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1

SECOND DIVISION

G.R. No. 108670 September 21, 1994

LBC EXPRESS, INC., petitioner,vs.THE C!RT " #PPE#LS, #$L" %. C#RLT, &'( R!R#L B#N)

" L#B#SN, INC., respondents.

P!N,J.:

In this Petition for Review on Certiorari, petitioner LBC questions thedeision 1of respondent Court of !ppe"#s "$r%in& the 'ud&%ent of theRe&ion"# (ri"# Court of Dipo#o& Cit), Br"nh *, "w"rdin& %or"# "nde+e%p#"r) d"%"&es, rei%urse%ent of P-,///.//, "nd osts of suit0 utde#etin& the "%ount of "ttorne)s fees.

Priv"te respondent !do#fo C"r#oto, inu%ent President23"n"&er of priv"terespondent Rur"# B"n4 of L""son, "##e&ed th"t on Nove%er 1, 15*6, hew"s in Ceu Cit) tr"ns"tin& usiness with the Centr"# B"n4 Re&ion"#O$e. 7e w"s instruted to proeed to 3"ni#" on or efore Nove%er 1,15*6 to fo##ow2up the Rur"# B"n4s p#"n of p")%ent of redisountin&o#i&"tions with Centr"# B"n4s %"in o$e in 3"ni#". 27e then purh"sed" round trip p#"ne ti4et to 3"ni#". 7e "#so phoned his sister E#sie C"r#oto2Conh" to send hi% ONE (7O8S!ND PESOS 9P1,///.//: for his po4et%one) in &oin& to 3"ni#" "nd so%e redisountin& p"pers thru petitionersLBC O$e "t Dipo#o& Cit). *

On Nove%er 1;, 15*6, 3rs. Conh" thru her #er4, !de#in" !nti&oonsi&ned thru LBC Dipo#o& Br"nh the pertinent dou%ents "nd the su%of ONE (7O8S!ND PESOS 9P1,///.//: to respondent C"r#oto "t No. .

On Nove%er 1?, 15*6, the dou%ents "rrived without the "shp"4.Respondent C"r#oto %"de person"# fo##ow2ups on th"t s"%e d"), "nd "#soon Nove%er 15 "nd /, 15*6 "t LBCs o$e in Ceu ut petitioner f"i#edto de#iver to hi% the "shp"4.

Consequent#), respondent C"r#oto s"id he w"s o%pe##ed to &o to Dipo#o&Cit) on Nove%er 6, 15*6 to #"i% the %one) "t LBCs o$e. 7is e@ort

w"s one %ore in v"in. On Nove%er ?, 15*6, he went "4 to Ceu Cit)"t LBCs o$e. 7e w"s, however, "dvised th"t the %one) h"s eenreturned to LBCs o$e in Dipo#o& Cit) upon shippers request. !&"in, hede%"nded for the ONE (7O8S!ND PESOS 9P1,///.//: "nd refund ofAOR(2NINE PESOS 9P65.//: LBC revenue h"r&es. 7e reeived the %one)on#) on Dee%er 1>, 15*6 #ess the revenue h"r&es.

Respondent C"r#oto #"i%ed th"t e"use of the de#") in the tr"ns%itt"# ofthe "shp"4, he f"i#ed to su%it the redisountin& dou%ents to Centr"#B"n4 on ti%e. !s " onsequene, his rur"# "n4 w"s %"de to p") theCentr"# B"n4 (7IR(2(O (7O8S!ND PESOS 9P-,///.//: "s pen"#t)interest. 4

7e "##e&ed#) su@ered e%"rr"ss%ent "nd hu%i#i"tion.

Petitioner LBC, on the other h"nd, "##e&ed th"t the "shp"4 w"s forw"rdedvi" P!L to LBC Ceu Cit) r"nh on Nove%er , 15*6. +On the s"%ed"), it w"s de#ivered "t respondent C"r#otos residene "t No. . Notwithst"ndin& the s"id notie, respondentC"r#oto did not #"i% the "shp"4 "t LBC Ceu. On Nove%er -, 15*6, itw"s returned to the shipper, E#sie C"r#oto2Conh" "t Dipo#o& Cit).

C#"i%in& th"t petitioner LBC w"nton#) "nd re4#ess#) disre&"rded itso#i&"tion, respondent C"r#oto instituted "n "tion for D"%"&es !risin&fro% Non2perfor%"ne of O#i&"tion do4eted "s Civi# C"se No. -;?5efore the Re&ion"# (ri"# Court of Dipo#o& Cit) on "nu"r) 6, 15*>. On une>, 15**, "n "%ended o%p#"int w"s #ed where respondent rur"# "n4'oined "s one of the p#"inti@s "nd pr")ed for the rei%urse%ent of (7IR(2(O (7O8S!ND PESOS 9P-,///.//:.

!fter he"rin&, the tri"# ourt rendered its deision, the dispositive portion ofwhih re"dsF

7EREAORE, 'ud&%ent is here) renderedF

1. Orderin& the defend"nt LBC !ir C"r&o, In. to p") unto p#"inti@ !do#fo 3.C"r#oto "nd Rur"# B"n4 of L""son, In., %or"# d"%"&es in the "%ount ofP1/,///.//0 e+e%p#"r) d"%"&es in the "%ount of P>,///.//0 "ttorne)sfees in the "%ount of P-,///.// "nd #i ti&"tion e+penses of P1,///.//0


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. Sentenin& defend"nt LBC !ir C"r&o, In., to rei%urse p#"inti@ Rur"#B"n4 of L""son, In. the su% of P-,///.// whih the #"tter p"id "spen"#t) interest to the Centr"# B"n4 of the Phi#ippines "s pen"#t) interestfor f"i#ure to redisount its due i##s on ti%e "risin& fro% the defend"ntsf"i#ure to de#iver the "shp"4, with #e&"# interest o%puted fro% the d"teof #in& of this "se0 "nd

-. Orderin& defend"nt to p") the osts of these proeedin&s.

SO ORDERED. 6

On "ppe"#, respondent ourt %odied the 'ud&%ent ) de#etin& the "w"rdof "ttorne)s fees. Petitioners 3otion for Reonsider"tion w"s denied in "Reso#ution d"ted "nu"r) 11, 155-.

7ene, this petition r"isin& the fo##owin& questions, to witF

1. hether or not respondent Rur"# B"n4 of L""son In., ein& "n "rtii"#person shou#d e "w"rded %or"# d"%"&es.

. hether or not the "w"rd of (7IR(2(O (7O8S!ND PESOS9P-,///.//: w"s %"de with &r"ve "use of disretion.

-. hether or not the respondent Court of !ppe"#s &r"ve#) "used itsdisretion in "$r%in& the tri"# ourts deision orderin& petitioner LBC top") %or"# "nd e+e%p#"r) d"%"&es despite perfor%"ne of its o#i&"tion.

e nd %erit in the petition.

(he respondent ourt erred in "w"rdin& %or"# d"%"&es to the Rur"# B"n4of L""son, In., "n "rtii"# person.

3or"# d"%"&es "re &r"nted in reo%pense for ph)si"# su@erin&, %ent"#"n&uish, fri&ht, serious "n+iet), es%irhed reput"tion, wounded fee#in&s,%or"# sho4, soi"# hu%i#i"tion, "nd si%i#"r in'ur). 7! orpor"tion, ein& "n"rtii"# person "nd h"vin& e+istene on#) in #e&"# onte%p#"tion, h"s nofee#in&s, no e%otions, no senses0 therefore, it "nnot e+periene ph)si"#su@erin& "nd %ent"# "n&uish. 83ent"# su@erin& "n e e+periened on#)) one h"vin& " nervous s)ste% "nd it Gows fro% re"# i##s, sorrows, "nd

&riefs of #ife 9H "## of whih "nnot e su@ered ) respondent "n4 "s "n"rtii"# person.

e "n neither sust"in the "w"rd of %or"# d"%"&es in f"vor of the priv"terespondents. (he ri&ht to reover %or"# d"%"&es is "sed on equit). 3or"#d"%"&es "re reover"#e on#) if the "se f"##s under !rti#e 15 of theCivi# Code in re#"tion to !rti#e 1. 10P"rt of onvention"# wisdo% is th"t hewho o%es to ourt to de%"nd equit), %ust o%e with #e"n h"nds.

In the "se "t enh, respondent C"r#oto is not without f"u#t. 7e w"s fu##)"w"re th"t his rur"# "n4s o#i&"tion wou#d %"ture on Nove%er 1, 15*6"nd his "n4 h"s set "side "sh for these i##s p")"#e. 117e w"s "## set to&o to 3"ni#" to sett#e this o#i&"tion. 7e h"s reeived the dou%entsneess"r) for the "pprov"# of their redisountin& "pp#i"tion with theCentr"# B"n4. 7e h"s "#so reeived the p#"ne ti4et to &o to 3"ni#".Neverthe#ess, he did not i%%edi"te#) proeed to 3"ni#" ut inste"d t"rriedfor d")s "##e&ed#) #"i%in& his ONE (7O8S!ND PESOS 9P1,///.//: po4et%one). Due to his de#")ed trip, he f"i#ed to su%it the redisountin&p"pers to the Centr"# B"n4 on ti%e "nd his "n4 w"s pen"#ied (7IR(2(O (7O8S!ND PESOS 9P-,///.//: for f"i#ure to p") its o#i&"tion on its

due d"te. (he undue i%port"ne &iven ) respondent C"r#oto to his ONE(7O8S!ND PESOS 9P1,///.//: po4et %one) is ine+p#i"#e for it w"s notindispens"#e for hi% to fo##ow up his "n4s redisountin& "pp#i"tion withCentr"# B"n4. !ordin& to s"id respondent, he needed the %one) toJinvite peop#e for " sn"4 or dinner.J 12(he "ttitude of s"id respondentspe"4s i## of his w")s of usiness de"#in&s "nd "nnot e ounten"ned )this Court. Veri#), it wi## e revo#tin& to our sense of ethis to use it "s "sisfor "w"rdin& d"%"&es in f"vor of priv"te respondent C"r#oto "nd the Rur"#B"n4 of L""son, In.

e "#so ho#d th"t respondents f"i#ed to show th"t petitioner LBCs #"tede#iver) of the "shp"4 w"s %otiv"ted ) person"# %"#ie or "d f"ith,

whether intention"# or thru &ross nei&ene. In f"t, it w"s proved durin&the tri"# th"t the "shp"4 w"s onsi&ned on Nove%er 1;, 15*6, " Arid").It w"s sent to Ceu on Nove%er 15, 15*6, the ne+t usiness d").Considerin& this iru%st"ne, petitioner "nnot e h"r&ed with &rossneet of dut). B"d f"ith under the #"w "n not e presu%ed0 it %ust eest"#ished ) #e"rer "nd onvinin& evidene. 1*!&"in, the unro4en'urisprudene is th"t in re"h of ontr"t "ses where the defend"nt isnot shown to h"ve "ted fr"udu#ent#) or in "d f"ith, #i"i#it) for d"%"&esis #i%ited to the n"tur"# "nd pro"#e onsequenes of the r"nh of theo#i&"tion whih the p"rties h"d foreseen or ou#d re"son"#e h"veforeseen. (he d"%"&es, however, wi## not in#ude #i"i#it) for %or"#

d"%"&es.14


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Presindin& fro% these pre%ises, the "w"rd of e+e%p#"r) d"%"&es %"de) the respondent ourt wou#d h"ve no #e&"# #e& to support itse#f. 8nder!rti#e - of the Civi# Code, in " ontr"tu"# or qu"si2ontr"tu"#re#"tionship, e+e%p#"r) d"%"&es %") e "w"rded on#) i f the defend"nth"d "ted in J" w"nton, fr"udu#ent, re4#ess, oppressive, or %"#evo#ent%"nner.J (he est"#ished f"ts of not so w"rr"nt the h"r"teri"tion of

the "tion of petitioner LBC.

