FEBTC v.

Pacilan Digest
Far East Bank vs. Pacilan
G.R. 157314 July 29, 2005 supple
Callejo Sr, J.:

Facts:
1. Pacilan maintains a current account with petitioner bank (now BPI). He issued several
postdated checks, the last one being check no. 2434886 amounting to P680. The said check was
presented to petitioner bank for payment on April 4, 1988 but was dishonored. It appeared that
the account of Pacilan has been closed on the evening of April 4 on the ground that it was
'improperly handled'.

2. It appeared that the plaintiff issued four checks from March 30 - April 4, 1988 amounting in
total to P7,410, on one hand, his funds in the bank only amounted to P6,981.43, thus an overdraft
of P 428.57 resulted therefrom. Consequently, the last check was dishonored despite the fact that
plaintiff deposited the amount the following day.

3. Pacilan wrote a complaint to the bank but after the bank did not reply, he filed an action for
damages against it and the employee (Villadelgado) who closed the account. The plaintiff
alleged that the immediate closure of his account was malicious and intended to embarrass him.

4. The lower court ruled in favor of the plaintiff and awarded actual damages (P100,000) and
exemplary damages (P50,000). The bank appealed, but the CA affirmed the lower court's
decision with modifications and held that the closure of the bank of plaintiff's account despite its
rules and regulation allowing a re-clearing of a check returned for insufficiency of funds, is
patently malicious and unjustifiable. Hence, this appeal.

5. The petitioner contended that in closing the account, it acted in good faith and in accordance
with the pertinent banking rules and regulations governing the operations of a regular demand
deposit, allowing it to close an account if the depositor frequently draws checks against
insufficient funds or uncollected deposits.

Issue: Whether or not the petitioner is liable for damages

NO. The award of damages under Art. 19 of the Civil Code is unjustifiable. The petitioner has
the right to close the account of plaintiff based on the rules and regulations on regular demand
deposits. The facts do not show that the petitioner abused its rights in the exercise of its duties.
The evidence negates the existence of bad faith and malice on the part of the petitioner bank,
which are the second and third elements necessary to prove an abuse of right in violation of Art.
19. The records also showed that indeed plaintiff has mishandled his account by issuing checks
previously against insufficient funds not just once, but more than a hundred times.
Moreover, the acceptance by the bank of the deposit the day after the closure of the
account cannot be considered as bad faith nor done with malice but a mere simple negligence of
its personnel.

As a result, whatever damage the plaintiff has suffered (by virtue of the subsequent
dishonor of the other checks he issued) should be borne by him alone as these was the result of
his own act in irregularly handling his account.


RELLOSA vs. PELLOSIS
GR# 138964, August 09, 2001

FACTS: Respondents were Marta Reyes lessees. They had built their houses on the leased land
which over the years underwent continuous improvements. When Marta died, her son Victor
inherited the land. Sometime in 1986, he informed respondents that they would have a right of
first refusal to buy the lot since they have been its lessees for more than 20 years. However, the
land was sold in 1989 to petitioner Cynthia Ortega without respondents knowledge. She
thereafter secured title to the property in her name and proceeded to condemn the structures on
the land via a Condemnation Petition with the Office of the Building Official in Manila City. The
respondents immediately filed with the Manila RTC a suit for the Declaration of Nullity of the
sale in Cynthias favor predicated on their right of first refusal. Nevertheless, the office of the
Building Official issued an order of demolition of the respondents houses which took place after
several interventions.

HELD: The abuse of rights rule established in Article 19, NCC require every person to act with
justice, to give everyone his due and to observe honesty and good faith. When a right is
exercised in a manner which discards these norms resulting in damage to another, a legal wrong
is committed for which the actor can be held accountable. In the case at bar, the issue is not so
much about the existence of the right/validity of the order of demolition as the question of
whether or not petitioners have acted in conformity with, and not in disregard of, the standard set
by Art. 19, NCC. At the time the petitioners implemented the order of demolition, barely 5 days
after respondents received a copy thereof, the same was not yet final and executory. The latter
are given 15 days to appeal. Due to petitioners premature action of demolishing the houses, the
respondents were effectively deprived of this recourse. The action of petitioners up to the point
where they were able to secure an order of demolition was not condemnable but implementing
the order unmindful of the respondents right to contest the ruling was a different matter and
could only be held utterly indefensible.

