HUMAN RELATIONS (digest)

1. ALBENSON vs. COURT OF APPEALS 1. there is an act which is legal

2. but which is contrary to morals, good custom, public order or public
FACTS:
policy
Albenson Ent. delivered mild steel plates to Guaranteed Industries Inc. A Pacific
Banking Corporation Check was paid and drawn against the account of EL 3. it is done with intent to injure
Woodworks. Check was later dishonored for the reason “Account Closed.” Company
traced source of check and later discovered that the signature belonged to one Eugenio
Baltao. Albenson made an extrajudical demand upon Baltao but latter denied that he A person who has not been paid an obligation owed to him will naturally seek ways to
issued the check or that the signature was his. Company filed a complaint against compel the debtor to pay him. It was normal for petitioners to find means to make the
Baltao for violation of BP 22. It was later discovered that private respondent had son: issuer of the check pay the amount thereof. In the absence of a wrongful act or
Eugene Baltao III, who manages the business establishment, EL Woodworks. No omission or of fraud or bad faith, moral damages cannot be awarded and that the
effort from the father to inform Albenson of such information. Rather the father filed adverse result of an action does not per se make the action wrongful and subject the
complaint for damages against Albenson. actor to the payment of damages, for the law could not have meant to impose a penalty
on the right to litigate.
ISSUE:
Whether there is indeed cause for the damages against Albenson Enterprise. WHEREFORE, the petition is GRANTED and the decision of the Court of Appeals in
C.A. G.R. C.V. No. 14948 dated May 13, 1989, is hereby REVERSED and SET
ASIDE. Costs against respondent Baltao.
RULING:
Based on Art 19, 20, 21 of the civil code, petitioners didn’t have the intent to cause
damage to the respondent or enrich themselves but just to collect what was due to
them. There was no abuse of right on the part of Albenson on accusing Baltao of BP
22.

Albenson Corp. honestly believed that it was private respondent who issued check
based on ff inquiries:
 SEC records showed that president to Guaranteed was Eugene Baltao
 Bank said signature belonged to EB
 EB did not do his part in clarifying that there were in fact 3 Ebs, Jr.,
Sr. and the III.

There was no malicious prosecution on the part of Albenson: there must be proof that:
 the prosecution was prompted by a sinister design to vex and humiliate
a person and
 that damages was initiated deliberately by defendant knowing that his
charges were false and groundless

Elements of abuse of right under Article 19:

1. there is a legal right or duty
2. exercised in bad faith
3. for the sole intent of prejudicing or injuring another

Elements under Article 21: contra bonus mores:

