Human Relations (91)

Arco Pulp and Paper Co., Inc., GR206806, June 25, 2014
Case Law/Principle:
Article 19 governs the rule on Human relations and provides for the degree of care to observed by everyone in the performance
of their duties/obligations and exercise of their rights,

However, Art. 19 on itself could not be a basis for an actionable tort, it must be accompanied by either Art. 20 (willful or
negligent violation of law) or Art 21 (willful violation of morals, good customs, policy)

Facts:
Dan Lim was engaged in the business of supplying scrap papers, cartons and other raw materials
Quality paper and Arco pulp entered into an agreement whereby Quality paper would deliver scrap papers and Arco Pulp would
pay the value of such scrap or deliver a finished products in equivalent to the value of the scrap papers,.

Arco pulp issued a post dated to which they assured would not bounce, subsequently it was dishonored for being drawn against
a closed account

On the same day, Arco Pulp entered into an Agreement with a certain Eric SY to provide for raw materials, where Arco Pulp
bound themselves to deliver to the Megapack Container Corporation their finished products, accdg to the memorandum, the
raw materials would be provided for by Quality Paper

Dan T Lim sent a letter to Arco Pulp demanding payment but to no avail, thus he filed for a complaint for collection of sum of
money

Trial court ruled in favor of Arco, holding that when Arco and Eric Sy entered into an agreement, novation took place, which
extinguished Arco Pulps obligation to Quality Paper or Dan T. Lim

CA reversed

Issue:
w/n there was a proper novation

Ruling:
Court has held that no, there was no proper novation, Arco pulp had an alternative obligation as a debtor, either pay Dante Lim
of the value of the scrap papers, or deliver finished products of the same value. Verily, Arco pulp issued a post-dated check,
which bounced, thereby depriving Dante which was due him, and the option of Arco pulp to deliver finished products of the
same value was already given to Eric Sy, thereby leaving only the payment of the value of the scrap papers.

For novation to take effect, it must be in unequivocal terms, and that the old and new obligation in every point is incompatible
with each other (here the obligation of Arco pulp to Dante and Eric Sy)

Thus novation comes from either Expromision, initiative does not come the debtor as it could be done even without the
consent of the debtor,,the third persons assumption of the obligation, while in Delegacion , initiative comes from the debtor,
as the debtor offers, and the creditor accepts, a third person who consents to the substitution and assumes the obligation

It must be in unequivocal terms, meaning it cannot be presumed, thus If the memorandum of agreement was intended to
novate the original agreement between the parties, respondent must have first agreed to the substitution of Eric Sy as his new
debtor. The memorandum of agreement must also state in clear and unequivocal terms that it has replaced the original
obligation of petitioner Arco Pulp and Paper to respondent, and that the obligations of Arco Pulp to new creditor.

Since there was no novation, the obligation of Arco Pulp to his creditor Dante Lim is still valid and subsisting.

Under Article 2220 of the Civil Code, moral damages may be awarded in case of breach of contract where the breach is due to
fraud or bad faith

Moral damages are not recoverable simply because a contract has been breached. They are recoverable only if the party from
whom it is claimed acted fraudulently or in bad faith or in wanton disregard of his contractual obligations. The breach must be
wanton, reckless, malicious or in bad faith, and oppressive or abusive

Requisites for Moral Damages

(1)first, there must be an injury, whether physical, mental or psychological, clearly sustained by the claimant;
(2) second, there must be culpable act or omission factually established;
(3) third, the wrongful act or omission of the defendant is the proximate cause of the injury sustained by the claimant; and
(4) fourth, the award of damages is predicated on any of the cases stated in Article 2219 of the Civil Code

Article 2219. Moral damages may be recovered in the following and analogous cases: not exclusive list
(1) A criminal offense resulting in physical injuries;
(2) Quasi-delicts causing physical injuries;
(3) Seduction, abduction, rape, or other lascivious acts;
(4) Adultery or concubinage;
(5) Illegal or arbitrary detention or arrest;
(6) Illegal search;
(7) Libel, slander or any other form of defamation;
(8) Malicious prosecution;
(9) Acts mentioned in Article 309;
(10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35.

However, breaches with bad faith are not included in the enumeration, as such is penalized under Art. 19 of the Civil Code
which provides that:
Every person in the performance of his duty or exercise of his right, act with justice, give everyone his due, and observe honesty
and good faith.