TITLE: Nikko Hotel Manila vs. Reyes
CITATION: GR No. 154259, February 28, 2005

FACTS:

Petitioners Nikko Hotel Manila and Ruby Lim assailed the decision of the Court of Appeals in
reversing the decision of RTC of Quezon City. CA held petitioner liable for damages to Roberto
Reyes aka Amang Bisaya, an entertainment artist.

There are two versions of the story:
Mr. Reyes: On the eve of October 13, 1994, Mr. Reyes while having coffee at the lobby of Nikko
Hotel was approached by Dr. Violet Filart, a friend several years back. According to Mr. Reyes,
Dr. Filart invited him to join a birthday party at the penthouse for the hotels former General
Manager, Mr. Tsuruoka. Plaintiff agreed as Dr. Filart agreed to vouch for him and carried a
basket of fruits, the latters gift. He He lined up at the buffet table as soon as it was ready but to
his great shock, shame and embarrassment, Ruby Lim, Hotels Executive Secretary, asked him to
leave in a loud voice enough to be heard by the people around them. He was asked to leave the
party and a Makati policeman accompanied him to step-out the hotel. All these time, Dr Filart
ignored him adding to his shame and humiliation.

Ms. Ruby Lim: She admitted asking Mr. Reyes to leave the party but not in the manner claimed
by the plaintiff. Ms. Lim approached several people including Dr. Filarts sister, Ms. Zenaida
Fruto, if Dr. Filart did invite him as the captain waiter told Ms. Lim that Mr. Reyes was with Dr.
Filarts group. She wasnt able to ask it personally with Dr. Filart since the latter was talking
over the phone and doesnt want to interrupt her. She asked Mr. Reyes to leave because the
celebrant specifically ordered that the party should be intimate consisting only of those who part
of the list. She even asked politely with the plaintiff to finish his food then leave the party.

During the plaintiffs cross-examination, he was asked how close was Ms. Lim when she
approached him at the buffet table. Mr. Reyes answered very close because we nearly kissed
each other. Considering the close proximity, it was Ms. Lims intention to relay the request
only be heard by him. It was Mr. Reyes who made a scene causing everybody to know what
happened.

ISSUE: Whether or not petitioners acted abusively in asking Mr. Reyes to leave the party.
HELD: Supreme Court held that petitioners did not act abusively in asking Mr. Reyes to leave
the party. Plaintiff failed to establish any proof of ill-motive on the part of Ms. Lim who did all
the necessary precautions to ensure that Mr. Reyes will not be humiliated in requesting him to
leave the party. Considering almost 20 years of experience in the hotel industry, Ms. Lim is
experienced enough to know how to handle such matters. Hence, petitioners will not be held
liable for damages brought under Article 19 and 20 of the Civil Code




ALBENSON vs. COURT OF APPEALSFACTS:
Albenson Ent. delivered mild steel plates to Guaranteed Industries Inc. A Pacific
BankingCorporation Check was paid and drawn against the account of EL
Woodworks. Check waslater dishonored for the reason Account Closed. Company traced
source of check and
laterd i s c o v e r e d t h a t t h e s i g n a t u r e b e l o n g e d t o o n e Eu g e n i o Ba l t a o .
Al b e n s o n ma d e a n extrajudical demand upon Baltao but latter denied that he
issued the check or that thesignature was his. Company filed a complaint against
Baltao for violation of BP 22. It was later discovered that private respondent had
son: Eugene Baltao III, who manages thebusiness establishment, EL Woodworks. No
effort from the father to inform Albenson of such information. Rather the father filed complaint
for damages against Albenson.
ISSUE:
Whether there is indeed cause for the damages against Albenson Enterprise.

RULING:
Based on Art 19, 20, 21 of the civil code, petitioners didnt have the intent to cause damage to
the respondent or enrich themselves but just to collect what was due to them.

