Escolar Documentos
Profissional Documentos
Cultura Documentos
office. He was, however, advised that the money has been returned to LBC's
office in Dipolog City upon shipper's request. Again, he demanded for the ONE
THOUSAND PESOS (P1,000.00) and refund of FORTY-NINE PESOS (P49.00)
LBC revenue charges. He received the money only on December 15, 1984 less
the revenue charges.
Respondent Carloto claimed that because of the delay in the transmittal of the
cashpack, he failed to submit the rediscounting documents to Central Bank on
time. As a consequence, his rural bank was made to pay the Central Bank
THIRTY-TWO THOUSAND PESOS (P32,000.00) as penalty interest. 4 He
allegedly suffered embarrassment and humiliation.
Petitioner LBC, on the other hand, alleged that the cashpack was forwarded via
PAL to LBC Cebu City branch on November 22, 1984. 5 On the same day, it
was delivered at respondent Carloto's residence at No. 2 Greyhound
Subdivision, Kinasangan, Pardo, Cebu City. However, he was not around to
receive it. The delivery man served instead a claim notice to insure he would
personally receive the money. This was annotated on Cashpack Delivery
Receipt No. 342805. Notwithstanding the said notice, respondent Carloto did
not claim the cashpack at LBC Cebu. On November 23, 1984, it was returned
to the shipper, Elsie Carloto-Concha at Dipolog City.
On November 16, 1984, Mrs. Concha thru her clerk, Adelina Antigo consigned
thru LBC Dipolog Branch the pertinent documents and the sum of ONE
THOUSAND PESOS (P1,000.00) to respondent Carloto at No. 2 Greyhound
Subdivision, Kinasangan, Pardo, Cebu City. This was evidenced by LBC Air
Cargo, Inc., Cashpack Delivery Receipt No. 34805.
Claiming that petitioner LBC wantonly and recklessly disregarded its obligation,
respondent Carloto instituted an action for Damages Arising from Nonperformance of Obligation docketed as Civil Case No. 3679 before the
Regional Trial Court of Dipolog City on January 4, 1985. On June 25, 1988, an
amended complaint was filed where respondent rural bank joined as one of the
plaintiffs and prayed for the reimbursement of THIRTY-TWO THOUSAND
PESOS (P32,000.00).
After hearing, the trial court rendered its decision, the dispositive portion of
which reads:
WHEREFORE, judgment is hereby rendered:
We also hold that respondents failed to show that petitioner LBC's late delivery
of the cashpack was motivated by personal malice or bad faith, whether
intentional or thru gross negligence. In fact, it was proved during the trial that
the cashpack was consigned on November 16, 1984, a Friday. It was sent to
Cebu on November 19, 1984, the next business day. Considering this
circumstance, petitioner cannot be charged with gross neglect of duty. Bad faith
under the law can not be presumed; it must be established by clearer and
convincing evidence. 13Again, the unbroken jurisprudence is that in breach of
contract cases where the defendant is not shown to have acted fraudulently or
in bad faith, liability for damages is limited to the natural and probable
consequences of the branch of the obligation which the parties had foreseen or
could reasonable have foreseen. The damages, however, will not include
liability for moral damages. 14
Prescinding from these premises, the award of exemplary damages made by
the respondent court would have no legal leg to support itself. Under Article
2232 of the Civil Code, in a contractual or quasi-contractual relationship,
exemplary damages may be awarded only if the defendant had acted in "a
wanton, fraudulent, reckless, oppressive, or malevolent manner." The
established facts of not so warrant the characterization of the action of
petitioner LBC.
IN VIEW WHEREOF, the Decision of the respondent court dated September
30, 1992 is REVERSED and SET ASIDE; and the Complaint in Civil Case No.
3679 is ordered DISMISSED. No costs.
SO ORDERED.
[G.R. No. 141994. January 17, 2005]
FILIPINAS BROADCASTING NETWORK, INC., petitioner, vs. AGO
MEDICAL AND EDUCATIONAL CENTER-BICOL CHRISTIAN
COLLEGE OF MEDICINE, (AMEC-BCCM) and ANGELITA F.
AGO, respondents.
The Case
This petition for review[1] assails the 4 January 1999 Decision [2] and 26
January 2000 Resolution of the Court of Appeals in CA-G.R. CV No. 40151.
The Court of Appeals affirmed with modification the 14 December 1992
Decision[3] of the Regional Trial Court of Legazpi City, Branch 10, in Civil Case
No. 8236. The Court of Appeals held Filipinas Broadcasting Network, Inc. and
its broadcasters Hermogenes Alegre and Carmelo Rima liable for libel and
ordered them to solidarily pay Ago Medical and Educational Center-Bicol
Christian College of Medicine moral damages, attorneys fees and costs of suit.
The Antecedents
Expos is a radio documentary[4] program hosted by Carmelo Mel Rima
(Rima) and Hermogenes Jun Alegre (Alegre). [5] Expos is aired every morning
over DZRC-AM which is owned by Filipinas Broadcasting Network, Inc. (FBNI).
Expos is heard over Legazpi City, the Albay municipalities and other Bicol
areas.[6]
In the morning of 14 and 15 December 1989, Rima and Alegre exposed
various alleged complaints from students, teachers and parents against Ago
Medical and Educational Center-Bicol Christian College of Medicine (AMEC)
and its administrators. Claiming that the broadcasts were defamatory, AMEC
and Angelita Ago (Ago), as Dean of AMECs College of Medicine, filed a
complaint for damages[7] against FBNI, Rima and Alegre on 27 February 1990.
Quoted are portions of the allegedly libelous broadcasts:
JUN ALEGRE:
Let us begin with the less burdensome: if you have children taking medical
course at AMEC-BCCM, advise them to pass all subjects because if they
fail in any subject they will repeat their year level, taking up all subjects
including those they have passed already. Several students had
approached me stating that they had consulted with the DECS which told them
that there is no such regulation. If [there] is no such regulation why is AMEC
doing the same?
xxx
Second: Earlier AMEC students in Physical Therapy had complained that
the course is not recognized by DECS. xxx
Third: Students are required to take and pay for the subject even if the
subject does not have an instructor - such greed for money on the part of
AMECs administration. Take the subject Anatomy: students would pay for the
subject upon enrolment because it is offered by the school. However there
would be no instructor for such subject. Students would be informed that course
would be moved to a later date because the school is still searching for the
appropriate instructor.
xxx
It is a public knowledge that the Ago Medical and Educational Center has
survived and has been surviving for the past few years since its inception
because of funds support from foreign foundations. If you will take a look at the
AMEC premises youll find out that the names of the buildings there are foreign
soundings. There is a McDonald Hall. Why not Jose Rizal or Bonifacio Hall?
