ABSCBN Broadcasting v. CA

FACTS:

ABSCBN entered into a Film Exhibition Agreement with Viva Production, Inc., where the former was given an exclusive right to exhibit some Viva films. However, there are two versions of the agreement:

1) Mr. Eugenio Lopez III, General Manager of ABSCBN, asserted that ABSCBN was granted with a film rights to fourteen (14) films for a total consideration of P36 million. 

2) However, Mr. Vicente Del Rosario insisted that the agreement covers 104 films for a total price of P60 million.

A counterproposal from Mrs. Charo Concio covering 53 films  for a consideration of P35 million was then rejected by Viva’s Board of Directors. 

Following the rejection, the 104 Viva-produced films were granted to RBS, which prompted ABSCBN to file for a TRO against the RBS, Viva Production, and Del Rosario. This resulted to the non-showing of the film “Maging Sino Ka Man” in RBS on the day of its supposed showing.  

The RTC and CA ruled that the contract was not perfected and granted RBS damages due to ABSCBN’s complaint.  

ISSUES:

I. WON there was a perfected contract between VIVA and ABS-CBN.

II. WON RBS is entitled to damages.

RULING:

I.

The contract between Viva Productions, Inc. and ABSCBN was not binding.

Under the law, corporate powers, such as the power to enter into contracts, are exercised by the Board of Directors, which power may be delegated to either an executive committee or officials or contracted managers. 

In this case, Del Rosario has no authority to bind a contract with ABS CBN until Viva’s BoD approves it. In fact, Viva’s Board of Director rejected ABS-CBN's counter-offer and insisted that the film package for 140 films be maintained. 

Therefore, the contract was not binding. 

II.

RBS is not entitled for moral damages and exemplary damages.

Under the law, the award of moral damages cannot be granted in favor of a corporation because, being an artificial person and having existence only in legal contemplation, it has no feelings, no emotions, no senses, It cannot, therefore, experience physical suffering and mental anguish, which can be experienced only by one having a nervous system.

In this case, it is RBS who claimed for moral damages. Hence, as a corporation, it cannot be entitled for such.  

Moreover, the claims for moral and exemplary damages are favored when there is an abuse of right on the part of the defendant. The elements of the abuse of right doctrine are: (1) the existence of a legal right or duty, (2) which is exercised in bad faith, and (3) for the sole intent of prejudicing or injuring another.

In this case, there is no adequate proof that ABS-CBN was inspired by malice or bad faith.

Therefore, RBS is not entitled for any damages.