CASES REPORTED

SUPREME COURT REPORTS ANNOTATED

____________________

G.R. No. 164703. May 4, 2010.*

ALLAN C. GO, doing business under the name and style

“ACG Express Liner,” petitioner, vs. MORTIMER F.
CORDERO, respondent.

G.R. No. 164747. May 4, 2010.*

MORTIMER F. CORDERO, petitioner, vs. ALLAN C. GO,

doing business under the name and style “ACG Express
Liner,” FELIPE M. LANDICHO and VINCENT D.
TECSON, respondents.

Courts; Jurisdiction; Summons; Courts acquire jurisdiction

over the plaintiffs upon the filing of the complaint, while
jurisdiction over the defendants in a civil case is acquired either
through the

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* FIRST DIVISION.
1
2

2 SUPREME COURT REPORTS ANNOTATED

Go vs. Cordero

service of summons upon them in the manner required by law or

through their voluntary appearance in court and their submission
to its authority. A party who makes a special appearance in court
challenging the jurisdiction of said court based on the ground of
invalid service of summons is not deemed to have submitted
himself to the jurisdiction of the court.—We find no error
committed by the trial court in overruling Robinson’s objection
over the improper resort to summons by publication upon a
foreign national like him and in an action in personam,
notwithstanding that he raised it in a special appearance
specifically raising the issue of lack of jurisdiction over his person.
Courts acquire jurisdiction over the plaintiffs upon the filing of
the complaint, while jurisdiction over the defendants in a civil
case is acquired either through the service of summons upon them
in the manner required by law or through their voluntary
appearance in court and their submission to its authority. A party
who makes a special appearance in court challenging the
jurisdiction of said court based on the ground of invalid service of
summons is not deemed to have submitted himself to the
jurisdiction of the court.

PETITION for review on certiorari of a decision of the

Court of Appeals.
The facts are stated in the opinion of the Court.
Lawrence L. Fernandez & Associates for Allan C. Go.
Tabura & Associates Law Offices for Mortimer F.
Cordero.
Martinez, Martinez, Alcudia Law Offices for respondent
Vincent Tecson.
Landicho & Associates Law Firm for respondent Felipe
M. Landicho.

VILLARAMA, JR., J.:

For review is the Decision1 dated March 16, 2004 as
modi-

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1 Penned by Associate Justice Jose Catral Mendoza (now a Member of

this Court) and concurred in by Associate Justices B.A. Adefuin-Dela Cruz
and Eliezer R. Delos Santos.

VOL. 620, MAY 4, 2010 3

Go vs. Cordero

fied by the Resolution2 dated July 22, 2004 of the Court of

Appeals (CA) in CA-G.R. CV No. 69113, which affirmed
with modifications the Decision3 dated May 31, 2000 of the
Regional Trial Court (RTC) of Quezon City, Branch 85 in
Civil Case No. 98-35332.
The factual antecedents:
Sometime in 1996, Mortimer F. Cordero, Vice-President
of Pamana Marketing Corporation (Pamana), ventured into
the business of marketing inter-island passenger vessels.
After contacting various overseas fast ferry manufacturers
from all over the world, he came to meet Tony Robinson, an
Australian national based in Brisbane, Australia, who is
the Managing Director of Aluminium Fast Ferries
Australia (AFFA).
Between June and August 1997, Robinson signed
documents appointing Cordero as the exclusive distributor
of AFFA catamaran and other fast ferry vessels in the
Philippines. As such exclusive distributor, Cordero offered
for sale to prospective buyers the 25-meter Aluminium
Passenger catamaran known as the SEACAT 25.4
After negotiations with Felipe Landicho and Vincent
Tecson, lawyers of Allan C. Go who is the owner/operator of
ACG Express Liner of Cebu City, a single proprietorship,
Cordero was able to close a deal for the purchase of two (2)
SEACAT 25 as evidenced by the Memorandum of
Agreement dated August 7, 1997.5 Accordingly, the parties
executed Shipbuilding Contract No. 7825 for one (1) high-
speed catamaran (SEACAT 25) for the price of
US$1,465,512.00.6 Per agreement between Robinson and
Cordero, the latter shall receive

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2 Penned by Associate Justice Jose Catral Mendoza (now a Member of

this Court) and concurred in by Associate Justices Delilah Vidallon-
Magtolis and Eliezer R. Delos Santos.
3 Penned by Judge Pedro M. Areola.
4 Folder of plaintiff’s exhibits, pp. 1-34.
5 Id., pp. 35-39.
6 Id., pp. 43-51.

4 SUPREME COURT REPORTS ANNOTATED

Go vs. Cordero

commissions totalling US$328,742.00, or 22.43% of the

purchase price, from the sale of each vessel.7
 Cordero made two (2) trips to the AFFA Shipyard in
Brisbane, Australia, and on one (1) occasion even
accompanied Go and his family and Landicho, to monitor
the progress of the building of the vessel. He shouldered all
the expenses for airfare, food, hotel accommodations,
transportation and entertainment during these trips. He
also spent for long distance telephone calls to communicate
regularly with Robinson, Go, Tecson and Landicho.
However, Cordero later discovered that Go was dealing
directly with Robinson when he was informed by Dennis
Padua of Wartsila Philippines that Go was canvassing for a
second catamaran engine from their company which
provided the ship engine for the first SEACAT 25. Padua
told Cordero that Go instructed him to fax the requested
quotation of the second engine to the Park Royal Hotel in
Brisbane where Go was then staying. Cordero tried to
contact Go and Landicho to confirm the matter but they
were nowhere to be found, while Robinson refused to
answer his calls. Cordero immediately flew to Brisbane to
clarify matters with Robinson, only to find out that Go and
Landicho were already there in Brisbane negotiating for
the sale of the second SEACAT 25. Despite repeated follow-
up calls, no explanation was given by Robinson, Go,
Landicho and Tecson who even made Cordero believe there
would be no further sale between AFFA and ACG Express
Liner.
In a handwritten letter dated June 24, 1998, Cordero
informed Go that such act of dealing directly with Robinson
violated his exclusive distributorship and demanded that
they respect the same, without prejudice to legal action
against him and Robinson should they fail to heed the
same.8 Cordero’s lawyer, Atty. Ernesto A. Tabujara, Jr. of
ACCRA

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7 Id., pp. 40-42.

8 Id., pp. 52-53.

VOL. 620, MAY 4, 2010 5

Go vs. Cordero
law firm, also wrote ACG Express Liner assailing the
fraudulent actuations and misrepresentations committed
by Go in connivance with his lawyers (Landicho and
Tecson) in breach of Cordero’s exclusive distributorship
appointment.9
Having been apprised of Cordero’s demand letter, Thyne
& Macartney, the lawyer of AFFA and Robinson, faxed a
letter to ACCRA law firm asserting that the appointment
of Cordero as AFFA’s distributor was for the purpose of one
(1) transaction only, that is, the purchase of a high-speed
catamaran vessel by ACG Express Liner in August 1997.
The letter further stated that Cordero was offered the
exclusive distributorship, the terms of which were
contained in a draft agreement which Cordero allegedly
failed to return to AFFA within a reasonable time, and
which offer is already being revoked by AFFA.10
As to the response of Go, Landicho and Tecson to his
demand letter, Cordero testified before the trial court that
on the same day, Landicho, acting on behalf of Go, talked to
him over the telephone and offered to amicably settle their
dispute. Tecson and Landicho offered to convince Go to
honor his exclusive distributorship with AFFA and to
purchase all vessels for ACG Express Liner through him
for the next three (3) years. In an effort to amicably settle
the matter, Landicho, acting in behalf of Go, set up a
meeting with Cordero on June 29, 1998 between 9:30 p.m.
to 10:30 p.m. at the Mactan Island Resort Hotel lobby. On
said date, however, only Landicho and Tecson came and no
reason was given for Go’s absence. Tecson and Landicho
proposed that they will convince Go to pay him
US$1,500,000.00 on the condition that they will get a cut of
20%. And so it was agreed between him, Landicho and
Tecson that the latter would give him a weekly status
report and that the matter will be settled in three (3) to
four (4) weeks and neither party will file an action against
each other

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9 Id., pp. 54-56.

