THIRD DIVISION[G.R. No. 140420.February 15 , 2001]SERGIO AMONOY,petitioner, vs.Spouses JOSE GUTIERREZ and ANGELA FORNILDA,respondents.

D E C I S I O N

PANGANIBAN,J.:Damnum absque injuria.Under this principle, the legitimate exercise of a persons rights, even if it causes loss to another, does not automatically result in an actionable injury.The law does not prescribe a remedy for the loss.This principle does not, however, apply when there is an abuse of a persons right, or when the exercise of this right is suspended or extinguished pursuant to a court order.Indeed, in the availment of ones rights, one must act with justice, give others their due, and observe honesty and good faith.The CaseBefore us is a Petition for Review under Rule 45 of the Rules of Court, assailing the April 21, 1999 Decision[1]of the Court of Appeals (CA) in CA-GR CV No. 41451, which set aside the judgment[2]of the Regional Trial Court (RTC) of Tanay, Rizal.The RTC had earlier dismissed the Complaint for damages filed by herein respondents against petitioner.The dispositive portion of the challenged CA Decision reads as follows:WHEREFORE, the appealed Decision is SET ASIDE, and in its stead judgment is rendered ordering the defendant-appellee Sergio Amonoy to pay the plaintiffs-appellants Bruno and Bernardina Gutierrez as actual damages the sum of [t]wo [h]undred [f]ifty [t]housand [p]esos (P250,000.00).[3]Likewise assailed is the October 19, 1999 CA Resolution,[4]which denied the Motion for Reconsideration.The FactsThe appellate court narrated the factual antecedents of this case as follows:This case had its roots in Special Proceedings No. 3103 of Branch I of the CFI of Pasig, Rizal, for the settlement of the estate of the deceased Julio Cantolos, involving six (6) parcels of land situated in Tanay, Rizal.Amonoy was the counsel of therein Francisca Catolos, Agnes Catolos, Asuncion Pasamba and Alfonso Formilda.On 12 January 1965, the Project of Partitionsubmitted was approved and x x x two (2) of the said lots were adjudicated to Asuncion Pasamba and Alfonso Formilda.The attorneys fees charged by Amonoy was P27,600.00 and on 20 January 1965 Asuncion Pasamba and Alfonso Formilda executed a deed of real estate mortgage on the said two (2) lots adjudicated to them, in favor of Amonoy to secure the payment of his attorneys fees.But it was only on 6 August 1969 after the taxes had been paid, the claims settled and the properties adjudicated, that the estate was declared closed and terminated.Asuncion Pasamba died on 24 February 1969 while Alfonso Fornilda passed away on 2 July 1969.Among the heirs of the latter was his daughter, plaintiff-appellant Angela Gutierrez.Because his attorneys fees thus secured by the two lots were not paid, on 21 January 1970 Amonoy filed for their foreclosure in Civil Case No. 12726 entitledSergio Amonoy vs. Heirs of Asuncion Pasamba and Heirs of Alfonso Fornildabefore the CFI of Pasig, Rizal, and this was assigned to Branch VIII.The heirs opposed, contending that the attorneys fees charged [were] unconscionable and that the agreed sum was only P11,695.92.But on 28 September 1972 judgment was rendered in favor of Amonoy requiring the heirs to pay within 90 days the P27,600.00 secured by the mortgage, P11,880.00 as value of the harvests, and P9,645.00 as another round of attorneys fees.Failing in that, the two (2) lots would be sold at public auction.They failed to pay.On 6 February 1973, the said lots were foreclosed and on 23 March 1973 the auction sale was held where Amonoy was the highest bidder at P23,760.00.On 2 May 1973 his bid was judicially confirmed.A deficiency was claimed and to satisfy it another execution sale was conducted, and again the highest bidder was Amonoy at P12,137.50.Included in those sold was the lot on which the Gutierrez spouses had their house.More than a year after the Decision in Civil Case No. 12726 was rendered, the said decedents heirs filed on 19 December 1973 before the CFI of Pasig, Rizal[,] Civil Case No. 18731 entitledMaria Penano, et al vs. Sergio Amonoy, et al, a suit for the annulment thereof.The case was dismissed by the CFI on 7 November 1977, and this was affirmed by the Court of Appeals on 22 July 1981.Thereafter, the CFI on 25 July 1985 issued a Writ of Possession and pursuant to which a notice to vacate was made on 26 August 1985.On Amonoys motion of 24 April 1986, the Orders of 25 April 1986 and 6 May 1986 were issued for the demolition of structures in the said lots, including the house of the Gutierrez spouses.On 27 September 1985 the petition entitledDavid Fornilda, et al vs Branch 164 RTC IVth Pasig, Deputy Sheriff Joaquin Antonil and Atty. Sergio Amonoy, G.R. No. L-72306, was filed before the Supreme Court.Among the petitioners was the plaintiff-appellant Angela Gutierrez.On a twinMusiyun(Mahigpit na Musiyon Para Papanagutin Kaugnay ng Paglalapastangan, and Musiyung Makahingi ng Utos sa Pagpapapigil ng Pagpapagiba at Pananagutin sa Paglalapastangan) with full titles as fanciful and elongated as theirPetisyung(Petisyung Makapagsuri Taglay and Pagpigil ng Utos), a temporary restraining order was granted on 2 June 1986 enjoining the demolition of the petitioners houses.Then on 5 October 1988 a Decision was rendered in the said G.R. No. L-72306 disposing that:WHEREFORE, Certiorari is granted; the Order of respondent Trial Court, dated 25 July 1985, granting a Writ of Possession, as well as its Orders, dated 25 April 1986 and 16 May 1986, directing and authorizing respondent Sheriff to demolish the houses of petitioners Angela and Leocadia Fornilda are hereby set aside, and the Temporary Restraining Order heretofore issued, is made permanent.The six (6) parcels of land herein controverted are hereby ordered returned to petitioners unless some of them have been conveyed to innocent third persons.[5]But by the time the Supreme Court promulgated the above-mentioned Decision, respondents house had already been destroyed, supposedly in accordance with a Writ of Demolition ordered by the lower court.Thus, a Complaint for damages in connection with the destruction of their house was filed by respondents against petitioner before the RTC on December 15, 1989.In its January 27, 1993 Decision, the RTC dismissed respondents suit.On appeal, the CA set aside the lower courts ruling and ordered petitioner to pay respondentsP250,000 as actual damages.Petitioner then filed a Motion for Reconsideration, which was also denied.Hence, this recourse.[6]The IssueIn his Memorandum,[7]petitioner submits this lone issue for our consideration:Whether or not the Court of Appeals was correct in deciding that the petitioner [was] liable to the respondents for damages[8]The Courts RulingThe Petition has no merit.