That is a very concrete and undeniable evidence that the support of foreign
foundations for AMEC is substantial, isnt it? With the report which is the basis
of the expose in DZRC today, it would be very easy for detractors and enemies
of the Ago family to stop the flow of support of foreign foundations who assist
the medical school on the basis of the latters purpose. But if the purpose of the
institution (AMEC) is to deceive students at cross purpose with its reason for
being it is possible for these foreign foundations to lift or suspend their
donations temporarily.[8]
xxx
On the other hand, the administrators of AMEC-BCCM, AMEC Science
High School and the AMEC-Institute of Mass Communication in their
effort to minimize expenses in terms of salary are absorbing or continues
to accept rejects. For example how many teachers in AMEC are former
teachers of Aquinas University but were removed because of immorality? Does
it mean that the present administration of AMEC have the total definite moral
foundation from catholic administrator of Aquinas University. I will prove to you
my friends, that AMEC is a dumping ground, garbage, not merely of moral
and physical misfits. Probably they only qualify in terms of intellect. The Dean
of Student Affairs of AMEC is Justita Lola, as the family name implies. She is
too old to work, being an old woman. Is the AMEC administration exploiting the
very [e]nterprising or compromising and undemanding Lola? Could it be that
AMEC is just patiently making use of Dean Justita Lola were if she is very old.
As in atmospheric situation zero visibility the plane cannot land, meaning she is
very old, low pay follows. By the way, Dean Justita Lola is also the chairman of
the committee on scholarship in AMEC. She had retired from Bicol University a
long time ago but AMEC has patiently made use of her.
xxx
MEL RIMA:
xxx My friends based on the expose, AMEC is a dumping ground for moral and
physically misfit people. What does this mean? Immoral and physically misfits
as teachers.
May I say Im sorry to Dean Justita Lola. But this is the truth. The truth is this,
that your are no longer fit to teach. You are too old. As an aviation, your case is
zero visibility. Dont insist.
xxx Why did AMEC still absorb her as a teacher, a dean, and chairman of the
scholarship committee at that. The reason is practical cost saving in salaries,
because an old person is not fastidious, so long as she has money to buy the
ingredient of beetle juice. The elderly can get by thats why she (Lola) was taken
in as Dean.
xxx
xxx On our end our task is to attend to the interests of students. It is likely that
the students would be influenced by evil. When they become members of
society outside of campus will be liabilities rather than assets. What do
you expect from a doctor who while studying at AMEC is so much burdened
with unreasonable imposition? What do you expect from a student who aside
from peculiar problems because not all students are rich in their struggle to
improve their social status are even more burdened with false regulations.
xxx[9] (Emphasis supplied)
The complaint further alleged that AMEC is a reputable learning institution.
With the supposed exposs, FBNI, Rima and Alegre transmitted malicious
imputations, and as such, destroyed plaintiffs (AMEC and Ago) reputation.
AMEC and Ago included FBNI as defendant for allegedly failing to exercise due
diligence in the selection and supervision of its employees, particularly Rima
and Alegre.
On 18 June 1990, FBNI, Rima and Alegre, through Atty. Rozil Lozares,
filed an Answer[10] alleging that the broadcasts against AMEC were fair and true.
FBNI, Rima and Alegre claimed that they were plainly impelled by a sense of
public duty to report the goings-on in AMEC, [which is] an institution imbued
with public interest.
Thereafter, trial ensued. During the presentation of the evidence for the
defense, Atty. Edmundo Cea, collaborating counsel of Atty. Lozares, filed a
Motion to Dismiss[11] on FBNIs behalf. The trial court denied the motion to
dismiss. Consequently, FBNI filed a separate Answer claiming that it exercised
due diligence in the selection and supervision of Rima and Alegre. FBNI
claimed that before hiring a broadcaster, the broadcaster should (1) file an
application; (2) be interviewed; and (3) undergo an apprenticeship and training
program after passing the interview. FBNI likewise claimed that it always
reminds its broadcasters to observe truth, fairness and objectivity in their
broadcasts and to refrain from using libelous and indecent language. Moreover,
FBNI requires all broadcasters to pass the Kapisanan ng mga Brodkaster sa
Pilipinas (KBP) accreditation test and to secure a KBP permit.
[12]
Both parties, namely, FBNI, Rima and Alegre, on one hand, and AMEC
and Ago, on the other, appealed the decision to the Court of Appeals. The Court
of Appeals affirmed the trial courts judgment with modification. The appellate
court made Rima solidarily liable with FBNI and Alegre. The appellate court
denied Agos claim for damages and attorneys fees because the broadcasts
were directed against AMEC, and not against her. The dispositive portion of the
Court of Appeals decision reads:
WHEREFORE, the decision appealed from is hereby AFFIRMED, subject to
the modification that broadcaster Mel Rima is SOLIDARILY ADJUDGED liable
with FBN[I] and Hermo[g]enes Alegre.
SO ORDERED.[14]
FBNI, Rima and Alegre filed a motion for reconsideration which the Court
of Appeals denied in its 26 January 2000 Resolution.
Hence, FBNI filed this petition.[15]
The Ruling of the Court of Appeals
In absolving Rima from the charge, the trial court ruled that Rimas only
participation was when he agreed with Alegres expos. The trial court found
Rimas statement within the bounds of freedom of speech, expression, and of
the press. The dispositive portion of the decision reads:
The Court of Appeals upheld the trial courts ruling that the questioned
broadcasts are libelous per se and that FBNI, Rima and Alegre failed to
overcome the legal presumption of malice. The Court of Appeals found Rima
and Alegres claim that they were actuated by their moral and social duty to
inform the public of the students gripes as insufficient to justify the utterance of
the defamatory remarks.