10 Id., pp. 56-57.

6 SUPREME COURT REPORTS ANNOTATED

 Go vs. Cordero

until a final report on the proposed settlement. No such

report was made by either Tecson or Landicho who, it
turned out, had no intention to do so and were just buying
time as the catamaran vessel was due to arrive from
Australia. Cordero then filed a complaint with the Bureau
of Customs (BOC) to prohibit the entry of SEACAT 25 from
Australia based on misdeclaration and undervaluation.
Consequently, an Alert Order was issued by Acting BOC
Commissioner Nelson Tan for the vessel which in fact
arrived on July 17, 1998. Cordero claimed that Go and
Robinson had conspired to undervalue the vessel by around
US$500,000.00.11
On August 21, 1998, Cordero instituted Civil Case No.
98-35332 seeking to hold Robinson, Go, Tecson and
Landicho liable jointly and solidarily for conniving and
conspiring together in violating his exclusive
distributorship in bad faith and wanton disregard of his
rights, thus depriving him of his due commissions (balance
of unpaid commission from the sale of the first vessel in the
amount of US$31,522.01 and unpaid commission for the
sale of the second vessel in the amount of US$328,742.00)
and causing him actual, moral and exemplary damages,
including P800,000.00 representing expenses for airplane
travel to Australia, telecommunications bills and
entertainment, on account of AFFA’s untimely cancellation
of the exclusive distributorship agreement. Cordero also
prayed for the award of moral and exemplary damages, as
well as attorney’s fees and litigation expenses.12
Robinson filed a motion to dismiss grounded on lack of
jurisdiction over his person and failure to state a cause of
action, asserting that there was no act committed in
violation of the distributorship agreement. Said motion was
denied by the trial court on December 20, 1999. Robinson
was likewise declared in default for failure to file his
answer within the pe-

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11 TSN, April 5, 2000, pp. 27-35; folder of plaintiff’s exhibits, p. 58.

12 Records, Vol. I, pp. 1-16.

7
 VOL. 620, MAY 4, 2010 7
Go vs. Cordero

riod granted by the trial court.13 As for Go and Tecson,

their motion to dismiss based on failure to state a cause of
action was likewise denied by the trial court on February
26, 1999.14 Subsequently, they filed their Answer denying
that they have anything to do with the termination by
AFFA of Cordero’s authority as exclusive distributor in the
Philippines. On the contrary, they averred it was Cordero
who stopped communicating with Go in connection with the
purchase of the first vessel from AFFA and was not doing
his part in making progress status reports and airing the
client’s grievances to his principal, AFFA, such that Go
engaged the services of Landicho to fly to Australia and
attend to the documents needed for shipment of the vessel
to the Philippines. As to the inquiry for the Philippine price
for a Wartsila ship engine for AFFA’s other on-going vessel
construction, this was merely requested by Robinson but
which Cordero misinterpreted as indication that Go was
buying a second vessel. Moreover, Landicho and Tecson
had no transaction whatsoever with Cordero who had no
document to show any such shipbuilding contract. As to the
supposed meeting to settle their dispute, this was due to
the malicious demand of Cordero to be given US$3,000,000
as otherwise he will expose in the media the alleged
undervaluation of the vessel with the BOC. In any case,
Cordero no longer had cause of action for his commission
for the sale of the second vessel under the memorandum of
agreement dated August 7, 1997 considering the
termination of his authority by AFFA’s lawyers on June 26,
1998.15
Pre-trial was reset twice to afford the parties
opportunity to reach a settlement. However, on motion filed
by Cordero through counsel, the trial court reconsidered
the resetting of the pre-trial to another date for the third
time as requested by Go, Tecson and Landicho, in view of
the latter’s failure to appear at the pre-trial conference on
January 7, 2000 despite

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13 Id., pp. 155-157, 167-171, 186-189, 249-251.

14 Id., pp. 70-77, 178.
15 Id., pp. 213-214.
 8

8 SUPREME COURT REPORTS ANNOTATED

Go vs. Cordero

due notice. The trial court further confirmed that said

defendants misled the trial court in moving for continuance
during the pre-trial conference held on December 10, 1999,
purportedly to go abroad for the holiday season when in
truth a Hold-Departure Order had been issued against
them.16 Accordingly, plaintiff Cordero was allowed to
present his evidence ex parte.
Cordero’s testimony regarding his transaction with
defendants Go, Landicho and Tecson, and the latter’s offer
of settlement, was corroborated by his counsel who also
took the witness stand. Further, documentary evidence
including photographs taken of the June 29, 1998 meeting
with Landicho, Tecson and Atty. Tabujara at Shangri-la’s
Mactan Island Resort, photographs taken in Brisbane
showing Cordero, Go with his family, Robinson and
Landicho, and also various documents, communications,
vouchers and bank transmittals were presented to prove
that: (1) Cordero was properly authorized and actually
transacted in behalf of AFFA as exclusive distributor in the
Philippines; (2) Cordero spent considerable sums of money
in pursuance of the contract with Go and ACG Express
Liner; and (3) AFFA through Robinson paid Cordero his
commissions from each scheduled payment made by Go for
the first SEACAT 25 purchased from AFFA pursuant to
Shipbuilding Contract No. 7825.17
On May 31, 2000, the trial court rendered its decision,
the dispositive portion of which reads as follows:

“WHEREFORE, PREMISES CONSIDERED, judgment is hereby

rendered in favor of Plaintiff and against defendants Allan C. Go, Tony
Robinson, Felipe Landicho, and Vincent Tecson. As prayed for,
defendants are hereby ordered to pay Plaintiff jointly and solidarily, the
following:
1. On the First Cause of Action, the sum total of SIXTEEN
MILLION TWO HUNDRED NINETY ONE THOUSAND THREE
HUNDRED FIFTY TWO AND FORTY THREE

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 16 Id., pp. 298-299.
17 TSN, April 14, 2000, pp. 2-44.

