Professional Documents
Culture Documents
NAVARRO
FACTS:
As was to be expected, NACOCO but partially performed the contracts. The buyers
threatened damage suits, some of which were settled. But one buyer, did in fact sue
before the Court of First Instance of Manila. The cases culminated in an out-of-court
amicable settlement when the Kalaw management was already out.
ISSUE:
Whether damages should be awarded
RULING:
No. This is a case of damnum absque injuria. Conjunction of damage and wrong is
here absent. There cannot be an actionable wrong if either one or the other is wanting.
Of course, Kalaw could not have been an insurer of profits. He could not be expected
to predict the coming of unpredictable typhoons. And even as typhoons supervened
Kalaw was not remissed in his duty. He exerted efforts to stave off losses. That Kalaw
cannot be tagged with crassa negligentia or as much as simple negligence, would
seem to be supported by the fact that even as the contracts were being questioned in
Congress and in the NACOCO board itself, President Roxas defended the actuations
of Kalaw.
It is a well known rule of law that questions of policy of management are left solely to
the honest decision of officers and directors of a corporation, and the court is without
authority to substitute its judgment for the judgment of the board of directors; the
board is the business manager of the corporation, and so long as it acts in good faith
its orders are not reviewable by the courts."
Under the given circumstances, the Kalaw contracts are valid corporate acts. Bad
faith does not simply connote bad judgment or negligence; it imports a dishonest
purpose or some moral obliquity and conscious doing of wrong; it means breach of a
known duty thru some motive or interest or ill will; it partakes of the nature of fraud.
Applying this precept to the given facts herein, we find that there was no "dishonest
purpose," or "some moral obliquity," or "conscious doing of wrong," or "breach of a
known duty," or "Some motive or interest or ill will" that "partakes of the nature of
fraud."