WHEREFORE,
premises
considered,
this
court
finds
for
the
plaintiff. Considering the degree of damages caused by the controversial
utterances, which are not found by this court to be really very serious and
damaging, and there being no showing that indeed the enrollment of
plaintiff school dropped, defendants Hermogenes Jun Alegre, Jr. and
Filipinas Broadcasting Network (owner of the radio station DZRC), are hereby
jointly and severally ordered to pay plaintiff Ago Medical and Educational
Center-Bicol Christian College of Medicine (AMEC-BCCM) the amount
of P300,000.00 moral damages, plus P30,000.00 reimbursement of attorneys
fees, and to pay the costs of suit.
The Court of Appeals found Rima also liable for libel since he remarked
that (1) AMEC-BCCM is a dumping ground for morally and physically misfit
teachers; (2) AMEC obtained the services of Dean Justita Lola to minimize
expenses on its employees salaries; and (3) AMEC burdened the students with
unreasonable imposition and false regulations.[16]
The Court of Appeals held that FBNI failed to exercise due diligence in the
selection and supervision of its employees for allowing Rima and Alegre to
make the radio broadcasts without the proper KBP accreditation. The Court of
Appeals denied Agos claim for damages and attorneys fees because the
libelous remarks were directed against AMEC, and not against her. The Court
of Appeals adjudged FBNI, Rima and Alegre solidarily liable to pay AMEC moral
damages, attorneys fees and costs of suit.
Issues
FBNI raises the following issues for resolution:
I. WHETHER THE BROADCASTS ARE LIBELOUS;
II. WHETHER AMEC IS ENTITLED TO MORAL DAMAGES;
III. WHETHER THE AWARD OF ATTORNEYS FEES IS PROPER; and
IV. WHETHER FBNI IS SOLIDARILY LIABLE WITH RIMA AND ALEGRE
FOR PAYMENT OF MORAL DAMAGES, ATTORNEYS FEES AND
COSTS OF SUIT.
The Courts Ruling
We deny the petition.
This is a civil action for damages as a result of the allegedly defamatory
remarks of Rima and Alegre against AMEC. [17] While AMEC did not point out
clearly the legal basis for its complaint, a reading of the complaint reveals that
AMECs cause of action is based on Articles 30 and 33 of the Civil Code. Article
30[18] authorizes a separate civil action to recover civil liability arising from a
criminal offense. On the other hand, Article 33 [19] particularly provides that the
injured party may bring a separate civil action for damages in cases of
defamation, fraud, and physical injuries. AMEC also invokes Article 19 [20] of the
Civil Code to justify its claim for damages. AMEC cites Articles 2176 [21] and
2180[22] of the Civil Code to hold FBNI solidarily liable with Rima and Alegre.
xxx Although defendants claim that they were motivated by consistent reports
of students and parents against plaintiff, yet, defendants have not presented in
court, nor even gave name of a single student who made the complaint to
them, much less present written complaint or petition to that effect. To accept
this defense of defendants is too dangerous because it could easily give license
to the media to malign people and establishments based on flimsy excuses that
there were reports to them although they could not satisfactorily establish it.
Such laxity would encourage careless and irresponsible broadcasting which is
inimical to public interests.
Secondly, there is reason to believe that defendant radio broadcasters, contrary
to the mandates of their duties, did not verify and analyze the truth of the
reports before they aired it, in order to prove that they are in good faith.
Alegre contended that plaintiff school had no permit and is not accredited to
offer Physical Therapy courses. Yet, plaintiff produced a certificate coming from
DECS that as of Sept. 22, 1987 or more than 2 years before the controversial
broadcast, accreditation to offer Physical Therapy course had already been
given the plaintiff, which certificate is signed by no less than the Secretary of
Education and Culture herself, Lourdes R. Quisumbing (Exh. C-rebuttal).
Defendants could have easily known this were they careful enough to verify.
And yet, defendants were very categorical and sounded too positive when they
made the erroneous report that plaintiff had no permit to offer Physical Therapy
courses which they were offering.
The allegation that plaintiff was getting tremendous aids from foreign
foundations like Mcdonald Foundation prove not to be true also. The truth is
there is no Mcdonald Foundation existing. Although a big building of plaintiff
school was given the name Mcdonald building, that was only in order to honor
the first missionary in Bicol of plaintiffs religion, as explained by Dr. Lita Ago.
Contrary to the claim of defendants over the air, not a single centavo appears to
be received by plaintiff school from the aforementioned McDonald Foundation
which does not exist.
Defendants did not even also bother to prove their claim, though denied by Dra.
Ago, that when medical students fail in one subject, they are made to repeat all
the other subject[s], even those they have already passed, nor their claim that
the school charges laboratory fees even if there are no laboratories in the
school. No evidence was presented to prove the bases for these claims, at
least in order to give semblance of good faith.
As for the allegation that plaintiff is the dumping ground for misfits, and immoral
teachers, defendant[s] singled out Dean Justita Lola who is said to be so old,
with zero visibility already. Dean Lola testified in court last Jan. 21, 1991, and
was found to be 75 years old. xxx Even older people prove to be effective
teachers like Supreme Court Justices who are still very much in demand as law
professors in their late years. Counsel for defendants is past 75 but is found by
this court to be still very sharp and effective. So is plaintiffs counsel.
Dr. Lola was observed by this court not to be physically decrepit yet, nor
mentally infirmed, but is still alert and docile.
The contention that plaintiffs graduates become liabilities rather than assets of
our society is a mere conclusion. Being from the place himself, this court is
aware that majority of the medical graduates of plaintiffs pass the board
examination easily and become prosperous and responsible professionals. [33]
Had the comments been an expression of opinion based on established
facts, it is immaterial that the opinion happens to be mistaken, as long as it
might reasonably be inferred from the facts. [34] However, the comments of Rima
and Alegre were not backed up by facts. Therefore, the broadcasts are not
privileged and remain libelous per se.
The broadcasts also violate the Radio Code [35] of the Kapisanan ng mga
Brodkaster sa Pilipinas, Ink. (Radio Code). Item I(B) of the Radio Code
provides:
B. PUBLIC AFFAIRS, PUBLIC ISSUES AND COMMENTARIES
1. x x x
4. Public affairs program shall present public issues free
from personal bias, prejudice and inaccurate and misleading
information. x x x Furthermore, the station shall strive to present
balanced discussion of issues. x x x.
xxx
7. The station shall be responsible at all times in the supervision of
public affairs, public issues and commentary programs so that
they conform to the provisions and standards of this code.