Main Issue:Petitioners LiabilityWell-settled is the maxim that damage resulting from the legitimate exercise of a persons rights is a loss without injury --damnum absque injuria--for which the law gives no remedy.[9]In other words, one who merely exercises ones rights does no actionable injury and cannot be held liable for damages.Petitioner invokes this legal precept in arguing that he is not liable for the demolition of respondents house.He maintains that he was merely acting in accordance with the Writ of Demolition ordered by the RTC.We reject this submission.Damnum absque injuriafinds no application to this case.True,petitionercommenced the demolition of respondents house on May 30, 1986 under the authority of a Writ of Demolition issued by the RTC.But the records show that a Temporary Restraining Order (TRO), enjoining the demolition of respondents house, was issued by the Supreme Court on June 2, 1986.The CA also found, based on the Certificate of Service of the Supreme Court process server, that a copy of the TRO was served on petitioner himself on June 4, 1986.Petitioner, however, did not heed the TRO of this Court.We agree with the CA that he unlawfully pursued the demolition of respondents house well until the middle of 1987.This is clear from Respondent Angela Gutierrezs testimony.The appellate court quoted the following pertinent portion thereof:[10]Q.On May 30, 1986, were they able to destroy your house?A.Not all, a certain portion onlyx x xx x xx x xQ.Was your house completely demolished?A.No, sir.Q.How about the following day?A.It was completely demolishedx x xx x xx x xQ.Until when[,] Mrs. Witness?A.Until 1987.Q.About what month of 1987?A.Middle of the year.Q.Can you tell the Honorable Court who completed the demolition?A.The men of Fiscal Amonoy.[11]The foregoing disproves the claim of petitioner that the demolition, which allegedly commenced only on May 30, 1986, was completed the following day.It likewise belies his allegation that the demolitions had already ceased when he received notice of the TRO.Although the acts of petitioner may have been legally justified at the outset, their continuation after the issuance of the TRO amounted to an insidious abuse of his right.Indubitably, his actions were tainted with bad faith.Had he not insisted on completing the demolition, respondents would not have suffered the loss that engendered the suit before the RTC.Verily, his acts constitutednot only an abuse of a right, but an invalid exercise of a right that had been suspendedwhen he received the TRO from this Court on June 4, 1986.By then, he was no longer entitled to proceed with the demolition.A commentator on this topic explains:The exercise of a right ends when the right disappears, and it disappears when it is abused, especially to the prejudice of others.The mask of a right without the spirit of justice which gives it life, is repugnant to the modern concept of social law.It cannot be said that a person exercises a right when he unnecessarily prejudices another x x x.Over and above the specific precepts of positive law are the supreme norms of justice x x x; and he who violates them violates the law.For this reason, it is not permissible to abuse our rights to prejudice others.[12]Likewise, inAlbenson Enterprises Corp. v. CA,[13]the Court discussed the concept of abuse of rights as follows:Article 19, known to contain what is commonly referred to as the principle of abuse of rights, sets certain standards which may be observed not only in the exercise of ones rights but also in the performance of ones duties.These standards are the following:to act with justice; to give everyone his due; and to observe honesty and good faith.The law, therefore, recognizes the primordial limitation on all rights:that in their exercise, the norms of human conduct set forth in Article 19 must be observed.A right, though by itself legal because recognized or granted by law as such, may nevertheless become the source of some illegality.When a right is exercised in a manner which does not conform with norms enshrined in Article 19 and results in damage to another, a legal wrong is thereby committed for which the wrongdoer must be held responsible x x x.Clearly then, the demolition of respondents house by petitioner, despite his receipt of the TRO, wasnot only an abuse but also an unlawful exercise of such right.In insisting on his alleged right, he wantonly violated this Courts Order and wittingly caused the destruction of respondents house.Obviously, petitioner cannot invokedamnum absque injuria, a principle premised on the valid exercise of a right.[14]Anything less or beyond such exercise will not give rise to the legal protection that the principle accords.And when damage or prejudice to another is occasioned thereby,liability cannot be obscured, much less abated.In the ultimate analysis, petitioners liability is premised on the obligation to repair or to make whole the damage caused to another by reason of ones act or omission, whether done intentionally or negligently and whether or not punishable by law.[15]WHEREFORE, the Petition isDENIEDand the appealed DecisionAFFIRMED.Costs against petitioner.SO ORDERED.

