Sison vs. David

Statements made in pleadings, petitions, and motions filed in the course of judicial proceedings are absolutely privileged communications, and no civil action for libel or slander may be founded thereon, provided the statements are pertinent and relevant to the subject under inquiry — even if alleged and proved to have been made falsely, knowingly, and with express malice.

Margarita David, a wealthy woman whose estate included extensive real properties in Manila and Pampanga, executed a will on December 20, 1938, constituting several legacies and naming her grandnieces Narcisa de la Fuente de Teodoro and Priscila de la Fuente de Sison as heirs of the residue, subject to a fideicommissary condition that, should both sisters die without descendants, the properties would pass one-half to the heirs of the testatrix's father and one-half to the heirs of her mother. Defendant Gonzalo D. David, a member of the Bar, was one of such heirs of Margarita's parents. On October 21, 1939, Margarita legally adopted the two sisters as her children, and on September 6, 1940, donated to them practically the same properties bequeathed in her will. Upon Margarita's death on February 24, 1941, Special Proceeding No. 58881 was instituted for the settlement of her estate, with Jose Teodoro, Sr. appointed as executor and David acting as his counsel. Plaintiff Carlos Moran Sison is the husband of Priscila de la Fuente de Sison.

On December 20, 1938, Margarita David executed a will constituting several legacies in favor of specified persons and naming her grandnieces Narcisa de la Fuente de Teodoro and Priscila de la Fuente de Sison — referred to as Mrs. Teodoro and Mrs. Sison — as heirs of the residue of her estate, subject to the condition that, if both sisters should die leaving no descendants, the properties would pass one-half to the heirs of the testatrix's father and the other half to the heirs of her mother. Gonzalo D. David, one of such heirs of Margarita's parents, is the defendant herein. On October 21, 1939, Margarita legally adopted the two sisters as her children. Soon thereafter, on September 6, 1940, she donated to them practically the same properties bequeathed in her will.

Upon Margarita David's death in Manila on February 24, 1941, Special Proceeding No. 58881 was instituted in the Court of First Instance of Manila for the settlement of her estate. Jose Teodoro, Sr. was appointed executor of the will, with Gonzalo David acting as his counsel. Mrs. Teodoro and Mrs. Sison subsequently extrajudicially partitioned among themselves the properties bequeathed and donated to them. Plaintiff Carlos Moran Sison is the husband of Mrs. Sison. On or about May 9, 1950, David caused a notice of adverse claim to be annotated on the titles of several lands acquired by Mrs. Sison, to secure the fees of Jose Teodoro, Sr. as executor and David's own fees as counsel for the executor. It turned out, however, that on or about February 28, 1949, Mrs. Sison had assigned said properties to Priscila Estate, Inc. — a corporation organized on that date by her and plaintiff, together with some nominal parties — in exchange for shares of stock.

On September 8, 1951, Priscila Estate, Inc. filed an "Urgent Petition Ex-Parte" in G.L.R.O. Cadastral Record No. 99 to lift David's adverse claim on one of the properties — that covered by Transfer Certificate of Title No. 20338, located at the intersection of Sto. Cristo and M. de Santos streets, San Nicolas, Manila — on the ground that the property already belonged to the corporation, which wished to sell it, and that other properties of the estate sufficed to answer for the adverse claim. The motion was granted the same day, provided that should any objection be interposed later, the movant obligated itself to file a corresponding bond. On September 26, 1951, David filed, on his behalf and that of Jose Teodoro, Sr., a "Petition for Bond" praying that the sale be disapproved and/or a bond of P12,000 be forthwith furnished by Priscila Estate, Inc. In support of this petition, David alleged, among other things, that the property to be sold was one of the few unencumbered properties inherited from Margarita David, that practically all of Mrs. Sison's properties were mortgaged and Priscila Estate, Inc. was operating on an overdraft, that the overdraft was due to improvements made as conjugal properties of Carlos Sison and Priscila de la Fuente, that paraphernal properties inherited from Margarita David were being sold to pay obligations of conjugal properties, and that the contemplated sale would defeat the fideicommissary provision in Margarita David's will.

