Narra Nickel Mining and Development Corp. vs
Such manner of computation is
Redmont Consolidated Mines Corporation
G.R. No. 195580 April 21, 2014
Facts: Sometime in December 2006, respondent
Redmont Consolidated Mines Corp. (Redmont), a
domestic corporation organized and existing under
Philippine laws, took interest in mining and exploring
certain areas of the province of Palawan. After
inquiring with the Department of Environment and
Natural Resources (DENR), it learned that the areas
where it wanted to undertake exploration and mining
activities where already covered by Mineral
Production Sharing Agreement (MPSA) applications
of petitioners Narra, Tesoro and McArthur. Petitioner
McArthur, through its predecessor-in-interest Sara
Marie Mining, Inc. (SMMI), filed an application for an
MPSA and Exploration Permit (EP) with the Mines
and Geo-Sciences Bureau (MGB), Region IV-B,
Office of the Department of Environment and Natural
Resources (DENR). Subsequently, SMMI was issued
MPSA-AMA-IVB-153 covering an area of over 1,782
hectares in Barangay Sumbiling, Municipality of
Bataraza, Province of Palawan and EPA-IVB-44
which includes an area of 3,720 hectares in Barangay
Malatagao, Bataraza, Palawan. The MPSA and EP
were then transferred to Madridejos Mining
Corporation (MMC) and, on November 6, 2006,
assigned to petitioner McArthur. Petitioner Narra
acquired its MPSA from Alpha Resources and
Development Corporation and Patricia Louise Mining
& Development Corporation (PLMDC) which
previously filed an application for an MPSA with the
MGB, Region IV-B, DENR on January 6, 1992.
Through the said application, the DENR issued
MPSA-IV-1-12 covering an area of 3.277 hectares in
barangays Calategas and San Isidro, Municipality of
Narra, Palawan. Subsequently, PLMDC conveyed,
transferred and/or assigned its rights and interests over
the MPSA application in favor of Narra. Another
MPSA application of SMMI was filed with the DENR
Region IV-B, labeled as MPSA-AMA-IVB-154
(formerly EPA-IVB-47) over 3,402 hectares in
Barangays Malinao and Princesa Urduja, Municipality
of Narra, Province of Palawan. SMMI subsequently
conveyed, transferred and assigned its rights and
interest over the said MPSA application to Tesoro. On
January 2, 2007, Redmont filed before the Panel of
Arbitrators (POA) of the DENR three (3) separate
petitions for the denial of petitioners’ applications for
MPSA designated as AMA-IVB-153, AMA-IVB-154
and MPSA IV-1-12. In the petitions, Redmont alleged
that at least 60% of the capital stock of McArthur,
Tesoro and Narra are owned and controlled by MBMI
Resources, Inc. (MBMI), a 100% Canadian
corporation. Redmont reasoned that since MBMI is a
considerable stockholder of petitioners, it was the
driving force behind petitioners’ filing of the MPSAs
over the areas covered by applications since it knows
that it can only participate in mining activities through
corporations which are deemed Filipino citizens.
Redmont argued that given that petitioners’ capital
stocks were mostly owned by MBMI, they were
likewise disqualified from engaging in mining
activities through MPSAs, which are reserved only for
Filipino citizens.
Issue: Whether or not the petitioner corporations are
Filipino and can validly be issued MPSA and EP.
Held: No. The SEC Rules provide for the manner of
calculating the Filipino interest in a corporation for
purposes, among others, of determining compliance
with nationality requirements (the ‘Investee
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Corporation’).
necessary since the shares in the Investee Corporation
may be owned both by individual stockholders
(‘Investing Individuals’) and by corporations and
partnerships (‘Investing Corporation’). The said rules
thus provide for the determination of nationality
depending on the ownership of the Investee
Corporation and, in certain instances, the Investing
Corporation.