FIRST DIVISION[G.R. No. 118192.October 23, 1997]PRO LINE SPORTS CENTER, INC., and QUESTOR CORPORATION,petitioners, vs. COURT OF APPEALS, UNIVERSAL ATHLETICS INDUSTRIAL PRODUCTS, INC., and MONICO SEHWANI,respondents.D E C I S I O NBELLOSILLO,J.:This case calls for a revisit of thedemesneof malicious prosecution and its implications.This petition stemmed from a criminal case for unfair competition filed by Pro Line Sports Center, Inc. (PRO LINE) and Questor Corporation (QUESTOR) against Monico Sehwani, president of Universal Athletics and Industrial Products, Inc. (UNIVERSAL).In that case Sehwani was exonerated.As a retaliatory move, Sehwani and UNIVERSAL filed a civil case for damages against PRO LINE and QUESTOR for what they perceived as the wrongful and malicious filing of the criminal action for unfair competition against them.But first, thedramatis personae.By virtue of its merger with A.G. Spalding Bros., Inc., on 31 December 1971,[1]petitioner QUESTOR, a US-based corporation, became the owner of the trademark "Spalding" appearing in sporting goods, implements and apparatuses.Co-petitioner PRO LINE, a domestic corporation, is the exclusive distributor of "Spalding" sports products in the Philippines.[2]Respondent UNIVERSAL, on the other hand, is a domestic corporation engaged in the sale and manufacture of sporting goods while co-respondent Monico Sehwani is impleaded in his capacity as president of the corporation.On 11 February 1981, or sixteen years ago, Edwin Dy Buncio, General Manager of PRO LINE, sent a letter-complaint to the National Bureau of Investigation (NBI) regarding the alleged manufacture of fake "Spalding" balls by UNIVERSAL.On 23 February 1981 the NBI applied for a search warrant with the then Court of First Instance, Br. 23, Pasig, Rizal, then presided over by Judge Rizalina Bonifacio Vera.On that same day Judge Vera issued Search Warrant No. 2-81 authorizing the search of the premises of UNIVERSAL in Pasig.In the course of the search, some 1,200 basketballs and volleyballs marked "Spalding" were seized and confiscated by the NBI.Three (3) days later, on motion of the NBI, Judge Vera issued another order, this time to seal and padlock the molds, rubber mixer, boiler and other instruments at UNIVERSAL's factory.All these were used to manufacture the fake "Spalding" products, but were simply too heavy to be removed from the premises and brought under the actual physical custody of the court.However, on 28 April 1981, on motion of UNIVERSAL, Judge Vera ordered the lifting of the seal and padlock on the machineries, prompting the People of the Philippines,the NBI, together with PRO LINE and QUESTOR, to file with the Court of Appeals a joint petition forcertiorariand prohibition with preliminary injunction (CA G.R. No. 12413) seeking the annulment of the order of 28 April 1981.On 18 May 1981, the appellate court issued a temporary restraining order enjoining Judge Vera from implementing her latest order.Meanwhile, on 26 February 1981, PRO LINE and QUESTOR filed a criminal complaint for unfair competition against respondent Monico Sehwani together with Robert, Kisnu, Arjan and Sawtri, all surnamed Sehwani, and Arcadio del los Reyes before the Provincial Fiscal of Rizal (I. S. No. 81-2040).The complaint was dropped on 24 June 1981 for the reason that it was doubtful whether QUESTOR had indeed acquired the registration rights over the mark "Spalding" from A. G. Spalding Bros., Inc., and complainants failed to adduce an actual receipt for the sale of"Spalding" balls by UNIVERSAL.[3]On 9 July 1981 a petition for review seeking reversal of the dismissal of the complaint was filed with the Ministry of Justice.While this was pending, the Court of Appeals rendered judgment on 4 August 1981 in CA G.R. No. 12413 affirming the order of Judge Vera which lifted the seal and padlock on the machineries of UNIVERSAL.The People, NBI, PRO LINE and QUESTOR challenged the decision of the appellate court before this Court in G.R. No. 57814.On 31 August 1981 we issued a temporary restraining order against the Court of Appeals vis-a-vis the aforesaid decision.In connection with the criminal complaint for unfair competition, the Minister of Justice issued on 10 September 1981 a Resolution overturning the earlier dismissal of the complaint and ordered the Provincial Fiscal of Rizal to file an Information for unfair competition against Monico Sehwani.The Information was accordingly filed on 29 December 1981 with then Court of First Instance of Rizal, docketed as Crim. Case No. 45284, and raffled to Br. 21 presided over by Judge Gregorio Pineda.Sehwani pleaded not guilty to the charge.But, while he admitted to having manufactured "Spalding" basketballs and volleyballs, he nevertheless stressed that this was only for the purpose of complying with the requirement of trademark