settlement with NAVIDA, et al., and
ABELLA, et al.
NAVIDA, et al., and ABELLA, et al., are further praying
that DOW, OCCIDENTAL and SHELL be dropped as
respondents in G.R. Nos. 125078 and 126654, as well
as in Civil Case Nos. 5617 and 24,251-96. The non-
settling defendants allegedly manifested that they
intended to file their cross-claims against their co-
defendants who entered into compromise
agreements. NAVIDA, et al., and ABELLA, et al., argue
that the non-settling defendants did not aver any cross-
claim in their answers to the complaint and that they
subsequently sought to amend their answers to plead
their cross-claims only after the settlement between the
plaintiff claimants and DOW, OCCIDENTAL, and SHELL
were executed. NAVIDA, et al., and ABELLA, et al.,
therefore, assert that the cross-claims are already
barred.
In their Memoranda, CHIQUITA and DOLE are
opposing the above motion of NAVIDA, et al., and
ABELLA, et al., since the latters Amended Complaints
cited several instances of tortious conduct that were
allegedly committed jointly and severally by the
defendant companies. This solidary obligation on the
part of all the defendants allegedly gives any co-
defendant the statutory right to proceed against the other
co-defendants for the payment of their respective
shares. Should the subject motion of NAVIDA, et al., and
ABELLA, et al., be granted, and the Court subsequently
orders the remand of the action to the trial court for
continuance, CHIQUITA and DOLE would allegedly be
deprived of their right to prosecute their cross-claims
against their other co-defendants. Moreover, a third
party complaint or a separate trial, according to
CHIQUITA, would only unduly delay and complicate the
proceedings. CHIQUITA and DOLE similarly insist that
the motion of NAVIDA, et al., and ABELLA, et al., to drop
DOW, SHELL and OCCIDENTAL as respondents in
G.R. Nos. 125078 and 126654, as well as in Civil Case
Nos. 5617 and 24,251-96, be denied.
Incidentally, on April 2, 2007, after the parties
have submitted their respective memoranda, DEL
MONTE filed a Manifestation and Motion[73] before the
Court, stating that similar settlement agreements were
allegedly executed by the plaintiff claimants with DEL
MONTE and CHIQUITA sometime in 1999. Purportedly
included in the agreements were Civil Case Nos. 5617
and 24,251-96. Attached to the said manifestation were
copies of the Compromise Settlement, Indemnity, and
Hold Harmless Agreement between DEL MONTE and
the settling plaintiffs, as well as the Release in Full
executed by the latter.[74] DEL MONTE specified therein
that there were only four (4) plaintiffs in Civil Case No.
5617 who are claiming against the Del Monte
parties[75] and that the latter have executed amicable
settlements which completely satisfied any claims
against DEL MONTE. In accordance with the alleged
compromise agreements with the four plaintiffs in Civil
Case No. 5617, DEL MONTE sought the dismissal of the
Amended Joint-Complaint in the said civil
case. Furthermore, in view of the above settlement
agreements with ABELLA, et al., in Civil Case No.
24,251-96, DEL MONTE stated that it no longer wished
to pursue its petition in G.R. No. 127856 and accordingly
prayed that it be allowed to withdraw the same.
Having adjudged that Civil Case Nos. 5617 and 24,251-
96 should be remanded to the RTC of General Santos
City and the RTC of Davao City, respectively, the Court
deems that the Consolidated Motions (to Drop Party-
Respondents) filed by NAVIDA, et al., and ABELLA, et
al., should likewise be referred to the said trial courts for
appropriate disposition.
Under Article 2028 of the Civil Code, [a] compromise is a
contract whereby the parties, by making reciprocal
concessions, avoid a litigation or put an end to one
already commenced. Like any other contract, an
extrajudicial compromise agreement is not excepted
from rules and principles of a contract. It is a consensual
contract, perfected by mere consent, the latter being
manifested by the meeting of the offer and the
acceptance upon the thing and the cause which are to
constitute the contract.[76] Judicial approval is not
required for its perfection.[77] A compromise has upon the
parties the effect and authority of res judicata[78] and this
holds true even if the agreement has not been judicially
approved.[79] In addition, as a binding contract, a
compromise agreement determines the rights and
obligations of only the parties to it.[80]
In light of the foregoing legal precepts, the RTC of
General Santos City and the RTC of Davao City should
first receive in evidence and examine all of the alleged
compromise settlements involved in the cases at bar to