IN VIE 7EREOA, the Deision of the respondent ourt d"ted Septe%er-/, 155 is REVERSED "nd SE( !SIDE0 "nd the Co%p#"int in Civi# C"se No.-;?5 is ordered DIS3ISSED. No osts.

SO ORDERED.


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6

AIRS( DIVISION

G.R. No. 141994. -&'&r/ 17, 200+

"ILIPIN#S BR#$C#STING NETR), INC.,petitioner, vs.#G

%E$IC#L #N$ E$!C#TIN#L CENTERBICL CHRISTI#N CLLEGE

" %E$ICINE, 3#%ECBCC% &'( #NGELIT# ". #G, respondents.

$ E C I S I N

C#RPI,J.5

Te C&e

(his petition for reviewK1"ss"i#s the 6 "nu"r) 1555 DeisionK"nd ;"nu"r) /// Reso#ution of the Court of !ppe"#s in C!21.(he Court of !ppe"#s "$r%ed with %odi"tion the 16 Dee%er 155DeisionK-of the Re&ion"# (ri"# Court of Le&"pi Cit), Br"nh 1/, in Civi#C"se No. *-;. (he Court of !ppe"#s he#d Ai#ipin"s Bro"d"stin& Networ4,In. "nd its ro"d"sters 7er%o&enes !#e&re "nd C"r%e#o Ri%" #i"#e for#ie# "nd ordered the% to so#id"ri#) p") !&o 3edi"# "nd Edu"tion"#Center2Bio# Christi"n Co##e&e of 3ediine %or"# d"%"&es, "ttorne)s fees"nd osts of suit.

Te #'tee(e't

E+pos is " r"dio dou%ent"r) K6pro&r"% hosted ) C"r%e#o 3e# Ri%"9Ri%": "nd 7er%o&enes un !#e&re 9!#e&re:.K>E+pos is "ired ever) %ornin&over DMRC2!3 whih is owned ) Ai#ipin"s Bro"d"stin& Networ4, In.9ABNI:. E+pos is he"rd over Le&"pi Cit), the !#") %uniip"#ities "nd otherBio# "re"s.K;

In the %ornin& of 16 "nd 1> Dee%er 15*5, Ri%" "nd !#e&ree+posed v"rious "##e&ed o%p#"ints fro% students, te"hers "nd p"rents"&"inst !&o 3edi"# "nd Edu"tion"# Center2Bio# Christi"n Co##e&e of3ediine 9!3EC: "nd its "d%inistr"tors. C#"i%in& th"t the ro"d"sts weredef"%"tor), !3EC "nd !n&e#it" !&o 9!&o:, "s De"n of !3ECs Co##e&e of3ediine, #ed " o%p#"int for d"%"&esK?"&"inst ABNI, Ri%" "nd !#e&reon ? Aeru"r) 155/. uoted "re portions of the "##e&ed#) #ie#ousro"d"stsF

-!N #LEGREF

Let us e&in with the #ess urdenso%eF : /o &;e me(&< ore &t #%ECBCC%, &(;e tem to p& &ree( :or mo'e/ o'te p&rt o: #%EC &(m'tr&to'. ("4e the su'et !n"to%)F studentswou#d p") for the su'et upon enro#%ent e"use it is o@ered ) theshoo#. 7owever there wou#d e no instrutor for suh su'et. Studentswou#d e infor%ed th"t ourse wou#d e %oved to " #"ter d"te e"use theshoo# is sti## se"rhin& for the "ppropri"te instrutor.

It is " pu#i 4now#ed&e th"t the !&o 3edi"# "nd Edu"tion"# Center h"ssurvived "nd h"s een survivin& for the p"st few )e"rs sine its ineptione"use of funds support fro% forei&n found"tions. If )ou wi## t"4e " #oo4 "tthe !3EC pre%ises )ou## nd out th"t the n"%es of the ui#din&s there "reforei&n soundin&s. (here is " 3Don"#d 7"##. h) not ose Ri"# orBonif"io 7"## (h"t is " ver) onrete "nd undeni"#e evidene th"t thesupport of forei&n found"tions for !3EC is sust"nti"#, isnt it ith thereport whih is the "sis of the e+pose in DMRC tod"), it wou#d e ver)e"s) for detr"tors "nd ene%ies of the !&o f"%i#) to stop the Gow ofsupport of forei&n found"tions who "ssist the %edi"# shoo# on the "sisof the #"tters purpose. But if the purpose of the institution 9!3EC: is todeeive students "t ross purpose with its re"son for ein& it is possi#e forthese forei&n found"tions to #ift or suspend their don"tions te%por"ri#).K*

' te oter &'(, te &(m'tr&tor o: #%ECBCC%, #%ECSe'e H> Soo< &'( te #%ECI'ttte o: %&Comm'&to' ' ter eort to m'mAe eDpe'e ' term o:& >ro'(, >&rb&>e, 'ot mere


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ver) o#d. !s in "t%ospheri situ"tion ero visii#it) the p#"ne "nnot #"nd,%e"nin& she is ver) o#d, #ow p") fo##ows. B) the w"), De"n ustit" Lo#" is"#so the h"ir%"n of the o%%ittee on sho#"rship in !3EC. She h"dretired fro% Bio# 8niversit) " #on& ti%e "&o ut !3EC h"s p"tient#) %"deuse of her.

%EL RI%#5

3) friends "sed on the e+pose, !3EC is " du%pin& &round for %or"# "ndph)si"##) %ist peop#e. h"t does this %e"n I%%or"# "nd ph)si"##)%ists "s te"hers.

3") I s") I% sorr) to De"n ustit" Lo#". But this is the truth. (he truth isthis, th"t )our "re no #on&er t to te"h. ou "re too o#d. !s "n "vi"tion,)our "se is ero visii#it). Dont insist.

+++ h) did !3EC sti## "sor her "s " te"her, " de"n, "nd h"ir%"n ofthe sho#"rship o%%ittee "t th"t. (he re"son is pr"ti"# ost s"vin& ins"#"ries, e"use "n o#d person is not f"stidious, so #on& "s she h"s %one)

to u) the in&redient of eet#e 'uie. (he e#der#) "n &et ) th"ts wh) she9Lo#": w"s t"4en in "s De"n.

+++ On our end our t"s4 is to "ttend to the interests of students. It is #i4e#)th"t the students wou#d e inGuened ) evi#. e' te/ beomemember o: oet/ ot(e o: &mp @'>, &'( tere be'> 'o o@'>t&t '(ee( te e'ro


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HERE"RE, the deision "ppe"#ed fro% is here) #""IR%E$, su'et tothe %odi"tion th"t ro"d"ster 3e# Ri%" is SLI$#RILF#$-!$GE$#i"#e with ABNKI "nd 7er%oK&enes !#e&re.

S R$ERE$.K16

ABNI, Ri%" "nd !#e&re #ed " %otion for reonsider"tion whih the Court of!ppe"#s denied in its ; "nu"r) /// Reso#ution.

7ene, ABNI #ed this petition.K1>

Te R

e den) the petition.

(his is " ivi# "tion for d"%"&es "s " resu#t of the "##e&ed#) def"%"tor)re%"r4s of Ri%" "nd !#e&re "&"inst !3EC.K1?hi#e !3EC did not point out

#e"r#) the #e&"# "sis for its o%p#"int, " re"din& of the o%p#"int reve"#sth"t !3ECs "use of "tion is "sed on !rti#es -/ "nd -- of the Civi# Code.!rti#e -/K1*"uthories " sep"r"te ivi# "tion to reover ivi# #i"i#it)"risin& fro% " ri%in"# o@ense. On the other h"nd, !rti#e --K15p"rtiu#"r#)provides th"t the in'ured p"rt) %") rin& " sep"r"te ivi# "tion ford"%"&es in "ses of def"%"tion, fr"ud, "nd ph)si"# in'uries. !3EC "#soinvo4es !rti#e 15K/of the Civi# Code to 'ustif) its #"i% for d"%"&es. !3ECites !rti#es 1?;K1"nd 1*/Kof the Civi# Code to ho#d ABNI so#id"ri#)#i"#e with Ri%" "nd !#e&re.

I.Whether the broadcasts are libelous

! #ie#K-is " pu#i "nd %"#iious i%put"tion of " ri%e, or of " vie ordefet, re"# or i%"&in"r), or "n) "t or o%ission, ondition, st"tus, oriru%st"ne tendin& to "use the dishonor, disredit, or onte%pt of "n"tur"# or 'uridi"# person, or to #"4en the %e%or) of one who is de"d.K6

(here is no question th"t the ro"d"sts were %"de pu#i "nd i%puted to!3EC defets or iru%st"nes tendin& to "use it dishonor, disredit "ndonte%pt. Ri%" "nd !#e&res re%"r4s suh "s &reed for %one) on the p"rtof !3ECs "d%inistr"tors0 !3EC is " du%pin& &round, &"r"&e of +++ %or"#"nd ph)si"# %ists0 "nd !3EC students who &r"du"te wi## e #i"i#itiesr"ther th"n "ssets of the soiet) "re #ie#ous perse. ("4en "s " who#e, thero"d"sts su&&est th"t !3EC is " %one)2%"4in& institution where

ph)si"##) "nd %or"##) unt te"hers "ound.
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7owever, ABNI ontends th"t the ro"d"sts "re not %"#iious. ABNI #"i%sth"t Ri%" "nd !#e&re were p#"in#) i%pe##ed ) their ivi dut) to "ir thestudents &ripes. ABNI "##e&es th"t there is no evidene th"t i## wi## or spite%otiv"ted Ri%" "nd !#e&re in %"4in& the ro"d"sts. ABNI further pointsout th"t Ri%" "nd !#e&re e+erted e@orts to ot"in !3ECs side "nd &"ve!&o the opportunit) to defend !3EC "nd its "d%inistr"tors. ABNI on#udesth"t sine there is no %"#ie, there is no #ie#.

ABNIs ontentions "re unten"#e.

Ever) def"%"tor) i%put"tion is presu%ed %"#iious. K>Ri%" "nd !#e&ref"i#ed to show "dequ"te#) their &ood intention "nd 'usti"#e %otive in"irin& the supposed &ripes of the students. !s hosts of " dou%ent"r) orpu#i "@"irs pro&r"%, Ri%" "nd !#e&re shou#d h"ve presented the pu#iissues free fro% inaccurate"nd %is#e"din& infor%"tion.K;7e"rin& thestudents "##e&ed o%p#"ints " %onth efore the e+pos,K?the) h"dsu$ient ti%e to verif) their soures "nd infor%"tion. 7owever, Ri%" "nd!#e&re h"rd#) %"de " thorou&h investi&"tion of the students "##e&ed&ripes. Neither did the) inquire "out nor onr% the purportedirre&u#"rities in !3EC fro% the Dep"rt%ent of Edu"tion, Cu#ture "ndSports. !#e&re testied th"t he %ere#) went to !3EC to verif) his report

fro% "n "##e&ed !3EC o$i"# who refused to dis#ose "n) infor%"tion.!#e&re si%p#) re#ied on the words of the students e"use the) were %"n)"nd not e"use there is proof th"t wh"t the) "re s")in& is true. K*(hisp#"in#) shows Ri%" "nd !#e&res re4#ess disre&"rd of whether their reportw"s true or not.