registration with the Philippine Patent Office.He cited Chapter 1, Rule 43, of the Rules of Practice on Trademark Cases,which requires that the mark applied for be used on applicant's goods for at least sixty (60) days prior to the filing of the trademark application and that the applicant must show substantial investment in the use of the mark.He also disclosed that UNIVERSAL applied for registration with the Patent Office on 20 February 1981.After the prosecution rested its case, Sehwani filed a demurrer to evidence arguing that the act of selling the manufactured goods was an essential and constitutive element of the crime of unfair competition under Art. 189 of the Revised Penal Code, and the prosecution was not able to prove that he sold the products.In its Order of 12 January 1981 the trial court granted the demurrer and dismissed the charge against Sehwani.PRO LINE and QUESTOR impugned before us in G.R. No. 63055 the dismissal of the criminal case.In our Resolution of 2 March 1983 we consolidated G.R. No. 63055 with G.R. No. 57814 earlier filed.On 20 April 1983 we dismissed the petition in G.R. No. 63055 finding that the dismissal by the trial court of Crim. Case No. 45284 was based on the merits of the case which amounted to an acquittal of Sehwani.Considering that the issue raised in G.R. No. 58714 had already been rendered moot and academic by the dismissal of Crim. Case No. 45284 and the fact that the petition in G.R. No. 63055 seeking a review of such dismissal had also been denied, the Court likewise dismissed the petition in G.R. No. 58714.The dismissal became final and executory with the entry of judgment made on 10 August 1983.Thereafter, UNIVERSAL and Sehwani filed a civil case for damages with the Regional Trial Court of Pasig[4]charging that PRO LINE and QUESTOR maliciously and without legal basis committed the following acts to their damage and prejudice:(a) procuring the issuance by the Pasig trial court of Search Warrant No. 2-81 authorizing the NBI to raid the premises of UNIVERSAL; (b) procuring an order from the same court authorizing the sealing and padlocking of UNIVERSAL's machineries and equipment resulting in the paralyzation and virtual closure of its operations; (c) securing a temporary restraining order from the Court of Appeals to prevent the implementation of the trial court's order of 28 April 1981 which authorized the lifting of the seal and padlock on the subject machineries and equipment to allow UNIVERSAL to resume operations; (d) securing a temporary restraining order from the High Tribunal against the Court of Appeals and charging the latter with grave abuse of discretion for holding that the order of 28 April 1981 was judiciously issued, thus prolonging the continued closure of UNIVERSAL's business; (e) initiating the criminal prosecution of Monico Sehwani for unfair competition under Art. 189 of the Penal Code; and, (g) appealing the order of acquittal in Crim. Case No. 45284 directly to the Supreme Court with no other purpose than to delay the proceedings of the case and prolong the wrongful invasion of UNIVERSAL's rights and interests.Defendants PRO LINE and QUESTOR denied all the allegations in the complaint and filed a counterclaim for damages based mainly on the unauthorized and illegal manufacture by UNIVERSAL of athletic balls bearing the trademark "Spalding."The trial court granted the claim of UNIVERSAL declaring that the series of acts complained of were "instituted with improper, malicious, capricious motives and without sufficient justification."It ordered PRO LINE and QUESTOR jointly and severally to pay UNIVERSAL and SehwaniP676,000.00 as actual and compensatory damages,P250,000.00 as moral damages,P250,000.00 as exemplary damages.[5]andP50,000.00 as attorney's fees.The trial court at the same time dismissed the counterclaim of PRO LINE and QUESTOR.The Court of Appeals affirmed the decision of the lower court but reduced the amount of moral damages toP150,000.00 and exemplary damages toP100,000.00.Two (2) issues are raised before us: (a) whether private respondents Sehwani and UNIVERSAL are entitled to recover damages for the alleged wrongful recourse to court proceedings by petitioners PRO LINE and QUESTOR; and, (b) whether petitioners' counterclaim should be sustained.PRO LINE and QUESTOR cannot be adjudged liable for damages for the alleged unfounded suit.The complainants were unable to prove two (2) essential elements of the crime of malicious prosecution, namely, absence of probable cause and legal malice on the part of petitioners.UNIVERSAL failed to show that the filing of Crim. Case No. 45284 was bereft of probable cause.Probable cause is the existence of such facts and circumstances as would excite the belief in a reasonable mind, acting on the facts within the knowledge of the prosecutor, that the person charged was guilty of the crime for which he was prosecuted.