Zulueta vs. Nicolas, 102 Phil.

944

FACTS:

This is an appeal taken by plaintiff from a decision of the Court of First Instance of
Manila, dismissing his complaint for damages on the ground of lack of cause of
action. Plaintiff instituted the present action on May 19, 1954 against the defendant
provincial fiscal of Rizal to recover moral and pecuniary damages in the sum of
P10,000. The complaint in substance alleges that on May 6, 1954, the defendant
fiscal conducted an investigation of a complaint for libel filed by herein plaintiff
against the provincial governor of Rizal and the staff members of the Philippine Free
Press; that after said investigation the fiscal "rendered an opinion" that there was no
prima facie case; that the alleged libelous statements were made in good faith and
for the sole purpose of serving the best interests of the public; and that in
consequence the fiscal absolved the said governor and the Free Press staff from the
crime of libel.

ISSUE:

whether plaintiff's complaint states a cause of action.

HELD:

No. The present action is based on article 27 of the new Civil Code, which provides
that "any person suffering material or moral loss because a public servant or
employee refuses or neglects without just cause, to perform his official duty may file
an action for damages and other relief against the latter." But as we said in Bagalay
vs. Ursal, this article "contemplates a refusal or neglect without just cause by a
public servant or employee to perform his official duty." Refusal of the fiscal to
prosecute when after an investigation he finds no sufficient evidence to establish a
prima facie case is not a refusal, without just cause, to perform an official duty. The
fiscal has for sure the legal duty to prosecute crimes where there is enough
evidence to justify such action. But it is equally his duty not to prosecute when after
an investigation he has become convinced that the evidence available is not
enough to establish a prima facie case. The fiscal is not bound to accept the opinion
of the complainant in a criminal case as to whether or not a prima facie case exists.
Vested with authority and discretion to determine whether there is sufficient
evidence to justify the filing of the corresponding information and, having control of
the prosecution of a criminal case, the fiscal cannot be subjected to dictation from
the offended party. Having legal cause to refrain from filing an information against
the persons whom the herein plaintiff wants him to charge with libel, the defendant
fiscal cannot be said to have refused or neglected without just cause to perform his
official duty. On the contrary, it would appear that he performed it.

It may not be amiss to state here that, as a general rule, a public prosecutor, being
a quasi-judicial officer empowered to exercise discretion or judgment, is not
personally liable for resulting injuries when acting within the scope of his authority,
and in the line of his official duty. As was said in the case of Mendoza vs. De Leon:
"Nor are officers or agents of the Government charged with the performance of
governmental duties which are in their nature legislative, or quasi judicial, liable for
the consequences of their official acts, unless it be shown that they act willfully and
maliciously, and with the express purpose of inflicting injury upon the plaintiff."

Ateneo de Manila University vs. CA, 145 SCRA 100

FACTS:

A waitress in the cafeteria of Cervini Hall inside the university campus charged Juan
Ramon Guanzon, son of private respondents Romeo Guanzon and Teresita Regalado,
and a boarder and first year student of the university with unbecoming conduct for
striking her at her left temple. The incident came about when Juan Guanzon was
asking for siopao at the counter, however he was asked to wait which made him
madder.

The university conducted an investigation of the slapping incident. On the basis of

the investigation results, Juan Ramon was dismissed from the university.The
dismissal of Juan Ramon triggered off the filing of a complaint for damages by his
parents against the university in the then Court of First Instance of Negros
Occidental at Bacolod City. The complaint states that Juan Ramon was expelled from
school without giving him a fair trial in violation of his right to due process and that
they are entitled to actual, moral, and exemplary damages as well as attorney's
fees.

In its answer, the university denied the material allegations of the complaint and
justified the dismissal of Juan Ramon on the ground that his unbecoming behavior is
contrary to good morals, proper decorum, and civility, that such behavior subjected
him as a student to the university's disciplinary regulations' action and sanction and
that the university has the sole prerogative and authority at any time to drop from
the school a student found to be undesirable in order to preserve and maintain its
integrity and discipline so indispensable for its existence as an institution of
learning.