Contr"r) to ABNIs #"i%, the ro"d"sts were not the resu#t of str"i&htreportin&. Si&ni"nt#), so%e ourts in the 8nited St"tes "pp#) theprivi#e&e of neutr"# report"&e in #ie# "ses invo#vin& %"tters of pu#iinterest or pu#i &ures. 8nder this privi#e&e, " repu#isherwho accurately"nd disinterested#) reports ert"in def"%"tor) st"te%ents%"de "&"inst pu#i &ures is shie#ded fro% #i"i#it), re&"rd#ess of therepu#ishers su'etive "w"reness of the truth or f"#sit) of the "us"tion.K5

Ri%" "nd !#e&re "nnot invo4e the privi#e&e of neutr"# report"&ee"use unfounded o%%ents "ound in the ro"d"sts. 3oreover, thereis no e+istin& ontrovers) invo#vin& !3EC when the ro"d"sts were %"de.(he privi#e&e of neutr"# report"&e "pp#ies where the def"%ed person is "pu#i &ure who is invo#ved in "n e+istin& ontrovers), "nd " p"rt) to th"tontrovers) %"4es the def"%"tor) st"te%ent. K-/

7owever, ABNI "r&ues vi&orous#) th"t %"#ie in #"w does not "pp#) to this"se. Citin& Borjal v. Court of Appeals,K-1ABNI ontends th"t thero"d"sts f"## within the over"&e of qu"#ied#) privi#e&edo%%uni"tions for ein& o%%ent"ries on %"tters of pu#i interest.Suh ein& the "se, !3EC shou#d prove %"#ie in f"t or "tu"# %"#ie.Sine !3EC "##e&ed#) f"i#ed to prove "tu"# %"#ie, there is no #ie#.

ABNIs re#i"ne on Borjalis %isp#"ed. In Borjal, the Court e#uid"ted onthe dotrine of f"ir o%%ent, thusF

KA"ir o%%ent"ries on %"tters of pu#i interest "re privi#e&ed "ndonstitute " v"#id defense in "n "tion for #ie# or s#"nder. (he dotrine off"ir o%%ent %e"ns th"t whi#e in &ener"# ever) disredit"#e i%put"tionpu#i#) %"de is dee%ed f"#se, e"use ever) %"n is presu%ed innoentunti# his &ui#t is 'udii"##) proved, "nd ever) f"#se i%put"tion is dee%ed%"#iious, neverthe#ess, when the disredit"#e i%put"tion is direted"&"inst " pu#i person in his pu#i "p"it), it is not neess"ri#)

"tion"#e. I' or(er t&t (re(t&b


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th"t p#"inti@ h"d no per%it to o@er Ph)si"# (her"p) ourses whih the)were o@erin&.

(he "##e&"tion th"t p#"inti@ w"s &ettin& tre%endous "ids fro% forei&nfound"tions #i4e 3don"#d Aound"tion prove not to e true "#so. (he truthis there is no 3don"#d Aound"tion e+istin&. !#thou&h " i& ui#din& ofp#"inti@ shoo# w"s &iven the n"%e 3don"#d ui#din&, th"t w"s on#) inorder to honor the rst %ission"r) in Bio# of p#"inti@s re#i&ion, "se+p#"ined ) Dr. Lit" !&o. Contr"r) to the #"i% of defend"nts over the "ir,not " sine ent"vo "ppe"rs to e reeived ) p#"inti@ shoo# fro% the"fore%entioned 3Don"#d Aound"tion whih does not e+ist.

Defend"nts did not even "#so other to prove their #"i%, thou&h denied )Dr". !&o, th"t when %edi"# students f"i# in one su'et, the) "re %"de torepe"t "## the other su'etKs, even those the) h"ve "#re"d) p"ssed, northeir #"i% th"t the shoo# h"r&es #"or"tor) fees even if there "re no#"or"tories in the shoo#. No evidene w"s presented to prove the "sesfor these #"i%s, "t #e"st in order to &ive se%#"ne of &ood f"ith.

!s for the "##e&"tion th"t p#"inti@ is the du%pin& &round for %ists, "ndi%%or"# te"hers, defend"ntKs sined out De"n ustit" Lo#" who is s"id toe so o#d, with ero visii#it) "#re"d). De"n Lo#" testied in ourt #"st "n.1, 1551, "nd w"s found to e ?> )e"rs o#d. +++ Even o#der peop#e proveto e e@etive te"hers #i4e Supre%e Court usties who "re sti## ver) %uhin de%"nd "s #"w professors in their #"te )e"rs. Counse# for defend"nts isp"st ?> ut is found ) this ourt to e sti## ver) sh"rp "nd e@etive. So isp#"inti@s ounse#.

Dr. Lo#" w"s oserved ) this ourt not to e ph)si"##) derepit )et, nor%ent"##) inr%ed, ut is sti## "#ert "nd doi#e.

(he ontention th"t p#"inti@s &r"du"tes eo%e #i"i#ities r"ther th"n

"ssets of our soiet) is " %ere on#usion. Bein& fro% the p#"e hi%se#f,this ourt is "w"re th"t %"'orit) of the %edi"# &r"du"tes of p#"inti@s p"ssthe o"rd e+"%in"tion e"si#) "nd eo%e prosperous "nd responsi#eprofession"#s.K--

7"d the o%%ents een "n e+pression of opinion "sed on est"#ishedf"ts, it is i%%"teri"# th"t the opinion h"ppens to e %ist"4en, "s #on& "s it%i&ht re"son"#) e inferred fro% the f"ts. K-67owever, the o%%ents ofRi%" "nd !#e&re were not "4ed up ) f"ts. (herefore, the ro"d"sts"re not privi#e&ed "nd re%"in #ie#ousper se.

(he ro"d"sts "#so vio#"te the R"dio CodeK->of the Kapisanan ng mgaBrodkaster sa Pilipinas, Ink. 9R"dio Code:. Ite% I9B: of the R"dio Code

providesF

B. P!BLIC #""#IRS, P!BLIC ISS!ES #N$ C%%ENT#RIES

6. Pbr&m &


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whih, if es%irhed, %") "#so e " &round for the "w"rd of %or"#d"%"&es is "n obiter dictum.K6Neverthe#ess, !3ECs #"i% for %or"#d"%"&es f"##s under ite% ? of !rti#e 15K6-of the Civi# Code. (hisprovision e+press#) "uthories the reover) of %or"# d"%"&es in "ses of#ie#, s#"nder or "n) other for% of def"%"tion. !rti#e 159?: does notqu"#if) whether the p#"inti@ is " n"tur"# or 'uridi"# person. (herefore, "'uridi"# person suh "s " orpor"tion "n v"#id#) o%p#"in for #ie# or "n)

other for% of def"%"tion "nd #"i% for %or"# d"%"&es.K66

3oreover, where the ro"d"st is #ie#ousper se, the #"w i%p#ies d"%"&es.K6>In suh " "se, evidene of "n honest %ist"4e or the w"nt of h"r"teror reput"tion of the p"rt) #ie#ed &oes on#) in %iti&"tion of d"%"&es.K6;Neither in suh " "se is the p#"inti@ required to introdue evidene of"tu"# d"%"&es "s " ondition preedent to the reover) of so%ed"%"&es.K6?In this "se, the ro"d"sts "re #ie#ousper se. (hus, !3EC isentit#ed to %or"# d"%"&es.

7owever, we nd the "w"rd of P-//,/// %or"# d"%"&es unre"son"#e.(he reord shows th"t even thou&h the ro"d"sts were #ie#ousper se,!3EC h"s not su@ered "n) sust"nti"# or %"teri"# d"%"&e to itsreput"tion. (herefore, we redue the "w"rd of %or"# d"%"&es

fro% P-//,/// to P1>/,///.

III.Whether the a$ard of attorne%s fees is proper

ABNI ontends th"t sine !3EC is not entit#ed to %or"# d"%"&es, there isno "sis for the "w"rd of "ttorne)s fees. ABNI "dds th"t the inst"nt "sedoes not f"## under the enu%er"tion in !rti#e /*K6*of the Civi# Code.

(he "w"rd of "ttorne)s fees is not proper e"use !3EC f"i#ed to 'ustif)s"tisf"tori#) its #"i% for "ttorne)s fees. !3EC did not "ddue evidene tow"rr"nt the "w"rd of "ttorne)s fees. 3oreover, oth the tri"# "nd "ppe##"teourts f"i#ed to e+p#iit#) st"te in their respetive deisions the r"tion"#e forthe "w"rd of "ttorne)s fees.K65In Inter&Asia Investment Industries,Inc. v. Court of Appeals,K>/we he#d th"tF

KIt is "n "epted dotrine th"t the "w"rd thereof "s "n ite% of d"%"&esis the e+eption r"ther th"n the ru#e, "nd ounse#s fees "re not to e"w"rded ever) ti%e " p"rt) wins " suit. Te po@er o: te ort to&@&r( &ttor'e/ :ee '(er #rtoint tort fe"sors "re "##the persons who o%%"nd, insti&"te, pro%ote, enour"&e, "dvise,ounten"ne, ooper"te in, "id or "et the o%%ission of " tort, or who"pprove of it "fter it is done, if done for their enet. K>-(hus, !3ECorret#) "nhored its "use of "tion "&"inst ABNI on !rti#es 1?; "nd1*/ of the Civi# Code.

!s oper"tor of DMRC2!3 "nd e%p#o)er of Ri%" "nd !#e&re, ABNI isso#id"ri#) #i"#e to p") for d"%"&es "risin& fro% the #ie#ous ro"d"sts. !sst"ted ) the Court of !ppe"#s, reover) for def"%"tor) st"te%entspu#ished ) r"dio or te#evision %") e h"d fro% the o@'er o: tet&to', " #iensee, teoper&tor o: te t&to', or " person whoproures, or p"rtiip"tes in, the %"4in& of the def"%"tor) st"te%ents.K>6!n e%p#o)er "nd e%p#o)ee "re so#id"ri#) #i"#e for " def"%"tor)st"te%ent ) the e%p#o)ee within the ourse "nd sope of his or her
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e%p#o)%ent, "t #e"st when the e%p#o)er "uthories or r"ties thedef"%"tion.K>>In this "se, Ri%" "nd !#e&re were #e"r#) perfor%in& theiro$i"# duties "s hosts of ABNIs r"dio pro&r"% E+pos when the) "ired thero"d"sts. ABNI neither "##e&ed nor proved th"t Ri%" "nd !#e&re wente)ond the sope of their wor4 "t th"t ti%e. (here w"s # i4ewise no showin&th"t ABNI did not "uthorie "nd r"tif) the def"%"tor) ro"d"sts.

3oreover, there is insu$ient evidene on reord th"t ABNI e+erised duedi#i&ene in the e


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issues free fro% in"ur"te "nd %is#e"din& infor%"tion. 7e"rin& thestudents "##e&ed o%p#"ints " %onth efore the e+pos, the) h"d su$ientti%e to verif) their soures "nd infor%"tion. 7owever, Ri%" "nd !#e&reh"rd#) %"de " thorou&h investi&"tion of the students "##e&ed &ripes.Neither did the) inquire "out nor onr% the purported irre&u#"rities in!3EC fro% the Dep"rt%ent of Edu"tion, Cu#ture "nd Sports. !#e&re

testied th"t he %ere#) went to !3EC to verif) his report fro% "n "##e&ed!3EC o$i"# who refused to dis#ose "n) infor%"tion. !#e&re si%p#) re#iedon the words of the students e"use the) were %"n) "nd not e"usethere is proof th"t wh"t the) "re s")in& is true. (his p#"in#) shows Ri%""nd !#e&res re4#ess disre&"rd of whether their report w"s true or not. 7"dthe o%%ents een "n e+pression of opinion "sed on est"#ished f"ts, itis i%%"teri"# th"t the opinion h"ppens to e %ist"4en, "s #on& "s it %i&htre"son"#) e inferred fro% the f"ts. 7owever, the o%%ents of Ri%" "nd!#e&re were not "4ed up ) f"ts. (herefore, the ro"d"sts "re notprivi#e&ed "nd re%"in #ie#ous per se.

(he ro"d"sts "#so vio#"te the R"dio Code of the ="pis"n"n n& %&"

Brod4"ster s" Pi#ipin"s, In4.

9R"dio Code:. Ite% I9B: of the R"dio Code providesF

B. P8BLIC !AA!IRS, P8BLIC ISS8ES !ND CO33EN(!RIES1. + + +6. Pu#i"@"irs pro&r"% sh"## present pu#i issues free fro% person"# i"s,pre'udie "nd in"ur"te "nd %is#e"din& infor%"tion. + + + Aurther%ore,the st"tion sh"## strive to present "#"ned disussion of issues. + + +.+ ++?. (he st"tion sh"## e responsi#e "t "## ti%es in the supervision of pu#i"@"irs, pu#i issues "nd o%%ent"r) pro&r"%s so th"t the) onfor% tothe provisions "nd st"nd"rds of this ode.*. It sh"## e the responsii#it) ofthe news"ster, o%%ent"tor, host "nd "nnouner to protet pu#i

interest, &ener"# we#f"re "nd &ood order in the present"tion of pu#i"@"irs "nd pu#i issues.