Wassmer vs. Velez

FACTS:
Francisco Velez and Beatriz, following their promise to love, decided to get married.
Two days before their marriage Francisco wrote Beatriz telling her that their marriage
had to be postponed as his mother opposes it. A day before his marriage he sent a
telegram informing her nothing changed rest assured returning soon. Francisco was
never heard from again. Beatriz sued for damages for breach of promise to marry.
ISSUE:
Is breach of promise to marry an actionable wrong?
HELD:
The extent to which acts not contrary to law may be perpetrated with impunity, is
not limitless for Article 21 of the Civil Code provides that any person who willfully
causes loss or injury to another in a manner that is contrary to morals, good customs
or public policy shall compensate the latter for the damages.
This is not a case of mere breach to marry. As stated, mere breach of promise to
marry is not an actionable wrong. But to formally set a wedding and go through all the
preparation and publicity, only to walk out of it when the matrimony is about to be
solemnized, is quite different. This is palpably and unjustifiably contrary to good
customs for which defendant must be held answerable in damages in accordance with
Article 21 of the Civil Code.
When a breach to marry is actionable under Article 21 of the Civil Code, moral
damages may be awarded under Article 2219(10) of the said Code. Exemplary
damages may also be awarded under Article 2232 of said Code where it is proven that
the defendant clearly acted in a wanton, reckless and oppressive manner.
Baksh vs. CA
In August 1986, while working as a waitress in Dagupan City, Pangasinan, Marilou
Gonzales, then 21 years old, met Gashem Shookat Baksh, a 29 year old exchange
student from Iran who was studying medicine in Dagupan. The two got really close and
intimate. On Marilous account, she said that Gashem later offered to marry her at the
end of the semester. Marilou then introduced Gashem to her parents where they
expressed their intention to get married. Marilous parents then started inviting sponsors
and relatives to the wedding. They even started looking for animals to slaughter for the
occasion.
Meanwhile, Marilou started living with Gashem in his apartment where they had sexual
intercourse. But in no time, their relationship went sour as Gashem began maltreating
Marilou. Gashem eventually revoked his promise of marrying Marilou and he told her
that he is already married to someone in Bacolod City. So Marilou went home and later
sued Gashem for damages.
The trial court ruled in favor of Marilou and awarded her P20k in moral damages. The
Court of Appeals affirmed the decision of the trial court.
On appeal, Gashem averred that he never proposed marriage to Marilou and that he
cannot be adjudged to have violated Filipino customs and traditions since he, being an
Iranian, was not familiar with Filipino customs and traditions.
ISSUE: Whether or not the Court of Appeals is correct.
HELD: Yes. Gashem is liable to pay for damages in favor of Marilou not really because
of his breach of promise to marry her but based on Article 21 of the Civil Code which
provides:
Any person who wilfully causes loss or injury to another in a manner that is contrary to
morals, good customs or public policy shall compensate the latter for the damage.
Breach of promise to marry is not an actionable wrong per se. In this case, it is the
deceit and fraud employed by Gashem that constitutes a violation of Article 21 of the
Civil Code. His promise of marrying Marilou was a deceitful scheme to lure her into
sexual congress. As found by the trial court, Marilou was not a woman of loose morals.
She was a virgin before she met Gashem. She would not have surrendered herself to
Gashem had Gashem not promised to marry her. Gashems blatant disregard of Filipino
traditions on marriage and on the reputation of Filipinas is contrary to morals, good
customs, and public policy. As a foreigner who is enjoying the hospitality of our country
and even taking advantage of the opportunity to study here he is expected to respect
our traditions. Any act contrary will render him liable under Article 21 of the Civil Code.
The Supreme Court also elucidated that Article 21 was meant to expand the concepts of
torts and quasi delict. It is meant to cover situations such as this case where the breach
complained of is not strictly covered by existing laws. It was meant as a legal remedy for
the untold number of moral wrongs which is impossible for human foresight to
specifically enumerate and punish in the statute books such as the absence of a law
penalizing a the breach of promise to marry.
The Supreme Court however agreed with legal luminaries that if the promise to marry
was made and there was carnal knowledge because of it, then moral damages may be
recovered (presence of moral or criminal seduction), Except if there was mutual lust; or
if expenses were made because of the promise (expenses for the wedding), then actual
damages may be recovered.


ERNESTO RAMAS UYPITCHING AND RAMAS UYPITCHING SONS, INC., PETITIONERS, VS.
ERNESTO QUIAMCO, RESPONDENT .
CORONA, J.:
FACTS:


Honeste vivere, non alterum laedere et jus suum cuique tribuere. To live virtuously, not to injure others and
to give everyone his due. These supreme norms of justice are the underlying principles of law and order in
society.