[6]In the case before us, then Minister of Justice Ricardo C. Puno found probable cause when he reversed the Provincial Fiscal who initially dismissed the complaint and directed him instead to file the corresponding Information for unfair competition against private respondents herein.[7]The relevant portions of the directive are quoted hereunder:The intent on the part of Universal Sports to deceive the public and to defraud a competitor by the use of the trademark "Spalding" on basketballs and volleyballs seems apparent.As President of Universal and as Vice President of the Association of Sporting Goods Manufacturers, Monico Sehwani should have known of the prior registration of the trademark "Spalding" on basketballs and volleyballs when he filed the application for registration of the same trademark on February 20, 1981, in behalf of Universal, with the Philippine Patent Office.He was even notified by the Patent Office through counsel on March 9, 1981, that "Spalding" was duly registered with said office in connection with sporting goods, implements and apparatus by A.G. Spalding & Bros., Inc. of the U.S.A.That Universal has been selling these allegedly misbranded "Spalding" balls has been controverted by the firms allegedly selling the goods.However, there is sufficient proof that Universal manufactured balls with the trademark "Spalding" as admitted by Monico himself and as shown by the goods confiscated by virtue of the search warrant.Jurisprudence abounds to the effect that either a seller or a manufacturer of imitation goods may be liable for violation of Section 29 of Rep. Act No. 166 (Alexander v. Sy Bok,97 Phil. 57).This is substantially the same rule obtaining in statutes and judicial construction since 1903 when Act No. 666 was approved (Finlay Fleming vs. Ong Tan Chuan,26 Phil. 579)xxxx[8]The existence of probable cause for unfair competition by UNIVERSAL is derivable from the facts and circumstances of the case.The affidavit of Graciano Lacanaria, a former employee of UNIVERSAL, attesting to the illegal sale and manufacture of "Spalding" balls and seized "Spalding" products and instruments from UNIVERSAL's factory was sufficientprima facieevidence to warrant the prosecution of private respondents.That a corporation other than the certified owner of the trademark is engaged in the unauthorized manufacture of products bearing the same trademark engenders a reasonable belief that a criminal offense for unfair competition is being committed.Petitioners PRO LINE and QUESTOR could not have been moved by legal malice in instituting the criminal complaint for unfair competition which led to the filing of the Information against Sehwani.Malice is an inexcusable intent to injure, oppress, vex, annoy or humiliate.We cannot conclude that petitioners were impelled solely by a desire to inflict needless and unjustified vexation and injury on UNIVERSAL's business interests.A resort to judicial processes is notper seevidence of ill will upon which a claim for damages may be based.A contrary rule would discourage peaceful recourse to the courts of justice and induce resort to methods less than legal, and perhaps even violent.[9]We are more disposed, under the circumstances, to hold that PRO LINE as the authorized agent of QUESTOR exercised sound judgment in taking the necessary legal steps to safeguard the interest of its principal with respect to the trademark in question.If the process resulted in the closure and padlocking of UNIVERSAL's factory and the cessation of its business operations, these were unavoidable consequences of petitioners' valid and lawful exercise of their right.One who makes use of his own legal right does no injury.Qui jure suo utitur nullum damnum facit.If damage results from a person's exercising his legal rights, it isdamnum absque injuria.[10]Admittedly, UNIVERSAL incurred expenses and other costs in defending itself from the accusation.But, as Chief Justice Fernando would put it, "the expenses and annoyance of litigation form part of the social burden of living in a society which seeks to attain social control through law."