determine the propriety of dropping any party as a
defendant therefrom.
The Court notes that the Consolidated Motions
(to Drop Party-Respondents) that was filed by
NAVIDA, et al., and ABELLA, et al., only pertained to
DOW, OCCIDENTAL and SHELL in view of the latter
companies alleged compromise agreements with the
plaintiff claimants. However, in subsequent
developments, DEL MONTE and CHIQUITA supposedly
reached their own amicable settlements with the plaintiff
claimants, but DEL MONTE qualified that it entered into
a settlement agreement with only four of the plaintiff
claimants in Civil Case No. 5617. These four plaintiff
claimants were allegedly the only ones who were
asserting claims against DEL MONTE. However, the
said allegation of DEL MONTE was simply stipulated in
their Compromise Settlement, Indemnity, and Hold
Harmless Agreement and its truth could not be verified
with certainty based on the records elevated to this
Court. Significantly, the 336 plaintiff claimants in Civil
Case No. 5617 jointly filed a complaint without
individually specifying their claims against DEL MONTE
or any of the other defendant companies. Furthermore,
not one plaintiff claimant filed a motion for the removal of
either DEL MONTE or CHIQUITA as defendants in Civil
Case Nos. 5617 and 24,251-96.
There is, thus, a primary need to establish who
the specific parties to the alleged compromise
agreements are, as well as their corresponding rights
and obligations therein.For this purpose, the courts a
quo may require the presentation of additional evidence
from the parties. Thereafter, on the basis of the records
of the cases at bar and the additional evidence
submitted by the parties, if any, the trial courts can then
determine who among the defendants may be dropped
from the said cases.
It is true that, under Article 2194 of the Civil
Code, the responsibility of two or more persons who are
liable for the same quasi-delict is solidary. A solidary
obligation is one in which each of the debtors is liable for
the entire obligation, and each of the creditors is entitled
to demand the satisfaction of the whole obligation from
any or all of the debtors.[81]
In solidary obligations, the paying debtors right
of reimbursement is provided for under Article 1217 of
the Civil Code, to wit:
Art. 1217. Payment made by
one of the solidary debtors extinguishes
the obligation. If two or more solidary
debtors offer to pay, the creditor may
choose which offer to accept.
He who made the payment may
claim from his co-debtors only the share
which corresponds to each, with the
interest for the payment already made. If
the payment is made before the debt is
due, no interest for the intervening
period may be demanded.
When one of the solidary
debtors cannot, because of his
insolvency, reimburse his share to the
debtor paying the obligation, such share
shall be borne by all his co-debtors, in
proportion to the debt of each.
The above right of reimbursement of a paying
debtor, and the corresponding liability of the co-debtors
to reimburse, will only arise, however, if a solidary debtor
who is made to answer for an obligation actually delivers
payment to the creditor. As succinctly held in Lapanday
Agricultural Development Corporation v. Court of
Appeals,[82][p]ayment, which means not only the delivery
of money but also the performance, in any other manner,
of the obligation, is the operative fact which will entitle
either of the solidary debtors to seek reimbursement for
the share which corresponds to each of the [other]
debtors.[83]
In the cases at bar, there is no right of
reimbursement to speak of as yet. A trial on the
merits must necessarily be conducted first in order
to establish whether or not defendant companies are
liable for the claims for damages filed by the plaintiff
claimants, which would necessarily give rise to an The Court likewise GRANTS the motion filed by
obligation to pay on the part of the defendants. Del Monte to withdraw its petition in G.R. No. 127856. In
view of the previous grant of the motion to withdraw the
At the point in time where the proceedings below petition in G.R. No. 125598, both G.R. Nos. 127856 and
were prematurely halted, no cross-claims have been 125598 are considered CLOSED AND TERMINATED.
interposed by any defendant against another
defendant. If and when such a cross-claim is made by a No pronouncement as to costs.
non-settling defendant against a settling defendant, it is
within the discretion of the trial court to determine the SO ORDERED.
propriety of allowing such a cross-claim and if the
settling defendant must remain a party to the case purely
in relation to the cross claim.