VOL. 620, MAY 4, 2010 9

Go vs. Cordero

CENTAVOS (P16,291,352.43) as actual damages with legal

interest from 25 June 1998 until fully paid;
2. On the Second Cause of Action, the sum of ONE MILLION
PESOS (P1,000,000.00) as moral damages;
3. On the Third Cause of Action, the sum of ONE MILLION PESOS
(P1,000,000.00) as exemplary damages; and
4. On the Fourth Cause of Action, the sum of ONE MILLION
PESOS (P1,000,000.00) as attorney’s fees;
Costs against the defendants.
SO ORDERED.”18

Go, Robinson, Landicho and Tecson filed a motion for

new trial, claiming that they have been unduly prejudiced
by the negligence of their counsel who was allegedly
unaware that the pre-trial conference on January 28, 2000
did not push through for the reason that Cordero was then
allowed to present his evidence ex-parte, as he had
assumed that the said ex-parte hearing was being
conducted only against Robinson who was earlier declared
in default.19 In its Order dated July 28, 2000, the trial
court denied the motion for new trial.20 In the same order,
Cordero’s motion for execution pending appeal was
granted. Defendants moved to reconsider the said order
insofar as it granted the motion for execution pending
appeal.21 On August 8, 2000, they filed a notice of appeal.22
On August 18, 2000, the trial court denied the motion
for reconsideration and on August 21, 2000, the writ of
execution pending appeal was issued.23 Meanwhile, the
notice of appeal was denied for failure to pay the appellate
court docket fee

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18 Records, Vol. I, pp. 445-446.

19 Id., pp. 460-465.
20 Id., pp. 477-480.
21 Id., pp. 481-485.
 22 Id., p. 486.
23 Id., pp. 500-502.

10

10 SUPREME COURT REPORTS ANNOTATED

Go vs. Cordero

within the prescribed period.24 Defendants filed a motion

for reconsideration and to transmit the case records to the
CA.25
On September 29, 2000, the CA issued a temporary
restraining order at the instance of defendants in the
certiorari case they filed with said court docketed as CA-
G.R. SP No. 60354 questioning the execution orders issued
by the trial court. Consequently, as requested by the
defendants, the trial court recalled and set aside its
November 6, 2000 Order granting the ex-parte motion for
release of garnished funds, cancelled the scheduled public
auction sale of levied real properties, and denied the ex-
parte Motion for Break-Open Order and Ex-Parte Motion
for Encashment of Check filed by Cordero.26 On November
29, 2000, the trial court reconsidered its Order dated
August 21, 2000 denying due course to the notice of appeal
and forthwith directed the transmittal of the records to the
CA.27
On January 29, 2001, the CA rendered judgment
granting the petition for certiorari in CA-G.R. SP No. 60354
and setting aside the trial court’s orders of execution
pending appeal. Cordero appealed the said judgment in a
petition for review filed with this Court which was
eventually denied under our Decision dated September 17,
2002.28
On March 16, 2004, the CA in CA-G.R. CV No. 69113
affirmed the trial court (1) in allowing Cordero to present
his evidence ex-parte after the unjustified failure of
appellants (Go, Tecson and Landicho) to appear at the pre-
trial conference despite due notice; (2) in finding that it was
Cordero and not Pamana who was appointed by AFFA as
the exclusive distributor in the Philippines of its SEACAT
25 and other fast ferry vessels, which is not limited to the
sale of one (1) such

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 24 Id., p. 503.
25 Id., pp. 512-514.
26 Records, Vol. II, pp. 550-620.
27 Id., pp. 621-622.
28 Cordero v. Go, G.R. No. 149754, 389 SCRA 288 (2002).

11

VOL. 620, MAY 4, 2010 11

Go vs. Cordero

catamaran to Go on August 7, 1997; and (3) in finding that

Cordero is entitled to a commission per vessel sold for
AFFA through his efforts in the amount equivalent to
22.43% of the price of each vessel or US$328,742.00, and
with payments of US$297,219.91 having been made to
Cordero, there remained a balance of US$31,522.09 still
due to him. The CA sustained the trial court in ruling that
Cordero is entitled to damages for the breach of his
exclusive distributorship agreement with AFFA. However,
it held that Cordero is entitled only to commission for the
sale of the first catamaran obtained through his efforts
with the remaining unpaid sum of US$31,522.09 or
P1,355,449.90 (on the basis of US$1.00=P43.00 rate) with
interest at 6% per annum from the time of the filing of the
complaint until the same is fully paid. As to the
P800,000.00 representing expenses incurred by Cordero for
transportation, phone bills, entertainment, food and
lodging, the CA declared there was no basis for such award,
the same being the logical and necessary consequences of
the exclusive distributorship agreement which are normal
in the field of sales and distribution, and the expenditures
having redounded to the benefit of the distributor
(Cordero).
On the amounts awarded by the trial court as moral and
exemplary damages, as well as attorney’s fees, the CA
reduced the same to P500,000.00, P300,000.00 and
P50,000.00, respectively. Appellants were held solidarily
liable pursuant to the provisions of Article 1207 in relation
to Articles 19, 20, 21 and 22 of the New Civil Code. The CA
further ruled that no error was committed by the trial
court in denying their motion for new trial, which said
court found to be pro forma and did not raise any
substantial matter as to warrant the conduct of another
trial.
By Resolution dated July 22, 2004, the CA denied the
motions for reconsideration respectively filed by the
appellants and appellee, and affirmed the Decision dated
March 16, 2004 with the sole modification that the legal
interest of 6% per annum shall start to run from June 24,
1998 until the finality
12

12 SUPREME COURT REPORTS ANNOTATED

Go vs. Cordero

of the decision, and the rate of 12% interest per annum

shall apply once the decision becomes final and executory
until the judgment has been satisfied.
The case before us is a consolidation of the petitions for
review under Rule 45 separately filed by Go (G.R. No.
164703) and Cordero (G.R. No. 164747) in which
petitioners raised the following arguments:
G.R. No. 164703
(Petitioner Go)

I. THE HONORABLE COURT OF APPEALS DISREGARDED THE

RULES OF COURT AND PERTINENT JURISPRUDENCE AND
ACTED WITH GRAVE ABUSE OF DISCRETION IN NOT
RULING THAT THE RESPONDENT IS NOT THE REAL
PARTY-IN-INTEREST AND IN NOT DISMISSING THE
INSTANT CASE ON THE GROUND OF LACK OF CAUSE OF
ACTION;
II. THE HONORABLE COURT OF APPEALS IGNORED THE
LAW AND JURISPRUDENCE AND ACTED WITH GRAVE
ABUSE OF DISCRETION IN HOLDING HEREIN PETITIONER
RESPONSIBLE FOR THE BREACH IN THE ALLEGED
EXCLUSIVE DISTRIBUTORSHIP AGREEMENT WITH
ALUMINIUM FAST FERRIES AUSTRALIA;
III. THE HONORABLE APPELLATE COURT MISAPPLIED THE
LAW AND ACTED WITH GRAVE ABUSE OF DISCRETION IN
FINDING PETITIONER LIABLE IN SOLIDUM WITH THE CO-
DEFENDANTS WITH RESPECT TO THE CLAIMS OF
RESPONDENT;
IV. THE HONORABLE COURT OF APPEALS MISAPPLIED LAW
AND JURISPRUDENCE AND GRAVELY ABUSED ITS
DISCRETION WHEN IT FOUND PETITIONER LIABLE FOR
 UNPAID COMMISSIONS, DAMAGES, ATTORNEY’S FEES,
AND LITIGATION EXPENSES; and
V. THE HONORABLE APPELLATE COURT ACTED CONTRARY
TO LAW AND JURISPRUDENCE AND GRAVELY ABUSED ITS
DISCRETION WHEN IT EFFECTIVELY DEPRIVED HEREIN
PETITIONER OF HIS RIGHT TO DUE

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VOL. 620, MAY 4, 2010 13

Go vs. Cordero

PROCESS BY AFFIRMING THE LOWER COURT’S

DENIAL OF PETITIONER’S MOTION FOR NEW
TRIAL.29

G.R. No. 164747

(Petitioner Cordero)