K-;

(he ro"d"sts f"i# to %eet the st"nd"rds presried in the R"dio Code,whih #")s down the ode of ethi"# ondut &overnin& pr"titioners in ther"dio ro"d"st industr). (he R"dio Code is " vo#unt"r) ode of onduti%posed ) the r"dio ro"d"st industr) on its own %e%ers. (he R"dioCode is " pu#i w"rr"nt) ) the r"dio ro"d"st industr) th"t r"dioro"d"st pr"titioners "re su'et to " ode ) whih their ondut "re%e"sured for #"pses, #i"i#it) "nd s"ntions. (he pu#i h"s " ri&ht toe+pet "nd de%"nd th"t r"dio ro"d"st pr"titioners #ive up to the ode

of ondut of their profession, 'ust #i4e other profession"#s. ! profession"#ode of ondut provides the st"nd"rds for deter%inin& whether " personh"s "ted 'ust#), honest#) "nd with &ood f"ith in the e+erise of his ri&hts"nd perfor%"ne of his duties "s required ) !rti#e 15 of the Civi# Code. !profession"# ode of ondut "#so provides the st"nd"rds for deter%inin&whether " person who wi##fu##) "uses #oss or in'ur) to "nother h"s "ted in

" %"nner ontr"r) to %or"#s or &ood usto%s under !rti#e 1 of the Civi#Code..ABNI ontends th"t !3EC is not entit#ed to %or"# d"%"&es e"useit is " orpor"tion. ! 'uridi"# person is &ener"##) not entit#ed to %or"#d"%"&es e"use, un#i4e " n"tur"# person, it "nnot e+periene ph)si"#su@erin& or suh senti%ents "s wounded fee#in&s, serious "n+iet), %ent"#"n&uish or %or"# sho4. (he Court of !ppe"#s ites

3"%u#"o Lu%er Co. v. PNB, et "# to 'ustif) the "w"rd of %or"# d"%"&es.7owever, the Courts st"te%ent in 3"%u#"o th"t " orpor"tion %") h"ve" &ood reput"tion whih, if es%irhed, %") "#so e " &round for the"w"rd of %or"# d"%"&es is "n oiter ditu%. Neverthe#ess, !3ECs #"i%for %or"# d"%"&es f"##s under ite% ? of !rti#e15 of the Civi# Code. (his

provision e+press#) "uthories the reover) of %or"# d"%"&es in "ses of#ie#, s#"nder or "n) other for% of def"%"tion. !rti#e 159?: does notqu"#if) whether the p#"inti@ is " n"tur"# or 'uridi"# person. (herefore, "'uridi"# person suh "s " orpor"tion "n v"#id#) o%p#"in for #ie# or "n)other for% of def"%"tion "nd #"i% for %or"# d"%"&es. 3oreover, wherethe ro"d"st is #ie#ous per se, the #"w i%p#ies d"%"&es. In suh " "se,evidene of "n honest %ist"4e or the w"nt of h"r"ter or reput"tion of thep"rt) #ie#ed &oes on#) in %iti&"tion of d"%"&es.

K6;

Neither in suh " "se is the p#"inti@ required to introdue evidene of

"tu"# d"%"&es "s " ondition preedent to the reover) of so%ed"%"&es. In this "se, the ro"d"sts "re #ie#ous per se. (hus, !3EC isentit#ed to %or"# d"%"&es. 7owever, we nd the "w"rd of P-//,/// %or"#d"%"&es unre"son"#e. (he reord shows th"t even thou&h the ro"d"stswere #ie#ous per se, !3EC h"s not su@ered "n) sust"nti"# or %"teri"#d"%"&e to its reput"tion. (herefore, we redue the "w"rd of %or"#d"%"&es fro% P-//,/// to P1>/,///.-. (he "w"rd of "ttorne)s fees is notproper. !3EC f"i#ed to 'ustif) s"tisf"tori#) its #"i% for "ttorne)s fees.!3EC did not "ddue evidene to w"rr"nt the "w"rd of "ttorne)s fees.3oreover, oth the tri"# "nd "ppe##"te ourts f"i#ed to e+p#iit#) st"te intheir respetive deisions the r"tion"#e for the "w"rd of "ttorne)s fees.


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In Inter2!si" Invest%ent Industries, In. v. Court of !ppe"#s, we he#d th"tFKIt is "n "epted dotrine th"t the "w"rd thereof "s "n ite% of d"%"&esis the e+eption r"ther th"n the ru#e, "nd ounse#s fees "re not to e"w"rded ever) ti%e " p"rt) wins " suit. (he power of the ourt to "w"rd"ttorne)s fees under !rti#e /*of the Civi# Code de%"nds f"tu"#, #e&"#"nd equit"#e 'usti"tion, without whih the "w"rd is " on#usion without

" pre%ise, its "sis ein& i%proper#) #eft to speu#"tion "nd on'eture. In"## events, the ourt %ust e+p#iit#) st"te in the te+t of the deision, "ndnot on#) in the deret"# portion thereof, the #e&"# re"son for the "w"rd of"ttorne)s fees.

K>1

9E%ph"sis supp#ied:Petition denied.


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SECN$ $IISIN

7ER3!N C. CRS(!L, L!3BER(O Before us is " Petition for ReviewK1of the DeisionK"nd Reso#utionK-of the

Court of !ppe"#s d"ted 6 Otoer //> "nd -1 3"rh //;, respetive#),

in C! , of Ceu Cit). K6

(he f"ts, "s u##ed fro% the reords, fo##ow.

On * 3"rh 15?*, spouses R")%undo "nd Des"%p"r"dos Cr)st"#

ot"ined " P-//,///.// #o"n in eh"#f of the Ceu Contr"tors Consortiu%Co. 9CCCC: fro% the B"n4 of the Phi#ippine Is#"nds2Butu"n r"nh 9BPI2

Butu"n:. (he #o"n w"s seured ) " h"tte# %ort&"&e on he"v) equip%ent

"nd %"hiner) of CCCC. On the s"%e d"te, the spouses e+euted in f"vor

of BPI2Butu"n " Continuin& Suret)ship K>where the) ound the%se#ves "s

suret) of CCCC in the "&&re&"te prinip"# su% of not

e+eedin& P-//,///.//.(here"fter, or on 5 3"rh 15?5, R")%undo

Cr)st"# e+euted " pro%issor) noteK;for the "%ount of P-//,///.//,

"#so in f"vor of BPI2Butu"n.

So%eti%e in !u&ust 15?5, CCCC renewed " previous #o"n, this ti%e fro%

BPI, Ceu Cit) r"nh 9BPI2Ceu Cit):. (he renew"# w"s evidened ) "

pro%issor) noteK?d"ted 1- !u&ust 15?5, si&ned ) the spouses in their

person"# "p"ities "nd "s %"n"&in& p"rtners of CCCC. (he pro%issor)

note st"tes th"t the spouses "re 'oint#) "nd sever"##) #i"#e with CCCC. It

"ppe"rs th"t efore the ori&in"# #o"n ou#d e &r"nted, BPI2

Ceu Cit) required CCCC to put up " seurit).

7owever, CCCC h"d no re"# propert) to o@er "s seurit) for the #o"n0

hene, the spouses e+euted " re"# est"te %ort&"&eK*over their own re"#

propert) on Septe%er 15??.K5On - Otoer 15??, the) e+euted

"nother re"# est"te %ort&"&e over the s"%e #ot in f"vor of BPI2Ceu Cit),

to seure "n "ddition"# #o"n of P/,///.// of CCCC.K1/

CCCC f"i#ed to p") its #o"ns to oth BPI2Butu"n "nd BPI2Ceu Cit) when

the) e"%e due. CCCC, "s we## "s the spouses, f"i#ed to p") their

o#i&"tions despite de%"nds. (hus, BPI resorted to the fore#osure of

the h"tte# %ort&"&e "nd the re"# est"te %ort&"&e. (he fore#osure s"#e on

the h"tte# %ort&"&e w"s initi"##) st"##ed with the issu"ne of " restr"inin&

order "&"inst BPI.K117owever, fo##owin& BPIs o%p#i"ne with the

neess"r) requisites of e+tr"'udii"# fore#osure, the fore#osure s"#e on theh"tte# %ort&"&e w"s onsu%%"ted on * Aeru"r) 15**, with the

proeeds "%ountin& to P6/,///.// "pp#ied to the #o"n fro% BPI2Butu"n

whih h"d then re"hed P?/?,-5-.5/.K13e"nwhi#e, on ? u#) 15*1, Insu#"r

B"n4 of !si" "nd !%eri" 9IB!!:, throu&h its Vie2President for Le&"# "nd

Corpor"te !@"irs, o@ered to u) the #ot su'et of the two 9: re"# est"te

%ort&"&es "nd to p") diret#) the spouses indetedness in e+h"n&e for

the re#e"se of the %ort&"&es. BPI re'eted IB!!s o@er to p").K1-
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BPI #ed " o%p#"int for su% of %one) "&"inst CCCC "nd the spouses

efore the Re&ion"# (ri"# Court of Butu"n Cit) 9R(C Butu"n:, see4in& to

reover the deien) of the #o"n of CCCC "nd the spouses with BPI2

Butu"n. (he tri"# ourt ru#ed in f"vor of BPI. Pursu"nt to the deision, BPI

instituted e+tr"'udii"# fore#osure of the spouses %ort&"&ed propert).K16

On 1/ !pri# 15*>, the spouses #ed "n "tion for Injunction With Damages,

With Prayer !or "estraining #rder and$ or Writ o% Preliminary

Injunction.K1>(he spouses #"i%ed th"t the fore#osure of the re"# est"te

%ort&"&es is i##e&"# e"use BPI shou#d h"ve e+h"usted CCCCs properties

rst, stressin& th"t the) "re %ere &u"r"ntors of the renewed #o"ns. (he)

"#so pr")ed th"t the) e "w"rded %or"# "nd e+e%p#"r) d"%"&es,

"ttorne)s fees, #iti&"tion e+penses "nd ost of suit. Susequent#), the

spouses #ed "n "%ended o%p#"int,K1;"ddition"##) "##e&in& th"t CCCC

h"d opened "nd %"int"ined " forei&n urren) s"vin&s "ount 9ACS!215?:

with pi, 3"4"ti r"nh 9BPI23"4"ti:, "nd th"t s"id ACS! w"s used "s

seurit) for " P6>/,///.// #o"n "#so e+tended ) BPI2

3"4"ti. (he P6>/,///.// #o"n w"s "##e&ed#) p"id, "nd there"fter the

spouses de%"nded the return of the ACS! p"ssoo4. BPI re'eted the

de%"nd0 thus, the spouses were un"#e to withdr"w fro% the s"id "ount

to p") for their other o#i&"tions to BPI.

(he tri"# ourt dis%issed the spouses o%p#"int "nd ordered the% to p")

%or"# "nd e+e%p#"r) d"%"&es "nd "ttorne)s fees to BPI. K1?It ru#ed th"t

sine the spouses "&reed to ind the%se#ves 'oint#) "nd sever"##), the) "re

so#id"ri#) #i"#e for the #o"ns0 hene, BPI "n v"#id#) fore#ose the two re"#

est"te %ort&"&es. 3oreover, ein& &u"r"ntors2%ort&"&ors, the spouses

"re not entit#ed to the enet of e+h"ustion. !nent the ACS!, the tri"# ourt

found th"t CCCC ori&in"##) h"d ACD8 S! No. 15? with BPI, Dewe)

Bou#ev"rd r"nh, whih w"s tr"nsferred to BPI23"4"ti "s ACD8 S!

?;Q//->, "t the request of Des"%p"r"dos Cr)st"#. ACD8 S! ?;Q//-> w"s

thus #osed, ut Des"%p"r"dosCr)st"# f"i#ed to surrender the p"ssoo4

e"use it w"s #ost. (he tr"nsferred ACS! in BPI23"4"ti w"s the one used

"s seurit) for CCCCs P6>/,///.// #o"n fro% BPI23"4"ti. CCCC w"s no

#on&er "##owed to withdr"w fro% ACD8 S! No. 15? e"use it w"s "#re"d)

#osed.

(he spouses "ppe"#ed the deision of the tri"# ourt to the Court of

!ppe"#s, ut their "ppe"# w"s dis%issed. K1*(he spouses %oved for the

reonsider"tion of the deision, ut the Court of !ppe"#s "#so denied their

%otion for reonsider"tion.K157ene, the present petition.

Before the Court, petitioners who "re the heirs of the spouses "r&ue th"t

the f"i#ure of the spouses to p") the BPI2Ceu Cit) #o"n of P1/,///.// w"s

due to BPIs i##e&"# refus"# to "ept p")%ent for the #o"n un#ess

the P-//,///.// #o"n fro% BPI2Butu"n wou#d "#so e p"id. Consequent#), in

view of BPIs un'ust refus"# to "ept p")%ent of the BPI2Ceu Cit) #o"n, the

#o"n o#i&"tion of the spouses w"s e+tin&uished, petitioners ontend.

(he ontention h"s no %erit. Petitioners re#) on IB!!s o@er to purh"se the

%ort&"&ed #ot fro% the% "nd to diret#) p") BPI out of the proeeds

thereof to sett#e the #o"n.K/BPIs refus"# to "&ree to suh p")%ent she%e

"nnot e+tin&uish the spouses #o"n o#i&"tion. In the rst p#"e, IB!! is not

priv) to the #o"n "&ree%ent or the pro%issor) note etween the spouses

"nd BPI. Contr"ts, "fter "##, t"4e e@et on#) etween the p"rties, their

suessors in interest, heirs "nd "ssi&ns. K1Besides, under !rt. 1-; of the

Civi# Code, the reditor is not ound to "ept p")%ent or perfor%"ne )

" third person who h"s no interest in the fu###%ent of the o#i&"tion,
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un#ess there is " stipu#"tion to the ontr"r). e see no stipu#"tion in the

pro%issor) note whih st"tes th"t " third person %") fu### the spouses

o#i&"tion. (hus, it is #e"r th"t the spouses "#one e"r responsii#it) for

the s"%e.

In "n) event, the pro%issor) note is the ontro##in& repositor) of

the o#i&"tion of the spouses. 8nder the pro%issor) note, the

spouses dened the p"r"%eters of their o#i&"tion "s fo##owsF

On or efore une 5, 15*/ on de%"nd, for v"#ue reeived,IQwe pro%ise to p"), 'oint#) "nd sever"##), to the B!N= OA(7E P7ILIPPINE ISL!NDS, "t its o$e in the it) of CeuPhi#ippines, the su% of ONE 78NDRED (EN( (7O8S!NDPESOS 9P1/,////.//:, Phi#ippine Curren), su'et toperiodi inst"##%ents on the prinip"# "s fo##owsF P-/,///.//qu"rter#) "%orti"tion st"rtin& Septe%er *, 15?5.+ + + K

! so#id"r) o#i&"tion is one in whih e"h of the detors is #i"#e for the

entire o#i&"tion, "nd e"h of the reditors is entit#ed to de%"nd the

s"tisf"tion of the who#e o#i&"tion fro% "n) or "## of the detors. K-!

#i"i# it) is so#id"r) on#) when the o#i&"tion e+press#)

so st"tes, when the #"w so provides or when the n"ture of the o#i&"tion so

requires.K6

(hus, when the o#i&or undert"4es to e 'oint#) "nd sever"##)#i"#e, it %e"ns th"t the o#i&"tion is so#id"r), K>suh "s in this "se. B)

st"tin& IQwe pro%ise to p"), 'oint#) "nd sever"##), to the B!N= OA (7E

P7ILIPPINE ISL!NDS, the spouses "&reed to e sou&ht out "nd e

de%"nded p")%ent fro%, ) BPI. BPI did de%"nd p")%ent fro% the%, ut

the) f"i#ed to o%p#) with their o#i&"tion, pro%ptin& BPIs v"#id resort to

the fore#osure of the h"tte# %ort&"&e "nd the re"# est"te %ort&"&es.

3ore i%port"nt#), the pro%issor) note, wherein the spouses undertoo4 to

e so#id"ri#) #i"#e for the prinip"# #o"n, p"rt"4es the n"ture

of " suret)ship "nd therefore is "n "ddition"# seurit) for the #o"n. (hus we

he#d in one "se th"t if so#id"r) #i"i#it) w"s instituted to &u"r"ntee "

prinip"# o#i&"tion, the #"w dee%s the ontr"t to e one of suret)ship.

K;!nd whi#e " ontr"t of " suret) is in essene seond"r) on#) to " v"#id

prinip"# o#i&"tion, the suret)s #i"i#it) to the reditor or pro%isee of the

prinip"# is s"id to e diret, pri%"r), "nd "so#ute0 in other words, the

suret) is diret#) "nd equ"##) ound with the prinip"#. (he suret) therefore

eo%es #i"#e for the det or dut) of "nother even if he possesses no

diret or person"# interest over the o#i&"tions nor does he reeive "n)

enet therefro%.K?

Petitioners ontend th"t the Court of !ppe"#s erred in not &r"ntin& their

ounter#"i%s, onsiderin& th"t the) su@ered %or"# d"%"&es in view of

the un'ust refus"# of BPI to "ept the p")%ent she%e proposed ) IB!!

"nd the "##e&ed#) un'ust "nd i##e&"# fore#osure of the re"# est"te

%ort&"&es on their propert).K*Converse#), the) "r&ue th"t the Court of

!ppe"#s erred in "w"rdin& %or"# d"%"&es to BPI, whih is " orpor"tion, "s

we## "s e+e%p#"r) d"%"&es, "ttorne)s fees "nd e+penses of #iti&"tion. K5

e do not "&ree. 3or"# d"%"&es "re %e"nt to o%pens"te the #"i%"nt

for "n) ph)si"# su@erin&, %ent"# "n&uish, fri&ht, serious "n+iet),es%irhed reput"tion, wounded fee#in&s, %or"# sho4, soi"# hu%i#i"tion

"nd si%i#"r in'uries un'ust#) "used.K-/Suh d"%"&es, to e reover"#e,

%ust e the pro+i%"te resu#t of " wron&fu# "t or o%ission the f"tu"#

"sis for whih is s"tisf"tori#) est"#ished ) the "&&rieved p"rt).K-1(here

ein& no wron&fu# or un'ust "t on the p"rt of BPI in de%"ndin& p")%ent

fro% the% "nd in see4in& the fore#osure of the h"tte# "nd re"# est"te

%ort&"&es, there is no #"wfu# "sis for "w"rd of d"%"&es in f"vor of

the spouses.
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Neither is BPI entit#ed to %or"# d"%"&es. ! 'uridi"# person is &ener"##) not

entit#ed to %or"# d"%"&es e"use, un#i4e " n"tur"# person, it "nnot

e+periene ph)si"# su@erin& or suh senti%ents "s wounded fee#in&s,

serious "n+iet), %ent"# "n&uish or %or"# sho4.K-(he Court of !ppe"#s

found BPI "s ein& f"%ous "nd h"vin& &"ined its f"%i#i"rit) "nd respet

not on#) in the Phi#ippines ut "#so in the who#e wor#d e"use of its &ood

wi## "nd &ood reput"tion %ust protet "nd defend the s"%e "&"inst "n)

unw"rr"nted suit suh "s the "se "t enh.K--In ho#din& th"t BPI is

entit#ed to %or"# d"%"&es, the Court of !ppe"#s re#ied on the "se

of People &. 'anero,K-6wherein the Court ru#ed th"t Kit is on#) when "

'uridi"# person h"s " &ood reput"tion th"t is de"sed, resu#tin& in soi"#

hu%i#i"tion, th"t %or"# d"%"&es %") e "w"rded.K->

e do not "&ree with the Court of !ppe"#s. ! st"te%ent si%i#"r to th"t

%"de ) the Court in 'anero "n e found in the "se of 'ambulao

(umber Co. &. P)B, et al.,K-;thusF

+ + + Ovious#), "n "rtii"# person #i4e herein "ppe##"ntorpor"tion "nnot e+periene ph)si"# su@erin&s, %ent"#"n&uish, fri&ht, serious "n+iet), wounded fee#in&s, %or"#sho4 or soi"# hu%i#i"tion whih "re "sis of %or"#d"%"&es. # orpor&to' m&/ &;e >oo(

rept&to' @, : bemre( m&/ &ro'(:or te &@&r( o: mor&< (&m&>e.+ + + 9E%ph"sissupp#ied:

Neverthe#ess, in the %ore reent "ses ofB*+CB) Corp. &. Court o%

ppeals, et al.,K-?"nd !ilipinas Broadcasting )etork, Inc. &. go 'edical

and -ducational Center+Bicol Christian College o% 'edicine '-C+BCC':,

K-*the Courthe#d th"t the st"te%ents in 'anero"nd 'ambulaowere

%ere obiter dicta, i%p#)in& th"t the "w"rd of %or"# d"%"&es to

orpor"tions is not " h"rd "nd f"st ru#e. Indeed, whi#e the Court %") "##ow

the &r"nt of %or"# d"%"&es to orpor"tions, it is not "uto%"ti"##)

&r"nted0 there %ust sti## e proof of the e+istene of the f"tu"# "sis of

the d"%"&e "nd its "us"# re#"tion to the defend"nts "ts. (his is so

e"use %or"# d"%"&es, thou&h in"p"#e of peuni"r) esti%"tion, "re in

the "te&or) of "n "w"rd desi&ned to o%pens"te the #"i%"nt for actual

injur%su@ered "nd not to i%pose " pen"#t) on the wron&doer.K-5

(he spouses o%p#"int "&"inst BPI proved to e unfounded, ut it does not

"uto%"ti"##) entit#e BPI to %or"# d"%"&es. !#thou&h the institution of "

#e"r#) unfounded ivi# suit "n "t ti%es e " #e&"# 'usti"tion for "n

"w"rd of "ttorne)s fees, suh #in&, however, h"s "#%ost inv"ri"#) een

he#d not to e " &round for "n "w"rd of %or"# d"%"&es. (he r"tion"#e for

the ru#e is th"t the #"w ou#d not h"ve %e"nt to i%pose " pen"#t) on the

ri&ht to #iti&"te. Otherwise, %or"# d"%"&es %ust ever) ti%e e "w"rded in

f"vor of the prev"i#in& defend"nt "&"inst "n unsuessfu# p#"inti@. K6/BPI

%") h"ve een inonveniened ) the suit, ut we do not see how it ou#d

h"ve possi#) su@ered es%irhed reput"tion on "ount of the sine suit

"#one. 7ene, the "w"rd of %or"# d"%"&es shou#d e de#eted.

