Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&amp;view=article&amp;id=40339:g-r-no-124221-august-4,-2000-victorino-magat,-jr-v-court-of-appeals,-et-al&amp;catid=1396&amp;Itemid=566
Timestamp: 2019-04-22 02:03:19+00:00

Document:
VICTORINO MAGAT, JR. substituted by heirs, OLIVIA D. MAGAT, and minors MA. DULCE MAGAT, MA. MAGNOLIA MAGAT, RONALD MAGAT and DENNIS MAGAT, Petitioners, v. COURT OF APPEALS and SANTIAGO A. GUERRERO, Respondents.
The case is an appeal 1 from the decision of the Court of Appeals 2 reversing the decision of the Regional Trial Court of Makati, Metro Manila, 3 ruling in favor of respondent Santiago A. Guerrero and dismissing petitioners’ complaint.
"SUBJECT:	SEIZURE AND CONTROL OF ALL PRIVATELY OWNED NEWSPAPERS, MAGAZINES, RADIO AND TELEVISION FACILITIES AND ALL OTHER MEDIA OF COMMUNICATION.
"In view of the present national emergency which has been brought about by the activities of those who are actively engaged in a criminal conspiracy to seize political and state power in the Philippines and to take over the Government by force and violence the extent of which has now assumed the proportion of an actual war against our people and their legitimate Government, and pursuant to Proclamation No. 1081 dated September 21, 1972, and in my capacity as commander in chief of all the armed forces of the Philippines and in order to prevent the use of privately owned newspapers, magazines, radio and television facilities and all other media of communications, for propaganda purposes against the government and its duly constituted authorities or for any purpose that tend to undermine the faith and confidence of the people in our government and aggravate the present national emergency, you are hereby ordered forthwith to take over and control or cause the taking over and control of all such newspapers, magazines, radio and television facilities and all other media of communications, wherever they are, for the duration of the present national emergency, or until otherwise ordered by me or by my duly designated representative.
"SUBJECT:	SUSPENDING THE ACCEPTANCE AND PROCESSING OF APPLICATIONS FOR RADIO STATION CONSTRUCTION PERMITS AND FOR PERMITS TO OWN AND/OR POSSESS RADIO TRANSMITTERS OR TRANSCEIVERS.
"In view of the existence of a state of emergency and the declaration by the President of martial law in the entire country under Proclamation No. 1081 dated September 21, 1972, effective immediately the acceptance and processing by the radio control office of applications for radio stations constructions permits and for permits to possess, own, transfer, purchase and sale of radio transmitters and transreceivers as well as manufacturers and dealer’s permits of said equipment is hereby suspended.
The contract was signed and Victorino contacted his Japanese supplier, Koide & Co., Ltd. and placed an order for the transceivers.
"4.	P20,000.00 as attorney’s fees.
"WHEREFORE, judgment is hereby rendered DISMISSING the complaint.
"No pronouncements as to costs.
The issue is whether the contract between Victorino and Guerrero for the purchase of radio transceivers was void. Stated differently, whether the transceivers subject of the contract were banned contraband items prohibited by the LOI and the Administrative Circular to import.
The contract was valid; the radio transceivers were not contraband.
We do not agree. The contract was not void ab initio. Nowhere in the LOI and Admin. Circular is there an express ban on the importation of transceivers.
Guerrero testified that a permit to import the transceivers from Japan was denied by the Radio Control Board. He stated that he, together with Aligada, Victorino and a certain John Dauden personally went to the Radio Control Office, and were denied a permit to import. They also went to the Office of the President, where Secretary Ronaldo B. Zamora explained that radios were "banned like guns because of martial law." 44 Guerrero testified that this prevented him from securing a letter of credit from the Central Bank. 45 This testimony was not rebutted.
The law provides that" [w]hen the service (required by the contract) has become so manifestly beyond the contemplation of the parties, the obligor may also be released therefrom, in whole or in part." 46 Here, Guerrero’s inability to secure a letter of credit and to comply with his obligation was a direct consequence of the denial of the permit to import. For this, he cannot be faulted.
Even if we assume that there was a breach of contract, damages cannot be awarded. Damnum absque injuria.
True, Guerrero borrowed equipment from the Subic Naval Base authorities at zero cost. 49 This does not automatically translate to bad faith. Guerrero was faced with the danger of the cancellation of his contract with Subic Naval Base. He borrowed equipment as a prudent and swift alternative. There was no proof that he resorted to this option with a deliberate and malicious intent to dishonor his contract with Victorino. An award of damages surely cannot be based on mere hypotheses, conjectures and surmises. Good faith is presumed, the burden of proving bad faith rests on the one alleging it. 50 Petitioners did not effectively discharge the burden in this case.
To recover moral damages in an action for breach of contract, the breach must be palpably wanton, reckless, malicious, in bad faith, oppressive or abusive. 51 This is not the case here.
WHEREFORE, we AFFIRM the decision of the Court of Appeals promulgated on October 11, 1995, in CA-G. R. CV No. 34952, dismissing the complaint.
1.	Under Rule 45 of the 1964 Revised Rules of Court.
2.	In CA-G.R. CV No. 34952, promulgated on October 4, 1995, Justice Corona Ibay-Somera, ponente, concurred in by Justices Nathanael P. de Pano, Jr. and Celia Lipana-Reyes, + sitting as Special Eleventh Division.
3.	In Civil Case No. 17827, dated July 12, 1991, Judge Salvador S. Abad Santos, presiding. The decision was actually signed by Judge Cecilio F. Balagot, as "assisting judge" citing Supreme Court Adm. Order No. 65, dated September 25, 1989 (Rollo, p. 94) as basis for his authority to sign (Rollo, p. 111).
4.	Regional Trial Court Record, p. 360.
7.	The radio frequency to be assigned by Subic Naval Base.
8.	Regional Trial Court Record, pp. 9-10.
9.	Regional Trial Court Record, p. 338.
13.	Regional Trial Court Record, p. 12.
17.	Regional Trial Court Record, p. 15.
18.	Through the Radio Regulation Office.
19.	As per the unrebutted testimony of Guerrero, it was Aligada and Victorino who had the responsibility of securing the required Letter of Credit from the Central Bank (Regional Trial Court Record, p. 369).
20.	Regional Trial Court Record, pp. 373-374.
23.	Through the presiding Judge Leo D. Medialdea.
24.	Regional Trial Court Record, p. 26.
26.	G.R. No. L-37120, 121 SCRA 418 (1983), Justice Venicio Escolin, ponente, concurred in by Justices Felix Makasiar, Hermogenes Concepcion, Jr., Juvenal K. Guerrero, and Vicente Abad Santos. Justice Ramon C. Aquino was on leave and Justice Pacifico P. De Castro had no part (Second Division).
27.	Regional Trial Court Record, p. 106.
28.	Through presiding Judge Rosario R. Veloso.
29.	Regional Trial Court Record, p. 107.
31.	Regional Trial Court Record, p. 120.
33.	Docketed as CA-G. R. CV No. 34952.
37.	Filed on April 26, 1996. On February 10, 1997, we resolved to give due course to the petition (Rollo, p. 177).
38.	Black’s Law Dictionary, Abridged Fifth Edition, p. 170.
41.	Adm. Circular No. 4.
42.	A "license" is a right or permission granted by some competent authority to carry on a business or to do an act which, without such license, would be illegal (Corona v. United Harbor Pilots Association of the Philippines, 283 SCRA 31 ).
43.	Art. 1347 of the Civil Code of the Philippines provides, "All things which are not outside the commerce of men, including future things may be the object of the contract.
44.	Regional Trial Court Record, p. 371.
46.	Article 1267, Civil Code of the Philippines.
47.	Claiming unrealized profits in the amount of P52,393.89, heirs of Victorino bank on Article 2201 of the Civil Code and aver that Guerrero acted in bad faith.
48.	Ford Philippines, Inc. v. Court of Appeals, 267 SCRA 320, 328 (1997); Priscilla L. Tan v. Northwest Airlines, Inc., G.R. No. 135802, March 3, 2000.
49.	Regional Trial Court Record, p. 430.
50.	AFP Mutual Benefit Association, Inc. v. Court of Appeals, G.R Nos. 104769-135016, March 3, 2000.
51.	Far East Bank and Trust Company v. Court of Appeals, 241 SCRA 671 (1995); Go v. Court of Appeals, 272 SCRA 752 (1997).
52.	Philippine Air Lines v. Miano, 242 SCRA 235 (1995).
53.	Integrated Packaging Corp. v. Court of Appeals, G.R. No. 115117, June 8, 2000.
54.	Scott Consultants & Resource Development Corporation, Inc. v. Court of Appeals, 242 SCRA 393 (1995); Kierulf v. Court of Appeals, 269 SCRA 433 (1997).
55.	Bernardo v. Court of Appeals (Special Sixth Division), 275 SCRA 413 (1997).
56.	People of the Philippines v. Carlito Ereno, G. R. No. 124706, February 22, 2000.
58.	Supra, Regional Trial Court Record, p. 152.
59.	Del Mundo v. Court of Appeals, 240 SCRA 348 (1995).
60.	Sulpicio Lines, Inc. v. Court of Appeals, 246 SCRA 376 (1995); Central Bank of the Philippines v. Spouses Alfonso, G.R. No. 131074, March 27, 2000.

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