 
I.
THE COURT OF APPEALS ERRED IN NOT SUSTAINING THE
JUDGMENT OF THE TRIAL COURT AWARDING
PETITIONER ACTUAL DAMAGES FOR HIS COMMISSION
FOR THE SALE OF THE SECOND VESSEL, SINCE THERE IS
SUFFICIENT EVIDENCE ON RECORD WHICH PROVES
THAT THERE WAS A SECOND SALE OF A VESSEL.
A. THE MEMORANDUM OF AGREEMENT DATED 7
AUGUST 1997 PROVIDES THAT RESPONDENT GO WAS
CONTRACTUALLY BOUND TO BUY TWO (2) VESSELS
FROM AFFA.
B. RESPONDENT GO’S POSITION PAPER AND
COUNTER-AFFIDAVIT/POSITION PAPER THAT WERE
FILED BEFORE THE BUREAU OF CUSTOMS, ADMITS
UNDER OATH THAT HE HAD INDEED PURCHASED A
SECOND VESSEL FROM AFFA.
C. RESPONDENTS ADMITTED IN THEIR PRE-TRIAL
BRIEF THAT THEY HAD PURCHASED A SECOND
VESSEL.
II.
THE COURT OF APPEALS ERRED IN RULING THAT
PETITIONER IS NOT ENTITLED TO HIS COMMISSIONS FOR
THE PURCHASE OF A SECOND VESSEL, SINCE IT WAS
PETITIONER’S EFFORTS WHICH ACTUALLY FACILITATED
AND SET-UP THE TRANSACTION FOR RESPONDENTS.
 III.
THE COURT OF APPEALS ERRED IN NOT IMPOSING THE
PROPER LEGAL INTEREST RATE ON RESPONDENTS’
UNPAID

_______________

29 Rollo (G.R. No. 164703), pp. 23-24.

14

14 SUPREME COURT REPORTS ANNOTATED

Go vs. Cordero

OBLIGATION WHICH SHOULD BE TWELVE PERCENT (12%)

FROM THE TIME OF THE BREACH OF THE OBLIGATION.
IV.
THE COURT OF APPEALS ERRED IN NOT SUSTAINING THE
ORIGINAL AMOUNT OF CONSEQUENTIAL DAMAGES
AWARDED TO PETITIONER BY THE TRIAL COURT
CONSIDERING THE BAD FAITH AND FRAUDULENT
CONDUCT OF RESPONDENTS IN MISAPPROPRIATING THE
MONEY OF PETITIONER.30

The controversy boils down to two (2) main issues: (1)

whether petitioner Cordero has the legal personality to sue
the respondents for breach of contract; and (2) whether the
respondents may be held liable for damages to Cordero for
his unpaid commissions and termination of his exclusive
distributorship appointment by the principal, AFFA.
I. Real Party-in-Interest
First, on the issue of whether the case had been filed by
the real party-in-interest as required by Section 2, Rule 3 of
the Rules of Court, which defines such party as the one (1)
to be benefited or injured by the judgment in the suit, or
the party entitled to the avails of the suit. The purposes of
this provision are: 1) to prevent the prosecution of actions
by persons without any right, title or interest in the case; 2)
to require that the actual party entitled to legal relief be
the one to prosecute the action; 3) to avoid a multiplicity of
suits; and 4) to discourage litigation and keep it within
certain bounds, pursuant to sound public policy.31 A case is
dismissible for lack of personality to sue upon proof that
the plaintiff is not
_______________

30 Rollo (G.R. No. 164747), pp. 21-22.

31 Oco v. Limbaring, G.R. No. 161298, January 31, 2006, 481 SCRA
348, 358.

15

VOL. 620, MAY 4, 2010 15

Go vs. Cordero

the real party-in-interest, hence grounded on failure to

state a cause of action.32
On this issue, we agree with the CA in ruling that it was
Cordero and not Pamana who is the exclusive distributor of
AFFA in the Philippines as shown by the Certification
dated June 1, 1997 issued by Tony Robinson.33 Petitioner
Go mentions the following documents also signed by
respondent Robinson which state that “Pamana Marketing
Corporation represented by Mr. Mortimer F. Cordero” was
actually the exclusive distributor: (1) letter dated 1 June
1997;34 (2) certification dated 5 August 1997;35 and (3)
letter dated 5 August 1997 addressed to petitioner Cordero
concerning “commissions to be paid to Pamana Marketing
Corporation.”36 Such apparent inconsistency in naming
AFFA’s exclusive distributor in the Philippines is of no
moment. For all intents and purposes, Robinson and AFFA
dealt only with Cordero who alone made decisions in the
performance of the exclusive distributorship, as with other
clients to whom he had similarly offered AFFA’s fast ferry
vessels. Moreover, the stipulated commissions from each
progress payments made by Go were directly paid by
Robinson to Cordero.37 Respondents Landicho and Tecson
were only too aware of Cordero’s authority as the person
who was appointed and acted as exclusive distributor of
AFFA, which can be gleaned from their act of immediately
furnishing him with copies of bank transmittals everytime
Go remits payment to Robinson, who in turn transfers a
portion of funds received to the bank account of Cordero in
the Philippines as his commission. Out of these partial
payments of his commis-

_______________
 32  Tamondong v. Court of Appeals, G.R. No. 158397, November 26,
2004, 444 SCRA 509.
33 Folder of exhibits, Exhibit “A-6,” p. 7.
34 Id., Exhibit “A-9,” p. 10
35 Id., Exhibit “A,” p. 1.
36 Id., Exhibit “A-3,” p. 4.
37 Id., Exhibits “J” to “J-2,” “K” to “K-4,” “M,” “Y’ to “Y-4,” pp. 59-66, 69-
71, 314-318.

16

16 SUPREME COURT REPORTS ANNOTATED

Go vs. Cordero

sion, Cordero would still give Landicho and Tecson their

respective “commission,” or “cuts” from his own
commission. Respondents Landicho and Tecson failed to
refute the evidence submitted by Cordero consisting of
receipts signed by them. Said amounts were apart from the
earlier expenses shouldered by Cordero for Landicho’s
airline tickets, transportation, food and hotel
38
accommodations for the trip to Australia.
Moreover, petitioner Go, Landicho and Tecson never
raised petitioner Cordero’s lack of personality to sue on
behalf of Pamana,39 and did so only before the CA when
they contended that it is Pamana and not Cordero, who
was appointed and acted as exclusive distributor for
AFFA.40 It was Robinson who argued in support of his
motion to dismiss that as far as said defendant is
concerned, the real party plaintiff appears to be Pamana,
against the real party defendant which is AFFA.41 As
already mentioned, the trial court denied the motion to
dismiss filed by Robinson.
We find no error committed by the trial court in
overruling Robinson’s objection over the improper resort to
summons by publication upon a foreign national like him
and in an action in personam, notwithstanding that he
raised it in a special appearance specifically raising the
issue of lack of jurisdiction over his person. Courts acquire
jurisdiction over the plaintiffs upon the filing of the
complaint, while jurisdiction over the defendants in a civil
case is acquired either through the service of summons
upon them in the manner required by law or through their
voluntary appearance in court and their submission to its
authority.42 A party who makes a special ap-

_______________

38 Id., Exhibits “R-6,” “P,” “R-7,” “V,” “W,” “X” to “X-7,” “Y” to “Y-4” and
“Z” to “Z-2,” pp. 232, 236-238, 239, 301-321.
39 Records, Vol. I, pp. 70-73, 203-213, 265-267, 460-464.
40 CA Rollo, pp. 78-84.
41 Records, Vol. I, pp. 241-242.
42  Perkin Elmer Singapore Pte Ltd. v. Dakila Trading Corporation,
G.R. No. 172242, August 14, 2007, 530 SCRA 170, 186.