In 1982, respondent Ernesto C. Quiamco was approached by Juan Davalan,
[2]
Josefino Gabutero and Raul
Generoso to amicably settle the civil aspect of a criminal case for robbery
[3]
filed by Quiamco against them.
They surrendered to him a red Honda XL-100 motorcycle and a photocopy of its certificate of registration.
Respondent asked for the original certificate of registration but the three accused never came to see him
again. Meanwhile, the motorcycle was parked in an open space inside respondent's business
establishment, Avesco-AVNE Enterprises, where it was visible and accessible to the public.

It turned out that, in October 1981, the motorcycle had been sold on installment basis to Gabutero by
petitioner Ramas Uypitching Sons, Inc., a family-owned corporation managed by petitioner Atty. Ernesto
Ramas Uypitching. To secure its payment, the motorcycle was mortgaged to petitioner corporation.
[4]


When Gabutero could no longer pay the installments, Davalan assumed the obligation and continued the
payments. In September 1982, however, Davalan stopped paying the remaining installments and told
petitioner corporation's collector, Wilfredo Verao, that the motorcycle had allegedly been "taken by
respondent's men."

Nine years later, on January 26, 1991, petitioner Uypitching, accompanied by policemen,
[5]
went to Avesco-
AVNE Enterprises to recover the motorcycle. The leader of the police team, P/Lt. Arturo Vendiola, talked to
the clerk in charge and asked for respondent. While P/Lt. Vendiola and the clerk were talking, petitioner
Uypitching paced back and forth inside the establishment uttering "Quiamco is a thief of a motorcycle."

On learning that respondent was not in Avesco-AVNE Enterprises, the policemen left to look for respondent
in his residence while petitioner Uypitching stayed in the establishment to take photographs of the
motorcycle. Unable to find respondent, the policemen went back to Avesco-AVNE Enterprises and, on
petitioner Uypitching's instruction and over the clerk's objection, took the motorcycle.

On February 18, 1991, petitioner Uypitching filed a criminal complaint for qualified theft and/or violation of
the Anti-Fencing Law
[6]
against respondent in the Office of the City Prosecutor of Dumaguete
City.
[7]
Respondent moved for dismissal because the complaint did not charge an offense as he had neither
stolen nor bought the motorcycle. The Office of the City Prosecutor dismissed the complaint
[8]
and denied
petitioner Uypitching's subsequent motion for reconsideration.

Respondent filed an action for damages against petitioners in the RTC of Dumaguete City, Negros Oriental,
Branch 37.
[9]
He sought to hold the petitioners liable for the following: (1) unlawful taking of the motorcycle;
(2) utterance of a defamatory remark (that respondent was a thief) and (3) precipitate filing of a baseless
and malicious complaint. These acts humiliated and embarrassed the respondent and injured his reputation
and integrity.

ISSUE:

Whether the filing of a complaint for qualified theft and/or violation of the Anti-Fencing Law in the Office of
the City Prosecutor warranted the award of moral damages, exemplary damages, attorney's fees and costs
in favor of respondent.

Petitioners' suggestion is misleading. They were held liable for damages not only for instituting a
groundless complaint against respondent but also for making a slanderous remark and for taking the
motorcycle from respondent's establishment in an abusive manner.

Correctness of the Findings
of the RTC and CA

As they never questioned the findings of the RTC and CA that malice and ill will attended not only the
public imputation of a crime to respondent
[14]
but also the taking of the motorcycle, petitioners were deemed
to have accepted the correctness of such findings. This alone was sufficient to hold petitioners liable for
damages to respondent.

Nevertheless, to address petitioners' concern, we also find that the trial and appellate courts correctly ruled
that the filing of the complaint was tainted with malice and bad faith. Petitioners themselves in fact
described their action as a "precipitate act."
[15]
Petitioners were bent on portraying respondent as a thief. In
this connection, we quote with approval the following findings of the RTC, as adopted by the CA:
x x x There was malice or ill-will [in filing the complaint before the City Prosecutor's Office] because
Atty. Ernesto Ramas Uypitching knew or ought to have known as he is a lawyer, that there was no probable
cause at all for filing a criminal complaint for qualified theft and fencing activity against [respondent]. Atty.
Uypitching had no personal knowledge that [respondent] stole the motorcycle in question. He was merely
told by his bill collector ([i.e.] the bill collector of Ramas Uypitching Sons, Inc.)[,] Wilfredo Verao[,] that
Juan Dabalan will [no longer] pay the remaining installment(s) for the motorcycle because the motorcycle
was taken by the men of [respondent]. It must be noted that the term used by Wilfredo Verao in informing
Atty. Ernesto Ramas Uypitching of the refusal of Juan Dabalan to pay for the remaining installment was
[']taken['], not [']unlawfully taken['] or 'stolen.' Yet, despite the double hearsay, Atty. Ernesto Ramas
Uypitching not only executed the [complaint-affidavit] wherein he named [respondent] as 'the suspect' of
the stolen motorcycle but also charged [respondent] of 'qualified theft and fencing activity' before the City
[Prosecutor's] Office of Dumaguete. The absence of probable cause necessarily signifies the presence of
malice. What is deplorable in all these is that Juan Dabalan, the owner of the motorcycle, did not accuse
[respondent] or the latter's men of stealing the motorcycle[,] much less bother[ed] to file a case for qualified
theft before the authorities. That Atty. Uypitching's act in charging [respondent] with qualified theft and
fencing activity is tainted with malice is also shown by his answer to the question of Cupid
Gonzaga
[16]
[during one of their conversations] - "why should you still file a complaint" You have already
recovered the motorcycle..."[:] "Aron motagam ang kawatan ug motor." ("To teach a lesson to the thief of
motorcycle.")
[17]

Moreover, the existence of malice, ill will or bad faith is a factual matter. As a rule, findings of fact of the trial
court, when affirmed by the appellate court, are conclusive on this Court. We see no compelling reason to
reverse the findings of the RTC and the CA.

Petitioners Abused Their
Right of Recovery as
Mortgagee(s)

Petitioners claim that they should not be held liable for petitioner corporation's exercise of its right as seller-
mortgagee to recover the mortgaged vehicle preliminary to the enforcement of its right to foreclose on the
mortgage in case of default. They are clearly mistaken.

True, a mortgagee may take steps to recover the mortgaged property to enable it to enforce or protect its
foreclosure right thereon. There is, however, a well-defined procedure for the recovery of possession of
mortgaged property: if a mortgagee is unable to obtain possession of a mortgaged property for its sale on
foreclosure, he must bring a civil action either to recover such possession as a preliminary step to the sale,
or to obtain judicial foreclosure.
[18]


Petitioner corporation failed to bring the proper civil action necessary to acquire legal possession of the
motorcycle. Instead, petitioner Uypitching descended on respondent's establishment with his policemen
and ordered the seizure of the motorcycle without a search warrant or court order. Worse, in the course of
the illegal seizure of the motorcycle, petitioner Uypitching even mouthed a slanderous statement.

No doubt, petitioner corporation, acting through its co-petitioner Uypitching, blatantly disregarded the lawful
procedure for the enforcement of its right, to the prejudice of respondent. Petitioners' acts violated the law
as well as public morals, and transgressed the proper norms of human relations.

The basic principle of human relations, embodied in Article 19 of the Civil Code, provides:
Art. 19. Every person must in the exercise of his rights and in the performance of his duties, act
with justice, give every one his due, and observe honesty and good faith.
Article 19, also known as the "principle of abuse of right," prescribes that a person should not use his
right unjustly or contrary to honesty and good faith, otherwise he opens himself to liability.
[19]
It seeks to
preclude the use of, or the tendency to use, a legal right (or duty) as a means to unjust ends.

There is an abuse of right when it is exercised solely to prejudice or injure another.
[20]
The exercise of a
right must be in accordance with the purpose for which it was established and must not be excessive or
unduly harsh; there must be no intention to harm another.
[21]
Otherwise, liability for damages to the injured
party will attach.

In this case, the manner by which the motorcycle was taken at petitioners' instance was not only attended
by bad faith but also contrary to the procedure laid down by law. Considered in conjunction with the
defamatory statement, petitioners' exercise of the right to recover the mortgaged vehicle was utterly
prejudicial and injurious to respondent. On the other hand, the precipitate act of filing an unfounded
complaint could not in any way be considered to be in accordance with the purpose for which the right to
prosecute a crime was established. Thus, the totality of petitioners' actions showed a calculated design to
embarrass, humiliate and publicly ridicule respondent. Petitioners acted in an excessively harsh fashion to
the prejudice of respondent. Contrary to law, petitioners willfully caused damage to respondent. Hence,
they should indemnify him