In Armed Forces of the Philippines Mutual

Benefit Association, Inc. v. Court of Appeals,[84] the
Court had the occasion to state that where there are,
along with the parties to the compromise, other persons
involved in the litigation who have not taken part in
concluding the compromise agreement but are adversely
affected or feel prejudiced thereby, should not be
precluded from invoking in the same proceedings an
adequate relief therefor.[85]

Relevantly, in Philippine International Surety

Co., Inc. v. Gonzales,[86] the Court upheld the ruling of
the trial court that, in a joint and solidary obligation, the
paying debtor may file a third-party complaint and/or a
cross-claim to enforce his right to seek contribution from
his co-debtors.

Hence, the right of the remaining defendant(s) to

seek reimbursement in the above situation, if proper, is
not affected by the compromise agreements allegedly
entered into by NAVIDA, et al., and ABELLA, et al., with
some of the defendant companies.

WHEREFORE, the Court hereby GRANTS the

petitions for review on certiorari in G.R. Nos. 125078,
126654, and 128398. We REVERSE and SET
ASIDE the Order dated May 20, 1996 of the Regional
Trial Court of General Santos City, Branch 37, in Civil
Case No. 5617, and the Order dated October 1, 1996 of
the Regional Trial Court of Davao City, Branch 16, and
its subsequent Order dated December 16, 1996 denying
reconsideration in Civil Case No. 24,251-96,
and REMAND the records of this case to the respective
Regional Trial Courts of origin for further and appropriate
proceedings in line with the ruling herein that said courts
have jurisdiction over the subject matter of the amended
complaints in Civil Case Nos. 5617 and 24,251-96.
VALLACAR TRANSIT, G.R. No. 175512
were thrown from the motorcycle. Catubig died on the spot where he
INC.,
Petitioner, Present: was thrown, while Emperado died while being rushed to the hospital.

CORONA, C.J.,
Chairperson, On February 1, 1994, Cabanilla was charged with reckless
VELASCO, JR.,
imprudence resulting in double homicide in Criminal Case No. M-15-
LEONARDO-DE CASTRO,
- versus - PERALTA,* and 94 before the Municipal Circuit Trial Court (MCTC) of Manjuyod-
PEREZ, JJ.
Bindoy-Ayungon of the Province of Negros Oriental. After
preliminary investigation, the MCTC issued a Resolution
Promulgated:
on December 22, 1994, dismissing the criminal charge against
JOCELYN CATUBIG, May 30, 2011 Cabanilla. It found that Cabanilla was not criminally liable for the
Respondent.
deaths of Catubig and Emperado, because there was no negligence,
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - -x not even contributory, on Cabanillas part.

DECISION Thereafter, respondent filed before the RTC on July 19,

1995 a Complaint for Damages against petitioner, seeking actual,
LEONARDO-DE CASTRO, J.: moral, and exemplary damages, in the total amount of P484,000.00,
for the death of her husband, Catubig, based on Article 2180, in
relation to Article 2176, of the Civil Code. Respondent alleged that
For review under Rule 45 of the Rules of Court is the
petitioner is civilly liable because the latters employee driver,
Decision[1] dated November 17, 2005 and the Resolution[2] dated
Cabanilla, was reckless and negligent in driving the bus which
November 16, 2006 of the Court Appeals in CA-G.R. CV No. 66815,
collided with Catubigs motorcycle.
which modified the Decision[3] dated January 26, 2000 of the
Regional Trial Court (RTC), Branch 30 of Dumaguete City, in Civil
Petitioner, in its Answer with Counterclaim, contended that
Case No. 11360, an action for recovery of damages based on Article
the proximate cause of the vehicular collision, which resulted in the
2180, in relation to Article 2176, of the Civil Code, filed by
deaths of Catubig and Emperado, was the sole negligence of Catubig
respondent Jocelyn Catubig against petitioner Vallacar Transit,
when he imprudently overtook another vehicle at a curve and
Inc.While the RTC dismissed respondents claim for damages, the
traversed the opposite lane of the road. As a special and affirmative
Court of Appeals granted the same.
defense, petitioner asked for the dismissal of respondents complaint
for not being verified and/or for failure to state a cause of action, as
The undisputed facts are as follows:
there was no allegation that petitioner was negligent in the selection
or supervision of its employee driver.
Petitioner is engaged in the business of transportation and
the franchise owner of a Ceres Bulilit bus with Plate No. T-0604-
In the Pre-Trial Order[4] dated June 10, 1997, the parties
1348. Quirino C. Cabanilla (Cabanilla) is employed as a regular bus
stipulated that the primary issue for trial was whether or not
driver of petitioner.
petitioner should be held liable for Catubigs death.Trial then ensued.

