THIRD DIVISION

MICHAEL C. GUY, PLAINTIFF-APPELLEE, v. RAFFY TULFO, ALLEN MACASAET,

NATURE OF THE ACTION:

FACTS:
An article entitled "Malinis ba talaga o naglilinis-linisan lang (Sino si Finance Sec. Juanita Amatong?)"
was published in Abante Tonite, a newspaper of general circulation in the Philippines, written by Tulfo.
The article reported that a certain Guy, who was then being investigated by the Department of Finance for
tax fraud, went to former the Revenue Integrity Protection Service (RIPS) of the Department of Finance
(DF) Secretary Juanita Amatong’s (Secretary Amatong) house to ask for help. Secretary Amatong then
purportedly called the head of the RIPS and directed that all the documents that it had obtained on Guy's
case be surrendered to her.

Claiming that the article had tainted his reputation, Guy filed a Complaint-Affidavit against Tulfo and the
the representatives of Abante Tonite's Monica Publishing Corporation: Macaseat et.al. The Regional
Trial Court (RTC) convicted Tulfo and Macasaet, et al. of the crime of libel. The trial court ordered Tulfo
and Macasaet, et al. to pay Guy: P5M as actual damages; P5M as moral damages; and P211k as attorney's
fees.

The CA affirmed the trial court's Judgment convicting Tulfo and Macasaet, et al. of libel. Nonetheless, it
reduced the award moral damages into P500k and ordered them to pay P500k as exemplary damages. But
the CA modified the said decision and deleted the award of exemplary damages. The actual damages was
also deleted for lack of factual basis

Petitioner maintains that contrary to the Court of Appeals' findings, there is factual and legal basis for the
award of actual damages. He avers that it had been established in the trial court proceedings that he may
be able to earn P50M in 10 years. This possibility, he points out, constitutes the factual basis for the
award of actual damages.

Petitioner posits that assuming that there is no sufficient basis for the award of actual damages, petitioner
asserts that he is still entitled to temperate damages. He claims that temperate damages may be awarded
even without competent proof, as long as the court finds that the victim has incurred some pecuniary loss.
He insists that in his case, the libelous article tainted his reputation, causing some of his clients to
terminate their arrangements with him.

Petitioner insists that he is entitled to moral damages in the amount of P5M. He argues that he suffered
humiliation and anxiety from the imputations in the article. For disgracing their family, her mother
chastised him. Also, his children were interrogated at school because of the article. Further the
publication of the article affected his reputation as a result of which his clients refused to transact with
him.

Finally, petitioner contends that exemplary damages should be awarded in his favor. He maintains that
respondent Tulfo deliberately took advantage of his standing as a renowned journalist to tarnish
petitioner's reputation. He asserts that respondent Tulfo's penchant for writing defamatory articles should
be restrained.

ISSUE:
(1) Whether or not Petitioner can be awarded actual damages, notwithstanding that the CA found no
basis for the same? – (NO)
(2) Whether or not Petitioner can be awarded Temperate damages notwithstanding that there is no basis
for the award of actual damages? – (NO)
(3) Whether or not the reduction of the award of moral damages is proper? – (YES)
(4) Whether or not Petitioner is entitled to Exemplary damages? – (YES)

RULING:
(1) Actual damages are "compensation for an injury that will put the injured party in the position
where it was before the injury. They pertain to such injuries or losses that are actually sustained and
susceptible of measurement." Actual damages constitute compensation for sustained pecuniary loss.
Nevertheless, a party may only be awarded actual damages when the pecuniary loss he or she had
suffered was duly proven. Thus:
Except as provided by law or by stipulation, a party is entitled to adequate compensation only for
such pecuniary loss as is duly proven. Basic is the rule that to recover actual damages, not only must the
amount of loss be capable of proof; it must also be actually proven with a reasonable degree of certainty,
premised upon competent proof or the best evidence obtainable.

This Court has, time and again, emphasized that actual damages cannot be presumed and courts, in
making an award, must point out specific facts which could afford a basis for measuring whatever
compensatory or actual damages are borne. An award of actual damages is "dependent upon competent
proof of the damages suffered and the actual amount thereof. The award must be based on the evidence
presented, not on the personal knowledge of the court; and certainly not on flimsy, remote, speculative
and unsubstantial proof."64 (Emphasis supplied, citations omitted)

As the Court of Appeals correctly found, petitioner failed to substantiate the loss he had allegedly
sustained. Save for his testimony in court, he presented no evidence to support his claim. His allegation of
possibly earning P50,000,000.00 in 10 years is a mere assumption without any foundation. This bare
allegation is insufficient to prove that he has indeed lost P5,000,000.00 as earnings. As this Court has
previously held, "the award of unrealized profits cannot be based on the sole testimony of the party
claiming it."

(2) A party may be awarded temperate damages should the court find that he or she has suffered some
pecuniary loss even if its amount cannot be determined with exact certainty. Notwithstanding the absence
of any evidence on the amount of actual damages suffered.

Petitioner failed to prove that he has suffered any pecuniary loss. While he testified that he lost clients as
a result of the libelous article, records reveal that he lost only one (1) client, Jayson Mallari (Mallari). On
cross-examination, Mallari even testified "that he was not immediately convinced by the article and called
petitioner before terminating his business with him." Moreover, as the records show, Mallari started
transacting with petitioner again sometime in 2005.

(3) Moral damages are "compensatory damages awarded for mental pain and suffering or mental
anguish resulting from a wrong." They are awarded to the injured party to enable him to obtain means that
will ease the suffering he sustained from respondent's reprehensible act.