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VOL. 620, MAY 4, 2010 17

Go vs. Cordero

pearance in court challenging the jurisdiction of said court

based on the ground of invalid service of summons is not
deemed to have submitted himself to the jurisdiction of the
court.43
In this case, however, although the Motion to Dismiss
filed by Robinson specifically stated as one (1) of the
grounds the lack of “personal jurisdiction,” it must be noted
that he had earlier filed a Motion for Time to file an
appropriate responsive pleading even beyond the time
provided in the summons by publication.44 Such motion
did not state that it was a conditional appearance entered
to question the regularity of the service of summons, but an
appearance submitting to the jurisdiction of the court by
acknowledging the summons by publication issued by the
court and praying for additional time to file a responsive
pleading. Consequently, Robinson having acknowledged
the summons by publication and also having invoked the
jurisdiction of the trial court to secure affirmative relief in
his motion for additional time, he effectively submitted
voluntarily to the trial court’s jurisdiction. He is now
estopped from asserting otherwise, even before this
Court.45

II. Breach of Exclusive Distributorship,

Contractual Interference and
Respondents’ Liability for Damages
 In Yu v. Court of Appeals,46 this Court ruled that the
right to perform an exclusive distributorship agreement
and to reap the profits resulting from such performance are
proprietary rights which a party may protect. Thus,
injunction is the

_______________

43 United Coconut Planters Bank v. Ongpin, G.R. No. 146593, October

26, 2001, 368 SCRA 464, 470.
44 Records, Vol. I, pp. 168-170.
45 See Dole Philippines, Inc. (Tropifresh Division) v. Quilala, G.R. No.
168723, July 9, 2008, 557 SCRA 433, 437-438.
46 G.R. No. 86683, January 21, 1993, 217 SCRA 328.

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18 SUPREME COURT REPORTS ANNOTATED

Go vs. Cordero

appropriate remedy to prevent a wrongful interference

with contracts by strangers to such contracts where the
legal remedy is insufficient and the resulting injury is
irreparable. In that case, the former dealer of the same
goods purchased the merchandise from the manufacturer
in England through a trading firm in West Germany and
sold these in the Philippines. We held that the rights
granted to the petitioner under the exclusive
distributorship agreement may not be diminished nor
rendered illusory by the expedient act of utilizing or
interposing a person or firm to obtain goods for which the
exclusive distributorship was conceptualized, at the
expense of the sole authorized distributor.47
In the case at bar, it was established that petitioner
Cordero was not paid the balance of his commission by
respondent Robinson. From the time petitioner Go and
respondent Landicho directly dealt with respondent
Robinson in Brisbane, and ceased communicating through
petitioner Cordero as the exclusive distributor of AFFA in
the Philippines, Cordero was no longer informed of
payments remitted to AFFA in Brisbane. In other words,
Cordero had clearly been cut off from the transaction until
the arrival of the first SEACAT 25 which was sold through
his efforts. When Cordero complained to Go, Robinson,
Landicho and Tecson about their acts prejudicial to his
rights and demanded that they respect his exclusive
distributorship, Go simply let his lawyers led by Landicho
and Tecson handle the matter and tried to settle it by
promising to pay a certain amount and to purchase high-
speed catamarans through Cordero. However, Cordero was
not paid anything and worse, AFFA through its lawyer in
Australia even terminated his exclusive dealership
insisting that his services were engaged for only one (1)
transaction, that is, the purchase of the first SEACAT 25 in
August 1997.

_______________

47 Id., pp. 331, 332.

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VOL. 620, MAY 4, 2010 19

Go vs. Cordero

Petitioner Go argues that unlike in Yu v. Court of

Appeals48 there is no conclusive proof adduced by petitioner
Cordero that they actually purchased a second SEACAT 25
directly from AFFA and hence there was no violation of the
exclusive distributorship agreement. Further, he contends
that the CA gravely abused its discretion in holding them
solidarily liable to Cordero, relying on Articles 1207, 19 and
21 of the Civil Code despite absence of evidence,
documentary or testimonial, showing that they conspired to
defeat the very purpose of the exclusive distributorship
agreement.49
We find that contrary to the claims of petitioner
Cordero, there was indeed no sufficient evidence that
respondents actually purchased a second SEACAT 25
directly from AFFA. But this circumstance will not absolve
respondents from liability for invading Cordero’s rights
under the exclusive distributorship. Respondents clearly
acted in bad faith in bypassing Cordero as they completed
the remaining payments to AFFA without advising him
and furnishing him with copies of the bank transmittals as
they previously did, and directly dealt with AFFA through
Robinson regarding arrangements for the arrival of the
first SEACAT 25 in Manila and negotiations for the
purchase of the second vessel pursuant to the
Memorandum of Agreement which Cordero signed in
behalf of AFFA. As a result of respondents’ actuations,
Cordero incurred losses as he was not paid the balance of
his commission from the sale of the first vessel and his
exclusive distributorship revoked by AFFA.
Petitioner Go contends that the trial and appellate
courts erred in holding them solidarily liable for Cordero’s
unpaid commission, which is the sole obligation of the
principal AFFA. It was Robinson on behalf of AFFA who, in
the letter dated August 5, 1997 addressed to Cordero,
undertook to pay commission payments to Pamana on a
staggered progress

_______________

48 Supra.
49 Rollo (G.R. No. 164703), pp. 33-34.

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20 SUPREME COURT REPORTS ANNOTATED

Go vs. Cordero

payment plan in the form of percentage of the commission

per payment. AFFA explicitly committed that it will, “upon
receipt of progress payments, pay to Pamana their full
commission by telegraphic transfer to an account
nominated by Pamana within one to two days of [AFFA]
receiving such payments.”50 Petitioner Go further
maintains that he had not in any way violated or caused
the termination of the exclusive distributorship agreement
between Cordero and AFFA; he had also paid in full the
first and only vessel he purchased from AFFA.51
While it is true that a third person cannot possibly be
sued for breach of contract because only parties can breach
contractual provisions, a contracting party may sue a third
person not for breach but for inducing another to commit
such breach.
Article 1314 of the Civil Code provides:

“Art. 1314. Any third person who induces another to violate

his contract shall be liable for damages to the other contracting
party.”

The elements of tort interference are: (1) existence of a

valid contract; (2) knowledge on the part of the third person
of the existence of a contract; and (3) interference of the
third person is without legal justification.52
The presence of the first and second elements is not
disputed. Through the letters issued by Robinson attesting
that Cordero is the exclusive distributor of AFFA in the
Philippines, respondents were clearly aware of the contract
between Cordero and AFFA represented by Robinson. In
fact, evidence

_______________

50 Id., pp 36-37; Exhibit “A-3,” folder of exhibits, p. 4.

51 Rollo (G.R. No. 164703), p. 39.
52 So Ping Bun v. Court of Appeals, G.R. No. 120554, September 21,
1999, 314 SCRA 751, 758, citing 30 Am Jur, Section 19, pp. 71-72 and
Sampaguita Pictures, Inc. v. Vasquez, et al. (Court of Appeals, 68 O.G.
7666).