[11]Thus we see no cogent reason for the award of damages, exorbitant as it may seem, in favor of UNIVERSAL.To do so would be to arbitrarily impose a penalty on petitioners' right to litigate.The criminal complaint for unfair competition, including all other legal remedies incidental thereto, was initiated by petitioners in their honest belief that the charge was meritorious.For indeed it was.The law brands business practices which are unfair, unjust or deceitful not only as contrary to public policy but also as inimical to private interests.In the instant case, we find quite aberrant Sehwani's reason for the manufacture of 1,200 "Spalding" balls, i.e., the pending application for trademark registration of UNIVERSAL with the Patent Office, when viewed in the light of his admission that the application for registration with the Patent Office was filed on 20 February 1981, a good nine (9) days after the goods were confiscated by the NBI.This apparently was an afterthought but nonetheless too late a remedy.Be that as it may, what is essential for registrability is proof of actual use in commerce for at least sixty (60) days and not the capability to manufacture and distribute samples of the product to clients.Arguably, respondents' act may constitute unfair competition even if the element of selling has not been proved.To hold that the act of selling is an indispensable element of the crime of unfair competition is illogical because if the law punishes the seller of imitation goods, then with more reason should the law penalize the manufacturer.In U. S. v. Manuel,[12]the Court ruled that the test of unfair competition is whether certain goods have been intentionally clothed with an appearance which is likely to deceive the ordinary purchasers exercising ordinary care.In this case, it was observed by the Minister of Justice that the manufacture of the "Spalding" balls was obviously done to deceive would-be buyers.The projected sale would have pushed through were it not for the timely seizure of the goods made by the NBI.That there was intent to sell or distribute the product to the public cannot also be disputed given the number of goods manufactured and the nature of the machinery and other equipment installed in the factory.We nonetheless affirm the dismissal of petitioners' counterclaim for damages.A counterclaim partakes of the nature of a complaint and/or a cause of action against the plaintiffs.[13]It is in itself a distinct and independent cause of action, so that when properly stated as such, the defendant becomes, in respect to the matter stated by him, an actor, and there are two simultaneous actions pending between the same parties, where each is at the same time both a plaintiff and defendant.[14]A counterclaim stands on the same footing and is to be tested by the same rules, as if it were an independent action.[15]Petitioners' counterclaim for damages based on the illegal and unauthorized manufacture of "Spalding" balls certainly constitutes an independent cause of action which can be the subject of a separate complaint for damages against UNIVERSAL.However, this separate civil action cannot anymore be pursued as it is already barred byres judicata, the judgment in the criminal case (against Sehwani) involving both the criminal and civil aspects of the case for unfair competition.[16]To recall, petitioners PRO LINE and QUESTOR, upon whose initiative the criminal action for unfair competition against respondent UNIVERSAL was filed, did not institute a separate civil action for damages nor reserve their right to do so.Thus the civil aspect for damages was deemed instituted in the criminal case.No better manifestation of the intent of petitioners to recover damages in the criminal case can be expressed than their active participation in the prosecution of the civil aspect of the criminal case through the intervention of their private prosecutor.Obviously, such intervention could only be for the purpose of recovering damages or indemnity because the offended party is not entitled to represent the People of the Philippines in the prosecution of a public offense.[17]Section 16, Rule 110, of the Rules of Court requires that the intervention of the offended party in the criminal action can be made only if he has not waived the civil action nor expressly reserved his right to institute it separately.[18]In an acquittal on the ground that an essential element of the crime was not proved, it is fundamental that the accused cannot be held criminally nor civilly liable for the offense.Although Art. 28 of the New Civil Code[19]authorizes the filing of a civil action separate and distinct from the criminal proceedings, the right of petitioners to institute the same is not unfettered.Civil liability arising from the crime is deemed instituted and determined in the criminal proceedings where the offended party did not waive nor reserve his right to institute it separately.[20]This is why we now hold that the final judgment rendered therein constitutes a bar to the present counterclaim for damages based upon the same cause.[21]WHEREFORE, the petition is partly GRANTED.The decision of respondent Court of Appeals is MODIFIED by deleting the award in favor of private respondents UNIVERSAL and Monico Sehwani of actual, moral and exemplary damages as well as attorney's fees.The dismissal of petitioners' counterclaim is AFFIRMED.No pronouncement as to costs.SO ORDERED.Davide, Jr., (Chairman), Vitug,andKapunan, JJ.,concur.