Moreover, where the broadcast is libelous per se, the law implies
damages.[45] In such a case, evidence of an honest mistake or the want of
character or reputation of the party libeled goes only in mitigation of damages.
[46]
Neither in such a case is the plaintiff required to introduce evidence of actual
damages as a condition precedent to the recovery of some damages. [47] In this
case, the broadcasts are libelous per se. Thus, AMEC is entitled to moral
damages.
However, we find the award of P300,000 moral damages unreasonable.
The record shows that even though the broadcasts were libelous per se, AMEC
has not suffered any substantial or material damage to its reputation. Therefore,
we reduce the award of moral damages from P300,000 to P150,000.
IV. Whether FBNI is solidarily liable with Rima and Alegre for
moral damages, attorneys fees and costs of suit
FBNI contends that it is not solidarily liable with Rima and Alegre for the
payment of damages and attorneys fees because it exercised due diligence in
the selection and supervision of its employees, particularly Rima and Alegre.
FBNI maintains that its broadcasters, including Rima and Alegre, undergo a
very regimented process before they are allowed to go on air. Those who apply
for broadcaster are subjected to interviews, examinations and an
apprenticeship program.
FBNI further argues that Alegres age and lack of training are irrelevant to
his competence as a broadcaster. FBNI points out that the minor deficiencies in
the KBP accreditation of Rima and Alegre do not in any way prove that FBNI
did not exercise the diligence of a good father of a family in selecting and
supervising them. Rimas accreditation lapsed due to his non-payment of the
KBP annual fees while Alegres accreditation card was delayed allegedly for
reasons attributable to the KBP Manila Office. FBNI claims that membership in
the KBP is merely voluntary and not required by any law or government
regulation.
FBNIs arguments do not persuade us.
The basis of the present action is a tort. Joint tort feasors are jointly and
severally liable for the tort which they commit. [52] Joint tort feasors are all the
persons who command, instigate, promote, encourage, advise, countenance,
cooperate in, aid or abet the commission of a tort, or who approve of it after it is
done, if done for their benefit. [53] Thus, AMEC correctly anchored its cause of
action against FBNI on Articles 2176 and 2180 of the Civil Code.
As operator of DZRC-AM and employer of Rima and Alegre, FBNI is
solidarily liable to pay for damages arising from the libelous broadcasts. As
stated by the Court of Appeals, recovery for defamatory statements published
by radio or television may be had from the owner of the station, a
licensee, the operator of the station, or a person who procures, or
participates in, the making of the defamatory statements. [54] An employer and
employee are solidarily liable for a defamatory statement by the employee
within the course and scope of his or her employment, at least when the
employer authorizes or ratifies the defamation. [55] In this case, Rima and Alegre
were clearly performing their official duties as hosts of FBNIs radio program
Expos when they aired the broadcasts. FBNI neither alleged nor proved that
Rima and Alegre went beyond the scope of their work at that time. There was
likewise no showing that FBNI did not authorize and ratify the defamatory
broadcasts.
P9,599.07
1wph1.t
purpose, as stated in its articles and by-laws. It is a familiar rule that the
actual purpose is not controlled by the corporate form or by the commercial
aspect of the business prosecuted, but may be shown by extrinsic
evidence, including the by-laws and the method of operation. From the
extrinsic evidence adduced, the Tax Court concluded that the Club is not
engaged in the business as a barkeeper and restaurateur.
Moreover, for a stock corporation to exist, two requisites must be complied
with, to wit: (1) a capital stock divided into shares and (2) an authority to
distribute to the holders of such shares, dividends or allotments of the
surplus profits on the basis of the shares held (sec. 3, Act No. 1459). In the
case at bar, nowhere in its articles of incorporation or by-laws could be
found an authority for the distribution of its dividends or surplus profits.
Strictly speaking, it cannot, therefore, be considered a stock corporation,
within the contemplation of the corporation law.
A tax is a burden, and, as such, it should not be deemed imposed upon
fraternal, civic, non-profit, nonstock organizations, unless the intent to the
contrary is manifest and patent" (Collector v. BPOE Elks Club, et al., supra),
which is not the case in the present appeal.
Having arrived at the conclusion that respondent Club is not engaged in the
business as an operator of a bar and restaurant, and therefore, not liable
for fixed and percentage taxes, it follows that it is not liable for any penalty,
much less of a compromise penalty.
This is a petition for certiorari to set aside the Resolution * dated July 3,
1987 of respondent National Labor Relations Commission (NLRC for
brevity) which affirmed the decision dated April 30, 1986 of Labor Arbiter
Vito J. Minoria of the NLRC, Regional Arbitration Branch No. VII at Cebu
City in Case No. RAB-VII-0556-85 entitled "Danilo Mercado, Complainant,
vs. Philippine National Oil Company-Energy Development Corporation,
Respondent", ordering the reinstatement of complainant Danilo Mercado
and the award of various monetary claims.
The factual background of this case is as follows:
Private respondent Danilo Mercado was first employed by herein petitioner
Philippine National Oil Company-Energy Development Corporation (PNOCEDC for brevity) on August 13, 1979. He held various positions ranging
from clerk, general clerk to shipping clerk during his employment at its
Cebu office until his transfer to its establishment at Palimpinon, Dumaguete,
Oriental Negros on September 5, 1984. On June 30, 1985, private
respondent Mercado was dismissed. His last salary was P1,585.00 a month
basic pay plus P800.00 living allowance (Labor Arbiter's Decision, Annex
"E" of Petition, Rollo, p. 52).
The grounds for the dismissal of Mercado are allegedly serious acts of
dishonesty committed as follows:
ORDERED.
The appeal to the NLRC was dismissed for lack of merit on July 3, 1987
and the assailed decision was affirmed.
Hence, this petition.
The issues raised by petitioner in this instant petition are:
such circumstances cannot give validity to the decision of the Labor Arbiter
(Ibid., pp. 192-193).
This issue has already been laid to rest in the case of PNOC-EDC vs.