On October 6, 1951, plaintiff commenced the present action for damages, alleging that the averments in paragraphs 2, 3, and 4 of David's petition for bond were made with malice and evident intent to put him in ridicule, implying that he was incompetent and unfit to manage Priscila Estate, Inc., that he had been converting paraphernal properties into conjugal ones to enrich himself at his wife's expense, and that he sought to avoid the fideicommissary provision of the will to enrich himself at the expense of Margarita David's relatives. Plaintiff claimed to have suffered mental anguish, serious anxiety, wounded feelings, moral shock, and social humiliation. David answered, denying malice, asserting that the petition for bond was an absolutely privileged communication, and contending that plaintiff had no cause of action since the party in interest in the cadastral proceedings was Priscila Estate, Inc., not plaintiff. David also set up a counterclaim with four causes of action: the first two based on allegedly defamatory statements made by plaintiff's counsel in pleadings filed in Special Proceeding No. 58881; the third based on a criminal complaint for libel filed by plaintiff against David, which the City Fiscal dismissed for lack of merit; and the fourth for P10,000 in attorney's fees and expenses incurred in defending against plaintiff's unjustified complaint.

The Court of First Instance of Manila rendered judgment on December 10, 1954, awarding plaintiff P5,000 as moral damages and P1,000 as attorney's fees. Nineteen days later, on December 29, 1954, the lower court motu proprio issued an amended decision, increasing the award to P15,000 as moral damages and P3,000 as attorney's fees, and finding no merit in defendant's counterclaim. David appealed to the Court of Appeals, which certified the records to the Supreme Court, the aggregate amount in controversy exceeding its appellate jurisdiction.

• Validity of Amended Decision: Defendant-appellant assailed the lower court's motu proprio amended decision as a nullity, arguing that no party had filed any motion or petition therefor and that the amendment did not involve a correction of mere clerical mistakes but a substantial modification of the award, the findings of fact, and the reasons therefor.
• Absolute Privilege of the Petition for Bond: Defendant maintained that the petition for bond, in which the challenged allegations were contained, was an absolutely privileged communication made in the course of judicial proceedings, and that the allegations were proper and necessary to protect his interests and those of his client Jose Teodoro, Sr.
• Lack of Cause of Action: Defendant argued that plaintiff had no cause of action against him, the party in interest in the cadastral proceedings being Priscila Estate, Inc., not plaintiff personally.
• Counterclaim for Damages: Defendant asserted that statements made by plaintiff's counsel in pleadings filed in Special Proceeding No. 58881 were malicious, scurrilous, scandalous, false, and irrelevant, causing him mental anguish, besmirched reputation, and social humiliation, warranting damages of P50,000 for each of the first three causes of action. He further claimed P10,000 in attorney's fees incurred in defending against plaintiff's unjustified complaint.

• Malice and Impertinence: Plaintiff-appellee argued that the allegations in defendant's petition for bond were made with malice and evident intent to put him in ridicule, implying that he was incompetent to manage Priscila Estate, Inc., that he was converting paraphernal properties into conjugal ones to enrich himself, and that he sought to defeat the fideicommissary provision of Margarita David's will.
• Qualified Privilege Only: Plaintiff maintained, and the lower court agreed, that the petition for bond was only a qualifiedly privileged communication, the privilege existing only if the allegations were pertinent or relevant to the case, and that the allegations were impertinent and irrelevant since all defendant wanted was the filing of a bond.
• Presumption of Malice: Plaintiff contended that malice should be presumed from the fact that defendant had caused his adverse claim to be annotated on property worth much more than the amount of said claim.
• Motion for Reconsideration: In seeking reconsideration, plaintiff argued that the decision erroneously stated P1,000,000 was borrowed from the RFC (claiming only P100,000 was borrowed), that the properties were not heavily encumbered, that certain paragraphs were irrelevant and inaccurate, and that the lower court's decision in his favor proved he was reasonably justified in filing the complaint.