Bellis vs BellisG.R. No. L-23678 June 6, 1967

Lessons Applicable: Divorce, Doctrine of Processual Presumption

Laws Applicable: Art. 16, 17 1039 NCC

Violet Kennedy (2ndwife)Amos G. Bellis --- Mary E. Mallen (1stwife)Legitimate Children: Legitimate Children:Edward A. Bellis Amos Bellis, Jr. George Bellis (pre-deceased) Maria Cristina BellisHenry A. Bellis Miriam Palma BellisAlexander BellisAnna Bellis Allsman

FACTS: Amos G. Bellis, a citizen of theState of Texasand of the United States. By his first wife, Mary E. Mallen, whom he divorced, he had 5 legitimate children: Edward A. Bellis, George Bellis (who pre-deceased him in infancy), Henry A. Bellis, Alexander Bellis and Anna Bellis Allsman By his second wife, Violet Kennedy, who survived him, he had 3 legitimate children: Edwin G. Bellis, Walter S. Bellis and Dorothy Bellis; and finally, he had three illegitimate children: Amos Bellis, Jr., Maria Cristina Bellis and Miriam Palma Bellis August 5, 1952: Amos G. Bellis executed a willin the Philippinesdividing his estate as follows:1.$240,000.00 to his first wife, Mary E. Mallen2.P40,000.00 each to his 3 illegitimate children, Amos Bellis, Jr., Maria Cristina Bellis, Miriam Palma Bellis3.remainder shall go to his seven surviving children by his first and second wives July 8, 1958: Amos G. Bellis died a resident of Texas, U.S.A September 15, 1958: his will was admitted to probate in the CFI of Manila on People'sBank and TrustCompany as executor of the will did as the will directed Maria Cristina Bellis and Miriam Palma Bellis filed their respective oppositions on the ground that they were deprived of their legitimes as illegitimate children Probate Court: Relying upon Art. 16 of the Civil Code, it applied the national law of thedecedent, which in this case is Texas law, which did not provide for legitimes.ISSUE: W/N Texas laws or national law of Amos should govern the intrinsic validity of the will

HELD: YES. Order of the probate court is hereby affirmed Doctrine of Processual Presumption: Theforeign law, whenever applicable, should be proved by the proponent thereof, otherwise, such law shall be presumed to be exactly the same as the law of the forum. In the absence of proof as to the conflict of law rule of Texas, it should not be presumed different from ours. Apply Philippine laws. Article 16, par. 2, and Art. 1039 of the Civil Code, render applicable the national law of thedecedent, in intestate or testamentary successions, with regard to four items: (a) the order of succession; (b) the amount of successional rights; (e) the intrinsic validity of the provisions of the will; and (d) the capacity to succeed. They provide that ART. 16.Real propertyas well as personal property is subject to the law of the country where it is situated.However, intestate and testamentary successions, both with respect to the order of succession and to the amount of successional rights and to the intrinsic validity of testamentary provisions, shall be regulated by the national law of the person whose succession is under consideration, whatever may he the nature of the property and regardless of the country wherein said property may be found. ART. 1039. Capacity to succeed is governed by the law of the nation of thedecedent. The parties admit that thedecedent, Amos G. Bellis, was a citizen of theState of Texas, U.S.A., and that under the laws of Texas, there are no forced heirs or legitimes. Accordingly, since the intrinsic validity of the provision of the will and the amount of successional rights are to be determined under Texas law, the Philippine law on legitimes cannot be applied to the testacy of Amos G. Bellis.