Leogardo, 175 SCRA 26 (July 5, 1989), involving the same petitioner and
the same issue, where this Court ruled that the doctrine that employees of
government-owned and/or con controlled corporations, whether created by
special law or formed as subsidiaries under the General Corporation law
are governed by the Civil Service Law and not by the Labor Code, has
been supplanted by the present Constitution. "Thus, under the present state
of the law, the test in determining whether a government-owned or
controlled corporation is subject to the Civil Service Law are the manner of
its creation, such that government corporations created by special charter
are subject to its provisions while those incorporated under the General
Corporation Law are not within its coverage."
Specifically, the PNOC-EDC having been incorporated under the General
Corporation Law was held to be a government owned or controlled
corporation whose employees are subject to the provisions of the Labor
Code (Ibid.).
The fact that the case arose at the time when the 1973 Constitution was still
in effect, does not deprive the NLRC of jurisdiction on the premise that it is
the 1987 Constitution that governs because it is the Constitution in place at
the time of the decision (NASECO v. NLRC, G.R. No. 69870, 168 SCRA
122 [1988]).
In the case at bar, the decision of the NLRC was promulgated on July 3,
1987. Accordingly, this case falls squarely under the rulings of the
aforementioned cases.
784 [July 27, 1990]; Lopez Sugar Corporation vs. Federation of Free
Workers, 189 SCRA 179 [August 30, 1990]). Judicial review by this Court
does not go so far as to evaluate the sufficiency of the evidence but is
limited to issues of jurisdiction or grave abuse of discretion (Filipinas
Manufacturers Bank vs. NLRC, 182 SCRA 848 [February 28, 1990]). A
careful study of the records shows no substantive reason to depart from
these established principles.
On the other hand, private respondent contends that as can be seen from
petitioner's Motion for Reconsideration and/or Appeal dated July 28, 1986
(Annex "F" of the Petition, Rollo, pp. 57- 64), the latter never questioned the
findings of facts of the Labor Arbiter but simply limited its objection to the
lack of legal basis in view of its stand that the NLRC had no jurisdiction over
the case (Private Respondent's Memorandum, Rollo, p. 104).
While it is true that loss of trust or breach of confidence is a valid ground for
dismissing an employee, such loss or breach of trust must have some basis
(Gubac v. NLRC, 187 SCRA 412 [July 13, 1990]). As found by the Labor
Arbiter, the accusations of petitioner PNOC-EDC against private
respondent Mercado have no basis. Mrs. Leonardo Nodado, from whom
the nipa shingles were purchased, sufficiently explained in her affidavit
(Rollo, p. 36) that the total purchase price of P1,680.00 was paid by
respondent Mercado as agreed upon. The alleged discount given by Mrs.
Nodado is not supported by evidence as well as the alleged appropriation
of P8.66 from the cost of fabrication of rubber stamps. The Labor Arbiter,
likewise, found no evidence to support the alleged violation of company
rules. On the contrary, he found respondent Mercado's explanation in his
affidavit (Rollo, pp. 38-40) as to the alleged violations to be satisfactory.
Moreover, these findings were never contradicted by petitioner petitioner
PNOC-EDC.
December 2, 1924
plaintiff the sum of P11,081.11 which is the difference between the amount
collected under section 1496 of the Administrative Code and the amount
which should have been collected under the provisions of said section 15 of
Act No. 2719. From that sentence the defendant appealed, and now makes
the following assignments of error:
I. The court below erred in holding that section 15 of Act No. 2719 does not
refer to coal lands owned by persons and corporations.
II. The court below erred in holding that the plaintiff was not subject to the
tax prescribed in section 1496 of the Administrative Code.
The question confronting us in this appeal is whether the plaintiff is subject
to the taxes under section 15 of Act No. 2719, or to the specific taxes under
section 1496 of the Administrative Code.
The plaintiff corporation was created on the 10th day of March, 1917, by Act
No. 2705, for the purpose of developing the coal industry in the Philippine
Island, in harmony with the general plan of the Government to encourage
the development of the natural resources of the country, and to provided
facilities therefor. By said Act, the company was granted the general powers
of a corporation "and such other powers as may be necessary to enable it
to prosecute the business of developing coal deposits in the Philippine
Island and of mining, extracting, transporting and selling the coal contained
in said deposits." (Sec. 2, Act No. 2705.) By the same law (Act No. 2705)
the Government of the Philippine Islands is made the majority stockholder,
evidently in order to insure proper government supervision and control, and
thus to place the Government in a position to render all possible
encouragement, assistance and help in the prosecution and furtherance of
the company's business.
On May 14, 1917, two months after the passage of Act No. 2705, creating
the National Coal Company, the Philippine Legislature passed Act No. 2719
"to provide for the leasing and development of coal lands in the Philippine
Islands." On October 18, 1917, upon petition of the National Coal Company,
lands of the public domain in the Philippine Island shall not be disposed of
in any manner except as provided in this Act," thereby giving a clear
indication that no "coal-bearing lands of the public domain" had been
disposed of by virtue of said proclamation.
(6) That the National Coal Company entered upon said land and mined said
coal, so far as the record shows, without any lease or other authority from
either the Secretary of Agriculture and Natural Resources or any person
having the power to grant a leave or authority.
Neither is there any provision in Act No. 2705 creating the National Coal
Company, nor in the amendments thereof found in Act No. 2822, which
authorizes the National Coal Company to enter upon any of the reserved
coal lands without first having obtained permission from the Secretary of
Agriculture and Natural Resources.
From all of the foregoing facts we find that the issue is well defined between
the plaintiff and the defendant. The plaintiff contends that it was liable only
to pay the internal revenue and other fees and taxes provided for under
section 15 of Act No. 2719; while the defendant contends, under the facts of
record, the plaintiff is obliged to pay the internal revenue duty provided for
in section 1496 of the Administrative Code. That being the issue, an
examination of the provisions of Act No. 2719 becomes necessary.
lawphi1.net
The following propositions are fully sustained by the facts and the law:
(1) The National Coal Company is an ordinary private corporation organized
under Act No. 2705, and has no greater powers nor privileges than the
ordinary private corporation, except those mentioned, perhaps, in section
10 of Act No. 2719, and they do not change the situation here.
(2) It mined on public lands between the month of July, 1920, and the
months of March, 1922, 24,089.3 tons of coal.