Article 19 is the general rule which governs Human Relations, but by itself is not the basis of an actionable tort, as it merely
prescribes for the degree of care required so that an actionable tort may rise when it is alleged together with either Article 20
(punishes acts which are done willfully or negligently contrary to law), and Article 21 (punishes acts which are done willfully in
violation of morals, good customs, policy, and order)

To recover moral damages in an action for breach of contract, the breach must be palpably wanton, reckless and malicious, in
bad faith, oppressive, or abusive. Hence, the person claiming bad faith must prove its existence by clear and convincing
evidence for the law always presumes good faith.

Here, When petitioner Arco Pulp and Paper issued a check in partial payment of its obligation to respondent, it was presumably
with the knowledge that it was being drawn against a closed account. Worse, it attempted to shift their obligations to a third
person without the consent of respondent. It clearly showed a dishonest purpose or conscious doing of a wrong, thus, being
wanton and malicious, moral damages may therefore be awarded.

Requisites for Exemplary Damages:

The requisites for the award of exemplary damages are as follows:
(1) they may be imposed by way of example in addition to compensatory damages, and only after the claimant's right to them
has been established;
(2) that they cannot be recovered as a matter of right, their determination depending upon the amount of compensatory
damages that may be awarded to the claimant; and
(3) the act must be accompanied by bad faith or done in a wanton, fraudulent, oppressive or malevolent manner. 51

1. Abuse of Rights (92 to 95)

Globe Mackay v. CA, GR 81262, August 25, 1989
Case Law/Principle:
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 the 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

While sound principles of justice and public policy dictate that persons shall have free resort to the courts for redress of wrongs
and vindication of their rights, the right to institute criminal prosecutions cannot be exercised maliciously and in bad faith.
Facts:
Tobias was employed by Globe, as a purchasing agent (nagbebenta) and admin assistant, Globe was able to discover several
fictitious purchases which caused it thousands of pesos

Accdg to Tobias, it was he who found the anomalous transactions and reported such to his superior

Petitioner Hendry confronted him stating that he was the number one suspect, and order him to take a forced leave for a week,
leaving his drawers and other files open

Etong si Hendry tinawag na agad si Tobias na swindler and crook, up to the point na tobias even had to take a lie detector test
(which he found innocent) and be subjected to a private investigator (which found him guilty but also contended to be
subjected to further investigation)

Petitioner Hendry issued a memoramdum suspending Tobias from work, however from the investigations from the police his
signatures handwritings and initials were not those of Tobias, and in fact the lie detector test found him to be not lying.

Despite such records, the petitioners herein filed an estafa case against Tobias, amounting to 6 complaints in all, to which were
all dismissed by the fiscal, four of which was appealed by the petitioners to the Secretary of Justice who however affirmed the
dismissal.

In the meantime, Tobias received termination of employment, hence he filed an illegal dismissal against the Petitioner, which
later on they came to an amicable settlement.

Unemployed, Tobias sought to seek employment with republic Telephone Company (RETELCO), and this douchebag Globe
Mackay, wrote a letter to retelco even without being asked, stating that Tobias was terminated due to dishonesty.

Tobia filed a civil case for damages anchored on alleged unlawful, malicious, oppressive, and abusive acts of petitioners, the
lower court found in favor of tobias, so as the CA, hence the appeal

Petitioners contend that they could not be made liable for damages in the lawful exercise of their right to dismiss private
respondent.
On the other hand, private respondent contends that because of petitioners' abusive manner in dismissing him as well as for
the inhuman treatment he got from them, the Petitioners must indemnify him for the damage that he had suffered.

Issue:
w/n the petitioners herein shall be held liable to Tobias.

Ruling:
Yes, the law recognizes a primordial limitation on all rights, that in their exercise the norms of human conduct 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 the 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.

Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his
due, and observe honesty and good faith.