ALFREDO VELAYO VS SHELL COMPANY, 100 PHIL 168

FACTS:Prior to 1948, Commercial Airlines (CALI) owed P170k (abt. $79k) to Shell and CAL offered its C-54 plane as payment to Shell Company (the plane was in California) but Shell at that time declined as it thought CALI had sufficient money to pay its debt. In 1948 however, CALI was going bankrupt so it called upon an informal meeting of its creditors. In that meeting, the creditors agreed to appoint representatives to a working committee that would determine the order of preference as to how each creditor should be paid. They also agreed not to file suit against CALI but CALI did reserve that it will file insolvency proceedings should its assets be not enough to pay them up. Shell Company was represented by a certain Fitzgerald to the three man working committee. Later, the working committee convened to discuss how CALIs asset should be divided amongst the creditors but while such was pending, Fitzgerald sent a telegraph message to Shell USA advising the latter that Shell Philippines is assigning its credit to Shell USA in the amount of $79k, thereby effectively collecting almost all if not the entire indebtedness of CALI to Shell Philippines. Shell USA got wind of the fact that CALI has a C-54 plane is California and so Shell USA petitioned before a California court to have the plane be the subject of a writ of attachment which was granted.Meanwhile, the stockholders of CALI were unaware of the assignment of credit made by Shell Philippines to Shell USA and they went on to approve the sale of CALIs asset to the Philippine Airlines. In September 1948, the other creditors learned of the assignment made by Shell. This prompted these other creditors to file their own complaint of attachment against CALIs assets. CALI then filed for insolvency proceedings to protect its assets in the Philippines from being attached. Velayos appointment as CALIs assignee was approved in lieu of the insolvency proceeding. In order for him to recover the C-54 plane in California, it filed for a writ of injunction against Shell Philippines in order for the latter to restrain Shell USA from proceeding with the attachment and in the alternative that judgment be awarded in favor of CALI for damages double the amount of the C-54 plane. The C-54 plane was not recovered. Shell Company argued it is not liable for damages because there is nothing in the law which prohibits a company from assigning its credit, it being a common practice.ISSUE:Whether or not Shell is liable for damages considering that it did not violate any law.HELD: Yes. The basis of such liability, in the absence of law, is Article 21 of the Civil Code which states:Art. 21. Any person who willfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage.Thus at one stroke, the legislator, if the forgoing rule is approved (as it was approved), would vouchsafe adequate legal remedy for that untold numbers of moral wrongs which is impossible for human foresight to provide for specifically in the statutes. A moral wrong or injury, even if it does not constitute a violation of a statute law, should be compensated by damages. Moral damages (Art. 2217) may be recovered (Art. 2219). In Article 20, the liability for damages arises from a willful or negligent act contrary to law. In this article, the act is contrary to morals, good customs or public policy.

Globe Mackay vs.CA 176 SCRA 778GLOBE MACKAY CABLE AND RADIO CORP., and HERBERT C. HENDRY, petitioners vs. THE HONORABLE COURT OF APPEALS and RESTITUTO M. TOBIAS, respondents.

FACTS:Private respondent Restituto M. Tobias was employed by petitioner Globe Mackay in dual capacity as purchasing agent and administrative assistant to the engineering operations manager. In 1972, the respondent discovered fraudulent anomalies and transactions in the said corporation for which it lost several hundred thousands of pesos. The private respondent reported to his superiors including Henry, the petitioner. However, he was confronted by Hendry stating that Tobias was the number one suspect. He was ordered to take a one week forced leave. When he returned to work, Hendry called him crook and swindler, and left a scornful remark to the Filipinos. The petitioners also charged six criminal cases against the respondentfive cases of estafa and one for violating Article 290 of the RPC (Discovering Secrets through Seizure of Correspondence). The petitioner also sent a poison letter to RETELCO causing the respondent to be unemployed.

ISSUE:Whether or not the petitioners are liable for damages to the respondent.

HELD:Petitioners invoked the right of damnun absque injuria or the damage or loss which does not constitute a violation of legal right or amount to a legal wrong is not actionable. However, this is not applicable in this case. It bears repeating that even granting that petitioners might have had the right to dismiss Tobias from work, the abusive manner in which that right was exercised amounted to a legal wrong for which petitioners must be held liable.

The court awarded Tobias the following: Php 80, 000 as actual damages, Php 200, 000 as moral damages, Php 20, 0000 as exemplary damages; Php 30, 000 as attorneys fees; and, costs. Petition was denied and the decision of CA is AFFIRMED.RCPI vs. CA

Facts: 24thof January 1983 private respondent spouses sent a telegram of condolence to their cousins through the herein petioner RCPI. The telegram was in perfect resemblance as to what was intended by the spouses however, it was written on a birthday card and was sealed in on a Christmasgram envelope. The spouses contended there was a breach of contract on the part of the RCPI, they in turn filed complaint on the trial court where it rendered its decision in favor of the spouses whereas, it was appealed in the CA where also the judgment in the lower court was affirmed in toto. Thus, the RCPI came to this Court for relief contending issues that the CA erred in rendering such judgment.

Issue: Whether or not the petitioner committed a breach of contract?Whether or not the RCPI are held liable for damages?

Held: The Court agrees with the appellate court in its decision and per endorsement of the trial courts findings that the RCPI as a corporation dealing with telecommunication are engaged in public interest and therefore rests in their shoulders an obligation to serve the public with care and without negligence. The reason of shortage in their production of the appropriate envelope is of no value to merit for it is their duty to have produced such. The negligence committed is evidentially sufficient to recover damages because the spouses suffered from ridicule amongst the people who have come to have knowledge of such activity.