(3) Upon demand of the Collector of Internal Revenue it paid a tax of P0.50
a ton, as taxes under the provisions of article 1946 of the Administrative
Code on the 15th day of December, 1922.
(4) It is admitted that it is neither the owner nor the lessee of the lands upon
which said coal was mined.
(5) The proclamation of Francis Burton Harrison, Governor-General, of the
18th day of October, 1917, by authority of section 1 of Act No. 926,
withdrawing from settlement, entry, sale, or other dispositon all coal-bearing
public lands within the Province of Zamboanga and the Island of Polillo,
was not a reservation for the benefit of the National Coal Company, but for
any person or corporation of the Philippine Islands or of the United States.
Third. The internal revenue duty and tax which must be paid upon coalbearing lands owned by any person, firm, association or corporation.
To repeat, it will be noted, first, that Act No. 2719 provides an internal
revenue duty and tax upon unreserved, unappropriated coal-bearing public
lands which may be leased by the Secretary of Agriculture and Natural
Resources; and, second, that said Act (No. 2719) provides an internal
revenue duty and tax imposed upon any person, firm, association or
corporation, who may be the owner of "coal-bearing lands." A reading of
said Act clearly shows that the tax imposed thereby is imposed upon two
classes of persons only lessees and owners.
The lower court had some trouble in determining what was the correct
interpretation of section 15 of said Act, by reason of what he believed to be
some difference in the interpretation of the language used in Spanish and
English. While there is some ground for confusion in the use of the
language in Spanish and English, we are persuaded, considering all the
provisions of said Act, that said section 15 has reference only to persons,
firms, associations or corporations which had already, prior to the existence
of said Act, become the owners of coal lands. Section 15 cannot certainty
refer to "holders or lessees of coal lands' for the reason that practically all of
the other provisions of said Act has reference to lessees or holders. If
section 15 means that the persons, firms, associations, or corporation
mentioned therein are holders or lessees of coal lands only, it is difficult to
understand why the internal revenue duty and tax in said section was made
different from the obligations mentioned in section 3 of said Act, imposed
upon lessees or holders.
From all of the foregoing, it seems to be made plain that the plaintiff is
neither a lessee nor an owner of coal-bearing lands, and is, therefore, not
subject to any other provisions of Act No. 2719. But, is the plaintiff subject
to the provisions of section 1496 of the Administrative Code?
Section 1496 of the Administrative Code provides that "on all coal and coke
there shall be collected, per metric ton, fifty centavos." Said section (1496)
is a part of article, 6 which provides for specific taxes. Said article provides
for a specific internal revenue tax upon all things manufactured or produced
in the Philippine Islands for domestic sale or consumption, and upon things
imported from the United States or foreign countries. It having been
demonstrated that the plaintiff has produced coal in the Philippine Islands
and is not a lessee or owner of the land from which the coal was produced,
we are clearly of the opinion, and so hold, that it is subject to pay the
internal revenue tax under the provisions of section 1496 of the
Administrative Code, and is not subject to the payment of the internal
revenue tax under section 15 of Act No. 2719, nor to any other provisions of
said Act.
September 6, 1934
service; that the granting of the application of the Rural Transit Company,
Ltd., would not serve public convenience but would constitute a ruinous
competition for the oppositor over said route.
After testimony was taken, the commission, on December 21, 1932,
approved the application of the Rural Transit Company, Ltd., and ordered
that the certificate of public convenience applied for be "issued to the
applicant Rural Transit Company, Ltd.," with the condition, among others,
that "all the other terms and conditions of the various certificates of public
convenience of the herein applicant and herein incorporated are made a
part hereof."
Q.
Will you please answer the question whether it is the
Bachrach Motor Company operating under the trade name of the
Rural Transit Company, Limited, or whether it is the Rural Transit
Company, Limited in its own name this application was filed?
A.
Q.
On January 14, 1933, the oppositor Red Line Transportation Company filed
a motion for rehearing and reconsideration in which it called the
commission's attention to the fact that there was pending in the Court of
First Instance of Manila case N. 42343, an application for the voluntary
dissolution of the corporation, Rural Transit Company, Ltd. Said motion for
reconsideration was set down for hearing on March 24, 1933. On March 23,
1933, the Rural Transit Company, Ltd., the applicant, filed a motion for
postponement. This motion was verified by M. Olsen who swears "that he
was the secretary of the Rural Transit Company, Ltd., in the above entitled
case." Upon the hearing of the motion for reconsideration, the commission
admitted without objection the following documents filed in said case No.
42343 in the Court of First Instance of Manila for the dissolution of the Rural
Transit Company, Ltd. the petition for dissolution dated July 6, 1932, the
decision of the said Court of First Instance of Manila, dated February 28,
1933, decreeing the dissolution of the Rural Transit Company, Ltd.
At the trial of this case before the Public Service Commission an issue was
raised as to who was the real party in interest making the application,
whether the Rural Transit Company, Ltd., as appeared on the face of the
application, or the Bachrach Motor Company, Inc., using name of the Rural
Transit Company, Ltd., as a trade name. The evidence given by the
applicant's secretary, Olsen, is certainly very dubious and confusing, as
may be seen from the following:
A.
I do not know what the legal construction or relationship
existing between the two.
JUDGE. I do not know what is in your mind by not telling the real
applicant in this case?
A.
Yes, sir.
I cannot say.
Yes, sir.
A.
Yes, sir.
law of their creation and continued existence requires each to adopt and
certify a distinctive name. The incorporators "constitute a body politic and
corporate under the name stated in the certificate." (Section 11, Act No.
1459, as amended.) A corporation has the power "of succession by its
corporate name." (Section 13, ibid.) The name of a corporation is therefore
essential to its existence. It cannot change its name except in the manner
provided by the statute. By that name alone is it authorized to transact
business. The law gives a corporation no express or implied authority to
assume another name that is unappropriated: still less that of another
corporation, which is expressly set apart for it and protected by the law. If
any corporation could assume at pleasure as an unregistered trade name
the name of another corporation, this practice would result in confusion and
open the door to frauds and evasions and difficulties of administration and
supervision. The policy of the law expressed in our corporation statute and
the Code of Commerce is clearly against such a practice. (Cf. Scarsdale
Pub. Co. Colonial Press vs. Carter, 116 New York Supplement, 731;
Svenska Nat. F. i. C. vs. Swedish Nat. Assn., 205 Illinois [Appellate Courts],
428, 434.)