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HUMAN RELATIONS (digest)
2. ALFREDO M. VELAYO v. SHELL COMPANY OF PHILIPPINE ISLANDS, GR
No. L-7817, 1956-10-31
Facts:
As of August, 1948, the books, of the Defendant showed a balance of P170,162.08 in
its favor for goods it sold and delivered to CALI.
As matter of fact, according to Mr. Fitzgerald, CALFs Douglas C-54 plane, then in
California, was offered to him by Mr. Alfonso Sycip, CALFs President of the Board
of Directors, in partial settlement of their accounts, which offer was, however, declined
by Mr. Crawford, probably... because upon inquiries made by Mr. Fitzgerald sometime
before
On August 6, 1948, the management of CALI informally convened its principal
creditors (excepting only the insignificant small claims) who were invited to a
luncheon that was held between 12:00 and 2:00 o'clock in the afternoon of that day in
the Trade and Commerce Building at
123 Juan Luna St., Manila, and informed them that CALI was in a state of insolvency
and had to stop operation.
To this working committee, Mr. Desmond Fitzgerald, Credit Manager, of the
Defendant, Atty. Agcaoili of the National Airports Corporation and Atty. Alexander
Sycip (Exhs. Ill and PPP, par. 5 P. Agcaoili's memorandum dated August 7, 1948, to
the General Manager of the National
Airports (Corp.) were appointed. After the creditors present knew the balance sheet
and heard the explanations of the officers of the CALI, it was their unanimous opinion
that it would be advantageous not to present suits against this corporation but to strive
for a fair... pro-rata division of its assets (Exh. MM, par 6, Memo of meeting), although
the management of the CALI announced that in case of non-agreement of the creditors
on a pro-rata division of the assets, it would file insolvency proceedings (p. 70, t.s.n.,
October 22, 1951).
Mr. Fitzgerald did not decline the nomination to form part of said working committee
and on August 9, 1948, the 3 members thereof discussed methods of achieving the
objectives of the committee as decided at the creditors' meeting, which were to
preserve the assets of the CALI... and to study the way of making a fair division of all
the assets among the creditors.
on that very day of the meeting of the working committee, August 9, 1948, which Mr.
Fitzgerald attended, Defendant effected a telegraphic transfer of its credit against the
CALI to the American corporation Shell
Oil Company, ' Inc., assigning its credit, amounting to $79,440.00, which was
subsequently followed by a deed of assignment of credit dated August 10, 1948, the
credit amounting this time to the sum of $85,081.29
Unaware of Defendants assignments of credit and attachment suit, the stockholders of
CALI resolved in a special meeting of August 12, 1948, to approve the memorandum
agreement of sale to the Philippine Air Lines, Inc. and noted "that the Board had been
trying to reach an... agreement with the creditors of the corporation to prevent
insolvency proceedings, but so far no definite agreement had been reached" (Exh. 00
Minutes of August 12, 1948, stockholders' meeting).
By the first week of September, 1948, the National Airports Corporation learned of
Defendant's action in the United States and hastened to file its own complaint with
attachment against the CALI in the Court of First Instance of Manila (Exhs. KKK,
LLL, and MMM).
On this... date, an order of insolvency was issued by the court (Exh. JJ) which
necessarily stayed the National Airports Corporation's action against the CALI and
dissolved its attachment (Exh. NNN), thus compelling the National Airports
Corporation to file its claims with the insolvency... court (Exh. SS).
After properly qualifying as Assignee, Alfredo M. Velayo instituted this case (No.
6966 of the Court of First Instance of Manila) on December 17,1948, against the Shell
Company of P. I., Ltd., for the purpose of securing from the Court a writ of injunction...
restraining Defendant, its agents, servants, attorneys and solicitors from prosecuting
in and for the County of San Bernardino in the Superior Court of the State of
California, U.S.A. the aforementioned Civil Case No. 62576 against the in solvent
Commercial Air Lines, Inc.,... begun by it in the name of the American corporation
Shell Oil Company, Inc., and as an alternative remedy, in case the purported
assignment of Defendant's alleged credit to the American corporation Shell Oil
Company, Inc., and the attachment issued against CALI in the said
Superior Court of California shall have the effect of defeating the procurement by
plaintiff as Assignee in insolvency of the above-mentioned airplane, which is the
property of the insolvent CALI, situated in the Ontario International Airport, within
the County of San
Bernardino, State of California, U.S.A., that judgment for damages in double the value
of the airplane be awarded in favor of plaintiff against Defendant, with costs.
Plaintiff haying failed to restrain the progress of the attachment, suit in the United
States by... denial of his application for a writ of preliminary injunction and the
consequences on execution of the C-54 plane in the County of San Bernardino, State
of California, U. S. A., he confines his action to the recovery of damages against the
Defendant.
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HUMAN RELATIONS (digest)
In its answer, Defendant, besides denying certain averments of the complaint alleged,
among other reasons, that the assignment of its credit in favor of the Shell Oil
Company, Inc, in the United States was for a valuable consideration and made in
accordance with the established commercial practices, there being no law prohibiting
a creditor from assigning his credit to another; that it had no interest whatsoever in
Civil Case No. 62576... instituted in the Superior Court in the State of California by
the Shell Oil Company, Inc., which is a separate and distinct corporation organized
and existing in the State of Virginia and doing business in the State of California, U.
S. A., the Defendant having as its... stockholders the Shell Petroleum Company of
London and other persons residing in that City, while the Shell Oil Company Inc., of
the United State has its principal stockholders the Shell Union Oil Company of the
U.S. and" presumably countless American investors inasmuch as its... shares of stock
are being traded daily in the New York stock market; that Mr. Fitzgerald, Defendant's
Credit Manager, was merely invited to a luncheon-meeting at the Trade and
Commerce Building in the City of Manila on August 6, 1948, without knowing the
purpose for... which it was called; and that Mr. Fitzgerald could not have officially
represented the Defendant at that time because such authority resides on Mr. Stephen
Crawfurd. Defendant, therefore, prays that the complaint be dismissed with costs
against the plaintiff.
Issue/s:
Whether or not by reason of said betrayal of confidence and trust, Defendant may be
made under the law to answer for the damages prayed by the plaintiff; and if so, what
should be the amount of such damages.
Ruling:
In addition to the aforementioned Section 37, Chapter 2 of the PRELIMINARY
TITLE of the Civil Code, dealing on Human
Relations, provides the following:
"ART 19. Any person must, in the exercise of his rights and in the performances of his
duties, act with justice, give everyone his due and observe honesty and good faith".
It may be said that this article only contains a mere declarations of principles and while
such statement may be is essentially correct, yet We find that such declaration is
implemented by Article 21 and sequence of the same Chapter which prescribe the
following:
"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.
"Another rule is expressed in Article 24 which compels the return of a thing acquired
'without just or legal grounds'. This provision embodies the doctrine that no person
should unjustly enrich himself at the expense of another, which has been one of the
mainstays of... every legal system for centuries. It is most needful that this ancient
principles be clearly and specifically consecrated in the proposed Civil Code to the
end that in cases not foreseen by the lawmaker, no one may unjustly benefit himself
to the prejudice of another. The
German Civil Code has a similar provision (art. 812)."
From the Civil Code Annonated by Ambrosio Padilla, Vol. I, p. 51, 1956 edition, We
also copy the following:
"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"
Now, if Article 23 of- the Civil Code goes as far as to provide that:
"Even if an act or event causing damage to another's property was not due to the fault
or negligence of the defendant, the latter shall be liable for indemnity if through the
act or event he was benefited:"... with mere much more reason the Defendant should
be liable for indemnity for acts it committed in bad faith and with betrayal of
confidence.
It may be argued that the aforequoted provisions of the Civil Code only came into
effect on August 80, 1950, and that they cannot be applicable to acts that took place in
1948, prior to its effectivety. But Article 2252 of the Civil Code, though providing...
that:
''Changes made and new provisions and rules laid down by this Code which may be
prejudice or impair vested or acquired rights in accordance with the old legislation,
shall have no retroactive effect.implies that when the new provisions of the Code does
nor prejudice or impair vested or acquired rights in accordance with the old legislation
and it cannot be alleged that in the case at bar Defendant had any vested or acquired
right to betray the confidence of the... insolvent CALI or of its creditors said new
provisions, like those on Human Relations, can be given retroactive effect.
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HUMAN RELATIONS (digest)

In accordance with these quoted provisions of the Civil Code, We hold Defendant
liable to pay to the plaintiff, for the benefit of the insolvent CALI and its creditors, as
compensatory damages a sum equivalent to the value of the plane at the time
aforementioned and another... equal sum as exemplary damages.

Wherefore, and on the strength of the foregoing considerations, the decision appealed
from is reversed and Defendant-Appellee, Shell Company of the Philippine Islands,
Ltd., is hereby sentenced to pay to Plaintiff-Appellant, as Assignee of the insolvent
CALI, damages in a sum... double the amount of the value of the insolvent's airplane
C-54 at the time Dedenfant's credit against the CALI was assigned to its sister
corporation in the United States, which value shall be determined in the corresponding
incident in the lower court after this decision... becomes final. Costs are taxed against
defendant-appellee.

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HUMAN RELATIONS (digest)

3. DAVID LLORENTE vs. SANDIGANBAYAN (under Article 19 of the Civil Code) and as a public officer, he was liable
for damages suffered by the aggrieved party (under Article 27). The
[G.R. No. 85464. October 3, 1991.]
petitioner claims that the Sandiganbayan's Decision is erroneous even if
FACTS: the Sandiganbayan acquitted him therein, because he was never in bad
faith as indeed found by the Sandiganbayan.
Atty. Llorente was employed in the PCA a public corporation. When he
was the Deputy Administrator for Administrative Services, Finance ISSUE:
Services and Legal Affairs Departments , Mr. Curio, Mrs. Perez, Mr.
Whether or not the petitioner may be held civilly liable in spite of his acquittal.
Azucena and Mrs. Javier applied for PCA clearances in support of their
gratuity benefits as they had resigned as a result of a massive HELD:
reorganization. Atty. Llorente was among the approving officers with
respect to clearances of rank-and-file employees, and as such he signed Petitioner is civilly liable having acted in bad faith in violation of Article
the clearances of Mrs. Perez, Mr. Azucena and Mrs. Javier despite 19 of the Civil Code.
pending accountabilities but did not sign the clearance of Mr. Curio who
The acts of the petitioner were legal (that is, pursuant to procedures),
was similarly circumstanced with the afore-named three employees.
yet it does not follow that his acts were done in good faith. For emphasis,
The reason given by Atty. Llorente was that when the clearance was
he had no valid reason to "go legal" all of a sudden with respect to Mr.
presented to him, he was already aware of the affidavit dated November
Curio, since he had cleared three employees who, as the Sandiganbayan
26, 1981, in which Mr. Curio assumed to pay any residual liability for
found, were all similarly circumstanced in that they all had pending
the disallowed cash advances, which at the time, December 8, 1981,
obligations when, their clearances were filed for consideration,
stood at P92,000.00. Moreover, Mr. Curio had other pending obligations
warranting similar official action. Thus, the petitioner had unjustly
noted on his clearance. Mr. Curio appealed the non-issuance of his
discriminated against Mr. Curio. It is no defense that the petitioner was
clearance to higher officers who however advised him to wait for the
motivated by no ill-will (a grudge, according to the Sandiganbayan),
resolution of the Tanodbayan with which he had filed this case initially
since the facts speak for themselves. It is no defense either that he was,
against Atty. Llorente. While Mr. Curio eventually was able to secure a
after all, complying merely with legal procedures since, as we indicated,
clearance in 1986, he had been deprived of gainful employment between
he was not as strict with respect to the three retiring other employees.
December 1981 and December 1986 because he could not present his
There can be no other logical conclusion that he was acting unfairly, no
PCA clearance. Thus, on December 10, 1986, an Information for
more, no less, to Mr. Curio. It is the essence of Article 19 of the Civil
violation of Section 3(c) of the Anti-Graft and Corrupt Practices Act
Code, under which the petitioner was made to pay damages, together
was filed against Atty Llorente. The Sandiganbayan acquitted the
with Article 27, that the performance of duty be done with justice and
petitioner in the absence of any evidence that he acted in bad faith,
good faith. The Court finds the award of P90,000.00 to be justified by
however it took the petitioner to task civilly, and ordered him to pay
Article 2202 of the Civil Code, which holds the defendant liable for all
"compensatory damages" in the sum of P90,000.00. According to the
"natural and probable" damages.
Sandiganbayan, the petitioner was guilty nonetheless of abuse of right
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HUMAN RELATIONS (digest)

4.