TOCOMS PHILIPPINES, INC. VS PHILIPS ELECTRONICS AND LIGHTNING, INC.

GR NO. 214046, FEBRUARY 5, 2020

REYES, A., JR., J.

FACTS:

Philips Singapore, a foreign corporation, and its agent in the Philippines, PELI,
appointed Tocoms as the distributor of Philips Domestic Appliance in the Philippines.
The Distribution Agreement was regularly renewed on a yearly basis from 2001 to
2008. Tocoms had successfully introduced and established Philips Domestic
Appliance in the market, but before the end of 2012, PELI informed Tocoms that the
agreement would not be renewed, giving no sufficient notice.

Tocoms discovered that PELI had been secretly selling the products to
Fabriano, a new distributor, at a lower price, causing prejudice to Tocoms. Tocoms
also alleged that PELI had given unreasonable demands to buy-back its inventory,
which would result in losses for Tocoms. Tocoms sent a letter of demand to PELI,
but it was refused. Tocoms then sought actual and exemplary damages, attorney's
fees, and a temporary restraining order to prevent the change in distributorship and
allow the sale of its remaining inventory.

PELI filed a Motion to Dismiss the case, alleging lack of jurisdiction, invalid
service summons, improper impleading, improper venue, and failure to state a
cause of action. The trial court denied the motion, but PELI's Motion for Partial
Reconsideration was also denied. The Court of Appeals (CA) granted PELI's Petition
for Certiorari, finding that the trial court committed grave abuse of discretion in
denying the motion to dismiss. The CA held that Tocoms' complaint failed to state a
cause of action as the Distribution Agreement was non-exclusive and had expired.
Tocoms then filed a Petition for Certiorari before the Supreme Court.

ISSUE:

Whether or not Tocoms has a valid cause of action against PELI?

RULING:

Yes, Tocoms has a valid cause of action against PELI. The Supreme Court
explained that a cause of action has three (3) elements: a legal right accruing to the
plaintiff, a duty on the defendant’s part to respect such right and an act or omission
by the defendant that violated the right or constitutes a breach of duty. Tocoms
based its cause of action on Articles 19, 20, and 21 of the Civil Code, which pertain
contrary to morals, good customs, or public policy. The acts done by PELI
constitutes bad faith in the exercise of its rights under the Distribution Agreement,
in violation of Article 19 and as punished by Article 21. The Court determines that
Tocoms may validly be awarded damages based on these allegations. However,
since Philips has not had the opportunity to prove that its actions were made
without malice and bad faith, the case is reinstated for further proceedings.

WHEREFORE, the court grants the petition, reverses the decision of the Court
of Appeals, and reinstates the case before the trial court for further proceedings.

ISMAEL G. LOMARDA AND CRISPINA RASO, PETITIONERS vs ENGR. ELMER

T. FUDALAN, RESPONDENT
G.R. NO. 246012, JUNE 17, 2020
 PERLAS-BERNABE, J.

FACTS:

Engr. Elmer T. Fudalan applied for electrical service from BOHECO I Electric
Cooperative, Inc. to illuminate his farmhouse in Cambanac, Baclayon, Bohol. His
wife, Alma Fudalan, attended a pre-membership seminar, paid a membership fee,
and was advised to employ an authorized electrician from BOHECO I. On October 7,
2006, he hired Sabino Albelda Sr., a BOHECO I authorized electrician, who informed
him that a certification from Crispina Raso, the Barangay Power Association (BAPA)
Chairperson, was required for the electrical connection.
Despite efforts to obtain the certification, Raso was unavailable. The
respondent consented to tapping his electrical line to BAPA's line upon Albelda's
assurance that he would not be charged with pilferage of electricity. However, Raso
refused to issue the certification and reported the matter to BOHECO I for
disconnection. The respondent and his wife complained to BOHECO I, and were
attended by Ismael G. Lomarda, who promised an ocular inspection. Raso continued
to withhold the certification, and later claimed that Lomarda prevented her from
issuing it due to a pending complaint against the respondent.
On November 6, 2006, Lomarda demanded P1,750.00 or a promissory note
for the certification, which the respondent refused. Lomarda then publicly accused
the respondent of illegal tapping and ordered the disconnection of his electricity.
The respondent filed a complaint for damages, alleging that petitioners conspired to
delay his application by withholding the certification, falsely accusing him of
premature tapping, and demanding excessive payment. The Regional Trial Court
(RTC) of Tagbilaran City, Bohol, Branch 49, found petitioners liable for damages and
ordered them to pay various damages and fees. The Court of Appeals (CA) affirmed
the RTC's decision, and petitioners appealed to the Supreme Court.
ISSUE:
Whether or not petitioners are liable for abuse of rights under Art. 19, in
relation to Art. 21 of the New Civil Code?
RULING:
Yes, the petitioners are liable for abuse of rights under Art. 19, in relation to
Art. 21 of the New Civil Code. Under the law there are certain standards set which
one must observe not only in the exercise of one’s rights but also in the
performance of one’s duties. In this regard, case law states that a right though by
itself legal because it is recognized or granted by law as such may nevertheless
become the source of some illegality. In this case, the conduct of Lomarda and Raso
was contrary to morals and good customs and was done with the intent to injure the
respondent. Wherefore, petitioners are jointly and severally liable for actual, moral,
and exemplary damages and attorney’s fees and litigation expenses in favor of
Fudalan.