The order of the commission of November 26, 1932, authorizing the
Bachrach Motor Co., Incorporated, to assume the name of the Rural Transit
Co., Ltd. likewise in corporated, as its trade name being void, and accepting
the order of December 21, 1932, at its face as granting a certificate of
public convenience to the applicant Rural Transit Co., Ltd., the said order
last mentioned is set aside and vacated on the ground that the Rural Transit
Company, Ltd., is not the real party in interest and its application was
fictitious.
In view of the dissolution of the Rural Transit Company, Ltd. by judicial
decree of February 28, 1933, we do not see how we can assess costs
against said respondent, Rural Transit Company, Ltd.
DECISION
Lyceum of Eastern Mindanao, Inc.; and
FELICIANO, J p:
Lyceum of Southern Philippines
Petitioner is an educational institution duly registered with the Securities
and Exchange Commission ("SEC"). When it first registered with the SEC
on 21 September 1950, it used the corporate name Lyceum of the
Philippines, Inc. and has used that name ever since.
Petitioner's original complaint before the SEC had included three (3) other
entities:
1. The Lyceum of Malacanay;
Commissioner Julio Sulit held that the corporate name of petitioner and that
of the Lyceum of Baguio, Inc. were substantially identical because of the
presence of a "dominant" word, i.e., "Lyceum," the name of the
geographical location of the campus being the only word which
distinguished one from the other corporate name. The SEC also noted that
petitioner had registered as a corporation ahead of the Lyceum of Baguio,
Inc. in point of time, 1 and ordered the latter to change its name to another
name "not similar or identical [with]" the names of previously registered
entities.
The Lyceum of Baguio, Inc. assailed the Order of the SEC before the
Supreme Court in a case docketed as G.R. No. L-46595. In a Minute
Resolution dated 14 September 1977, the Court denied the Petition for
Review for lack of merit. Entry of judgment in that case was made on 21
October 1977. 2
Before this Court, petitioner asserts that the Court of Appeals committed the
following errors:
Armed with the Resolution of this Court in G.R. No. L-46595, petitioner then
wrote all the educational institutions it could find using the word "Lyceum"
as part of their corporate name, and advised them to discontinue such use
of "Lyceum." When, with the passage of time, it became clear that this
recourse had failed, petitioner instituted before the SEC SEC-Case No.
2579 to enforce what petitioner claims as its proprietary right to the word
"Lyceum." The SEC hearing officer rendered a decision sustaining
petitioner's claim to an exclusive right to use the word "Lyceum." The
hearing officer relied upon the SEC ruling in the Lyceum of Baguio, Inc.
case (SEC-Case No. 1241) and held that the word "Lyceum" was capable
of appropriation and that petitioner had acquired an enforceable exclusive
right to the use of that word.
On appeal, however, by private respondents to the SEC En Banc, the
decision of the hearing officer was reversed and set aside. The SEC En
Banc did not consider the word "Lyceum" to have become so identified with
petitioner as to render use thereof by other institutions as productive of
confusion about the identity of the schools concerned in the mind of the
general public. Unlike its hearing officer, the SEC En Banc held that the
Petitioner then went on appeal to the Court of Appeals. In its Decision dated
28 June 1991, however, the Court of Appeals affirmed the questioned
Orders of the SEC En Banc. 4 Petitioner filed a motion for reconsideration,
without success.
1. The Court of Appeals erred in holding that the Resolution of the Supreme
Court in G.R. No. L-46595 did not constitute stare decisis as to apply to this
case and in not holding that said Resolution bound subsequent
determinations on the right to exclusive use of the word Lyceum.
2. The Court of Appeals erred in holding that respondent Western
Pangasinan Lyceum, Inc. was incorporated earlier than petitioner.
3. The Court of Appeals erred in holding that the word Lyceum has not
acquired a secondary meaning in favor of petitioner.
4. The Court of Appeals erred in holding that Lyceum as a generic word
cannot be appropriated by the petitioner to the exclusion of others. 5
We will consider all the foregoing ascribed errors, though not necessarily
seriatim. We begin by noting that the Resolution of the Court in G.R. No. L46595 does not, of course, constitute res adjudicata in respect of the case
at bar, since there is no identity of parties. Neither is stare decisis pertinent,
if only because the SEC En Banc itself has re-examined Associate
Commissioner Sulit's ruling in the Lyceum of Baguio case. The Minute
Resolution of the Court in G.R. No. L-46595 was not a reasoned adoption
of the Sulit ruling.
by one producer with reference to his article that, in that trade and to that
branch of the purchasing public, the word or phrase has come to mean that
the article was his product." 12
The question which arises, therefore, is whether or not the use by petitioner
of "Lyceum" in its corporate name has been for such length of time and with
such exclusivity as to have become associated or identified with the
petitioner institution in the mind of the general public (or at least that portion
of the general public which has to do with schools). The Court of Appeals
recognized this issue and answered it in the negative:
"Under the doctrine of secondary meaning, a word or phrase originally
incapable of exclusive appropriation with reference to an article in the
market, because geographical or otherwise descriptive might nevertheless
have been used so long and so exclusively by one producer with reference
to this article that, in that trade and to that group of the purchasing public,
the word or phrase has come to mean that the article was his produce (Ana
Ang vs. Toribio Teodoro, 74 Phil. 56). This circumstance has been referred
to as the distinctiveness into which the name or phrase has evolved
through the substantial and exclusive use of the same for a considerable
period of time. Consequently, the same doctrine or principle cannot be
made to apply where the evidence did not prove that the business (of the
plaintiff) has continued for so long a time that it has become of
consequence and acquired a good will of considerable value such that its
articles and produce have acquired a well-known reputation, and confusion
will result by the use of the disputed name (by the defendant) (Ang Si Heng
vs. Wellington Department Store, Inc., 92 Phil. 448).
With the foregoing as a yardstick, [we] believe the appellant failed to satisfy
the aforementioned requisites. No evidence was ever presented in the
hearing before the Commission which sufficiently proved that the word
'Lyceum' has indeed acquired secondary meaning in favor of the appellant.