Under the SEC Rules, there are two cases in
determining the nationality of the Investee
Corporation. The first case is the ‘liberal rule’, later
coined by the SEC as the Control Test in its 30 May
1990 Opinion, and pertains to the portion in said
Paragraph 7 of the 1967 SEC Rules which states,
‘(s)hares belonging to corporations or partnerships at
least 60% of the capital of which is owned by Filipino
citizens shall be considered as of Philippine
nationality.’ Under the liberal Control Test, there is no
need to further trace the ownership of the 60% (or
more) Filipino stockholdings of the Investing
Corporation since a corporation which is at least 60%
Filipino-owned is considered as Filipino.
The second case is the Strict Rule or the Grandfather
Rule Proper and pertains to the portion in said
Paragraph 7 of the 1967 SEC Rules which states, “but
if the percentage of Filipino ownership in the
corporation or partnership is less than 60%, only the
number of shares corresponding to such percentage
shall be counted as of Philippine nationality.” Under
the Strict Rule or Grandfather Rule Proper, the
combined totals in the Investing Corporation and the
Investee Corporation must be traced (i.e.,
“grandfathered”) to determine the total percentage of
Filipino ownership. Moreover, the ultimate Filipino
ownership of the shares must first be traced to the level
of the Investing Corporation and added to the shares
directly owned in the Investee Corporation.
In other words, based on the said SEC Rule and DOJ
Opinion, the Grandfather Rule or the second part of
the SEC Rule applies only when the 60-40 Filipino-
foreign equity ownership is in doubt (i.e., in cases
where the joint venture corporation with Filipino and
foreign stockholders with less than 60% Filipino
stockholdings [or 59%] invests in other joint venture
corporation which is either 60-40% Filipino-alien or
the 59% less Filipino). Stated differently, where the
60-40 Filipino- foreign equity ownership is not in
doubt, the Grandfather Rule will not apply.
San Juan Structural and Steel Fabricators, Inc. vs
Court of Appeals
296 SCRA 631 [GR No. 129459 September 29,
1998]
Facts: Plaintiff-appellant San Juan structural and steel
fabricators Inc.’s amended complaint alleged that on
February 14, 1989, plaintiff-appellant entered into an
agreement with defendant-appellee Motorich Sales
Corporation for the transfer to it of a parcel of land
identified as lot 30, Block 1 of the Acropolis Greens
Subdivision located in the district of Murphy, Quezon
City, Metro Manila containing an area of 414 sqm,
covered by TCT no. 362909; that as stipulated in the
agreement of February 14, 1i989, plaintiff-appellant
paid the down payment in the sum of P100,000, the
balance to be paid on or before March 2, 19889; that
on March 1, 1989,Mr. Andres T. Co, president of
Plaintiff-appellant corporation, wrote a letter to
defendant-appellee Motorich Sales Corporation
requesting a computation for the balance to be paid;
that said letter was coursed through the defendant-
appellee’s broker. Linda Aduca who wrote the
computation of the balance; that on March 2, 1989,
plaintiff-appellant was ready with the amount
corresponding to the balance, covered by Metrobank
cashier’s check no. 004223 payable to defendant-
appellee Motorich Sales Corporation; that plaintiff-
appellant and defendant-appellee were supposed to
meet in the plaintiff-appellant’s office but defendant-
appellee’s treasurer, Nenita Lee Gruenbeg did not
appear; that defendant-appelle despite repeated
demands and in utter disregard of its commitments had
refused to execute the transfer of rights/deed of
assignment which is necessary to transfer the
certificate of title; that defendant ACL development
corporation is impleaded as a necessary party since
TCT no. 362909 is still in the name of said defendant;
while defendant VNM Realty and Development
Corporation is likewise impleaded as a necessary party
in view of the fact that it is the transferor of the right
in favor of defendant-appellee Motorich Sales
Corporation; that on April 6, 1989 defendant ACL
Development Corporation and Motorich Sales
Corporation entered into a deed of absolute sale
whereby the former transferred to the latter the subject
property; that by reason of said transfer; the registry of
deeds of Quezon City issued a new title in the name of
Motorich Sales Corporation, represented by
defendant-appellee Nenita Lee Gruenbeg and
Reynaldo L. Gruenbeg, under TCT no. 3751; that as a
result of defendants-appellees Nenita and Motorich’s
bad faith in refusing to execute a formal transfer of
rights/deed of assignment, plaintiff-appellant suffered
moral and nominal damages which may be assessed
against defendant-appellees in the sum of P500,000;
that as a result of an unjustified and unwarranted
failure to execute the required transfer or formal deed
of sale in favor of plaintiff-appellant, defendant-
appellees should be assessed exemplary damages in
the sum of P100,000; that by reason of the said bad
faith in refusing to execute a transfer in favor of
plaintiff-appellant the latter lost opportunity to
construct a residential building in the sum of P100,000
and that as a consequence of such bad faith, it has been
constrained to obtain the services of counsel at an
agreed fee of P100,000 plus appearance fee of for
every appearance in court hearings.