After due trial, the lower court found for the Guanzons. Upon appeal to the Court of
Appeals by the university, the trial court's decision was initially reversed and set
aside. The complaint was dismissed. However, upon motion for reconsideration filed
by the Guanzons, the appellate court reversed its decision and set it aside through a
special division of five. In the resolution issued by the appellate court, the lower
court's decision was reinstated. The motion for reconsideration had to be referred to
a special division of five in view of the failure to reach unanimity on the resolution of
the motion, the vote of the regular division having become 2 to 1.The petitioner
now asks us to review and reverse the resolution of the division of five.
ISSUE:

Whether or not the Supreme Court may decline to review the said Boards findings

HELD:

Yes. By reason of their special knowledge and expertise gained from the handling of
specific matters falling under their respective jurisdictions, we ordinarily accord
respect if not finality to factual findings of administrative tribunals. However, there
are exceptions to this rule and judicial power asserts itself whenever the factual
findings are not supported by evidence; where the findings are vitiated by fraud,
imposition, or collusion; where the procedure which led to the factual findings is
irregular; when palpable errors are committed; or when a grave abuse of discretion,
arbitrariness, or capriciousness is manifest.

The Board of Discipline was made up of distinguished members of the faculty-Fr.

Francisco Perez, Biology Department Chairman; Dr. Amando Capawan, a Chemistry
professor; Assistant Dean Piccio of the College; and Dr. Reyes of the same College.
There is nothing in the records to cast any doubt on their competence and
impartiality insofar as this disciplinary investigation is concerned.

Moreover, notwithstanding the non-participation of the private respondents, the

university, as stated earlier, undertook a fair and objective investigation of the
slapping incident.

Due process in administrative proceedings also requires consideration of the

evidence presented and the existence of evidence to support the decision.

Cojuangco Jr. vs. CA, 309 SCRA 602

FACTS:

Petitioner Eduardo Cojuangco Jr. filed a Petition for Review under Rule 45 of the ROC
seeking to set aside CAs decision, after it reversed a favorable decision of the RTC
that ordered the private respondents to pay him moral and exemplary damages,
attorneys fees and costs of the suit, and denied his Motion for Reconsideration.

Cojuangco, a known businessman-sportsman owned several racehorses which he

entered in sweepstakes races. Several of his horses won the races on various dates,
and won prizes together with the 30% due for trainer/grooms. He sent letters of
demand for the collection of the prizes due him but private respondents PCSO and
its then chairman Fernando Carrascoso Jr. consistently replied that the demanded
prizes are being withheld on advice of PCGG. Consequently, Cojuangco filed this
case before the Manila RTC but before the receipt summons, PCGG advised private
respondents that it poses no more objection to its remittance of the prized
winnings. This was immediately communicated to petitioners counsel Estelito
Mendoza by Carrascoso but the former refused to accept the prizes at this point,
reasoning that the matter had already been brought to court.

The trial court ruled that the private respondents had no authority to withhold the
subject racehorse winnings since no writ of sequestration was issued by PCGG.
Ordering the private respondents to pay in solidum the claimed winnings, the trial
court further held that, by not paying the winnings, Carrascoso had acted in bad
faith amounting to the persecution and harassment of petitioner and his family.
While the case was pending with the CA, the petitioner moved for partial execution
pending appeal to which the private respondents posed no objection to.

CA reversed the trial courts finding of bad faith, holding that the former PCSO
chairman was merely carrying out the instruction of the PCGG. It likewise noted that
Carrascosos acts of promptly replying to demands and not objecting to partial
execution negated bad faith.

ISSUE:

W/N the award for damages against respondent Carrascoso is warranted by

evidence the law

HELD:

YES AND NO. Petitioner is only entitled to nominal damages.

Bad faith does not simply connote bad judgment or simple negligence. It imports a
dishonest purpose or some moral obliquity and conscious doing of a wrong, a
breach of a known duty due to some motive or interest of ill will that partakes of the
nature of fraud. There is sufficient evidence on record to support Respondent
Courts conclusion that Carrascoso did not act in bad faith. His letters to PCGG
indicated his uncertainties as to the extent of the sequestration against the
properties of the plaintiff. There is also denying that plaintiff is a very close political
and business associate of the former President Marcos. Sequestration was also a
novel remedy. Under these equivocalities, Carrascoso could not be faulted in asking
further instructions from the PCGG, on what to do and more so, to obey the
instructions given. Besides, EO2 has just been issued by President Aquino, freezing
all assets and properties in the Philippines (of) former President Marcos and/or his
wifetheir close friends, subordinates, business associates