On January 27, 1994, respondents husband, Quintin

Police Officer (PO) 2 Robert B. Elnas (Elnas),[5] Emilio
Catubig, Jr. (Catubig), was on his way home from Dumaguete City
Espiritu (Espiritu),[6] Dr. Norberto Baldado, Jr. (Dr. Baldado),[7] Peter
riding in tandem on a motorcycle with his employee, Teddy
Cadimas (Cadimas),[8] and respondent[9]herself testified in support of
Emperado (Emperado). Catubig was the one driving the
respondents complaint.
motorcycle. While approaching a curve at kilometers 59 and 60,
Catubig tried to overtake a slow moving ten-wheeler cargo truck by
PO2 Elnas conducted an investigation of the collision
crossing-over to the opposite lane, which was then being traversed by
incident. According to PO2 Elnas, the bus was running fast, at a
the Ceres Bulilit bus driven by Cabanilla, headed for the opposite
speed of 100 kilometers per hour, when it collided with the
direction. When the two vehicles collided, Catubig and Emperado
motorcycle which was trying to overtake a truck. The collision
occurred on the lane of the bus. Catubig was flung 21 meters away,
and Emperado, 11 meters away, from the point of impact. The
motorcycle was totaled; the chassis broke into three parts, and the
front wheel and the steering wheel with the shock absorbers were
found 26 meters and 38 meters, respectively, from the collision
point. In contrast, only the front bumper of the bus suffered damage.
Cadimas personally witnessed the collision of the bus and
the motorcycle. He recalled that he was then waiting for a ride
to Dumaguete City and saw the Ceres Bulilit bus making a turn at a
curve. Cadimas signaled the said bus to halt but it was running
fast. Cadimas also recollected that there was a cargo truck running
slow in the opposite direction of the bus. Cadimas next heard a thud
and saw that the bus already collided with a motorcycle.
Espiritu was the photographer who took photographs of the
scene of the accident. He identified the five photographs which he
had taken of Catubig lying on the ground, bloodied; broken parts of
the motorcycle; and the truck which Catubig tried to overtake.
Dr. Baldado was the medico-legal doctor who conducted
the post-mortem examination of Catubigs body. He reported that
Catubig suffered from the following injuries: laceration and fracture
of the right leg; laceration and fracture of the left elbow; multiple
abrasions in the abdominal area, left anterior chest wall, posterior
right arm, and at the back of the left scapular area; and contusion-
hematoma just above the neck. Dr. Baldado confirmed that Catubig
was already dead when the latter was brought to the hospital, and that
the vehicular accident could have caused Catubigs instantaneous
death.
Respondent herself testified to substantiate the amount of
damages she was trying to recover from petitioner for Catubigs death,
such as Catubigs earning capacity; expenses incurred for the wake
and burial of Catubig, as well as of Emperado; the cost of the
motorcycle; and the costs of the legal services and fees respondent
had incurred.
Respondents documentary exhibits consisted of her and
Catubigs Marriage Contract dated August 21, 1982, their two
childrens Certificate of Live Births, Catubigs College Diploma dated
March 24, 1983, the list and receipts of the expenses for Catubigs
burial, the sketch of the collision site prepared by PO2 Elnas, the
excerpts from the police blotter, the photographs of the
collision,[10] and the Post Mortem Report[11] on Catubigs cadaver
prepared by Dr. Baldado.
In an Order[12] dated October 6, 1998, the RTC admitted all
of respondents aforementioned evidence.
On the other hand, Rosie C. Amahit (Amahit)[13] and
Nunally Maypa (Maypa)[14] took the witness stand for petitioner.
Amahit was a Court Stenographer at the MCTC who took
the transcript of stenographic notes (TSN) in Criminal Case No. M-
15-94 against Cabanilla. Amahit verified that the document being
presented by the defense in the present case was a true and correct
copy of the TSN of the preliminary investigation held in Criminal
Case No. M-15-94 on May 25, 1994, and another document was a
duplicate original of the MCTC Resolution dated December 22, 1994
dismissing Criminal Case No. M-15-94.
Maypa is the Administrative and Personnel Manager at the
Dumaguete branch of petitioner. He started working for petitioner
on September 22, 1990 as a clerk at the Human Resources
Development Department at the Central Office of petitioner
in Bacolod City. Sometime in November 1993, he became an
Administrative Assistant at the Dumaguete branch of petitioner; and
in August 1995, he was promoted to his current position at the same
branch.
While he was still an Administrative Assistant, Maypa was
responsible for the hiring of personnel including drivers and
conductors. Maypa explained that to be hired as a driver, an applicant
should be 35 to 45 years old, have at least five years experience in
driving big trucks, submit police, court, and medical clearances, and
possess all the necessary requirements for driving a motor vehicle of
more than 4,500 kilograms in gross weight such as a professional
drivers license with a restriction code of 3. The applicant should also
pass the initial interview, the actual driving and maintenance skills
tests, and a written psychological examination involving defensive