"Moral damages are not punitive in nature," but instead a type of "award designed to compensate the
claimant for actual injury suffered.in Equitable Leasing Corporation v. Suyom:
Moral damages are not punitive in nature, but are designed to compensate and alleviate in some
way the physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded
feelings, moral shock, social humiliation, and similar injury unjustly caused a person. Although incapable
of pecuniary computation, moral damages must nevertheless be somehow proportional to and in
approximation of the suffering inflicted. This is so because moral damages are in the category of an
award designed to compensate the claimant for actual injury suffered, not to impose a penalty on the
wrongdoer.
Unlike actual and temperate damages, moral damages may be awarded even if the injured party failed to
prove that he has suffered pecuniary loss. As long as it was established that complainant's injury was the
result of the offending party's action, the complainant may recover moral damages.

Article 2219 of the Civil Code specifically states that moral damages may be recovered in cases of libel,
slander, or defamation. The amount of moral damages that courts may award depends upon the set of
circumstances for each case. There is no fixed standard to determine the amount of moral damages to be
given. Courts are given the discretion to fix the amount to be awarded in favor of the injured party, so
long as there is sufficient basis for awarding such amount.

Here, petitioner insists that he is entitled to moral damages in the amount of P5,000,000.00. He argues
that he suffered social humiliation and anxiety from the libelous article. His 77-year-old mother castigated
him for disgracing their family. His children questioned him after they had been interrogated in school for
the article about their father. Finally, petitioner claims that the article tainted his reputation, prompting his
clients and business associates to refuse to transact with him.

While this Court recognizes the embarrassment and unease suffered by petitioner, it must be emphasized
that moral damages may only be awarded when the claimant has sufficiently proved: (1) the factual
foundation of the award; and (2) the causal connection of petitioner's suffering to respondents' act. In
Kierulf v. Court of Appeals:
This Court cannot remind the bench and the bar often enough that in order that moral damages
may be awarded, there must be pleading and proof of moral suffering, mental anguish, fright and the like.
While no proof of pecuniary loss is necessary in order that moral damages may be awarded, the amount
of indemnity being left to the discretion of the court, it is nevertheless essential that the claimant should
satisfactorily show the existence of the factual basis of damages and its causal connection to defendant's
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.

Here, other than his bare allegations of besmirched reputation and loss of clientele, petitioner failed to
present evidence supporting his assertions. He submitted no evidence substantiating his claimed loss. He
also failed to adduce proof to support his claim that his reputation was tainted due to the libelous article.
Moreover, he did not present in court any testimony from the business associates who had allegedly lost
faith in him. Records reveal that he lost only one (1) client, Jayson Mallari (Mallari). On cross-
examination, Mallari even testified "that he was not immediately convinced by the article and called
petitioner before terminating his business with him." Moreover, as the records show, Mallari started
transacting with petitioner again.

Nonetheless, moral damages should still be awarded. As he had testified during trial, members of his
family were displeased with him for being accused of committing illegal and corrupt acts. He was berated
by his mother Tor having humiliated their family. His children were questioned at school. As such, an
award of P500,000.00 as moral damages is an adequate recompense to the mental anguish and wounded
feelings that petitioner had endured.

(4) Under Article 2230 of the Civil Code, exemplary damages may be awarded only when the crime
was committed with one (1) or more aggravating circumstances.

"Exemplary or corrective damages are imposed by way of example or correction for the public good."It is
imposed as a punishment for highly reprehensible conduct" and serves as a notice to prevent the public
from "the repetition of socially deleterious actions." "Such damages are required by public policy, for
wanton acts must be suppressed. They are an antidote so that the poison of wickedness may not run
through the body politic."

Kierulf laid down the requirements that must be satisfied before exemplary damages may be awarded:
 Exemplary damages are designed to permit the courts to mould behavior that has socially
deleterious consequences, and its imposition is required by public policy to suppress the wanton acts of an
offender. However, it cannot be recovered as a matter of right. It is based entirely on the discretion of the
court. Jurisprudence sets certain requirements before exemplary damages may be awarded, to wit:
(1) They may be imposed by way of example or correction only in addition, among others, to
compensatory damages, and cannot be recovered as a matter of right, their determination depending upon
the amount of compensatory damages that may be awarded to the claimant;
(2) the claimant must first establish his right to moral, temperate, liquidated or compensatory
damages; and
(3) the wrongful act must be accompanied by bad faith, and the award would be allowed only if
the guilty party acted in a wanton, fraudulent, reckless, oppressive or malevolent manner.98 (Citations
omitted)

Here, respondents published the libelous article without verifying the truth of the allegations against
petitioner. As the Court of Appeals found, the Revenue Integrity Protection Service only investigates
officials of the Department of Finance and its attached agencies who are accused of corruption. Petitioner,
on the other hand, is no government official and, therefore, beyond the Revenue Integrity Protection
Service's jurisdiction. It only goes to show that respondents did not verify the information on which the
article was based. Thus, to ensure that such conduct will no longer be repeated, and considering their
profession, respondents are directed to pay petitioner exemplary damages in the amount of
P1,000,000.00.

Journalists should observe high standards expected from their profession. They must take responsibility
for the accuracy of their work, careful never to deliberately distort facts or context by verifying
information before releasing it for public consumption. This case comes at a time when the credibility of
journalists is needed more than ever; when their tried-and-tested practice of adhering to their own code of
ethics becomes more necessary, so that their truth may provide a stronger bulwark against the
recklessness in social media. Respondents, then, should have been more circumspect in what they
published. They are not media practitioners with a lack of social following; their words reverberate.