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VOL. 620, MAY 4, 2010 21

Go vs. Cordero

on record showed that respondents initially dealt with and

recognized Cordero as such exclusive dealer of AFFA high-
speed catamaran vessels in the Philippines. In that
capacity as exclusive distributor, petitioner Go entered into
the Memorandum of Agreement and Shipbuilding Contract
No. 7825 with Cordero in behalf of AFFA.
As to the third element, our ruling in the case of So Ping
Bun v. Court of Appeals53 is instructive, to wit:

“A duty which the law of torts is concerned with is respect for

the property of others, and a cause of action ex delicto may be
predicated upon an unlawful interference by one person of the
enjoyment by the other of his private property. This may pertain
to a situation where a third person induces a party to renege on or
violate his undertaking under a contract. In the case before us,
petitioner’s Trendsetter Marketing asked DCCSI to execute lease
contracts in its favor, and as a result petitioner deprived
respondent corporation of the latter’s property right. Clearly, and
as correctly viewed by the appellate court, the three elements of
tort interference above-mentioned are present in the instant case.
Authorities debate on whether interference may be justified
where the defendant acts for the sole purpose of furthering his
own financial or economic interest. One view is that, as a general
rule, justification for interfering with the business relations of
another exists where the actor’s motive is to benefit himself. Such
justification does not exist where his sole motive is to cause harm
to the other. Added to this, some authorities believe that it is not
necessary that the interferer’s interest outweigh that of the party
whose rights are invaded, and that an individual acts under an
economic interest that is substantial, not merely de minimis, such
that wrongful and malicious motives are negatived, for he acts in
self-protection. Moreover, justification for protecting one’s
financial position should not be made to depend on a comparison
of his economic interest in the subject matter with that of others.
It is sufficient if the impetus of his conduct lies in a proper
business interest rather than in wrongful motives.

_______________

53 Supra.

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22 SUPREME COURT REPORTS ANNOTATED

Go vs. Cordero

As early as Gilchrist vs. Cuddy, we held that where there

was no malice in the interference of a contract, and the
impulse behind one’s conduct lies in a proper business
interest rather than in wrongful motives, a party cannot
be a malicious interferer. Where the alleged interferer is
financially interested, and such interest motivates his conduct, it
cannot be said that he is an officious or malicious intermeddler.
In the instant case, it is clear that petitioner So Ping Bun
prevailed upon DCCSI to lease the warehouse to his enterprise at
the expense of respondent corporation. Though petitioner took
interest in the property of respondent corporation and
benefited from it, nothing on record imputes deliberate
wrongful motives or malice in him.
xxx
While we do not encourage tort interferers seeking their
economic interest to intrude into existing contracts at the expense
of others, however, we find that the conduct herein complained of
did not transcend the limits forbidding an obligatory award for
damages in the absence of any malice. The business desire is
there to make some gain to the detriment of the contracting
parties. Lack of malice, however, precludes damages. But it
does not relieve petitioner of the legal liability for
entering into contracts and causing breach of existing
ones. The respondent appellate court correctly confirmed the
permanent injunction and nullification of the lease contracts
between DCCSI and Trendsetter Marketing, without awarding
damages. The injunction saved the respondents from further
damage or injury caused by petitioner’s interference.”54 [emphasis
supplied.]

Malice connotes ill will or spite, and speaks not in

response to duty. It implies an intention to do ulterior and
unjustifiable harm. Malice is bad faith or bad motive.55 In
the case of Lagon v. Court of Appeals,56 we held that to
sustain a case for tortuous interference, the defendant
must have acted with malice

_______________

54 Id., pp. 758-760.

55 Borjal v. Court of Appeals, G.R. No. 126466, January 14, 1999, 301
SCRA 1, 28.
56 G.R. No. 119107, March 18, 2005, 453 SCRA 616, 626.

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Go vs. Cordero

or must have been driven by purely impure reasons to

injure the plaintiff; in other words, his act of interference
cannot be justified. We further explained that the word
“induce” refers to situations where a person causes another
to choose one course of conduct by persuasion or
intimidation. As to the allegation of private respondent in
said case that petitioner induced the heirs of the late Bai
Tonina Sepi to sell the property to petitioner despite an
alleged renewal of the original lease contract with the
deceased landowner, we ruled as follows:

“Assuming ex gratia argumenti that petitioner knew of the

contract, such knowledge alone was not sufficient to make him
liable for tortuous interference. x x x
Furthermore, the records do not support the allegation of
private respondent that petitioner induced the heirs of Bai Tonina
Sepi to sell the property to him. The word “induce” refers to
situations where a person causes another to choose one course of
conduct by persuasion or intimidation. The records show that the
decision of the heirs of the late Bai Tonina Sepi to sell the
property was completely of their own volition and that petitioner
did absolutely nothing to influence their judgment. Private
respondent himself did not proffer any evidence to support his
claim. In short, even assuming that private respondent was able to
prove the renewal of his lease contract with Bai Tonina Sepi, the
fact was that he was unable to prove malice or bad faith on the
part of petitioner in purchasing the property. Therefore, the claim
of tortuous interference was never established.”57

In their Answer, respondents denied having anything to

do with the unpaid balance of the commission due to
Cordero and the eventual termination of his exclusive
distributorship by AFFA. They gave a different version of
the events that transpired following the signing of
Shipbuilding Contract No. 7825. According to them, several
builder-competitors still entered the picture after the said
contract for the purchase of one (1) SEACAT 25 was sent to
Brisbane in July 1997 for au-

_______________

57 Id., p. 626.

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24 SUPREME COURT REPORTS ANNOTATED

Go vs. Cordero

thentication, adding that the contract was to be effective

on August 7, 1997, the time when their funds was to
become available. Go admitted he called the attention of
AFFA if it can compete with the prices of other builders,
and upon mutual agreement, AFFA agreed to give them a
discounted price under the following terms and conditions:
(1) that the contract price be lowered; (2) that Go will
obtain another vessel; (3) that to secure compliance of such
conditions, Go must make an advance payment for the
building of the second vessel; and (4) that the payment
scheme formerly agreed upon as stipulated in the first
contract shall still be the basis and used as the guiding
factor in remitting money for the building of the first
vessel. This led to the signing of another contract
superseding the first one (1), still to be dated 07 August
1997. Attached to the answer were photocopies of the
second contract stating a lower purchase price
(US$1,150,000.00) and facsimile transmission of AFFA to
Go confirming the transaction.58
As to the cessation of communication with Cordero, Go
averred it was Cordero who was nowhere to be contacted at
the time the shipbuilding progress did not turn good as
promised, and it was always Landicho and Tecson who,
after several attempts, were able to locate him only to
obtain unsatisfactory reports such that it was Go who
would still call up Robinson regarding any progress status
report, lacking documents for MARINA, etc., and go to
Australia for ocular inspection. Hence, in May 1998 on the
scheduled launching of the ship in Australia, Go engaged
the services of Landicho who went to Australia to see to it
that all documents needed for the shipment of the vessel to
the Philippines would be in order. It was also during this
time that Robinson’s request for inquiry on the Philippine
price of a Wartsila engine for AFFA’s then on-going vessel
construction, was misinterpreted by Cordero as indicating
that Go was buying a second vessel.59

_______________

58 Records, Vol. I, pp. 204-206.

59 Id., pp. 206-207.

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Go vs. Cordero

We find these allegations unconvincing and a mere

afterthought as these were the very same averments
contained in the Position Paper for the Importer dated
October 9, 1998, which was submitted by Go on behalf of
ACG Express Liner in connection with the complaint-
affidavit filed by Cordero before the BOC-SGS Appeals
Committee relative to the shipment valuation of the first
SEACAT 25 purchased from AFFA.60 It appears that the
purported second contract superseding the original
Shipbuilding Contract No. 7825 and stating a lower price of
US$1,150,000.00 (not US$1,465,512.00) was only presented
before the BOC to show that the vessel imported into the
Philippines was not undervalued by almost US$500,000.00.
Cordero vehemently denied there was such modification of
the contract and accused respondents of resorting to
falsified documents, including the facsimile transmission of
AFFA supposedly confirming the said sale for only
US$1,150,000.00. Incidentally, another document filed in
said BOC case, the Counter-Affidavit/Position Paper for the
Importer dated November 16, 1998,61 states in paragraph 8
under the Antecedent facts thereof, that—

“8. As elsewhere stated, the total remittances made by herein

Importer to AFFA does not alone represent the purchase price for
Seacat 25. It includes advance payment for the acquisition
of another vessel as part of the deal due to the discounted
price.”62

which even gives credence to the claim of Cordero that

respondents negotiated for the sale of the second vessel and
that the nonpayment of the remaining two (2) instalments
of his commission for the sale of the first SEACAT 25 was a
result of Go and Landicho’s directly dealing with Robinson,
obviously to obtain a lower price for the second vessel at
the expense of Cordero.

_______________

60 Folder of exhibits, Exhibit “BB,” pp. 324-342.

61 Id., Exhibit “CC,” pp. 343-361.
62 Id., p. 345.

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26 SUPREME COURT REPORTS ANNOTATED

Go vs. Cordero

The act of Go, Landicho and Tecson in inducing

Robinson and AFFA to enter into another contract directly
with ACG Express Liner to obtain a lower price for the
second vessel resulted in AFFA’s breach of its contractual
obligation to pay in full the commission due to Cordero and
unceremonious termination of Cordero’s appointment as
exclusive distributor. Following our pronouncement in
Gilchrist v. Cuddy (supra), such act may not be deemed
malicious if impelled by a proper business interest rather
than in wrongful motives. The attendant circumstances,
however, demonstrated that respondents transgressed the
bounds of permissible financial interest to benefit
themselves at the expense of Cordero. Respondents
furtively went directly to Robinson after Cordero had
worked hard to close the deal for them to purchase from
AFFA two (2) SEACAT 25, closely monitored the progress
of building the first vessel sold, attended to their concerns
and spent no measly sum for the trip to Australia with Go,
Landicho and Go’s family members. But what is appalling
is the fact that even as Go, Landicho and Tecson secretly
negotiated with Robinson for the purchase of a second
vessel, Landicho and Tecson continued to demand and
receive from Cordero their “commission” or “cut” from
Cordero’s earned commission from the sale of the first
SEACAT 25.
Cordero was practically excluded from the transaction
when Go, Robinson, Tecson and Landicho suddenly ceased
communicating with him, without giving him any
explanation. While there was nothing objectionable in
negotiating for a lower price in the second purchase of
SEACAT 25, which is not prohibited by the Memorandum
of Agreement, Go, Robinson, Tecson and Landicho clearly
connived not only in ensuring that Cordero would have no
participation in the contract for sale of the second SEACAT
25, but also that Cordero would not be paid the balance of
his commission from the sale of the first SEACAT 25. This,
despite their knowledge that it was commission already
earned by and due to Cordero. Thus, the trial and appellate
courts correctly ruled that the actua-
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VOL. 620, MAY 4, 2010 27

Go vs. Cordero

tions of Go, Robinson, Tecson and Landicho were without

legal justification and intended solely to prejudice Cordero.
The existence of malice, ill will or bad faith is a factual
matter. As a rule, findings of fact of the trial court, when
affirmed by the appellate court, are conclusive on this
Court.63 We see no compelling reason to reverse the
findings of the RTC and the CA that respondents acted in
bad faith and in utter disregard of the rights of Cordero
under the exclusive distributorship agreement.
 The failure of Robinson, Go, Tecson and Landico to act
with fairness, honesty and good faith in securing better
terms for the purchase of high-speed catamarans from
AFFA, to the prejudice of Cordero as the duly appointed
exclusive distributor, is further proscribed by Article 19 of
the Civil Code:

“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.”
As we have expounded in another case:
“Elsewhere, we explained that 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 responsible.”
The object of this article, therefore, is to set certain standards
which must be observed not only in the exercise of one’s rights but
also in the performance of one’s duties. These standards are the
following: act with justice, give everyone his due and observe
honesty and good faith. Its antithesis, necessarily, is any act
evincing bad faith or intent to injure. Its elements are the
following: (1) There is a legal right or duty; (2) which is exercised
in bad faith; (3) for the sole intent of prejudicing or injuring
another. When Article 19 is violated, an action for damages is
proper under Articles 20 or 21 of the Civil Code. Article 20
pertains to damages arising from a violation of law x x x. Article
21, on the other hand, states:

_______________

63 Ramas v. Quiamco, G.R. No. 146322, December 6, 2006, 510 SCRA 172, 178.

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28 SUPREME COURT REPORTS ANNOTATED

Go vs. Cordero

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.
Article 21 refers to acts contra bonus mores and has the following
elements: (1) There is an act which is legal; (2) but which is
contrary to morals, good custom, public order, or public policy;
and (3) it is done with intent to injure.
 A common theme runs through Articles 19 and 21, and that is,
the act complained of must be intentional.”64

Petitioner Go’s argument that he, Landicho and Tecson

cannot be held liable solidarily with Robinson for actual,
moral and exemplary damages, as well as attorney’s fees
awarded to Cordero since no law or contract provided for
solidary obligation in these cases, is equally bereft of merit.
Conformably with Article 2194 of the Civil Code, the
responsibility of two or more persons who are liable for the
quasi-delict is solidary.65 In Lafarge Cement Philippines,
Inc. v. Continental Cement Corporation,66 we held:

[O]bligations arising from tort are, by their nature,

always solidary. We have assiduously maintained this legal
principle as early as 1912 in Worcester v. Ocampo, in which
we held:
x x x The difficulty in the contention of the appellants is
that they fail to recognize that the basis of the present
action is tort. They fail to recognize the universal doctrine
that each joint tort feasor is not only individually liable for
the tort in

_______________

64 Nikko Hotel Manila Garden v. Reyes, G.R. No. 154259, February 28, 2005,
452 SCRA 532, 546-547, citing Albenson Enterprises Corp. v. Court of Appeals,
G.R. No. 88694, January 11, 1993, 217 SCRA 16, 25.
65 Ngo Sin Sing v. Li Seng Giap & Sons, Inc., G.R. No. 170596, November 28,
2008, 572 SCRA 625, 638, citing Chan, Jr. v. Iglesia ni Cristo, Inc., G.R. No.
160283, October 14, 2005, 473 SCRA 177, 186.
66 G.R. No. 155173, November 23, 2004, 443 SCRA 522.

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VOL. 620, MAY 4, 2010 29

Go vs. Cordero

which he participates, but is also jointly liable with his tort

feasors. x x x
It may be stated as a general rule that joint tort feasors
are all the persons who command, instigate, promote,
encourage, advise, countenance, cooperate in, aid or abet
the commission of a tort, or who approve of it after it is
done, if done for their benefit. They are each liable as
principals, to the same extent and in the same
 manner as if they had performed the wrongful act
themselves. x x x”
Joint tort feasors are jointly and severally liable for the
tort which they commit. The persons injured may sue all of
them or any number less than all. Each is liable for the
whole damages caused by all, and all together are jointly
liable for the whole damage. It is no defense for one sued
alone, that the others who participated in the wrongful act
are not joined with him as defendants; nor is it any excuse
for him that his participation in the tort was insignificant
as compared to that of the others. x x x
Joint tort feasors are not liable pro rata. The damages
can not be apportioned among them, except among
themselves. They cannot insist upon an apportionment, for
the purpose of each paying an aliquot part. They are jointly
and severally liable for the whole amount. x x x
A payment in full for the damage done, by one of the joint
tort feasors, of course satisfies any claim which might exist
against the others. There can be but satisfaction. The
release of one of the joint tort feasors by agreement
generally operates to discharge all. x x x
Of course, the court during trial may find that some of
the alleged tort feasors are liable and that others are not
liable. The courts may release some for lack of evidence
while condemning others of the alleged tort feasors. And
this is true even though they are charged jointly and
severally.”67 [emphasis supplied.]

The rule is that the defendant found guilty of

interference with contractual relations cannot be held
liable for more than

_______________

67 As cited in Ngo Sin Sing v. Li Seng Giap & Sons, Inc., supra.

30

30 SUPREME COURT REPORTS ANNOTATED

Go vs. Cordero

the amount for which the party who was inducted to break
the contract can be held liable.68 Respondents Go, Landicho
and Tecson were therefore correctly held liable for the
balance of petitioner Cordero’s commission from the sale of
the first SEACAT 25, in the amount of US$31,522.09 or its
peso equivalent, which AFFA/Robinson did not pay in
violation of the exclusive distributorship agreement, with
interest at the rate of 6% per annum from June 24, 1998
until the same is fully paid.
Respondents having acted in bad faith, moral damages
may be recovered under Article 2219 of the Civil Code.69
On the other hand, the requirements of an award of
exemplary damages are: (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.70 The award of exemplary damages is thus in
order. However, we find the sums awarded by the trial
court as moral and exemplary damages as reduced by the
CA, still excessive under the circumstances.
Moral damages are meant to compensate and alleviate
the physical suffering, mental anguish, fright, serious
anxiety, besmirched reputation, wounded feelings, moral
shock, social

_______________

68  Daywalt v. Corporacion de PP. Agustinos Recoletos, 39 Phil. 587

(1919).
69  Magat v. Court of Appeals, G.R. No. 124221, August 4, 2000, 337
SCRA 298; Far East Bank & Trust Company v. Court of Appeals, 311 Phil.
783; 241 SCRA 671 (1995); and Expertravel & Tours, Inc. v. Court of
Appeals, G.R. No. 130030, June 25, 1999, 309 SCRA 141, 145-146.
70  National Steel Corporation v. Regional Trial Court of Lanao del
Norte, Br. 2, Iligan City, G.R. No. 127004, March 11, 1999 304 SCRA 609.

31

VOL. 620, MAY 4, 2010 31

Go vs. Cordero

humiliation, and similar injuries unjustly caused.

Although incapable of pecuniary estimation, the amount
must somehow be proportional to and in approximation of
the suffering inflicted. Moral damages are not punitive in
nature and were never intended to enrich the claimant at
the expense of the defendant. There is no hard-and-fast
rule in determining what would be a fair and reasonable
amount of moral damages, since each case must be
governed by its own peculiar facts. Trial courts are given
discretion in determining the amount, with the limitation
that it “should not be palpably and scandalously excessive.”
Indeed, it must be commensurate to the loss or injury
suffered.71
We believe that the amounts of P300,000.00 and
P200,000.00 as moral and exemplary damages,
respectively, would be sufficient and reasonable. Because
exemplary dam-

_______________

71 Samson, Jr. v. Bank of the Philippine Islands, G.R. No. 150487, July
10, 2003, 405 SCRA 607, 611-612, citing Expertravel & Tours, Inc. v. Court
of Appeals, 368 Phil. 444; 309 SCRA 141 (1999); De la Serna v. Court of
Appeals, G.R. No. 109161, June 21, 1994, 233 SCRA 325; Visayan Sawmill
Company, Inc. v. Court of Appeals, G.R. No. 83851, March 3, 1993, 219
SCRA 378; Flores v. Uy, G.R. Nos. 121492 & 124325, October 26, 2001,
368 SCRA 347; Pagsuyuin v. Intermediate Appellate Court, G.R. No.
72121, February 6, 1991, 193 SCRA 547; Northwest Airlines v. Laya, G.R.
No. 145956, May 29, 2002, 382 SCRA 730; Cavite Development Bank v.
Sps. Lim, 381 Phil. 355; 324 SCRA 346 (2000); Coca-Cola Bottlers, Phils.,
Inc. v. Roque, 367 Phil. 493; 308 SCRA 215 (1999); Morales v. Court of
Appeals, G.R. No. 117228, June 19, 1997, 274 SCRA 282; Prudential Bank
v. Court of Appeals, 384 Phil. 942; 328 SCRA 260 (2000); Singson v. Court
of Appeals, 346 Phil. 831; 282 SCRA 149 (1997); Del Rosario v. Court of
Appeals, 334 Phil. 812; 267 SCRA 158 (1997); Philippine National Bank v.
Court of Appeals, 326 Phil. 326; 256 SCRA 309 (1996); Mayo v. People,
G.R. No. 91201, December 5, 1991, 204 SCRA 642; Policarpio v. Court of
Appeals, G.R. No. 94563, March 5, 1991, 194 SCRA 729; Radio
Communications of the Phils., Inc. v. Rodriguez, G.R. No. 83768, February
28, 1990, 182 SCRA 899; and Prudenciado v. Alliance Transport System,
Inc., No. L-33836, March 16, 1987, 148 SCRA 440.

32

32 SUPREME COURT REPORTS ANNOTATED

Go vs. Cordero
 ages are awarded, attorney’s fees may also be awarded in
consonance with Article 2208 (1).72 We affirm the appellate
court’s award of attorney’s fees in the amount of
P50,000.00.
WHEREFORE, the petitions are DENIED. The Decision
dated March 16, 2004 as modified by the Resolution dated
July 22, 2004 of the Court of Appeals in CA-G.R. CV No.
69113 are hereby AFFIRMED with MODIFICATION in
that the awards of moral and exemplary damages are
hereby reduced to P300,000.00 and P200,000.00,
respectively.
With costs against the petitioner in G.R. No. 164703.
SO ORDERED.

Puno (C.J., Chairperson), Carpio-Morales, Leonardo-

De Castro and Bersamin, JJ., concur.

Petitions denied, judgment affirmed with modification.

Note.—It is necessary to determine first whether the

action is in personam, in rem or quasi in rem because the
rules on service of summons under Rule 14 of the Rules of
Court of the Philippines apply according to the nature of
the action. (Belen vs. Chavez, 549 SCRA 472 [2008])
——o0o—— 

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72  B.F. Metal (Corporation) v. Lomotan, G.R. No. 170813, April 16,
2008, 551 SCRA 618.

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