driving techniques. Upon passing these examinations, the applicant
still had to go through a 15-day familiarization of the bus and road
conditions before being deployed for work. Maypa, however,
admitted that at the time of his appointment as Administrative
Assistant at the Dumaguete branch, Cabanilla was already an
employee driver of petitioner.
Maypa further explained the investigation and grievance
procedure followed by petitioner in cases of vehicular accidents
involving the latters employee drivers. Maypa related that Cabanilla
had been put on preventive suspension following the vehicular
accident on January 27, 1994 involving the bus Cabanilla was driving
and the motorcycle carrying Catubig and Emperado. Following an
internal investigation of said accident conducted by petitioner,
Cabanilla was declared not guilty of causing the same, for he had not
been negligent.
Lastly, Maypa recounted the expenses petitioner incurred
as a result of the present litigation.
The documentary exhibits of petitioner consisted of the
TSN of the preliminary investigation in Criminal Case No. M-15-94
held on May 25, 1994 before the MCTC of Manjuyod-Bindoy-
Ayungon of the Province of Negros Oriental; Resolution dated
December 22, 1994 of the MCTC in the same case; and the Minutes
dated February 17, 1994 of the Grievance Proceeding conducted by
petitioner involving Cabanilla.[15]
The RTC, in its Order[16] dated November 12, 1999,
admitted all the evidence presented by petitioner.
On January 26, 2000, the RTC promulgated its Decision
favoring petitioner. Based on the sketch prepared by PO2 Elnas,
which showed that the point of impact x x x occurred beyond the
center lane near a curve within the lane of the Ceres bus[;][17] plus,
the testimonies of PO2 Elnas and Cadimas that the motorcycle
recklessly tried to overtake a truck near a curve and encroached the
opposite lane of the road, the RTC ruled that the proximate cause of
the collision of the bus and motorcycle was the negligence of the
driver of the motorcycle, Catubig. The RTC, moreover, was
convinced through the testimony of Maypa, the Administrative and
Personnel Manager of the Dumaguete branch of petitioner, that
petitioner had exercised due diligence in the selection and
supervision of its employee drivers, including Cabanilla.
After trial, the RTC concluded:
WHEREFORE, finding preponderance
of evidence in favor of the [herein petitioner] that
the [herein respondents] husband is the reckless
and negligent driver and not the driver of the
[petitioner], the above-entitled case is hereby
ordered dismissed.
[Petitioners] counterclaim is also dismissed for
lack of merit.[18]
Respondent appealed to the Court of Appeals. In its
Decision dated November 17, 2005, the appellate court held that both
Catubig and Cabanilla were negligent in driving their respective
vehicles. Catubig, on one hand, failed to use reasonable care for his
own safety and ignored the hazard when he tried to overtake a truck
at a curve. Cabanilla, on the other hand, was running his vehicle at a
high speed of 100 kilometers per hour. The Court of Appeals also
brushed aside the defense of petitioner that it exercised the degree of
diligence exacted by law in the conduct of its business. Maypa was
not in a position to testify on the procedures followed by petitioner in
hiring Cabanilla as an employee driver considering that Cabanilla
was hired a year before Maypa assumed his post at the Dumaguete
branch of petitioner.
Thus, the Court of Appeals decreed:
WHEREFORE, based on the foregoing,
the assailed decision of the trial court is
modified. We rule that [herein petitioner] is
equally liable for the accident in question which
led to the deaths of Quintin Catubig, Jr. and
Teddy Emperado and hereby award to the heirs
of Quintin Catubig, Jr. the amount
[of] P250,000.00 as full compensation for the
death of the latter.[19]
The Court of Appeals denied the motion for reconsideration
of petitioner in a Resolution dated November 16, 2006.
Hence, the instant Petition for Review.
Petitioner asserts that respondents complaint for damages
should be dismissed for the latters failure to verify the same. The
certification against forum shopping attached to the complaint, signed
by respondent, is not a valid substitute for respondents verification
that she has read the pleading and that the allegations therein are true
and correct of her personal knowledge or based on authentic
records.[20] Petitioner cited jurisprudence in which the Court ruled
that a pleading lacking proper verification is treated as an unsigned
pleading, which produces no legal effect under Section 3, Rule 7 of
the Rules of Court.
Petitioner also denies any vicarious or imputed liability
under Article 2180, in relation to Article 2176, of the Civil
Code. According to petitioner, respondent failed to prove the
culpability of Cabanilla, the employee driver of petitioner. There are
already two trial court decisions (i.e., the Resolution dated December
22, 1994 of the MCTC of Manjuyod-Bindoy-Ayungon of the
Province of Negros Oriental in Criminal Case No. M-15-94 and
the Decision dated January 26, 2000 of the RTC in the instant civil
suit) explicitly ruling that the proximate cause of the collision was
Catubigs reckless and negligent act. Thus, without the fault or

