8. ABS-CBN vs.

CA, 301 SCRA 589

Facts:
In 1992, ABS-CBN Broadcasting Corporation, through its Vice-President Charo
Santos-Concio, requested Viva Production, Inc. to allow ABS-CBN to air at least 14
films produced by Viva. Pursuant to this request, a meeting was held between Vivas
representative (Vicente Del Rosario) and ABS-CBNs Eugenio Lopez (General
Manager) and Santos-Concio was held on April 2, 1992. During the meeting Del
Rosario proposed a film package which will allow ABS-CBN to air 104 Viva films for
P60 million. Later, Santos-Concio, in a letter to Del Rosario, proposed a
counterproposal of 53 films (including the 14 films initially requested) for P35
million. Del Rosario presented the counter offer to Vivas Board of Directors but the
Board rejected the counter offer. Several negotiations were subsequently made but
on April 29, 1992, Viva made an agreement with Republic Broadcasting Corporation
(referred to as RBS or GMA 7) which gave exclusive rights to RBS to air 104 Viva
films including the 14 films initially requested by ABS-CBN.
ABS-CBN now filed a complaint for specific performance against Viva as it
alleged that there is already a perfected contract between Viva and ABS-CBN in the
April 2, 1992 meeting. Lopez testified that Del Rosario agreed to the
counterproposal and he (Lopez) even put the agreement in a napkin which was
signed and given to Del Rosario. ABS-CBN also filed an injunction against RBS to
enjoin the latter from airing the films. The injunction was granted. RBS now filed a
countersuit with a prayer for moral damages as it claimed that its reputation was
debased when they failed to air the shows that they promised to their viewers. RBS
relied on the ruling in People vs. Manero and Mambulao Lumber vs. PNB which
states that a corporation may recover moral damages if it has a good reputation
that is debased, resulting in social humiliation. The trial court ruled in favor of Viva
and RBS. The Court of Appeals affirmed the trial court.

Issues:
1.
Whether or not a contract was perfected in the April 2, 1992 meeting
between the representatives of the two corporations
2.
Whether or not a corporation, like RBS, is entitled to an award of moral
damages upon grounds of debased reputation

Ruling:

1. No. There is no proof that a contract was perfected in the said meeting.
Lopez testimony about the contract being written in a napkin is not corroborated
because the napkin was never produced in court. Further, there is no meeting of the
minds because Del Rosarios offer was of 104 films for P60 million was not accepted.
And that the alleged counter-offer made by Lopez on the same day was not also
accepted because theres no proof of such. The counter offer can only be deemed to
have been made days after the April 2 meeting when Santos-Concio sent a letter to
Del Rosario containing the counter-offer. Regardless, there was no showing that Del
Rosario accepted. But even if he did accept, such acceptance will not bloom into a
perfected contract because Del Rosario has no authority to do so.
As a rule, corporate powers, such as the power; to enter into contracts; are
exercised by the Board of Directors. But this power may be delegated to a corporate
committee, a corporate officer or corporate manager. Such a delegation must be
clear and specific. In the case at bar, there was no such delegation to Del Rosario.
The fact that he has to present the counteroffer to the Board of Directors of Viva is
proof that the contract must be accepted first by the Vivas Board. Hence, even if
Del Rosario accepted the counter-offer, it did not result to a contract because it will
not bind Viva sans authorization.
2. No. 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. No moral damages can be awarded to a juridical
person. The statement in the case of People vs Manero and Mambulao Lumber vs
PNB is a mere obiter dictum hence it is not binding as jurisprudence.