G.R. No.

172428

HERMAN C. CRYSTAL, LAMBERTO

C. CRYSTAL, ANN GEORGIA C.
SOLANTE, and DORIS C. Present:
MAGLASANG, as Heirs of
Deceased SPOUSES RAYMUNDO QUISUMBING, J.,
I. CRYSTAL and DESAMPARADOS Chairperson,
C. CRYSTAL, CARPIO MORALES,
Petitioners, TINGA,

- versus -

Promulgated:
November 28, 2008
BANK OF THE PHILIPPINE ISLANDS,
Respondent.

…x x x…

A juridical person is generally not entitled to moral damages because, unlike a

natural person, it cannot experience physical suffering or such sentiments as
wounded feelings, serious anxiety, mental anguish or moral shock. [32] The Court
of Appeals found BPI as being famous and having gained its familiarity and respect
not only in the Philippines but also in the whole world because of its good will and
good reputation must protect and defend the same against any unwarranted suit such
as the case at bench.[33] In holding that BPI is entitled to moral damages, the Court
of Appeals relied on the case of People v. Manero,[34] wherein the Court ruled that
[i]t is only when a juridical person has a good reputation that is debased, resulting in
social humiliation, that moral damages may be awarded.[35]

We do not agree with the Court of Appeals. A statement similar to that made by the
Court in Manero can be found in the case of Mambulao Lumber Co. v. PNB, et
al.,[36] thus:
 x x x Obviously, an artificial person like herein appellant corporation
cannot experience physical sufferings, mental anguish, fright, serious
anxiety, wounded feelings, moral shock or social humiliation which are
basis of moral damages. A corporation may have good
reputation which, if besmirched may also be a ground for the award of
moral damages. x x x (Emphasis supplied)

Nevertheless, in the more recent cases of ABS-CBN Corp. v. Court of Appeals, et

al.,[37] and Filipinas Broadcasting Network, Inc. v. Ago Medical and Educational
Center-Bicol Christian College of Medicine (AMEC-BCCM),[38] the Court held that
the statements in Manero and Mambulao were mere obiter dicta, implying that the
award of moral damages to corporations is not a hard and fast rule. Indeed,
while the Court may allow the grant of moral damages to corporations, it is not
automatically granted; there must still be proof of the existence of the factual
basis of the damage and its causal relation to the defendants acts. This is so
because moral damages, though incapable of pecuniary estimation, are in the
category of an award designed to compensate the claimant for actual injury suffered
and not to impose a penalty on the wrongdoer.[39]

The spouses complaint against BPI proved to be unfounded, but it does not
automatically entitle BPI to moral damages. Although the institution of a clearly
unfounded civil suit can at times be a legal justification for an award of attorney's
fees, such filing, however, has almost invariably been held not to be a ground for an
award of moral damages. The rationale for the rule is that the law could not have
meant to impose a penalty on the right to litigate. Otherwise, moral damages must
every time be awarded in favor of the prevailing defendant against an unsuccessful
plaintiff.[40] BPI may have been inconvenienced by the suit, but we do not see how
it could have possibly suffered besmirched reputation on account of the single suit
alone. Hence, the award of moral damages should be deleted.

The awards of exemplary damages and attorneys fees, however, are

proper. Exemplary damages, on the other hand, are imposed by way of example or
correction for the public good, when the party to a contract acts in a wanton,
fraudulent, oppressive or malevolent manner, while attorneys fees are allowed when
exemplary damages are awarded and when the party to a suit is compelled to incur
expenses to protect his interest.[41] The spouses instituted their complaint against BPI
notwithstanding the fact that they were the ones who failed to pay their obligations.
Consequently, BPI was forced to litigate and defend its interest. For these reasons,
BPI is entitled to the awards of exemplary damages and attorneys fees.

…x x x…

[32]
People v. Manero, Jr., G.R. Nos. 86883-85, 29 January 1993, 218 SCRA 85, 96-97.
[33]
Rollo, p. 30.
[34]
G.R. Nos. 86883-8529, 29 January 1993, 218 SCRA 85.
[35]
Id. at 97.
[36]
130 Phil. 366 (1968).
[37]
ABS-CBN Broadcasting Corp. v. Court of Appeals, 361 Phil. 499 (1999).
[38]
G.R. No. 141994, 17 January 2005, 448 SCRA 413.
[39]
Development Bank of The Philippines v. Court of Appeals, 451 Phil. 563, 587 (2003).
[40]
Expertravel and Tours, Inc. v. Court of Appeals, 368 Phil. 444, 449-450 (1999).
[41]
Spouses Paguyo v. Astorga, G.R. No. 13098, 16 September 2005, 470 SCRA 33, 35.
 ABS-CBN BROADCASTING CORPORATION, petitioners, vs. HONORABLE
COURT OF APPEALS, REPUBLIC BROADCASTING CORP., VIVA
PRODUCTIONS, INC., and VICENTE DEL ROSARIO, respondents.
G.R. No. 128690. January 21, 1999

…x x x…

Moral damages are in the category of an award designed to compensate the

claimant for actual injury suffered and not to impose a penalty on the
wrongdoer.[62] The award is not meant to enrich the complainant at the expense of the
defendant, but to enable the injured party to obtain means, diversion, or amusements
that will serve to obviate the moral suffering he has undergone. It is aimed at the
restoration, within the limits of the possible, of the spiritual status quo ante, and
should be proportionate to the suffering inflicted.[63] Trial courts must then guard
against the award of exorbitant damages; they should exercise balanced restrained
and measured objectivity to avoid suspicion that it was due to passion, prejudice, or
corruption or the part of the trial court.[64]
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 can be experienced
only by one having a nervous system.[65] The statement in People v.
Manero[66] and Mambulao Lumber Co. v. PNB[67] that a corporation may recover
moral damages if it has a good reputation that is debased, resulting in social
humiliation is an obiter dictum.

…x x x…
[62]
Pagsuyuin v. Intermediate Appellate Court, 193 SCRA 547, 555 [1991].
[63]
Visayan Sawmil Company v. Court of Appeals, 219 SCRA 378, 392 [1993]. Citing R & B Security. Insurance
Co., Inc. v. Intermediate Appellate Court, 129 SCRA 736 [1984]; De la Serna v. Court of Appeals, 233 SCRA 325,
329-330 [1994].
[64]
People v. Wenceslao, 212 SCRA 560, 569 [1992], citing Filinvest Credit Corp. v. Intermediate Appellate Court,
166 SCRA 155 [1988].
[65]
Prime White Cement Corp. v. Intermediate Appellate Court, 220 SCRA 103, 113-114 [1993]; LBC Express Inc.
v. Court of Appeals, 236 SCRA 602 [1994]; Acme Shoe, Rubber and Plastic Corp. v. Court of Appeals, 260 SCRA
714, 722 [1996].
[66]
Supra note 31.
[67]
130 Phil. 366 [1968].

G.R. No. L-22973 January 30, 1968

MAMBULAO LUMBER COMPANY, plaintiff-appellant,

vs.
PHILIPPINE NATIONAL BANK and ANACLETO HERALDO Deputy
Provincial Sheriff of Camarines Norte, defendants-appellees.

Obviously, an artificial person like herein appellant corporation cannot experience

physical sufferings, mental anguish, fright, serious anxiety, wounded feelings,
moral shock or social humiliation which are basis of moral damages. 21 A
corporation may have a good reputation which, if besmirched, may also be a
ground for the award of moral damages.

21 See Art. 2217, Civil Code.