negligence of its employee driver, no liability at all could be imputed
upon petitioner.
Petitioner additionally argues, without conceding any fault
or liability, that the award by the Court of Appeals in respondents
favor of the lump sum amount of P250,000.00 as total death
indemnity lacks factual and legal basis. Respondents evidence to
prove actual or compensatory damages are all self-serving, which are
either inadmissible in evidence or devoid of probative value. The
award of moral and exemplary damages is likewise contrary to the
ruling of the appellate court that Catubig should be equally held
liable for his own death.
Respondent maintains that the Court of Appeals correctly
adjudged petitioner to be liable for Catubigs death and that the
appellate court had already duly passed upon all the issues raised in
the petition at bar.
The petition is meritorious.
At the outset, we find no procedural defect that would have
warranted the outright dismissal of respondents complaint.
Respondent filed her complaint for damages against
petitioner on July 19, 1995, when the 1964 Rules of Court was still in
effect. Rule 7, Section 6 of the 1964 Rules of Court provided:
SEC. 6. Verification.A pleading is
verified only by an affidavit stating that the
person verifying has read the pleading and that
the allegations thereof are true of his own
knowledge.
Verifications based on "information
and belief," or upon "knowledge, information and
belief," shall be deemed insufficient.
On July 1, 1997, the new rules on civil procedure took
effect. The foregoing provision was carried on, with a few
amendments, as Rule 7, Section 4 of the 1997 Rules of Court, viz:
SEC. 4. Verification. Except when
otherwise specifically required by law or rule,
pleadings need not be under oath, verified or
accompanied by affidavit.
A pleading is verified by an affidavit
that the affiant has read the pleading and that the
allegations therein are true and correct of his
knowledge and belief.
A pleading required to be verified
which contains a verification based on
information and belief, or upon knowledge,
information and belief, or lacks a proper
verification, shall be treated as an unsigned
pleading.
The same provision was again amended by A.M. No. 00-2-
10, which became effective on May 1, 2000. It now reads:
SEC. 4. Verification. - Except when
otherwise specifically required by law or rule,
pleadings need not be under oath, verified or
accompanied by affidavit.
A pleading is verified by an affidavit
that the affiant has read the pleading and that the
allegations therein are true and correct of his
personal knowledge or based on authentic
records.
A pleading required to be verified
which contains a verification based on
information and belief or upon knowledge,
information and belief, or lacks a proper
verification, shall be treated as an unsigned
pleading.
The 1997 Rules of Court, even prior to its amendment by
A.M. No. 00-2-10, clearly provides that a pleading lacking proper
verification is to be treated as an unsigned pleading which produces
no legal effect. However, it also just as clearly states that [e]xcept
when otherwise specifically required by law or rule, pleadings need
not be under oath, verified or accompanied by affidavit. No such law
or rule specifically requires that respondents complaint for damages
should have been verified.
Although parties would often submit a joint verification
and certificate against forum shopping, the two are different.
In Pajuyo v. Court of Appeals,[21] we already pointed out
that:
A partys failure to sign the certification
against forum shopping is different from the
partys failure to sign personally the
verification. The certificate of non-forum
shopping must be signed by the party, and not by
counsel. The certification of counsel renders the
petition defective.
On the other hand, the requirement on
verification of a pleading is a formal and not a
jurisdictional requisite. It is intended simply to
secure an assurance that what are alleged in the
pleading are true and correct and not the product
of the imagination or a matter of speculation, and
that the pleading is filed in good faith. The party
need not sign the verification. A partys
representative, lawyer or any person who
 personally knows the truth of the facts alleged in
speculation. When circumstances warrant, the court may simply order
the pleading may sign the verification.[22]
the correction of unverified pleadings or act on it and waive strict
compliance with the rules in order that the ends of justice may
In the case before us, we stress that as a general rule, a
thereby be served.[23]
pleading need not be verified, unless there is a law or rule specifically
requiring the same. Examples of pleadings that require verification
We agree with petitioner, nonetheless, that respondent was
are: (1) all pleadings filed in civil cases under the 1991 Revised Rules
unable to prove imputable negligence on the part of petitioner.
on Summary Procedure; (2) petition for review from the Regional
Trial Court to the Supreme Court raising only questions of law under
Prefatorily, we restate the time honored principle that in a
Rule 41, Section 2; (3) petition for review of the decision of the
petition for review under Rule 45, only questions of law may be
Regional Trial Court to the Court of Appeals under Rule 42, Section
raised. It is not our function to analyze or weigh all over again
1; (4) petition for review from quasi-judicial bodies to the Court of
evidence already considered in the proceedings below, our
Appeals under Rule 43, Section 5; (5) petition for review before the
jurisdiction is limited to reviewing only errors of law that may have
Supreme Court under Rule 45, Section 1; (6) petition for annulment
been committed by the lower court.The resolution of factual issues is
of judgments or final orders and resolutions under Rule 47, Section 4;
the function of lower courts, whose findings on these matters are
(7) complaint for injunction under Rule 58, Section 4; (8) application
received with respect. A question of law which we may pass upon
for preliminary injunction or temporary restraining order under Rule
must not involve an examination of the probative value of the
58, Section 4; (9) application for appointment of a receiver under
evidence presented by the litigants.[24]
Rule 59, Section 1; (10) application for support pendente lite under
The above rule, however, admits of certain exceptions. The
Rule 61, Section 1; (11) petition for certiorari against the judgments,
findings of fact of the Court of Appeals are generally conclusive but
final orders or resolutions of constitutional commissions under Rule
may be reviewed when: (1) the factual findings of the Court of
64, Section 2; (12) petition for certiorari, prohibition,
Appeals and the trial court are contradictory; (2) the findings are
and mandamus under Rule 65, Sections 1 to 3; (13) petition for quo
grounded entirely on speculation, surmises or conjectures; (3) the
warranto under Rule 66, Section 1; (14) complaint for expropriation
inference made by the Court of Appeals from its findings of fact is
under Rule 67, Section 1; (15) petition for indirect contempt under
manifestly mistaken, absurd or impossible; (4) there is grave abuse of
Rule 71, Section 4, all from the 1997 Rules of Court; (16) all
discretion in the appreciation of facts; (5) the appellate court, in
complaints or petitions involving intra-corporate controversies under
making its findings, goes beyond the issues of the case and such
the Interim Rules of Procedure on Intra-Corporate Controversies;