Issues: Whether or not the corporation’s treasurer act
can bind the corporation.
Whether or not the doctrine of piercing the veil of
corporate entity is applicable.
Held: No. Such contract cannot bind Motorich,
because it never authorized or ratified such sale.
A corporation is a juridical person separate and
distinct from its stockholders or members.
Accordingly, the property of the corporation is not the
property of the corporation is not the property of its
stockholders or members and may not be sold by the
stockholders or members without express
authorization from the corporation’s board of
directors.
Section 23 of BP 68 provides the Board of Directors
or Trustees – Unless otherwise provided in this code,
the corporate powers of all corporations formed under
this code shall be exercised, all business conducted,
and all property of such corporations controlled and
held by the board of directors or trustees to be elected
from among the stockholders of stocks, or where there
is no stock, from among the members of the
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corporations, who shall hold office for 1 year and until
their successors are elected and qualified.
As a general rule, the acts of corporate officers within
the scope of their authority are binding on the
corporation. But when these officers exceed their
authority, their actions, cannot bind the corporation,
unless it has ratified such acts as is estopped from
disclaiming them.
Because Motorich had never given a written
authorization to respondent Gruenbeg to sell its parcel
of land, we hold that the February 14, 1989 agreement
entered into by the latter with petitioner is void under
Article 1874 of the Civil Code. Being inexistent and
void from the beginning, said contract cannot be
ratified.
The statutorily granted privilege of a corporate veil
may be used only for legitimate purposes. On
equitable consideration,the veil can be disregarded
when it is utilized as a shield to commit fraud,
illegality or inequity, defeat public convenience;
confuse legitimate issues; or serve as a mere alter ego
or business conduit of a person or an instrumentality,
agency or adjunct of another corporation.
We stress that the corporate fiction should be set aside
when it becomes a shield against liability for fraud, or
an illegal act on inequity committed on third person.
The question of piercing the veil of corporate fiction is
essentially, then a matter of proof. In the present case,
however, the court finds no reason to pierce the
corporate veil of respondent Motorich. Petitioner
utterly failed to establish the said corporation was
formed, or that it is operated for the purpose of
shielding any alleged fraudulent or illegal activities of
its officers or stockholders; or that the said veil was
used to conceal fraud, illegality or inequity at the
expense of third persons like petitioner.
RYUICHI YAMAMOTO v.
NISHINO LEATHER INDUSTRIES,
INC. and IKUO NISHINO 551
SCRA 447 (2008)
To disregard the separate juridical
personality of a corporation, the
wrongdoing or unjust act in
contravention of a plaintiff’s legal rights
must be clearly and convincingly
established. Also, without acceptance, a
mere offer produces no obligation.
Ryuichi Yamamoto and Ikuo Nishino
agreed to enter into a joint venture
wherein Nishino would acquire such
number of shares of stock equivalent to
70% of the authorized capital stock of the
corporation. However, Nishino and his
brother Yoshinobu Nishino acquired
more than 70% of the authorized capital
stock. Negotiations subsequently ensued
in light of a planned takeover by Nishino
who would buy-out the shares of stock of
Yamamoto who was advised through a
letter that he may take all the equipment/
machinery he had contributed to the
company (for his own use and sale)
provided that the value of such machines
is deducted from the capital
contributions which will be paid to him.
However, the letter requested that he
give his “comments on all the above,
soonest”. On the basis of the said letter,
Yamamoto attempted to recover the
machineries but Nishino hindered him to
do so, drawing him to file a Writ of
Replevin. The Trial Court issued the writ.
However, on appeal, Nishino claimed
that the properties being recovered were
owned by the corporation and the above-
said letter was a mere proposal which
was not yet authorized by the Board of
Directors. Thus, the Court of Appeals
reversed the trial court’s decision despite
Yamamoto’s contention that the
company is merely an instrumentality of
the Nishinos.
ISSUE:
Whether or not Yamamoto can recover
the properties he contributed to the
company in view of the Doctrine of
Piercing the Veil of Corporate Fiction and
Doctrine of Promissory Estoppel.
HELD:
One of the elements determinative of the
applicability of the doctrine of piercing
the veil of corporate fiction is that control
must have been used by the defendant to
commit fraud or wrong, to perpetuate the
violation of a statutory or other positive
legal duty, or dishonest and unjust act in
contravention of the plaintiff’s legal
rights. To disregard the separate juridical
personality of a corporation, the
wrongdoing or unjust act in
contravention of a plaintiff’s legal rights
must be clearly and convincingly
established; it cannot be presumed.
Without a demonstration that any of the
evils sought to be prevented by the
doctrine is present, it does not
apply. Estoppel may arise from the
making of a promise. However, it bears
noting that the letter was followed by a
request for Yamamoto to give his
“comments on all the above, soonest.”
What was thus proffered to Yamamoto
was not a promise, but a mere offer,
subject to his acceptance. Without
acceptance, a mere offer produces no
obligation. Thus, the machineries and
equipment, which comprised
Yamamoto’s investment, remained part
of the capital property of the corporation.
MJE
ERIC GODFREY STANLEY LIVESEY, v. BINSWANGER
PHILIPPINES, INC. AND KEITH ELLIOT
[G.R. No. 177493, March 19, 2014]
TOPIC: Separate Personality/ Piercing the Veil
PONENTE:Brion
CASE LAW/ DOCTRINE:
Piercing the veil of corporate fiction is an equitable
doctrine developed to address situations where the
separate corporate personality of a corporation is
abused or used for wrongful purposes. Under the
doctrine, the corporate existence may be
disregarded where the entity is formed or used for
non–legitimate purposes, such as to evade a just and
due obligation, or to justify a wrong, to shield or
perpetrate fraud or to carry out similar or
inequitable considerations, other unjustifiable aims
or intentions, in which case, the fiction will be
disregarded and the individuals composing it and the
two corporations will be treated as identical.
Emergency Recit:
LIVESEY was illegally dismissed. A compromise
agreement was forged between the two parties, but
CBB failed to pay the next two installments
amounting to US$18K due to closure/cessation
of business. LIVESEY claimed that there was
evidence showing that CBB and Binswanger are
one and the same corporation. Invoking the
doctrine of piercing the veil of corporate fiction,
LIVESEY prayed that an alias writ of execution
be issued against respondents Binswanger and
Keith Elliot, CBB’s former President, and now
Binswanger’s President and CEO.
LA: BINSWANGER NLRC: LIVESEY CA:
BINSWANGER - Emphasizing that the mere fact
that Binswanger and CBB have the same
President is not in itself sufficient to pierce the
veil of corporate fiction of the two entities, and
that although Elliot was formerly CBB’s
President, this circumstance alone does not
make him answerable for CBB’s liabilities, there
being no proof that he was motivated by malice
or bad faith when he signed the compromise
agreement in CBB’s behalf.
SC: Shortly after Elliot forged the
compromise agreement with Livesey, CBB
ceased operations, a corporate event that
was not disputed by the respondents. Then
Binswanger suddenly appeared. It was
established almost simultaneously with
CBB’s closure, with no less than Elliot as its
President and CEO. Through the confluence
of events surrounding CBB’s closure and
Binswanger’s sudden emergence, a
reasonable mind would arrive at the
conclusion that Binswanger is CBB’s alter
ego or that CBB and Binswanger are one
and the same corporation. There are also
indications of badges of fraud in
Binswanger’s incorporation. It was a
business strategy to evade CBB’s financial
liabilities, including its outstanding
obligation to Livesey. (SEE DOCTRINE)
ISSUE(S): W/N CBB and Binswanger should be
considered as one and the same.
HELD: YES.
RATIO:
▪ Shortly after Elliot forged the compromise
agreement with LIVESEY, CBB ceased operations,
a corporate event that was not disputed by the
respondents. Then Binswanger suddenly
appeared. It was established almost
simultaneously with CBB’s closure, with no less
than Elliot as its President and CEO.
▪ Through the confluence of events surrounding
CBB’s closure and Binswanger’s sudden
emergence, a reasonable mind would arrive at
the conclusion that Binswanger is CBB’s alter
ego or that CBB and Binswanger are one and the
same corporation. There are also indications of
badges of fraud in Binswanger’s incorporation. It
was a business strategy to evade CBB’s financial
liabilities, including its outstanding obligation to
LIVESEY.
▪ Piercing the veil of corporate fiction is an
equitable doctrine developed to address
situations where the separate corporate
personality of a corporation is abused or used for
wrongful purposes. Under the doctrine, the
corporate existence may be disregarded where
the entity is formed or used for non–legitimate
purposes, such as to evade a just and due
obligation, or to justify a wrong, to shield or
perpetrate fraud or to carry out similar or
inequitable considerations, other unjustifiable
aims or intentions, in which case, the fiction will
be disregarded and the individuals composing it
and the two corporations will be treated as
identical.
▪ LIVESEY’s evidence, whose existence the
respondents never denied, converged to show
this continuity of business operations from CBB
to Binswanger. It was not just coincidence that
Binswanger is engaged in the same line of
business CBB embarked on:
(1) it even holds office in the very same building
and on the very same floor where CBB once
stood;
(2) CBB’s key officers, Elliot, no less, and Catral
moved over to Binswanger, performing the tasks
they were doing at CBB;
(3) notwithstanding CBB’s closure, Binswanger’s
Web Editor (Young), in an e–mail
correspondence, supplied the information that
Binswanger is “now known” as either CBB
(Chesterton Blumenauer Binswanger or as
Chesterton Petty, Ltd., in the Philippines;
(4) the use of Binswanger of CBB’s paraphernalia
(receiving stamp) in connection with a labor case
where Binswanger was summoned by the
authorities, although Elliot claimed that he
bought the item with his own money; and
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(5) Binswanger’s takeover of CBB’s project with
the PNB.
What happened to CBB, we believe, supports
LIVESEY’s assertion that De Guzman, CBB’s former
Associate Director, informed him that at one time
Elliot told her of CBB’s plan to close the corporation
and organize another for the purpose of evading
CBB’s liabilities to Livesey and its other financial
liabilities. This wrongful intent we cannot and must
not condone, for it will give a premium to an
iniquitous business strategy where a corporation is
formed or used for a non–legitimate purpose, such
as to evade a just and due obligation. We, therefore,
find Elliot as liable as Binswanger for CBB’s
unfulfilled obligation to LIVESEY.
Francisco Motors Corporation v. CA and Sps.
Manuel (G.R. No. 100812)
Facts:
Petitioner Francisco Motors Corp filed a
complaint to recover from respondent spouses
Manuel the unpaid balance of the jeepney
bought by the latter from them. As their
answer, respondent spouses interposed a
counterclaim for unpaid legal services by
Gregorio Manuel which was not paid by
petitioner corporation’s directors and officers.
Respondent Manuel alleges that he represented
members of the Francisco family who were
directors and officers of herein petitioner
corporation in an intestate estate proceeding
but even after its termination, his services were
not paid. The trial court ruled in favor of
petitioner but also allowed respondent spouses’
counterclaim. CA affirmed.
Issue:
Whether or not petitioner corporation may be
held liable for the liability incurred by its
directors and officers in their personal capacity.
Ruling: NO.
In our view, however, given the facts and
circumstances of this case, the doctrine of
piercing the corporate veil has no relevant
application here. Respondent court erred in
permitting the trial court’s resort to this
doctrine.
In the case at bar, instead of holding certain
individuals or persons responsible for an alleged
corporate act, the situation has been reversed.