Sea Commercial Company, Inc. vs. Court of Appeals

G.R. No. 122823, Nov 25, 1999
FACTS:
On September 20, 1966, Sea Commercial Company, Inc. (SEACOM) and
Jamandre Industries, Inc. (JII) entered into a dealership agreement, initially
appointing JII as SEACOM's exclusive dealer in Iloilo, which was later amended to
include Capiz on a non-exclusive basis. SEACOM subsequently filed a case in the
Regional Trial Court of Manila to recover PHP 18,843.85 for unpaid deliveries, while
JII denied the obligation and counterclaimed for damages amounting to PHP
85,415.61, alleging that SEACOM directly sold 21 units of Mitsubishi power tillers to
a prospective buyer, Farm System Development Corporation (FSDC), thus harming
JII's business. The trial court ruled in favor of SEACOM for the unpaid balance but
also granted JII’s counterclaim for unrealized profits, moral and exemplary
damages, and attorney's fees. The Court of Appeals affirmed the trial court’s
decision in full, prompting SEACOM to petition for review on certiorari to the
Supreme Court.
ISSUE:
o Whether or not SEACOM acted in bad faith by competing with its own dealer,
JII, in the sale of farm machineries to FSDC?
o Is JII entitled to moral and exemplary damages and attorney’s fees?

RULING:
The Supreme Court ruled that SEACOM acted in bad faith by directly
competing with JII in the sale of farm machinery to FSDC, violating Article 19 of the
Civil Code, which requires individuals to act with justice, honesty, and good faith.
Although the dealership agreement was non-exclusive, SEACOM’s actions were
considered unethical and unjust, as they interfered with JII's prospective sale,
leading to liability under the abuse of right doctrine.
The Court upheld the decision to award JII compensation for unrealized profits
and modified the award of moral and exemplary damages. This adjustment was in
response to the testimony of Tirso Jamandre, who detailed the mental anguish and
sleepless nights he experienced as a result of SEACOM's misconduct.

Uypitching vs. Quiamco

G.R. No. 146322, Dec 6, 2006

FACTS:
 The case involves a dispute between Ernesto Ramas Uypitching and
his family-owned company, Ramas Uypitching Sons, Inc., and Ernesto C. Quiamco
over the seizure of a red Honda XL-100 motorcycle. In 1982, Quiamco received the
motorcycle from individuals involved in a robbery case, but the original registration
was never given. After the motorcycle was sold to Gabutero, who defaulted on
payments, Uypitching attempted to reclaim it without legal authority, leading to
Quiamco suing for unlawful seizure and defamation. The trial court ruled in favor of
Quiamco, awarding him damages, a decision later upheld by the Court of Appeals
with modified damages. The petitioners' appeal for further review was ultimately
denied.
ISSUE:
Whether or not petitioners are liable for damages due to their malicious and
ill-willed actions, including the unlawful seizure of the motorcycle, defamatory
remarks, and the filing of a baseless complaint?
RULING:
Yes, petitioners are liable for the said acts done by them. The Court found
that the petitioners acted unlawfully and in bad faith by filing a criminal complaint
against Quiamco without probable cause. Uypitching, the lawyer, should have
recognized the lack of evidence, as "taken" did not imply theft, and his reliance on
double hearsay showed malice. Seizing the motorcycle without a warrant and
making slanderous remarks constituted an abuse of rights. The Court emphasized
that rights must be exercised appropriately, not excessively or unjustly. Therefore,
the petitioners violated Articles 19 and 20 of the Civil Code, justifying damages for
their intent to embarrass Quiamco.
 Chevron Philippines, Inc. vs. Mendoza
G.R. No. 211533, Jun 19, 2019