(he "w"rds of e+e%p#"r) d"%"&es "nd "ttorne)s fees, however, "re

proper. E+e%p#"r) d"%"&es, on the other h"nd, "re i%posed ) w") ofe+"%p#e or orretion for the pu#i &ood, when the p"rt) to " ontr"t

"ts in " w"nton, fr"udu#ent, oppressive or %"#evo#ent %"nner, whi#e

"ttorne)s fees "re "##owed when e+e%p#"r) d"%"&es "re "w"rded "nd

when the p"rt) to " suit is o%pe##ed to inur e+penses to protet his

interest.K61(he spouses instituted their o%p#"int "&"inst BPI

notwithst"ndin& the f"t th"t the) were the ones who f"i#ed to p") their

o#i&"tions. Consequent#), BPI w"s fored to #iti&"te "nd defend its
http://sc.judiciary.gov.ph/jurisprudence/2008/november2008/172428.htm#_ftn32http://sc.judiciary.gov.ph/jurisprudence/2008/november2008/172428.htm#_ftn32http://sc.judiciary.gov.ph/jurisprudence/2008/november2008/172428.htm#_ftn33http://sc.judiciary.gov.ph/jurisprudence/2008/november2008/172428.htm#_ftn33http://sc.judiciary.gov.ph/jurisprudence/2008/november2008/172428.htm#_ftn34http://sc.judiciary.gov.ph/jurisprudence/2008/november2008/172428.htm#_ftn35http://sc.judiciary.gov.ph/jurisprudence/2008/november2008/172428.htm#_ftn36http://sc.judiciary.gov.ph/jurisprudence/2008/november2008/172428.htm#_ftn37http://sc.judiciary.gov.ph/jurisprudence/2008/november2008/172428.htm#_ftn38http://sc.judiciary.gov.ph/jurisprudence/2008/november2008/172428.htm#_ftn39http://sc.judiciary.gov.ph/jurisprudence/2008/november2008/172428.htm#_ftn40http://sc.judiciary.gov.ph/jurisprudence/2008/november2008/172428.htm#_ftn41http://sc.judiciary.gov.ph/jurisprudence/2008/november2008/172428.htm#_ftn41http://sc.judiciary.gov.ph/jurisprudence/2008/november2008/172428.htm#_ftn32http://sc.judiciary.gov.ph/jurisprudence/2008/november2008/172428.htm#_ftn33http://sc.judiciary.gov.ph/jurisprudence/2008/november2008/172428.htm#_ftn34http://sc.judiciary.gov.ph/jurisprudence/2008/november2008/172428.htm#_ftn35http://sc.judiciary.gov.ph/jurisprudence/2008/november2008/172428.htm#_ftn36http://sc.judiciary.gov.ph/jurisprudence/2008/november2008/172428.htm#_ftn37http://sc.judiciary.gov.ph/jurisprudence/2008/november2008/172428.htm#_ftn38http://sc.judiciary.gov.ph/jurisprudence/2008/november2008/172428.htm#_ftn39http://sc.judiciary.gov.ph/jurisprudence/2008/november2008/172428.htm#_ftn40http://sc.judiciary.gov.ph/jurisprudence/2008/november2008/172428.htm#_ftn41


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interest. Aor these re"sons, BPI is entit#ed to the "w"rds of e+e%p#"r)

d"%"&es "nd "ttorne)s fees.

7EREAORE, the petition is DENIED. (he Deision "nd Reso#ution of the

Court of !ppe"#s d"ted 6 Otoer //> "nd -1 3"rh //;, respetive#),"re here) !AAIR3ED, with the 3ODIAIC!(ION th"t the "w"rd of %or"#

d"%"&es to B"n4 of the Phi#ippine Is#"nds is DELE(ED.

Costs "&"inst the petitioners.

SO ORDERED.


18/52

1*

7IRD DIVISION

G.R. No. L*4+48 No;ember 29, 1988

RI#L C%%ERCI#L B#N)ING CRPR#TIN, petitioner,vs.

THE HNR#BLE P#CI"IC P. $E C#STR &'( PHILIPPINE IRGINI#TB#CC #$%INISTR#TIN,respondents

CRTES,J.:

(he ru+ of the inst"nt ontrovers) dwe##s on the #i"i#it) of " "n4 forre#e"sin& its depositors funds upon orders of the ourt, pursu"nt to " writof &"rnish%ent. If in o%p#i"ne with the ourt order, the "n4 de#iveredthe &"rnished "%ount to the sheri@, who in turn de#ivered it to the'ud&%ent reditor, ut susequent#), the order of the ourt diretin&p")%ent w"s set "side ) the s"%e 'ud&e, shou#d the "n4 e he#d

so#id"ri#) #i"#e with the 'ud&%ent reditor to its depositor forrei%urse%ent of the &"rnished funds (he Court does not thin4 so.

In Civi# C"se No. 21?*> of the Court of Airst Inst"ne of Ri"#, ueonCit) Br"nh I entit#ed JB"do P#"nters, In. versus Phi#ippine Vir&ini"(o"o !d%inistr"tion, et "#.,J whih w"s "n "tion for reover) of unp"idto"o de#iveries, "n Order 9P"rti"# ud&%ent: w"s issued on "nu"r) 1>,15?/ ) the 7on. Lourdes P. S"n Die&o, then Presidin& ud&e, orderin& thedefend"nts therein to p") 'oint#) "nd sever"##), the p#"inti@ B"do P#"nters,In. 9herein"fter referred to "s JB!DOCJ: within 6* hours the "&&re&"te"%ount of P/;,51;.?;, with #e&"# interests thereon.

On "nu"r) ;,15?/, B!DOC #ed "n 8r&ent E+2P"rte 3otion for " rit ofE+eution of the s"id P"rti"# ud&%ent whih w"s &r"nted on the s"%e d")) the herein respondent 'ud&e who "ted in p#"e of the 7on. ud&e S"nDie&o who h"d 'ust een e#ev"ted "s " ustie of the Court of !ppe"#s.!ordin), the Br"nh C#er4 of Court on the ver) s"%e d"), issued " ritof E+eution "ddressed to Spei"# Sheri@ A"ustino Ri&or, who then issued "Notie of , 15?/.


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15

(he reord reve"#s th"t on Aeru"r) , 15?/, priv"te respondent PV(! #ed" 3otion for Reonsider"tion of the OrderQ P"rti"# ud&%ent of "nu"r) 1>,15?/. (his w"s &r"nted "nd the "fore%entioned P"rti"# ud&%ent w"s set"side. (he "se w"s set for he"rin&s on Nove%er 6, 5 "nd 11, 15?/ KRo##o,pp. />2/?. 7owever, in view of the f"i#ure of p#"inti@ B!DOC to "ppe"ron the s"id d"tes, the #ower ourt ordered the dis%iss"# of the "se "&"inst

PV(! for f"i#ure to proseute KRo##o, p. /*.

It %ust e noted th"t the Order of respondent ud&e d"ted !pri# ;, 15?/diretin& the p#"inti@ to rei%urse PV(! t e "%ount of P/;,51;.?; withinterests e"%e /nal "s to s"id p#"inti@ who f"i#ed to even #e " %otionfor reonsider"tion, %uh #ess to "ppe"# fro% the s"id Order.Consequent#), the order to restore the "ount of PV(! with RCBC in thes"%e ondition "nd st"te it w"s efore the issu"ne of the questionedorders %ust e uphe#d "s to the p#"inti@, B!DOC.

7owever, the questioned Order of !pri# ;, 15?/ %ust e set "side insof"r"s it ordered the petitioner RCBC, 'oint#) "nd sever"##) with B!DOC, torei%urse PV(!.

(he petitioner %ere#) oe)ed " %"nd"tor) diretive fro% the respondentud&e d"ted "nu"r) ?, 15?/, orderin& petitioner 56 Jto de#iver in he4the "%ount &"rnished to Sheri@ A"ustino Ri&or "nd Sheri@ Ri&or is in turnordered to "sh the he4 "nd de#iver the "%ount to the p#"inti@srepresent"tive "ndQor ounse# on reord.J KReord on !ppe"#, p. /.

PV(! however #"i%s th"t the %"nner in whih the "n4 o%p#ied with theSheri@s Notie of


20/52

/

de#iverin& its depositors funds pursu"nt to " ourt order whih w"s %ere#)in the e+erise of its power of ontro# over suh funds.

... (he &"rnish%ent of propert) to s"tisf) " writ ofe+eution oper"tes "s "n "tt"h%ent "nd f"stens upon thepropert) " #ien ) whih the propert) is rou&ht under the

'urisdition of the ourt issuin& the writ. It is rou&htinto custodia legis, under the so#e ontro# of suh ourt KDeLeon v. S"#v"dor, ? of the Ru#es of Court providesF

E@et of "tt"h%ent of dets "nd redits.H!## persons h"vin& intheir possession or under their ontro# "n) redits or other si%i#"rperson"# propert) e#on&in& to the p"rt) "&"inst who% "tt"h%entis issued, or owin& "n) dets to the s"%e, "## the ti%e of servieupon the% of " op) of the order of "tt"h%ent "nd notie "sprovided in the #"st preedin& setion, sh"## e #i"#e to the"pp#i"nt for the "%ount of suh redits, dets or other propert),unti# the "tt"h%ent e dish"r&ed, or "n) 'ud&%ent reovered )hi% e s"tised, un#ess suh propert) e de#ivered or tr"nsferred,or suh dets e p"id, to the #er4, sheri@ or other proper o$er ofthe ourt issuin& the "tt"h%ent.


21/52

1

de#"r"tion of nu##it) of the order of de#iver). !s orret#) pointed out )the petitionerF

(h"t the respondent ud&e, "fter his Order w"s enfored, s"w t tore"## s"id Order "nd deree its nu##it), shou#d not pre'udie onewho dutifu##) "ided ) it, the presu%ption ein& th"t 'udii"#

orders "re v"#id "nd issued in the re&u#"r perfor%"ne of the dutiesof the CourtJ KSetion >9%: Ru#e 1-1, Revised Ru#es of Court. (hisshou#d oper"te with &re"ter fore in re#"tion to the hereinpetitioner whih, not ein& " p"rt) in the "se, w"s 'ust "##edupon to perfor% "n "t in "ord"ne with " 'udii"# G"t. ! ontr"r)view wi## invite disrespet for the %"'est) of the #"w "nd induere#ut"ne in o%p#)in& with 'udii"# orders out of fe"r th"t s"idorders %i&ht e susequent#) inv"#id"ted "nd there) e+pose oneto su@er so%e pen"#t) or pre'udie for oe)in& the s"%e. !nd thisis wh"t wi## h"ppen were the ontroversi"# orders to e sust"ined.e need not undersore the d"n&er of this "s " preedent.

K Brief for the Petitioner, Ro##o, p. 10 E%ph"sis supp#ied.

Aro% the fore&oin&, it %") e on#uded th"t the h"r&e of re"h of trust"ndQor dere#ition of dut) "s we## "s #"4 of prudene in e@etin& thei%%edi"te p")%ent of the &"rnished "%ount is tot"##) unfounded. 8ponreeipt of the Notie of 0 : toontr"ts of "n) 4ind "s %") e neess"r) or inident"# to the "tt"in%entof its purpose with "n) person, r% or orpor"tion, with the 10 "nd -: &ener"##), to e+erise "## the powersof " orpor"tion under the Corpor"tion L"w, insof"r "s the) "re notinonsistent with the provisions of this !t KSetion 694:, R.!. No. ;>.

Aro% the fore&oin&, it is #e"r th"t PV(! h"s een endowed with "person"#it) distint "nd sep"r"te fro% the &overn%ent whih owns "ndontro#s it. !ordin), this Court h"s heretofore de#"red th"t the funds ofthe PV(! "n e &"rnished sine Jfunds of pu#i orpor"tion whih "nsue "nd e sued were not e+e%pt fro% &"rnish%entJ KPhi#ippine N"tion"#B"n4 v. P""#"n, , 15?*, *- SCR! >5>, >5*.


22/52

In )ational *hipyards and *teel Corp. &. CI"K*- 9156:0 B""ni "nd 3"toto v. N"tion"# Coonut Corpor"tion et"#., 1// Phi#. 6?1 915>;:0 Reot"n v. N"tion"# Rie Corn Corpor"tion,


23/52

-

funds e#on&in& to the Bure"u of Pu#i 7i&hw")s, "n "&en) of the&overn%ent, w"s chargeable ith knoledge o% the e1emption o% suchgo&ernment %unds %rom e1ecution and garnishment pursu"nt to thee#e%ent"r) preept th"t pu#i funds "nnot e disursed without the"ppropri"tion required ) #"w. On the other h"nd, the s"%e "nnot ho#dtrue for RCBC "s the funds entrusted to its ustod), whih e#on& to "

pu#i orpor"tion, "re in the n"ture of priv"te funds insof"r "s theirsuseptii#it) to &"rnish%ent is onerned. 7ene, RCBC "nnot eh"r&ed with #"4 of prudene for i%%edi"te#) o%p#)in& with the order tode#iver the &"rnished "%ount. Sine the funds in its ustod) "re preise#)%e"nt for the p")%ent of #"wfu##)2inurred o#i&"tions, RCBC "nnotri&htfu##) resist " ourt order to enfore p")%ent of suh o#i&"tions. (h"tsuh ourt order susequent#) turned out to h"ve een erroneous#) issuedshou#d not oper"te to the detri%ent of one who o%p#ied with its #e"rorder.

Ain"##), it is ontended th"t RCBC w"s ound to inquire into the #e&"#it) "ndpropriet) of the rit of E+eution "nd Notie of


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6

(7IRD DIVISION

G.R. No. 19++80 #pr< 21, 2014

N#RR# NIC)EL %INING #N$ $EELP%ENT CRP., TESR %INING

#N$ $EELP%ENT, INC., &'( %C#RTH!R %INING, INC.,Petitioners,vs.RE$%NT CNSLI$#TE$ %INES CRP.,Respondent.

D E C I S I O N

EL#SC, -R.,J.:

Before this Court is " Petition for Review on Certior"ri under Ru#e 6> #ed) N"rr" Ni4e# "nd 3inin& Deve#op%ent Corp. 9N"rr":, (esoro 3inin& "ndDeve#op%ent, In. 9(esoro:, "nd 3!rthur 3inin& In. 93!rthur:, whihsee4s to reverse the Otoer 1, /1/ Deision1"nd the Aeru"r) 1>, /11Reso#ution of the Court of !ppe"#s 9C!:.

(he A"ts

So%eti%e in Dee%er //;, respondent Red%ont Conso#id"ted 3inesCorp. 9Red%ont:, " do%esti orpor"tion or&"nied "nd e+istin& underPhi#ippine #"ws, too4 interest in %inin& "nd e+p#orin& ert"in "re"s of theprovine of P"#"w"n. !fter inquirin& with the Dep"rt%ent of Environ%ent"nd N"tur"# Resoures 9DENR:, it #e"rned th"t the "re"s where it w"nted toundert"4e e+p#or"tion "nd %inin& "tivities where "#re"d) overed )3iner"# Prodution Sh"rin& !&ree%ent 93PS!: "pp#i"tions of petitionersN"rr", (esoro "nd 3!rthur.

Petitioner 3!rthur, throu&h its predeessor2in2interest S"r" 3"rie 3inin&,In. 9S33I:, #ed "n "pp#i"tion for "n 3PS! "nd E+p#or"tion Per%it 9EP:with the 3ines "nd - overin& "n "re" ofover 1,?* het"res in B"r"n&") Su%i#in&, 3uniip"#it) of B"t"r"",Provine of P"#"w"n "nd EP!2IVB266 whih in#udes "n "re" of -,?/het"res in B"r"n&") 3"#"t"&"o, B"t"r"", P"#"w"n. (he 3PS! "nd EPwere then tr"nsferred to 3"dride'os 3inin& Corpor"tion 933C: "nd, onNove%er ;, //;, "ssi&ned to petitioner 3!rthur.

Petitioner N"rr" "quired its 3PS! fro% !#ph" Resoures "nd Deve#op%entCorpor"tion "nd P"trii" Louise 3inin& Deve#op%ent Corpor"tion

9PL3DC: whih previous#) #ed "n "pp#i"tion for "n 3PS! with the 3-, !3!2IVB21>6 "nd 3PS!IV2121.

In the petitions, Red%ont "##e&ed th"t "t #e"st ;/T of the "pit"# sto4 of3!rthur, (esoro "nd N"rr" "re owned "nd ontro##ed ) 3B3I Resoures,In. 93B3I:, " 1//T C"n"di"n orpor"tion. Red%ont re"soned th"t sine3B3I is " onsider"#e sto4ho#der of petitioners, it w"s the drivin& foreehind petitioners #in& of the 3PS!s over the "re"s overed )"pp#i"tions sine it 4nows th"t it "n on#) p"rtiip"te in %inin& "tivitiesthrou&h orpor"tions whih "re dee%ed Ai#ipino itiens. Red%ont "r&uedth"t &iven th"t petitioners "pit"# sto4s were %ost#) owned ) 3B3I,the) were #i4ewise disqu"#ied fro% en&"&in& in %inin& "tivities throu&h3PS!s, whih "re reserved on#) for Ai#ipino itiens.

In their !nswers, petitioners "verred th"t the) were qu"#ied personsunder Setion -9"q: of Repu#i !t No. 9R!: ?56 or the Phi#ippine 3inin&

!t of 155> whih providedF

Se. - Denition of (er%s. !s used in "nd for purposes of this !t, thefo##owin& ter%s, whether in sin&u#"r or p#ur"#, sh"## %e"nF

9"q: Ju"#ied personJ %e"ns "n) itien of the Phi#ippines with "p"it)to ontr"t, or " orpor"tion, p"rtnership, "ssoi"tion, or ooper"tiveor&"nied or "uthoried for the purpose of en&"&in& in %inin&, withtehni"# "nd n"ni"# "p"i#it) to undert"4e %iner"# resouresdeve#op%ent "nd du#) re&istered in "ord"ne with #"w "t #e"st si+t) perent 9;/T: of the "pit"# of whih is owned ) itiens of the Phi#ippinesFProvided, (h"t " #e&"##) or&"nied forei&n2owned orpor"tion sh"## edee%ed " qu"#ied person for purposes of &r"ntin& "n e+p#or"tion per%it,n"ni"# or tehni"# "ssist"ne "&ree%ent or %iner"# proessin& per%it.
http://www.lawphil.net/judjuris/juri2014/apr2014/gr_195580_2014.html#fnt1http://www.lawphil.net/judjuris/juri2014/apr2014/gr_195580_2014.html#fnt1http://www.lawphil.net/judjuris/juri2014/apr2014/gr_195580_2014.html#fnt2http://www.lawphil.net/judjuris/juri2014/apr2014/gr_195580_2014.html#fnt1http://www.lawphil.net/judjuris/juri2014/apr2014/gr_195580_2014.html#fnt2


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!ddition"##), the) st"ted th"t their n"tion"#it) "s "pp#i"nts is i%%"teri"#e"use the) "#so "pp#ied for Ain"ni"# or (ehni"# !ssist"ne !&ree%ents9A(!!: deno%in"ted "s !A(!2IVB2/5 for 3!rthur, !A(!2IVB2/* for (esoro"nd !A(!2IVB2/? for N"rr", whih "re &r"nted to forei&n2ownedorpor"tions. Neverthe#ess, the) #"i%ed th"t the issue on n"tion"#it)shou#d not e r"ised sine 3!rthur, (esoro "nd N"rr" "re in f"t Phi#ippineN"tion"#s "s ;/T of their "pit"# is owned ) itiens of the Phi#ippines.

(he) "sserted th"t thou&h 3B3I owns 6/T of the sh"res of PL3C 9whihowns >,55? sh"res of N"rr":,-6/T of the sh"res of 33C 9whih owns >,55?sh"res of 3!rthur:6"nd 6/T of the sh"res of SL3C 9whih, in turn, owns>,55? sh"res of (esoro:,>the sh"res of 3B3I wi## not %"4e it the owner of"t #e"st ;/T of the "pit"# sto4 of e"h of petitioners. (he) "dded th"tthe est too# used in deter%inin& the n"tion"#it) of " orpor"tion is theJontro# test,J e%odied in Se. - of R! ?/6 or the Aorei&n Invest%ents!t of 1551. (he) "#so #"i%ed th"t the PO! of DENR did not h"ve'urisdition over the issues in Red%onts petition sine the) "re notenu%er"ted in Se. ?? of R! ?56. Ain"##), the) stressed th"t Red%ont h"sno person"#it) to sue the% e"use it h"s no pendin& #"i% or "pp#i"tionover the "re"s "pp#ied for ) petitioners.

On Dee%er 16, //?, the PO! issued " Reso#ution disqu"#if)in&petitioners fro% &"inin& 3PS!s. It he#dF

KIt is #e"r#) est"#ished th"t respondents "re not qu"#ied "pp#i"nts toen&"&e in %inin& "tivities. On the other h"nd, KRed%ont h"vin& #ed itsown "pp#i"tions for "n EP! over the "re"s e"r#ier overed ) the 3PS!"pp#i"tion of respondents %") e onsidered if "nd when the) "requ"#ied under the #"w. (he vio#"tion of the require%ents for the issu"ne"ndQor &r"nt of per%its over %inin& "re"s is #e"r#) est"#ished thus, thereis re"son to e#ieve th"t the "ne##"tion "ndQor revo"tion of per%its"#re"d) issued under the pre%ises is in order "nd open the "re"s overedto other qu"#ied "pp#i"nts.

7EREAORE, the P"ne# of !ritr"tors nds the Respondents, 3!rthur3inin& In., (esoro 3inin& "nd Deve#op%ent, In., "nd N"rr" Ni4e# 3inin&"nd Deve#op%ent Corp. "s, DIS8!LIAIED for ein& onsidered "s Aorei&nCorpor"tions. (heir 3iner"# Prodution Sh"rin& !&ree%ent 93PS!: "rehere) + + + DECL!RED N8LL !ND VOID.;

(he PO! onsidered petitioners "s forei&n orpor"tions ein& Je@etive#)ontro##edJ ) 3B3I, " 1//T C"n"di"n o%p"n) "nd de#"red their 3PS!snu## "nd void. In the s"%e Reso#ution, it &"ve due ourse to Red%ontsEP!s. (here"fter, on Aeru"r) ?, //*, the PO! issued "n Order ?den)in&the 3otion for Reonsider"tion #ed ) petitioners.

!&&rieved ) the Reso#ution "nd Order of the PO!, 3!rthur "nd (esoro#ed " 'oint Notie of !ppe"#*"nd 3e%or"ndu% of !ppe"#5with the 3ines

!d'udi"tion Bo"rd 93!B: whi#e N"rr" sep"r"te#) #ed its Notie of!ppe"#1/"nd 3e%or"ndu% of !ppe"#.11

In their respetive %e%or"ndu%, petitioners e%ph"sied th"t the) "requ"#ied persons under the #"w. !#so, throu&h " #etter, the) infor%ed the3!B th"t the) h"d their individu"# 3PS! "pp#i"tions onverted to A(!!s.3!rthurs A(!! w"s deno%in"ted "s !A(!2IVB2/51on 3") //?, whi#e

(esoros 3PS! "pp#i"tion w"s onverted to !A(!2IVB2/*1-on 3") *,//?, "nd N"rr"s A(!! w"s onverted to !A(!2IVB2/?16on 3"rh -/, //;.

Pendin& the reso#ution of the "ppe"# #ed ) petitioners with the 3!B,Red%ont #ed " Co%p#"int1>with the Seurities "nd E+h"n&e Co%%ission9SEC:, see4in& the revo"tion of the erti"tes for re&istr"tion ofpetitioners on the &round th"t the) "re forei&n2owned or ontro##edorpor"tions en&"&ed in %inin& in vio#"tion of Phi#ippine #"ws. (here"fter,Red%ont #ed on Septe%er 1, //* " 3"nifest"tion "nd 3otion toSuspend Proeedin& efore the 3!B pr")in& for the suspension of theproeedin&s on the "ppe"#s #ed ) 3!rthur, (esoro "nd N"rr".

Susequent#), on Septe%er *, //*, Red%ont #ed efore the Re&ion"#(ri"# Court of ueon Cit), Br"nh 5 9R(C: " Co%p#"int1;for in'untion with"pp#i"tion for issu"ne of " te%por"r) restr"inin& order 9(RO: "ndQor writof pre#i%in"r) in'untion, do4eted "s Civi# C"se No. /*2;--?5. Red%ontpr")ed for the deferr"# of the 3!B proeedin&s pendin& the reso#ution ofthe Co%p#"int efore the SEC.

But efore the R(C "n reso#ve Red%onts Co%p#"int "nd "pp#i"tions forin'untive re#iefs, the 3!B issued "n Order on Septe%er 1/, //*, ndin&the "ppe"# %eritorious. It he#dF

7EREAORE, in view of the fore&oin&, the 3ines !d'udi"tion Bo"rd here)REVERSES "nd SE(S !SIDE the Reso#ution d"ted 16 Dee%er //? of the

P"ne# of !ritr"tors of Re&ion IV2B 93I3!ROP!: in PO!2DENR C"se Nos.//12/1, //?2/ "nd //?2/-, "nd its Order d"ted /? Aeru"r) //*den)in& the 3otions for Reonsider"tion of the !ppe##"nts. (he Petition#ed ) Red%ont Conso#id"ted 3ines Corpor"tion on / "nu"r) //? ishere) ordered DIS3ISSED.1?

Be#"ted#), on Septe%er 1;, //*, the R(C issued "n Order 1*&r"ntin&Red%onts "pp#i"tion for " (RO "nd settin& the "se for he"rin& thepr")er for the issu"ne of " writ of pre#i%in"r) in'untion on Septe%er 15,//*.

3e"nwhi#e, on Septe%er , //*, Red%ont #ed " 3otion forReonsider"tion 15of the Septe%er 1/, //* Order of the 3!B.
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Susequent#), it #ed " Supp#e%ent"# 3otion for Reonsider"tion/onSepte%er 5, //*.

Before the 3!B ou#d reso#ve Red%onts 3otion for Reonsider"tion "ndSupp#e%ent"# 3otion for Reonsider"tion, Red%ont #ed efore the R(C "Supp#e%ent"# Co%p#"int1in Civi# C"se No. /*2;--?5.

On Otoer ;, //*, the R(C issued "n Order &r"ntin& the issu"ne of "writ of pre#i%in"r) in'untion en'oinin& the 3!B fro% n"##) disposin& ofthe "ppe"#s of petitioners "nd fro% reso#vin& Red%onts 3otion forReonsider"tion "nd Supp#e%ent 3otion for Reonsider"tion of the 3!BsSepte%er 1/, //* Reso#ution.

On u#) 1, //5, however, the 3!B issued " seond Order den)in&Red%onts 3otion for Reonsider"tion "nd Supp#e%ent"# 3otion forReonsider"tion "nd reso#vin& the "ppe"#s #ed ) petitioners.

7ene, the petition for review #ed ) Red%ont efore the C!, "ss"i#in& theOrders issued ) the 3!B. On Otoer 1, /1/, the C! rendered "

Deision, the dispositive of whih re"dsF

7EREAORE, the Petition is P!R(I!LL


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de#"r"tion th"t the 3PS!s of 3!rthur, (esoro "nd N"rr" "re void is hi&h#)i%proper.

hi#e the petition w"s pendin& with the C!, Red%ont #ed with the O$eof the President 9OP: " petition d"ted 3") ?, /1/ see4in& the "ne##"tionof petitioners A(!!s. (he OP rendered " Deision;on !pri# ;, /11,wherein it "ne#ed "nd revo4ed petitioners A(!!s for vio#"tin& "nd

iru%ventin& the JConstitution + + +K, the S%"## S"#e 3inin& L"w "ndEnviron%ent"# Co%p#i"ne Certi"te "s we## "s Setions - "nd * of theAorei&n Invest%ent !t "nd E.O. >*6.J?(he OP, in "$r%in& the"ne##"tion of the issued A(!!s, "&reed with Red%ont st"tin& th"tpetitioners o%%itted vio#"tions "&"inst the "ove%entioned #"ws "ndf"i#ed to su%it evidene to ne&"te the%. (he Deision further quoted theDee%er 16, //? Order of the PO! fousin& on the "##e&ed%isrepresent"tion "nd #"i%s %"de ) petitioners of ein& do%esti orAi#ipino orpor"tions "nd the "d%itted ontinued %inin& oper"tion of P3DCusin& their #o"##) seured S%"## S"#e 3inin& Per%it inside the "re" e"r#ier"pp#ied for "n 3PS! "pp#i"tion whih w"s eventu"##) tr"nsferred to N"rr".It "#so "&reed with the PO!s esti%"tion th"t the #in& of the A(!!"pp#i"tions ) petitioners is " #e"r "d%ission th"t the) "re Jnot "p"#e

of ondutin& " #"r&e s"#e %inin& oper"tion "nd th"t the) need then"ni"# "nd tehni"# "ssist"ne of " forei&n entit) in their oper"tion, th"tis wh) the) sou&ht the p"rtiip"tion of 3B3I Resoures, In.J*(heDeision further quotedF

(he #in& of the A(!! "pp#i"tion on une 1>, //?, durin& the penden) ofthe "se on#) de%onstr"te the vio#"tions "nd #"4 of qu"#i"tion of therespondent orpor"tions to en&"&e in %inin&. (he #in& of the A(!!"pp#i"tion onversion whih is "##owed forei&n orpor"tion of the e"r#ier3PS! is "n "d%ission th"t indeed the respondent is not Ai#ipino ut r"therof forei&n n"tion"#it) who is disqu"#ied under the #"ws. Corpor"tedou%ents of 3B3I Resoures, In. furnished its sto4ho#ders in their he"do$e in C"n"d" su&&est th"t the) "re ondutin& oper"tion on#) throu&h

their #o"# ounterp"rts.5

(he 3otion for Reonsider"tion of the Deision w"s further denied ) theOP in " Reso#ution-/d"ted u#) ;, /11. Petitioners then #ed " Petition forReview on Certior"ri of the OPs Deision "nd Reso#ution with the C!,do4eted "s C!2


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de#"r"tion thereon wou#d e of no pr"ti"# use or v"#ue.J-(hus, theourts J&ener"##) de#ine 'urisdition over the "se or dis%iss it on the&round of %ootness.J--

(he J%ootnessJ prinip#e, however, does "ept ert"in e+eptions "nd the%ere r"isin& of "n issue of J%ootnessJ wi## not deter the ourts fro% tr)in&" "se when there is " v"#id re"son to do so. In D"vid v. 3""p"&"#2!rro)o

9D"vid:, the Court provided four inst"nes where ourts "n deide "notherwise %oot "se, thusF

1.: (here is " &r"ve vio#"tion of the Constitution0

.: (he e+eption"# h"r"ter of the situ"tion "nd p"r"%ount pu#iinterest is invo#ved0

-.: hen onstitution"# issue r"ised requires for%u#"tion ofontro##in& prinip#es to &uide the enh, the "r, "nd the pu#i0"nd

6.: (he "se is "p"#e of repetition )et ev"din& review. -6

!## of the e+eptions st"ted "ove "re present in the inst"nt "se. e ofthis Court note th"t " &r"ve vio#"tion of the Constitution, spei"##)Setion of !rti#e II, is ein& o%%itted ) " forei&n orpor"tion ri&htunder our ountr)s nose throu&h " %)ri"d of orpor"te #")erin& underdi@erent, "##e&ed#), Ai#ipino orpor"tions. (he intri"te orpor"te #")erin&uti#ied ) the C"n"di"n o%p"n), 3B3I, is of e+eption"# h"r"ter "ndinvo#ves p"r"%ount pu#i interest sine it undeni"#) "@ets thee+p#oit"tion of our Countr)s n"tur"# resoures. (he orrespondin& "tionsof petitioners durin& the #ifeti%e "nd e+istene of the inst"nt "se r"isequestions "s wh"t prinip#e is to e "pp#ied to "ses with si%i#"r issues. Nodenite ru#in& on suh prinip#e h"s een pronouned ) the Court0 hene,

the disposition of the issues or errors in the inst"nt "se wi## serve "s "&uide Jto the enh, the "r "nd the pu#i.J->Ain"##), the inst"nt "se is"p"#e of repetition )et ev"din& review, sine the C"n"di"n o%p"n),3B3I, "n 4eep on uti#iin& du%%) Ai#ipino orpor"tions throu&h v"riousshe%es of orpor"te #")erin& "nd onversion of "pp#i"tions to s4irt theonstitution"# prohiition "&"inst forei&n %inin& in Phi#ippine soi#.

Conversion of 3PS! "pp#i"tions to A(!! "pp#i"tions

e sh"## disuss the rst error in on'untion with the si+th error presented) petitioners sine oth invo#ve the onversion of 3PS! "pp#i"tions toA(!! "pp#i"tions. Petitioners propound th"t the C! erred in ru#in& "&"inst

the% sine the questioned 3PS! "pp#i"tions were "#re"d) onverted intoA(!! "pp#i"tions0 thus, the issue on the prohiition re#"tin& to 3PS!

"pp#i"tions of forei&n %inin& orpor"tions is ""de%i. !#so, petitionerswou#d w"nt us to orret the C!s ndin& whih dee%ed the"fore%entioned onversions of "pp#i"tions "s suspiious in n"ture, sine itis "sed on %ere on'etures "nd sur%ises "nd not supported withevidene.

e dis"&ree.

(he C!s "n"#)sis of the "tions of petitioners "fter the "se w"s #ed"&"inst the% ) respondent is on point. (he h"n&in& of "pp#i"tions )petitioners fro% one t)pe to "nother 'ust e"use " "se w"s #ed "&"instthe%, in truth, wou#d r"ise not " few septis e)erows. h"t is there"son for suh onversion Did the s"id onversion not ste% fro% the"se h"##en&in& their itienship "nd to h"ve the "se dis%issed "&"instthe% for ein& J%ootJ It is quite ovious th"t it is petitioners str"te&) toh"ve the "se dis%issed "&"inst the% for ein& J%oot.J

Consider the histor) of this "se "nd how petitioners responded to ever)"tion done ) the ourt or "ppropri"te &overn%ent "&en)F on "nu"r) ,//?, Red%ont #ed three sep"r"te petitions for deni"# of the 3PS!"pp#i"tions of petitioners efore the PO!. On une 1>, //?, petitioners#ed " onversion of their 3PS! "pp#i"tions to A(!!s. (he PO!, in itsDee%er 16, //? Reso#ution, oserved this suspet h"n&e of"pp#i"tions whi#e the "se w"s pendin& efore it "nd he#dF

(he #in& of the Ain"ni"# or (ehni"# !ssist"ne !&ree%ent "pp#i"tion is" #e"r "d%ission th"t the respondents "re not "p"#e of ondutin& "#"r&e s"#e %inin& oper"tion "nd th"t the) need the n"ni"# "nd tehni"#"ssist"ne of " forei&n entit) in their oper"tion th"t is wh) the) sou&ht thep"rtiip"tion of 3B3I Resoures, In. (he p"rtiip"tion of 3B3I in theorpor"tion on#) proves the f"t th"t it is the C"n"di"n o%p"n) th"t wi##provide the n"nes "nd the resoures to oper"te the %inin& "re"s for the

&re"ter enet "nd interest of the s"%e "nd not the Ai#ipino sto4ho#derswho on#) h"ve " #ess sust"nti"# n"ni"# st"4e in the orpor"tion.

+ + + (he #in& of the A(!! "pp#i"tion on une 1>, //?, durin& thependen) of the "se on#) de%onstr"te the vio#"tions "nd #"4 ofqu"#i"tion of the respondent orpor"tions to en&"&e in %inin&. (he #in&of the A(!! "pp#i"tion onversion whih is "##owed forei&n orpor"tion ofthe e"r#ier 3PS! is "n "d%ission th"t indeed the respondent is not Ai#ipinout r"ther of forei&n n"tion"#it) who is disqu"#ied under the #"ws.Corpor"te dou%ents of 3B3I Resoures, In. furnished its sto4ho#ders intheir he"d o$e in C"n"d" su&&est th"t the) "re ondutin& oper"tionon#) throu&h their #o"# ounterp"rts.-;
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