The extant rule is that public officers shall not be liable by way of moral and
exemplary damages for acts done in the performance of official duties, unless there
is a clear showing of bad faith, malice or gross negligence. Attorneys fees and
expenses of litigation cannot be imposed either, in the absence of clear showing of
any of the grounds provided therefor under the Civil Code. The trial courts award of
these kinds of damages must perforce be deleted.
Nevertheless, this Court agrees with the petitioner and the trial that Respondent
Carrascoso may still be held liable under Article 32 of the Civil Code, which
provides:

Art. 32. Any public officer or employee, or any private individual, who directly or
indirectly obstruct, defeats, violates or in any manner impedes or impairs any of the
following rights and liberties of another person shall be liable to the latter for
damages:

xxx xxx xxx

(6) The rights against deprivation of property without due process of law;

Under the aforecited article, it is not necessary that the public officer acted with
malice or bad faith. To be liable, it is enough that there was a violation of the
constitutional rights of petitioner, even on the pretext of justifiable motives or good
faith in the performance of ones duties.

We hold that petitioners right to the use of his property was unduly impeded. While
Respondent Carrascoso may have relied upon the PCGGs instructions, he could
have further sought the specific legal basis therefor. A little exercise of prudence
would have disclosed that there was no writ issued specifically for the sequestration
of the racehorse winnings of petitioner. There was apparently no record of any such
writ covering his racehorses either. The issuance of a sequestration order requires
the showing of a prima facie case and due regard for the requirements of due
process. The withholding

of the prize winnings of petitioner without a properly issued sequestration order

clearly spoke of a violation of his property rights without due process of law.

Art. 2221 of the Civil Code authorizes the award of nominal damages to a plaintiff
whose right has been violated or invaded by the defendant, for the purpose of
vindicating or recognizing that right, not for indemnifying the plaintiff for any loss
suffered.

MEA Builders, Inc. vs. CA, 450 SCRA 155

FACTS:

MEA entered into a contract with Capital Resources Corporation (CRC) for the
construction of housing units for CRCs residential subdivision in Multinational
Village, Paranaque, Metro Manila in consideration of P39,256,880, payable in cash
and negotiable securities. Under the contract the cash portion shall be payable in
90-day stand-by letters of credit from a bank.

MEA, CRC and private respondent Metropolitan Bank and Trust Company
(Metrobank) entered into a tripartite agreement whereby stand-by letters of credit
would be issued to cover the cash portion of the payments on completed housing
units in the MEA and CRC July 15, 1982 contract, subject to the following conditions:

i)The houses, townhouses, and duplexes shall have already been completed, as
attested to by the Certificate of Completion duly signed by the Contractor and
accepted by the owner or the owners representative, Metrobank representative, and
the Home Financing Corporation;

ii) That the letters of credit shall be in amounts not less than P2,000,000.00 for each
letter of credit, in other words, the aggregate total of the contracted price of the
completed units should not fall below P2,000,000.00 per letter of credit;

iii) That the letter of credit shall be a domestic, assignable, divisible, and irrevocable
letter of credit payable ninety (90) days from date of issuance and/or opening of the
letter of credit and the drawdown date can be advanced to the date of receipt of
payment by Metrobank from the National Home Mortgage Finance Corporation/other
entities for units covered by the particular of credit; and,

iv) That the owner shall secure an HFC Guarantee in favor of Metrobank to cover the
amounts of these letters of credit which are fully secured by real estate mortgages
as provided for in the agreement.

On the same day, MEA and CRC amended the July 15, 1982 construction agreement
by increasing the contract price to P45,552,950.

In a letter to Home Financing Corporation (HFC), Metrobank expressed its

willingness to finance the construction of the CRC Multinational Village project up to
the amount of P190 million thru letters of credit.

MEA wrote Metrobank asking if it could obtain the desired stand-by letters of credit
even without the HFC guarantee. In its reply, Metrobank advised MEA that the
letters of credit could be issued only upon submission of the HFC guarantee and
only for completed houses/townhouses/duplex units.

On January 14, 1983, with the construction work under the tripartite agreement
already in progress, MEA and CRC executed another contract, this time for the
horizontal development of another parcel of land also in Multinational Village. Under
the contract, MEA was to perform landfill and other stipulated infrastructural work
for P7,755,000, excluding the cost of filling materials which MEA would advance
chargeable to CRC.

On January 18, 1983, CRC submitted to HFC a Progress Report[10] of work

accomplished by MEA stating its accomplishment to be worth P2,691,685.45.
On February 11, 1983, HFC issued an official resolution approving the P120,000,000
cash guarantee.[11]

On March 1, 1983, in order to increase its capital, MEA secured from Metrobank an
advance of P3,000,000 from the amount which may become due to it under the
tripartite agreement. Metrobank advanced the amount on condition that it would
nominally be covered by a promissory note[12] and by a suretyship agreement
executed by petitioners Llave, Yu and Yuanlian. The suretyship agreement[13] was
executed on March 3, 1983.

The promissory note was twice extended. When MEA completed construction of
several housing units entitling it to P3,330,277.60 from Metrobank, the amount was
applied as follows:

a. partial liquidation of the P3,000,000.00 advance made by MEA in the amount of

P1,5000,000.00;

b. various other accounts payable by MEA to or assumed by it in favor of Metrobank

in the amount of P1,253,511.14;

c. balance received by or credited to the account of MEA in the amount of

P576,716.45.

As a result of the partial liquidation, petitioners executed a new promissory note[14]

in favor of Metrobank for the remaining P1,500,000 balance out of the original
P3,000,000.

By May 10, 1983, MEA finished 45 single detached units, evidenced by certificates
of completion authenticated by CRC, MEA, Metrobank and HFC.

On November 4, 1983 MEA informed Metrobank of the suspension of its operations

and that it would resume operations after arrangements regarding the letter of
credit were finalized.
Metrobank paid P3,274,263.22 for the 45 finished detached houses
P1,830,227.60 in irrevocable domestic letter of credit and P1,444,035.62 in cash
evidenced by a certificate of full payment.[15]

On January 31, 1984 MEA informed Metrobank and CRC of its work resumption. [16]

In its February 9, 1984 reply,[17] Metrobank advised MEA to hold off construction
work until after CRC would have sold a substantial number of the completed units. It
was to their mutual benefit to reduce their exposure to the project.

In a letter[18] dated June 11, 1984, MEA objected to the indefinite suspension and
demanded payment for their work accomplishments, plus interest and charges.

In the meantime, MEA defaulted on the P1.5 million promissory note which matured
February 6, 1984. Hence, on September 25, 1984, Metrobank instituted Civil Case
No. 8532 for the recovery of the amount covered by the promissory note plus
interest in the sum of P1,800,840.

In their answer with compulsory counterclaim, MEA and other petitioners admitted
the execution of the promissory note as well as the continuing suretyship. However,
they denied any liability to Metrobank on the ground that the promissory note and
continuing suretyship failed to reflect the true intent and agreement of the parties.
They contended that the real agreement of the parties was not a straight or simple
loan payable within a fixed period of time but an advance payment scheme tied up
with the agreements relative to the execution of construction work in the CRC-
Multinational Village Project, to be liquidated from payments expected to become
due to MEA. In support thereof, they also invoked the tripartite agreement among
CRC, MEA and Metrobank.

On July 18, 1991, the trial court decided in favor of MEA and found that the
promissory note covering the P1.5 million was not really a straight or simple loan.

Heirs of Simeon Borlado, vs. CA

FACTS:
On April 15, 1942: Serapio Borlado sold the lot to Francisco Bacero. His widow
Amparo Dionisio Vda. de Bacero, as legal guardian of her minor children,later on
sold the lot on February 1948 to the Spouses Bienvenido Bulan and Salvacion
Borbon and they declared the lot in the name of Bulan for Tax Declaration purposes
and obtained the continuous, peaceful, uninterrupted, adverse and exclusive
possession of the lot until November 4, 1972 when heirs of Simeon Borlado forcibly
entered and wrested physical possession from them. The spouses filed with the MTC
a complaint for ejectment. The MTC ruled in favor of the spouses. The heirs were
ordered to vacated the lot and pay 100 cavans of palay annually from 1972 until
they vacate the premises and P5K for attorneys fees and cost of suit

ISSUE:

W/N the 100 cavans of palay is an acceptable form of damages

HELD:

NO. Affirm with modification. Deleting the 100 cavans of palay for lack of basis.

Palay is not legal tender currency in the Philippines.