If there was any of this kind, the same tend to prove only that the appellant
had been using the disputed word for a long period of time. Nevertheless,
its (appellant) exclusive use of the word (Lyceum) was never established or
proven as in fact the evidence tend to convey that the cross-claimant was
already using the word 'Lyceum' seventeen (17) years prior to the date the
appellant started using the same word in its corporate name. Furthermore,
educational institutions of the Roman Catholic Church had been using the
same or similar word like 'Liceo de Manila,' 'Liceo de Baleno' (in Baleno,
Masbate), 'Liceo de Masbate,' 'Liceo de Albay' long before appellant started
using the word 'Lyceum'. The appellant also failed to prove that the word
'Lyceum' has become so identified with its educational institution that
confusion will surely arise in the minds of the public if the same word were
to be used by other educational institutions.
In other words, while the appellant may have proved that it had been using
the word 'Lyceum' for a long period of time, this fact alone did not amount to
mean that the said word had acquired secondary meaning in its favor
because the appellant failed to prove that it had been using the same word
all by itself to the exclusion of others. More so, there was no evidence
presented to prove that confusion will surely arise if the same word were to
be used by other educational institutions. Consequently, the allegations of
the appellant in its first two assigned errors must necessarily fail." 13
(Underscoring partly in the original and partly supplied)
We agree with the Court of Appeals. The number alone of the private
respondents in the case at bar suggests strongly that petitioner's use of the
word "Lyceum" has not been attended with the exclusivity essential for
applicability of the doctrine of secondary meaning. It may be noted also that
at least one of the private respondents, i.e., the Western Pangasinan
Lyceum, Inc., used the term "Lyceum" seventeen (17) years before the
petitioner registered its own corporate name with the SEC and began using
the word "Lyceum." It follows that if any institution had acquired an
exclusive right to the word "Lyceum," that institution would have been the
Western Pangasinan Lyceum, Inc. rather than the petitioner institution.
In this connection, petitioner argues that because the Western Pangasinan
Lyceum, Inc. failed to reconstruct its records before the SEC in accordance
with the provisions of R.A. No. 62, which records had been destroyed
On appeal, the SEC en banc affirmed the dismissal declaring that the
corporate names of Petitioners and Private Respondent hardly breed
confusion inasmuch as each contains at least two different words and,
therefore, rules out any possibility of confusing one for the other.
On 30 January 1990, Petitioners sought an extension of time to file a
Petition for Review on Certiorari before this Court, which Petition was later
referred to the Court of Appeals in a Resolution dated 12 February 1990.
In deciding to dismiss the petition on 31 July 1990, the Court of
Appeals 1 swept aside Petitioners' claim that following the ruling in Converse
Rubber Corporation v. Universal Converse Rubber Products, Inc., et al, (G. R.
No. L-27906, January 8, 1987, 147 SCRA 154), the word PHILIPS cannot be
used as part of Private Respondent's corporate name as the same constitutes a
dominant part of Petitioners' corporate names. In so holding, the Appellate
Court observed that the Converse case is not four-square with the present case
inasmuch as the contending parties in Converse are engaged in a similar
business, that is, the manufacture of rubber shoes. Upholding the SEC, the
Appellate Court concluded that "private respondents' products consisting of
chain rollers, belts, bearings and cutting saw are unrelated and non-competing
with petitioners' products i.e. electrical lamps such that consumers would not in
any probability mistake one as the source or origin of the product of the other."
The Appellate Court denied Petitioners' Motion for Reconsideration on 20
November 1990, hence, this Petition which was given due course on 22
April 1991, after which the parties were required to submit their
memoranda, the latest of which was received on 2 July 1991. In December
1991, the SEC was also required to elevate its records for the perusal of
this Court, the same not having been apparently before respondent Court of
Appeals.
We find basis for petitioners' plea.
As early as Western Equipment and Supply Co. v. Reyes, 51 Phil. 115
(1927), the Court declared that a corporation's right to use its corporate and
trade name is a property right, a right in rem, which it may assert and
protect against the world in the same manner as it may protect its tangible
property, real or personal, against trespass or conversion. It is regarded, to
a certain extent, as a property right and one which cannot be impaired or
defeated by subsequent appropriation by another corporation in the same
field (Red Line Transportation Co. vs. Rural Transit Co., September 8,
1934, 20 Phil 549).
A name is peculiarly important as necessary to the very existence of a
corporation (American Steel Foundries vs. Robertson, 269 US 372, 70 L ed
317, 46 S Ct 160; Lauman vs. Lebanon Valley R. Co., 30 Pa 42; First
National Bank vs. Huntington Distilling Co. 40 W Va 530, 23 SE 792). Its
name is one of its attributes, an element of its existence, and essential to its
identity (6 Fletcher [Perm Ed], pp. 3-4). The general rule as to corporations
is that each corporation must have a name by which it is to sue and be
sued and do all legal acts. The name of a corporation in this respect
designates the corporation in the same manner as the name of an
individual designates the person (Cincinnati Cooperage Co. vs. Bate. 96 Ky
356, 26 SW 538; Newport Mechanics Mfg. Co. vs. Starbird. 10 NH 123);
and the right to use its corporate name is as much a part of the corporate
franchise as any other privilege granted (Federal Secur. Co. vs. Federal
Secur. Corp., 129 Or 375, 276 P 1100, 66 ALR 934; Paulino vs. Portuguese
Beneficial Association, 18 RI 165, 26 A 36).
A corporation acquires its name by choice and need not select a name
identical with or similar to one already appropriated by a senior corporation
while an individual's name is thrust upon him (See Standard Oil Co. of New
Mexico, Inc. v. Standard Oil Co. of California, 56 F 2d 973, 977). A
corporation can no more use a corporate name in violation of the rights of
others than an individual can use his name legally acquired so as to
mislead the public and injure another (Armington vs. Palmer, 21 RI 109. 42
A 308).
Our own Corporation Code, in its Section 18, expressly provides that:
The fact that there are other companies engaged in other lines of business
using the word "PHILIPS" as part of their corporate names is no defense
and does not warrant the use by Private Respondent of such word which
constitutes an essential feature of Petitioners' corporate name previously
adopted and registered and-having acquired the status of a well-known
mark in the Philippines and internationally as well (Bureau of Patents
Decision No. 88-35 [TM], June 17, 1988, SEC Records).
No costs.
SO ORDERED.