It is the petitioner as a corporation which is
being ordered to answer for the personal
liability of certain individual directors, officers
and incorporators concerned. Hence, it appears
to us that the doctrine has been turned upside
down because of its erroneous invocation. Note
that according to private respondent Gregorio
Manuel his services were solicited as counsel
for members of the Francisco family to
represent them in the intestate proceedings
over Benita Trinidad’s estate. These estate
proceedings did not involve any business of
petitioner.
Furthermore, considering the nature of the
legal services involved, whatever obligation said
incorporators, directors and officers of the
corporation had incurred, it was incurred in
their personal capacity. When directors and
officers of a corporation are unable to
compensate a party for a personal obligation, it
is far-fetched to allege that the corporation is
perpetuating fraud or promoting injustice, and
be thereby held liable therefore by piercing its
corporate veil.
Filipinas Broadcasting Network vs
AMEC-BCCM Case Digest
Filipinas Broadcasting Network Inc. vs. Ago
Medical and Educational Center-Bicol
Christian College of Medicine (AMEC-
BCCM)
[GR 141994, 17 January 2005]
Facts: “Exposé” is a radio documentary
program hosted by Carmelo ‘Mel’ Rima
(“Rima”) and Hermogenes ‘Jun’ Alegre
(“Alegre”). Exposé is aired every morning over
DZRC-AM which is owned by Filipinas
Broadcasting Network, Inc. (“FBNI”). “Exposé”
is heard over Legazpi City, the Albay
municipalities and other Bicol areas. 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 AMEC’s
College of Medicine, filed a complaint for
damages against FBNI, Rima and Alegre on 27
February 1990.
The complaint further alleged that AMEC is a
reputable learning institution. With the
supposed exposés, 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 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
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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 on
FBNI’s 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. On 14 December 1992,
the trial court rendered a Decision finding FBNI
and Alegre liable for libel except Rima. The trial
court held that the broadcasts are libelous per
se. The trial court rejected the broadcasters’
claim that their utterances were the result of
straight reporting because it had no factual
basis. The broadcasters did not even verify
their reports before airing them to show good
faith. In holding FBNI liable for libel, the trial
court found that FBNI failed to exercise
diligence in the selection and supervision of its
employees. In absolving Rima from the charge,
the trial court ruled that Rima’s only
participation was when he agreed with Alegre’s
exposé. The trial court found Rima’s statement
within the “bounds of freedom of speech,
expression, and of the press.” 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 court’s judgment with
modification. The appellate court made Rima
solidarily liable with FBNI and Alegre. The
appellate court denied Ago’s claim for
damages and attorney’s fees because the
broadcasts were directed against AMEC, and
not against her. FBNI, Rima and Alegre filed a
motion for reconsideration which the Court of
Appeals denied in its 26 January 2000
Resolution. Hence, FBNI filed the petition for
review.
Issue: Whether AMEC is entitled to moral
damages.
Held: A juridical person is generally not entitled
to moral damages because, unlike a natural
person, it cannot experience physical suffering
or such sentiments as wounded feelings,
serious anxiety, mental anguish or moral
shock. The Court of Appeals cites Mambulao
Lumber Co. v. PNB, et al. to justify the award
of moral damages. However, the Court’s
statement in Mambulao that “a corporation may
have a good reputation which, if besmirched,
may also be a ground for the award of moral
damages” is an obiter dictum. Nevertheless,
AMEC’s claim for moral damages falls under
item 7 of Article 2219 of the Civil Code. This
provision expressly authorizes the recovery of
moral damages in cases of libel, slander or any
other form of defamation. Article 2219(7) does
not qualify whether the plaintiff is a natural or
juridical person. Therefore, a juridical person
such as a corporation can validly complain for
libel or any other form of defamation and claim
for moral damages. Moreover, where the
broadcast is libelous per se, the law implies
damages. 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. 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. In this case, the
broadcasts are libelous per se. Thus, AMEC is
entitled to moral damages. However, the Court
found 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,
the Court reduced the award of moral damages
from P300,000 to P150,000.

MJE