findings are contrary to the admissions of both appellant and
(17) complaint or petition for rehabilitation and suspension of
appellee; (6) the judgment of the Court of Appeals is premised on a
payment under the Interim Rules on Corporate Rehabilitation; and
misapprehension of facts; (7) the Court of Appeals fails to notice
(18) petition for declaration of absolute nullity of void marriages and
certain relevant facts which, if properly considered, will justify a
annulment of voidable marriages as well as petition for summary
different conclusion; and (8) the findings of fact of the Court of
proceedings under the Family Code.
Appeals are contrary to those of the trial court or are mere
conclusions without citation of specific evidence, or where the facts
In contrast, all complaints, petitions, applications, and other
set forth by the petitioner are not disputed by respondent, or where
initiatory pleadings must be accompanied by a certificate against
the findings of fact of the Court of Appeals are premised on the
forum shopping, first prescribed by Administrative Circular No. 04-
absence of evidence but are contradicted by the evidence on
94, which took effect on April 1, 1994, then later on by Rule 7,
record.[25]
Section 5 of the 1997 Rules of Court. It is not disputed herein that
respondents complaint for damages was accompanied by such a
The issue of negligence is basically factual.[26] Evidently, in
certificate.
this case, the RTC and the Court of Appeals have contradictory
factual findings: the former found that Catubig alone was negligent,
In addition, verification, like in most cases required by the
while the latter adjudged that both Catubig and petitioner were
rules of procedure, is a formal, not jurisdictional, requirement, and
negligent.
mainly intended to secure an assurance that matters which are alleged
are done in good faith or are true and correct and not of mere
 Respondent based her claim for damages on Article 2180,
in relation to Article 2176, of the Civil Code, which read:
Art. 2176. Whoever by act or omission causes damage to
another, there being fault or negligence, is obliged to pay
for the damage done. Such fault or negligence, if there is no
pre-existing contractual relation between the parties, is
called a quasi-delict and is governed by the provisions of
this Chapter.
Art. 2180. The obligation imposed by Article 2176 is
demandable not only for ones own acts or omissions, but
also for those persons for whom one is responsible.
xxxx
Employers shall be liable for the damages caused by their
employees and household helpers acting within the scope
of their assigned tasks, even though the former are not
engaged in any business or industry.
xxxx
The responsibility treated of in this article shall cease when
the persons herein mentioned prove that they observed all
the diligence of a good father of a family to prevent
damage.
There is merit in the argument of the petitioner that Article
2180 of the Civil Code imputing fault or negligence on the part of the
employer for the fault or negligence of its employee does not apply to
petitioner since the fault or negligence of its employee driver,
Cabanilla, which would have made the latter liable for quasi-delict
under Article 2176 of the Civil Code, has never been established by
respondent. To the contrary, the totality of the evidence presented
during trial shows that the proximate cause of the collision of the bus
and motorcycle is attributable solely to the negligence of the driver of
the motorcycle, Catubig.
Proximate cause is defined as that cause, which, in natural
and continuous sequence, unbroken by any efficient intervening
cause, produces the injury, and without which the result would not
have occurred. And more comprehensively, the proximate legal cause
is that acting first and producing the injury, either immediately or by
setting other events in motion, all constituting a natural and
continuous chain of events, each having a close causal connection
with its immediate predecessor, the final event in the chain
immediately effecting the injury as a natural and probable result of
the cause which first acted, under such circumstances that the person
responsible for the first event should, as an ordinary prudent and
intelligent person, have reasonable ground to expect at the moment of
his act or default that an injury to some person might probably result
therefrom.[27]
The RTC concisely articulated and aptly concluded that
Catubigs overtaking of a slow-moving truck ahead of him, while
approaching a curve on the highway, was the immediate and
proximate cause of the collision which led to his own death, to wit:
Based on the evidence on record, it is
crystal clear that the immediate and
proximate cause of the collision is the reckless
and negligent act of Quintin Catubig, Jr. and
not because the Ceres Bus was running very
fast. Even if the Ceres Bus is running very fast
on its lane, it could not have caused the
collision if not for the fact that Quintin
Catubig, Jr. tried to overtake a cargo truck
and encroached on the lane traversed by the
Ceres Bus while approaching a curve. As the
driver of the motorcycle, Quintin Catubig, Jr. has
not observed reasonable care and caution in
driving his motorcycle which an ordinary prudent
driver would have done under the
circumstances. Recklessness on the part of
Quintin Catubig, Jr. is evident when he tried to
overtake a cargo truck while approaching a curve
in Barangay Donggo-an, Bolisong, Manjuyod,
Negros Oriental. Overtaking is not allowed while
approaching a curve in the highway (Section
41(b), Republic Act [No.] 4136, as
amended). Passing another vehicle proceeding on
the same direction should only be resorted to by a
driver if the highway is free from incoming
vehicle to permit such overtaking to be made in
safety (Section 41(a), Republic Act [No.]
4136). The collision happened because of the
recklessness and carelessness of [herein
respondents] husband who was overtaking a
cargo truck while approaching a
curve. Overtaking another vehicle while
approaching a curve constitute reckless driving
penalized not only under Section 48 of Republic
Act [No.] 4136 but also under Article 365 of the
Revised Penal Code.
The Court commiserate with the
[respondent] for the untimely death of her
husband. However, the Court as dispenser of
justice has to apply the law based on the facts of
the case. Not having proved by preponderance of
evidence that the proximate cause of the collision
is the negligence of the driver of the Ceres bus,
this Court has no other option but to dismiss this
case.[28](Emphases supplied.)
The testimonies of prosecution witnesses Cadimas and PO2
Elnas that Cabanilla was driving the bus at a reckless speed when the
collision occurred lack probative value.
We are unable to establish the actual speed of the bus from
Cadimass testimony for he merely stated that the bus did not stop
when he tried to flag it down because it was running very fast. [29]
PO2 Elnas, on the other hand, made inconsistent statements
as to the actual speed of the bus at the time of the collision. During
the preliminary investigation in Criminal Case No. M-15-94 before
the MCTC, PO2 Elnas refused to give testimony as to the speed of
either the bus or the motorcycle at the time of the collision and an
opinion as to who was at fault.[30] But during the trial of the present
case before the RTC, PO2 Elnas claimed that he was told by
Cabanilla that the latter was driving the bus at the speed of around
100 kilometers per hour.[31]