FACTS:
The case involves consolidated petitions between Chevron Philippines, Inc.
(formerly Caltex Philippines, Inc.) and Leo Z. Mendoza. In 1997, Mendoza applied for
a dealership at a company-owned service station in Sta. Cruz, Virac, Catanduanes,
successfully completing the required psychographic exam, on-the-job evaluation,
and business proposal defense. However, the dealership was awarded to the
Spouses Carmen and Jose Romeo Francisco, the latter being the grandson of the
lot's owner. Mendoza alleged favoritism in this decision. In 1998, after reapplying
for a dealership in Virac or San Andres and offering multiple sites, he was again
unsuccessful; this time, the dealership was given to his brother-in-law, Joseph Cua,
whose site was located on a national highway. Mendoza subsequently filed a
complaint for torts and damages, but the Regional Trial Court dismissed his case,
instead awarding Chevron moral and exemplary damages, along with attorney's
fees and litigation expenses. The Court of Appeals upheld the RTC's ruling but
removed the award for moral and exemplary damages. Both parties then filed
petitions for review on certiorari, leading to the current proceedings.
ISSUE:
Whether or not Chevron abused its right in awarding the dealership to the
Franciscos and Cua instead of Mendoza?
RULING:
No, Chevron did not commit any abuse of right in awarding the dealership to
the Franciscos and Cua. The principle of abuse of rights under Article 19 of the Civil
Code requires a legal right to be exercised in bad faith with the intent to harm
another. In this case, Mendoza failed to prove Chevron's bad faith in awarding the
dealership to the Franciscos based on their qualifications, despite Cua's site being
more strategically located. Consequently, without evidence of bad faith, the claim of
abuse of rights could not be substantiated.
 BEATRIZ P. WASSMER vs FRANCISCO X. VELEX
G.R. NO. L-20089, February 28, 1965

FACTS:
In the case of Beatriz P. Wassmer v. Francisco X. Velez, the Supreme Court of
the Philippines ruled on February 26, 1965, regarding a dispute stemming from
Velez's failure to marry Wassmer as scheduled. Wassmer sued Velez, who claimed
that his inability to marry was due to fortuitous events beyond his control. The lower
court rejected Velez's affidavit as insufficient, leading him to seek reconsideration
from the Supreme Court, arguing that his affidavit constituted a valid defense.
ISSUE:
Is the affidavit of merits submitted by Francisco X. Velez valid in claiming a
defense based on fortuitous events and circumstances beyond his control?
RULING:
In the case, Justice Bengzon ruled that Velez's affidavit of merits was
insufficient because it failed to provide specific facts and relied on vague
conclusions about the reasons for his failure to marry. The court emphasized that
affidavits must detail factual circumstances to prevent wasting judicial resources on
unsubstantiated defenses. Since Velez's affidavit left the court uncertain about the
actual facts, it was deemed invalid, leading to the denial of his motion for
reconsideration. This ruling aligned with prior cases requiring clear factual bases in
affidavits of merits.

Guevarra, et al. vs. Banach

G.R. No. 214016, Nov 24, 2021
FACTS:
Jhonna Guevarra and her parents were involved in a legal case against Jan
Banach, a German citizen, over a breach of promise to marry. Banach had courted
Guevarra, claiming he intended to marry her while still being married to his third
wife and using a false name. He sent Guevarra P500,000 to buy a home, but she
ended the engagement upon discovering his lies. Banach then sued for damages,
alleging fraud and unjust enrichment. The Regional Trial Court found Guevarra and
her parents liable for damages, but the Court of Appeals later upheld the return of
the P500,000 while removing moral damages and attorney's fees due to Banach's
deceit. Both parties sought reconsideration, leading to a petition for review.
ISSUE:
Whether or not Guevarra is liable damages under violation of Articles 20, 21,
and 22 of the Civil Code after breaking off her engagement to Banach?
RULING:
Under Philippine law, breach of promise to marry is not considered an
actionable wrong. The Civil Code's human relations provisions stipulate that a party
seeking damages must have acted in good faith. In this instance, Banach's actions
were characterized by fraud and deceit, as he misrepresented his marital status and
true identity. Consequently, he could not successfully claim damages based on the
principle of unjust enrichment.
The Supreme Court emphasized the significance of individual autonomy in
the choice of a marriage partner, asserting that this decision should be made free
from external pressures or the fear of legal consequences. This personal choice is
safeguarded by the liberty and human dignity provisions of the 1987 Philippine
Constitution. Additionally, the Court advocated for discouraging litigation over
broken promises to marry, reinforcing the need to uphold individual autonomy and
human dignity.