Yes, the court allows the exercise of the company to resolve and uncover the truth, such that Tobias was forced to take a leave
for one week leaving his drawers open for inspection, such should have been enough, but when it has exceeded or that the
high-handed treatment was duly uncalled for, to the extend of calling him a swindler or a crook, as such statement was without
basis

The imputation of guilt without basis and the pattern of harassment during the investigations of Tobias transgress the
standards of human conduct set forth in Article 19 of the Civil Code.
Abusive or transgressions of human conduct or beyond the norms provided under art 19 for perf or exr:
1. branding/calling of swindler or crook despite absence of proof of such
2. illegally dismissed
 3. Hendry would tell Tobias to just admit otherwise they would file hundreds of cases which would land him in jail
4. You Filipinos cannot be trusted
5. Written Letter to Retelco, stating Tobias was dismissed due to dishonesty, even without basis/not proven

Further. there was even an instance where Hendry would tell Tobias to just admit otherwise they would file hundreds of cases
which would land him in jail, Hendry added that, "You Filipinos cannot be trusted." The threat unmasked petitioner's bad faith
in the various actions taken against Tobias. On the other hand, the scornful remark about Filipinos as well as Hendry's earlier
statements about Tobias being a "crook" and "swindler" are clear violations of 'Tobias' personal dignity.

Furthermore, the written letter of Globe Mackay to RETELCO, absent of any request for such, stating that Tobias was dismissed
due to dishonesty, is just plain abuse of the rights and in violation of the dignity of the person

Finally, While sound principles of justice and public policy dictate that persons shall have free resort to the courts for redress of
wrongs and vindication of their rights [Buenaventura v. Sto. Domingo, 103 Phil. 239 (1958)], the right to institute criminal
prosecutions can not be exercised maliciously and in bad faith. The right to file criminal complaints should not be used as a
weapon to force an alleged debtor to pay an indebtedness. To do so would be a clear perversion of the function of the criminal
processes and of the courts of justice.

How to determine malicious prosecution:

There must be proof that the prosecution was done to vex or humiliate a person

The court has held that Hendry indeed was motivated by malicious intent on its prosecution against tobias, sabi nila buti nga
daw 6 lang ung kinaso nila, when they could have filed 100 cases due to number of anomalous cases, when the court found that
they could indeed file 100 more cases just to threaten Tobias into admitting, thus motivated nga with malicious intent

Moreover, the damage incurred by Tobias was not only in connection with the abusive manner in which he was
dismissed(globe) but was also the result of several other quasi-delictual acts committed by petitioners. (retelco)

Albenson v. CA, GR 88694, January 11, 1993

Case Law/Principle:

Facts:

Issue:

Ruling:

UE v. Jader, GR 132344, February 17, 2000

Case Law/Principle:

Facts:

Issue:

Ruling:
Sesbreno v. CA, GR 160689, March 26, 2014
Case Law/Principle:

Facts:

Issue:

Ruling:

2. Illegal Acts (96)

Comsavings v. Spouses Capistrano, GR 170942, August 28, 2013
Case Law/Principle:

Facts:

Issue:

Ruling:

3. Acts Contra Bonos Mores (97 to 103)

Wassmer v. Velez, GR L-20089, December 26, 1964
Case Law/Principle:

Facts:

Issue:

Ruling:

Tanjanco v. CA, GR L- 18630, December 17, 1966

Case Law/Principle:

Facts:

Issue:
Ruling:

Pe v. Pe, GR L-17396, May 30, 1962

Case Law/Principle:

Facts:

Issue:

Ruling:

Carpio v. Valmonte, GR 151866, September 9, 2004

Case Law/Principle:

Facts:

Issue:

Ruling:

Drilon v. CA, GR 107019, March 20, 1997

Case Law/Principle:

Facts:

Issue:

Ruling:

Magbanua v. Junsay, GR 132659, February 12, 2007

Case Law/Principle:

Facts:
Issue:

Ruling:

Quisaba v. Sta. Ines, GR L-38000, August 30, 1974

Case Law/Principle:

Facts:

Issue:

Ruling:

4. Violation of Human Dignity (104 to 106)

Spouses Guanio v. Makati Shangri-La, GR 190601, February 7, 2011
Case Law/Principle:

Facts:

Issue:

Ruling:

Gregorio v. CA, GR 179799, September 11, 2009

Case Law/Principle:

Facts:

Issue:

Ruling:

Spouses Hing v. Chiacuy, GR 179736, June 26, 2013

Case Law/Principle:
Facts:

Issue:

Ruling:

5. Dereliction of Duty
Define

6. Unfair Competition (107)

Willaware Products Corp v. Jesichris Manufacturing Corp., GR 195549, September 3, 2014
Case Law/Principle:

Facts:

Issue:

Ruling: