V. Special TortsI. Violation of Civil/Political Right (Article 32)

ABS-CBN V. CAG.R. No. 128690 January 21, 1999

FACTS:Viva, throughDel Rosario, offered ABS-CBNthrough its vice-president Charo Santos-Concio, a list of 3 film packages or 36 titlesfrom which ABS-CBN may exerciseits right of first refusal.Mrs. Concio informed Vic through a letter that they can only purchase 10 titles to be schedules on non-primetime slots because they were very adult themes which the ruling of theMTRCB advises to be aired at 9:00 p.m. On February 27, 1992,Del Rosario approached ABS-CBN's Ms. Conciowith a list consisting of 52 original movie titlesas well as 104 re-runsproposing to sell to ABS-CBN airing rightsfor P60M. Subsequently, on April 2, 1992,Del Rosario and ABS-CBNgeneral manager, Eugenio Lopez III met wherein Del Rosario allegedly agreed to grant rights for14 films for P30M. After the meeting, Del Rosario and Mr. Graciano Gozon of RBS Senior Vice-president for Financediscussed the terms andconditionsof Viva's offer to sell the 104 films, after the rejection of the same package by ABS-CBN. But Ms. Concio sent theproposaldraft of53 films forP35M which Viva's Board rejected since they will not accept anything less than P60M. Thereafter, Viva granted RBS exclusive grants for P60M.

The RTC issued TRO against RBS in showing 14 films as filed by ABS-CBN. RBS also set up a cross-claim against VIVA. The RTC ordered ABS-CBN to pay RBSP107,727premium paid by RBS to the surety which issued their bond to lift the injunction,P191,843.00 for the amount of print advertisement for "Maging Sino Ka Man" in various newspapers, P1M attorney's fees, P5M moral damages, P5M exemplary damages and costs. Cross-claim to VIVA was dismissed. ABS-CBN appealed.VIVA and Del Rosario also appealed seeking moral and exemplary damages and additional attorney's fees. The CAreduced the awards of moral damages to P2M, exemplary damages to P2M and attorney's fees to P500,000. Itdenied VIVA and Del Rosario's appeal because it was RBS and not VIVA which was actually prejudiced when the complaint was filed by ABS-CBN.

ISSUE:1. W/N RBS is entitled to damages.

HELD: 1. YES. One is entitled to compensation for actual damages only for such pecuniary loss suffered by him as he has duly proved. The indemnification shall comprehend not only the value of the loss suffered, but also that of the profits that the obligee failed to obtain.In contracts and quasi-contracts the damages which may be awarded are dependent on whether the obligor acted with good faith or otherwise, It case of good faith, the damages recoverable are those which are the natural and probable consequences of the breach of the obligation and which the parties have foreseen or could have reasonably foreseen at the time of the constitution of the obligation. If the obligor acted with fraud, bad faith, malice, or wanton attitude, he shall be responsible for all damages which may be reasonably attributed to the non-performance of the obligation.In crimes and quasi-delicts, the defendant shall be liable for all damages which are the natural and probable consequences of the act or omission complained of, whether or not such damages has been foreseen or could have reasonably been foreseen by the defendant. Actual damages may likewise be recovered for loss or impairment of earningcapacityin cases of temporary or permanent personal injury, or for injury to the plaintiff's business standing or commercial credit.The claim of RBS for actual damages did not arise from contract, quasi-contract, delict, or quasi-delict. It arose from the fact of filing of the complaint despite ABS-CBN's alleged knowledge of lack of cause of action. Needless to state the award of actual damages cannot be comprehended under the above law on actual damages. RBS could only probably take refuge under Articles 19, 20, and 21 of the Civil Code.

In this case, ABS-CBN had not yet filed the required bond; as a matter of fact, it asked for reduction of the bond and even went tothe Courtof Appeals to challenge the order on the matter. Clearly then, it was not necessary for RBS to file a counterbond. Hence, ABS-CBN cannot be held responsible for the premium RBS paid for the counterbond. Neither could ABS-CBN be liable for the print advertisements for "Maging Sino Ka Man" for lack of sufficient legal basis.

Article 2217 defines what are included in moral damages, while Article 2219 enumerates the cases where they may be recovered, Article 2220 provides that moral damages may be recovered in breaches of contract where the defendant acted fraudulently or in bad faith. RBS's claim for moral damages could possibly fall only under item (10) of Article 2219 : (10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35.

The award of moral damages cannot be granted in favor of a corporation because, being an artificial person and having existence only in legal contemplation, it has no feelings, no emotions, no senses, It cannot, therefore, experience physical suffering and mental anguish, which call be experienced only by one having a nervous system. Acorporation may recover moral damages if it "has a good reputation that is debased, resulting in social humiliation" is an obiter dictum. On this score alone the award for damages must be set aside, since RBS is a corporation.

Exemplary damagesare imposed by way of example or correction for the public good, in addition to moral, temperate, liquidated or compensatory damages.They are recoverable in criminal cases as part of thecivil liability when the crime was committed with one or more aggravating circumstancesin quasi-contracts, if the defendant acted with gross negligenceand in contracts and quasi-contracts, if the defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner. It may be reiterated that the claim of RBS against ABS-CBN is not based on contract, quasi-contract, delict, or quasi-delict, Hence, the claims for moral and exemplary damages can only be based on Articles 19, 20, and 21 of the Civil Code. There is no adequate proof that ABS-CBN was inspired by malice or bad faith. If damages result from a person'sexerciseof a right, it is damnum absque injuria.