• Validity of Amended Decision: Whether the lower court's motu proprio amended decision, rendered nineteen days after the original decision and before any appeal was taken, is valid.
• Absolute Privilege in Judicial Proceedings: Whether the statements contained in defendant's "Petition for Bond," filed in the course of judicial proceedings, are absolutely privileged communications such that no civil action for libel or slander may arise therefrom.
• Relevancy of the Challenged Allegations: Whether the allegations in defendant's petition for bond were pertinent and relevant to the relief sought therein, so as to bring them within the scope of absolute privilege.
• Counterclaim: Whether defendant's counterclaim — particularly its first three causes based on statements made by plaintiff's counsel in judicial pleadings and the third based on a dismissed criminal complaint — and the fourth cause for attorney's fees have merit.

• Validity of Amended Decision: Yes. The amended decision was rendered within the reglementary period to appeal and before any appeal had been taken, so the lower court retained jurisdiction and control over the case; the amendment was authorized by Rule 124, Section 5, of the Rules of Court.

• Absolute Privilege in Judicial Proceedings: Yes. Utterances made in the course of judicial proceedings, including all kinds of pleadings, petitions, and motions, are absolutely privileged, and no civil action for libel or slander may be founded thereon when pertinent and relevant to the subject under inquiry, however false and malicious such statements may be.

• Relevancy of the Challenged Allegations: Yes. The allegations in defendant's petition for bond were not only pertinent but material to the relief prayed for, as they demonstrated the risk that the adverse claim would become unenforceable if the sale proceeded without a bond; nothing but relevancy to the relief sought was necessary for the absolute privilege to attach.

• Counterclaim: The first three causes of action were dismissed — the first two because the statements by plaintiff's counsel, though sarcastic and harsh, were relevant to the pleadings in which they were made and thus absolutely privileged; the third because the dismissal of the criminal complaint was insufficient to warrant damages absent proof that plaintiff acted in bad faith knowing the charge was groundless. The fourth cause was granted, plaintiff being a member of the Bar who should have known the petition for bond was absolutely privileged and that the basic facts stated therein were true, warranting an award of attorney's fees under Article 2208(4) of the Civil Code.

• Validity of Amended Decision: The amended decision was rendered nineteen days after the promulgation of the original decision, or within the reglementary period to appeal therefrom, and before any appeal had been taken by the parties. The lower court therefore still had jurisdiction and control over the case. Moreover, the amendment was authorized by Rule 124, Section 5, of the Rules of Court, pursuant to which every court has the power to amend and control its processes and orders so as to make them conformable to law and justice. The contention that the amendment was a nullity because no party had moved for it and because it involved a substantial modification rather than a correction of clerical mistakes was without merit.

• Absolute Privilege in Judicial Proceedings: The Court drew a clear distinction between absolutely privileged and qualifiedly privileged communications. An absolutely privileged communication is one for which, by reason of the occasion on which it is made, no remedy is provided in a civil action for slander or libel — even if made maliciously. A qualifiedly privileged communication, by contrast, is actionable upon proof of actual malice. The Court cited extensively from Corpus Juris Secundum, American Jurisprudence, and Newell on The Law of Slander and Libel to establish that utterances made in the course of judicial proceedings — including all kinds of pleadings, petitions, and motions — belong to the class of absolutely privileged communications. The reason underlying the rule is public policy: members of the legislature, judges, jurors, lawyers, and witnesses must be able to speak their minds freely and exercise their functions without incurring the risk of criminal prosecution or civil actions for damages. The lower court erred in treating the privilege as merely qualified; the pertinency or relevancy requirement does not convert an absolute privilege into a qualified one, because the exemption attached to the privilege in judicial proceedings never extends to matters patently unrelated to the subject of the inquiry in any event.

• Relevancy of the Challenged Allegations: The lower court labored under the impression that the only relief sought in the petition for bond was the filing of a bond. However, defendant specifically prayed that the sale be disapproved and/or the bond be furnished, and the body of the petition indicated that the prayer for disapproval was a means of seeking reconsideration of the order of September 8, 1951 granting the ex parte petition. The reasons adduced — that the properties were mortgaged, that Priscila Estate, Inc. was operating on an overdraft, that the overdraft was due to conjugal improvements, that paraphernal properties were being sold to pay conjugal obligations, and that the sale would defeat the fideicommissary provision — were not only pertinent but material to the relief sought. They indicated that unless the adverse claim annotation was maintained or a bond filed, it would become increasingly difficult to trace the paraphernal properties and enforce the claims. Whether or not the reasons sufficed to justify the granting of relief was immaterial; nothing but relevancy was necessary for the absolute privilege to attach, and such privilege is unaffected by actual malice or by factual or legal inaccuracies. Furthermore, the allegations were neither malicious nor unfounded: most of the valuable properties transmitted by Margarita David to Mrs. Sison were in fact mortgaged, the properties assigned to Priscila Estate, Inc. were encumbered for P397,717.00, a P1,000,000 loan had been secured from the RFC, and plaintiff had organized CMS Estate, Inc. with sole control over all voting shares, tending to place the properties beyond the reach of claimants.

• Counterclaim: The first two causes of action were predicated on statements made by plaintiff's counsel in pleadings filed in Special Proceeding No. 58881. Although sarcastic, unnecessarily pungent, and tending to detract from the dignity of judicial proceedings, these statements were relevant to the subject matter of the pleadings in which they were made and were therefore absolutely privileged, rendering the causes of action untenable. The third cause of action, based on the criminal complaint for libel filed by plaintiff against defendant and subsequently dismissed by the City Fiscal, failed because the dismissal was insufficient to warrant damages absent competent evidence that plaintiff had acted in bad faith, knowing the charge was groundless. The fourth cause of action was granted because plaintiff, as a member of the Bar, must have known that the petition for bond was an absolutely privileged communication and that the allegations therein were pertinent and relevant. He also knew the basic facts stated therein were true. Some of the inferences he drew were purely his own, and there was no attempt to prove that the alleged injury to his reputation had adversely affected his credit, business transactions, or social and domestic relations. The complaint was clearly unfounded and the record strongly indicated it was filed with a harassing purpose, warranting an award of attorney's fees and litigation expenses under Article 2208(4) of the Civil Code.

• Absolute Privilege in Judicial Proceedings — Utterances made in the course of judicial proceedings, including all kinds of pleadings, petitions, and motions, are absolutely privileged communications. No civil action for libel or slander may be founded thereon when the statements are pertinent and relevant to the subject under inquiry, however false and malicious they may be. The privilege is not intended so much for the protection of those engaged in public service as for the promotion of public welfare, so that judges, lawyers, jurors, and witnesses may speak their minds freely and exercise their functions without fear of prosecution or civil liability. The exemption is absolute and unconditional: even the existence of express malice does not destroy the privilege. The Court applied this doctrine to the defendant's "Petition for Bond," holding that because the challenged allegations were pertinent and material to the relief sought, the absolute privilege attached and barred plaintiff's action for damages.

• Distinction Between Absolute and Qualified Privilege — An absolutely privileged communication is one for which no remedy is provided in a civil action for slander or libel, regardless of the existence of express malice. A qualifiedly or conditionally privileged communication is one made in good faith, without actual malice, on a subject in which the author has an interest or duty, to a person having a corresponding interest or duty; it is actionable upon proof of actual malice. The pertinency or relevancy requirement essential to the privilege in judicial proceedings does not make it a qualified privilege; rather, it is a limitation on the scope of the absolute privilege, because the exemption never extends to matters patently unrelated to the subject of the inquiry. The Court relied on this distinction to correct the lower court's error in treating the privilege as merely qualified.

• Relevancy as the Sole Requisite for Absolute Privilege in Judicial Proceedings — Nothing but relevancy to the relief sought is necessary for a communication made in judicial proceedings to enjoy the benefit of absolute privilege. Whether or not the reasons given suffice to justify the granting of the relief sought is of no moment. The privilege is unaffected by actual malice or by factual or legal inaccuracies in the utterances made. The Court applied this principle by finding that the allegations in defendant's petition for bond — concerning the mortgaged status of properties, the corporate overdraft, the conversion of paraphernal into conjugal assets, and the potential defeat of the fideicommissary provision — were material to the relief sought and therefore absolutely privileged.

• "Hence, the 'Petition for bond' of defendant herein is absolutely privileged, and no civil action for libel or slander may arise therefrom, unless the contents of the petition are irrelevant to the subject matter thereof." — This passage states the ratio decidendi: the definitive holding that the petition for bond is absolutely privileged, conditioned only on the relevancy of its contents to the subject matter.

• "Such privilege is unaffected, either by actual malice or by factual or legal inaccuracies in the utterances made in the course of said proceedings." — This formulation articulates the scope of the absolute privilege in judicial proceedings, emphasizing that neither malice nor factual error defeats the privilege once relevancy is established.

• "Nothing but relevancy to said relief was necessary for defendant's petition to have the benefits of the absolute privilege conferred by judicial proceedings." — This passage defines the sole requisite for absolute privilege in judicial proceedings, distilling the doctrine to its essential condition.

• "The class of absolutely privileged communications is narrow and is practically limited to legislative and judicial proceedings and other acts of state." — This quotation, drawn from American Jurisprudence and adopted by the Court, delineates the boundaries of absolute privilege and explains the public-policy rationale underlying the rule.

• Tupas vs. Parreño, L-12545 (April 30, 1959) — Cited as authority for the proposition that utterances made in the course of judicial proceedings belong to the class of absolutely privileged communications. Followed.

• Harshaw vs. Harshaw, 136 ALR 1411 — Cited for the proposition that, under peculiar situations, a few decisions have required probable cause for the enjoyment of absolute privilege, but such decisions do not reflect the clear weight of authority. Distinguished and not followed.

• Hayslip vs. Welliford, 195 Tenn. 621, 263 SW 2d 136, 42 ALR 2d 820 — Cited for the prevailing rule in the United States that statements made in a pleading in a civil action are absolutely privileged and no action for libel may be founded thereon when pertinent and relevant to the subject under inquiry, however false and malicious. Followed.

• Rule 124, Section 5, Rules of Court — Empowers every court to amend and control its processes and orders so as to make them conformable to law and justice. Applied to uphold the validity of the lower court's motu proprio amended decision, rendered within the reglementary period to appeal and before any appeal had been taken.

• Article 2208(4), Civil Code of the Philippines — Authorizes the award of attorney's fees and expenses of litigation when the defendant's act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest. Applied to justify the award of P3,000 in attorney's fees and litigation expenses against plaintiff, whose complaint was clearly unfounded and filed with a harassing purpose.

• Section 17, Republic Act No. 296 (The Judiciary Act) — Governs the appellate jurisdiction of the Supreme Court in cases certified by the Court of Appeals where the amount in controversy exceeds the latter's jurisdiction. Applied to confirm the Supreme Court's retention of appellate jurisdiction over the appeal.

Padilla, Bautista Angelo, Labrador, Reyes, J.B.L., Barrera, and Gutierrez David, JJ., concurred in the January 28, 1961 decision. In the resolution denying the motion for reconsideration, Bengzon, Acting C.J., Padilla, Bautista Angelo, Labrador, Reyes, J.B.L., Barrera, Paredes, and Dizon, JJ., concurred.