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Case: ABS-CBN BROADCASTING CORPORATION VS. CA,

REPUBLIC BROADCASTING CORP, VIVA
PRODUCTION INC, and VICENTE DEL ROSARIO
Citation/Date: G.R. 128690, Jan 21 1999
Subject/Topic: CIVIL LAW Sales Perfected Contract
-- Torts Damages and Defenses

FACTS:
1. In 1990, ABSCBN and VIVA executed a Fil Exhibition Agreement whereby VIVA
gave ABSCBN an exclusive right to exhibit some VIVA Films.

2. VIVA, through DEL ROSARIO offered ABSCBN, through its VP Charo Santos-
Concio, a list of 3 film packages (equivalent to 36 titles) from which ABSCBN
may exercise its right of first refusal. This right was exercised when VP Concio
ticked off only 10 titles for purchase as evidenced by a rejection letter.

3. As a response, DEL ROSARIO gave another package proposal, which was

discussed upon by him and ABSCBN General Manager Lopez during their
meeting at the Tamarind Grill Restaurant, QC on April 2, 1992.

Two conflicting versions arise therefrom:

(a) According to ABSCBN GM Lopez, both of them agreed that ABSCBN was
granted exclusive rights to 14 films for a total consideration of P36M, as
allegedly written on a napkin.

(b) According to DEL ROSARIO, he denied aforesaid agreement, and insisted on

the package offer of 104 films for a total price of P60M but with GM Lopez
promising to make a counter-proposal.

4. April 7, 1992, DEL ROSARIO received the draft exhibition agreement from VP
Concio which contained the counter-proposal covering 53 films. However, this
was rejected by the VIVA Board of Directors, insisting that it will not sell less than
the package of 104 films.

5. After said rejection, VIVA signed a letter of agreement with RBC granting the
latter exclusive right to air the 104 VIVA films, including the 14 VIVA films claimed
by ABSCBN.

6. ABSCBN filed a complaint for specific performance with prayer for a writ of
preliminary injunction &/or TRO against RBC, VIVA and DEL ROSARIO.

7. RTC issued a TRO enjoining respondents from proceeding with the airing,
broadcasting, and television of the 14 VIVA films subject of the controversy,
starting with the film of Maging Sino Ka Man, which was scheduled to be shown
in RBCs Channel 7 at 7PM of May 27, 1992.

8. As the parties failed to enter into an amicable settlement, RBC posted a

counterbond, which the RTC approved.

9. Later, RTC rendered a decision in favor of RBC and VIVA; thereby making
ABSCBN liable for damages. It held that there was no meeting of the minds on
the price and terms of the offer.

10. CA affirmed the RTC; thereby sustaining with modifications the ff. award of
damages:
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Case: ABS-CBN BROADCASTING CORPORATION VS. CA,
REPUBLIC BROADCASTING CORP, VIVA
PRODUCTION INC, and VICENTE DEL ROSARIO
Citation/Date: G.R. 128690, Jan 21 1999
Subject/Topic: CIVIL LAW Sales Perfected Contract
-- Torts Damages and Defenses

(a) Actual damages, consisting in the cost of print advertisements

(P191,843.00)and the premium payments for the counterbond (P107,727.00),
as evidenced by pecuniary loss which RBC suffered as a result of the filing of
the complaint by ABSCBN;

(b) Moral damages (P2 million), since RBCs reputation was debased by the filing
of the complaint and the non-showing of the film Maging Sino Ka Man;

(c) Exemplary damages (P2 million), by way of example or correction for the
public good in view of the filing of the complaint despite ABSCBNs
knowledge that the contract with VIVA had not been perfected; and

(d) Attorneys fees (P500,000.00), because RBC was unnecessarily forced to

litigate.

ISSUES:
(1) WON there is perfected contract between ABSCBN and VIVA. (NO)
(2) WON the award of damages is proper. (NO)

HELD:

(1) NO. There was NO perfected contract between ABSCBN and VIVA.

Contracts that are consensual in nature are perfected upon mere meeting of the
minds, once there is concurrence between the offer and the acceptance of the subject
matter, consideration, and terms of payment of a contract is produced. The offer must
be certain. To convert the offer into a contract, the acceptance must be absolute and
must not qualify the terms of the offer; it must be plain, unequivocal, unconditional, and
without variance of any sort from the proposal. A qualified acceptance, or one that
involves a new proposal, constitutes a counter-offer and is a rejection of the original
offer.

Here, ABSBCN made no acceptance of VIVAs officer, for it was met by a

counter-offer as evidenced by the counter-proposal in the form of a draft contract sent
by ABSCBN VP Concio, proposing exhibition of 53 films for a consideration of P35
million, instead of the VIVAs package proposal of 104 films for P60 million. Such
counter-offer substantially varied the terms of the offer.