As the RTC noted, Cadimas and PO2 Elnas both pointed

out that the motorcycle encroached the lane of the bus when it tried to
overtake, while nearing a curve, a truck ahead of it, consistent with
the fact that the point of impact actually happened within the lane
traversed by the bus. It would be more reasonable to assume then that
it was Catubig who was driving his motorcycle at high speed because
to overtake the truck ahead of him, he necessarily had to drive faster
than the truck. Catubig should have also avoided overtaking the
vehicle ahead of him as the curvature on the road could have
obstructed his vision of the oncoming vehicles from the opposite
lane.
The evidence shows that the driver of the bus, Cabanilla,
was driving his vehicle along the proper lane, while the driver of the
motorcycle, Catubig, had overtaken a vehicle ahead of him as he was
approaching a curvature on the road, in disregard of the provision of
the law on reckless driving, at the risk of his life and that of his
employee, Emperado.

The presumption that employers are negligent under Article

2180 of the Civil Code flows from the negligence of their
employees.[32] Having adjudged that the immediate and proximate
cause of the collision resulting in Catubigs death was his own
negligence, and there was no fault or negligence on Cabanillas part,
then such presumption of fault or negligence on the part of petitioner,
as Cabanillas employer, does not even arise. Thus, it is not even
necessary to delve into the defense of petitioner that it exercised due
diligence in the selection and supervision of Cabanilla as its
employee driver.

WHEREFORE, premises considered, the petition

is GRANTED. The Decision dated November 17, 2005 and
Resolution dated November 16, 2006 of the Court Appeals in CA-
G.R. CV No. 66815 are SET ASIDE and the Decision dated January
26, 2000 of the Regional Trial Court, Branch 30 of Dumaguete City,
dismissing Civil Case No. 11360 is REINSTATED.

SO ORDERED.