Said counter-proposal was also rejected by VIVA through its Board of Directors.
Granting DEL ROSARIO accepted the counter-offer, said acceptance did not bind VIVA
as there was no proof whatsoever that DEL ROSARIO had the specific authority to do
so.

Hence, there is no meeting of the minds. VIVA is not bound by any contract with
ABSCBN.

(2) NO. The award of damages is NOT proper.

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Case: ABS-CBN BROADCASTING CORPORATION VS. CA,
REPUBLIC BROADCASTING CORP, VIVA
PRODUCTION INC, and VICENTE DEL ROSARIO
Citation/Date: G.R. 128690, Jan 21 1999
Subject/Topic: CIVIL LAW Sales Perfected Contract
-- Torts Damages and Defenses

Damages SCs ruling

Actual Damages
- One is entitled only for such pecuniary loss
suffered by him as he has duly proved
(a) In contracts and quasi-contracts, it shall
depend on whether the obligor acted
with good faith or not:
(i) If in good faith, the damages
recoverable are those which are
the natural and probable
consequences of the breach of
the obligation and which the
parties have foreseen or could
have reasonably foreseen at the
time of the constitution of the
obligation;
(ii) If with bad faith, fraud, malice, or
wanton attitude, he shall be
responsible for all damages
which may be reasonably
attributed to the nonperformance
of the obligation;
(b) In crimes and quasi-delicts, the
defendant shall be liable for all damages
which are the natural and probable
consequences of the act or omission
complained of, whether or not such
damages has been foreseen or could
have reasonably been foreseen by the
defendant.
IMPROPER
Here, RBCs claim for actual
damages does not arise from
contract, quasi-contract, delict, or
quasi-delict. It arose from the fact of
filing of the complaint despite
ABSCBNs alleged knowledge of the
lack of cause of action. Such award
of actual damages cannot be
comprehended under the law on
actual damages.
With respect to the premium
payments, it is not necessary for
RBC to file a counterbond since
ABSCBN had not yet filed the
required injunctive bond. Hence,
ABSCBN cannot be held
responsible for the same.
With respect to the print
advertisements, there was no
sufficient legal basis for the award of
actual damages for the same.

- Also, he may recover for loss or impairment

of earning capacity in cases of temporary
or permanent personal injury, or for injury
to the plaintiffs business standing or
commercial credit.

Moral Damages IMPROPER.

- It is designed to compensate the claimant
for actual injury suffered, and not to impose RBC is a corporation. Being an
a penalty on the wrongdoer. artificial person, it cannot experience
- It cannot be granted in favor of a physical suffering and mental
corporation because, being an artificial anguish.
person and having existence only in legal
contemplation, it has no feelings, no
emotions, no senses. It cannot therefore
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Case: ABS-CBN BROADCASTING CORPORATION VS. CA,
REPUBLIC BROADCASTING CORP, VIVA
PRODUCTION INC, and VICENTE DEL ROSARIO
Citation/Date: G.R. 128690, Jan 21 1999
Subject/Topic: CIVIL LAW Sales Perfected Contract
-- Torts Damages and Defenses

experience physical suffering, mental

anguish, which can be experienced only by
one having a nervous system.

Exemplary Damages IMPROPER.

- It is imposed by way of example or
correction for the public good, in addition to
moral, temperate, liquidated or
compensatory damages:
(a) In criminal cases, as part of the civil
liability when crime was committed with
one or more aggravating
circumstances;
(b) In quasi-delict, if the defendant acted
with gross negligence;
(c) In contracts and quasi-contracts, if the
defendant acted in a wanton,
fraudulent, reckless, oppressive or
malevolent manner.
It may be reiterated that the claim of
RBC against ABSCBN is not based
on contract, quasi-contract, delict, or
quasi-delict.
Hence, the claim for moral and
exemplary damages can only be
based on Articles 19, 20, and 21 of
the NCC (i.e. with respect to abuse
of rights). However, the element of
malice or bad faith is still wanting.
Settled is the rule that the adverse
result of an action does not per se
make the action wrongful and
subject the actor to damages.

Attorneys Fees IMPROPER.

- This not awarded every time a party wins a
suit. There is no sufficient showing of bad
- Even when the claimant is compelled to faith on the part of ABSCBN.
litigate with third persons or to incur
expenses to protect his rights, still
attorneys fees may not be awarded where
no sufficient showing of bad faith could be
reflected in a partys persistence in a case
other than erroneous conviction of the
righteousness of his cause.

WHEREFORE, the instant petition is GRANTED. The challenged decision of the CA is

hereby REVERSED.