ENRIQUE J.L. RUIZ AND JOSE V. HERRERA, IN THEIR BEHALF AND AS MINORITY STOCKHOLDERS OF THE ALLIED TECHNOLOGISTS, INC., PLAINTIFFS AND APPELLANTS, VS. THE SECRETARY OF NATIONAL D…

Enrique J.L. Ruiz and Jose V. Herrera from an order of the
Court of First Instance of Manila, in Civil Case No. 26601, dated February
25, 1959,
dismissing plaintiffs’ complaint.

On September
11, 1950,
a contract was executed between the defendant Allied Technologists Inc.,
(corporation, for short), and the Republic of the Philippines, for the construction of the Veterans Memorial Hospital. Ruiz and Herrera were
stockholders and officers of the corporation. The construction of the hospital
was terminated in 1955. On August 20, 1954, and June 20, 1955, Civil Case Nos.
2S778 and 26601, respectively, were filed by same plaintiffs herein, making as
parties-defendants in both cases, the same defendants herein, the Secretary of
National Defense, Col. Nicolas Jimenez (Engineer), the Finance Officer, and the
Auditor of the Dept. of National Defense, Pablo D. Panlilio
and Allied Technologists, Inc. Civil Case No. 23778 was dismissed by the CFI on
October 12, 1954 and the dismissal was affirmed by this Court on July 7, 1955,
in G.R. No. L-8638. Civil Case No. 26601 was also
dismissed on September 13, 1955. On appeal, this Court reversed
the order of dismissal, under the impression that the real controversy was
confined merely between defendant Panlilio and
plaintiffs Ruiz and Herrera over the 15 percent of the contract price, which was
retained by the Department of National Defense. The retention of the 15 percent
of the contract price in the sum of P34,740.000 was
made to answer for any claim or lien that might arise, in the course of the
construction. The last case, however, was remanded to the court of origin, for
further proceedings. Panlilio and the corporation
filed their amended answers, stating that the amount retained by the Department
of National Defense was already paid to defendant corporation,
as sought for by the plaintiffs in their complaint. In view of this
development, the trial court invited the parties to a conference, in which the
plaintiffs indicated their conformity, to the dismissal of the complaint with
respect to the retention of the 15% of the contract price; but insisted upon
the hearing of the second question, which sought the declaration and
recognition of plaintiffs Ruiz and Herrera, as two of the three architects of
the hospital. The trial court, nevertheless, dismissed the complaint, for being
already academic and moot. Hence, this appeal by
plaintiffs-appellants, who alleged in their lone assignment of error that
“the lower court grievously erred in ordering the dismissal of the case,
with costs against the plaintiffs.”

Plaintiffs-appellants contend that
the only ground relied upon by the lower court to dismissing the case, without
any trial, is the allegation contained in pars. 4 and (e) of the answers of the
appellees Panlilio and
Allied Technologists, Inc., respectively, that the amount retained by the
Department of National Defense had already been paid; that except for this bare
allegation of the appellees, no evidence was adduced
to prove the truth of the same; that even assuming for the sake of argument,
that the same is true, nevertheless the first part of the first cause of action
still remains, for which they had insisted upon a hearing in order to establish
their right to be recognized as two of the three architects of the hospital;
that because the pleadings do not show any ground which might legally justify
the action taken by the lower court, the latter should not have ordered the
dismissal of the entire case but should have ordered only the striking out of
the moot portion of appellants’ first cause of action, citing Pacal vs. Ramos, 81 Phil. 30, 33; 27 C. J.S. 209-210; Bush
vs. Murray 205 N.Y.S. 21, 26, 209 App. Div. 563; Bearden vs. Longino, 190 S.E. 12, 183, Ga. 819). Appellants further
argue in their brief that they base their cause of action on article 21, New
Civil Code.

The appeal has no merit. The order
appealed from, states—

“Considering tie manifestation
of counsel for plaintffs that the latter would insist
on the hearing of the above entitled case for the purpose of establishing their
right to be recognized as the architects of the Veterans Hospital together with
defendant Pablo D. Panlllio, and it appearing that
plaintiffs’ Amended Complaint with Injunction prays, among others, ‘That this
Hon. Court order defendants Secretary of National Defense, Col. Nicolas
Jimenez, and the Finance Officer and Auditor of the Department of National
Defense to pay the Allied Technologists, Inc. the balance unpaid by virtue of
the contract executed on Sept. 11, 1950 (Annex ‘C’ hereof) for services
rendered under Title and to be rendered under Title II of said contract; that
paragraph 4 of defendant Pablo Panlilio’s Amended
Answer to said complaint alleges ‘That whatever amounts were retained by the
Dept, of National Defense on the contract price which retention was authorized
by the contract was paid by the Dept. of National Defense to the Allied
Technologists, Inc., as sought by the plaintiffs; that paragraph (e) of the
answer to the amended complaint of defendant Allied Technologists, Inc., also
alleges ‘That, whatever amounts were retained by the Department of National
Defense, per the stipulations contained in the contract, have already been paid
by the said Department of National Defense to the Allied Technologists, Inc.
and, therefore, the present action seeking to compel the aforementioned Department
of National Defense to pay to defendant Allied Technologists, Inc. the amounts
retained by the Department of National Defense is academic, groundless,
unfounded and malicious’; that the said allegations of the separate answers of
defendants Pablo, Panlilio and Allied Technologists,
Inc., are not and can not be denied by plaintiffs, and that it is this Court’s
understanding that defendant has no objection to the dismissal of this case—it
Is ordered that this case be, as it is hereby DISMISSED, with costs against
plaintiffs.”

A cursory reading of pars. 18 and 19 of the amended complaint
with injunction and prayers (1) and (2) thereof, reveals that appellants’ first
cause of action is composed of two parts, as follows:

(a) A judicial declaration or recognition
that appellants .Ruiz and Herrera, together with appellee
Panlilio, were the architects of the Veterans Hospital; and

(b) An injunction restraining the appellee government officials from paying their co-appellee Panlilio the sum
retained by the former, as per stipulation contained in the contract for the
construction of the hospital because “they will not only be deprived of the
monetary value of the services legally due them, but that their professional
prestige and standing will be seriously impaired”.

As appellants admitted, they no
longer consider the Secretary and other officials of the Department of National
Defense, as parties-defendants in the ease, said officials can no longer be
compelled to recognize the appellants, Ruiz and Herrera, as co-architects with appellee Panlilio of the Veterans Hospital. And, as the amount retained by
the Department on the contract price, which retention was authorized by the
contract, was, as sought by the appellants, already paid to the Allied
Technologists, Inc., there is nothing more for the trial court to decide, even
without first ruling on the special defenses of appellees
Panlilio and the corporation.

Moreover, by discarding the
Secretary and other officials of the Department of National Defense, as parties-defendants,
appellants could hot expect the trial court to order them to recognize and
declare appellants as co-architects in the construction of the hospital. And
this must be so, because the construction, agreement expressly provides that
the architect being contracted by the Government was appellee
Pablo Panlilio. The said agreement states that the
same was entered into by the government, party of the first part and
“Allied Technologists, Inc. x x and Mr. Pablo D.
Panlilio, architect, hereinafter called the party of
the second part” and “The Allied Technologists, Inc. for rendering
engineering’ services and Mr. Pablo D. Panlilio, architect, for rendering architect services”. And the
contract was signed for the Government by “Ramon Magsaysay,
Secretary of National Defense (party of the first part),” and “Allied
Technologists, Inc. as to By Enrique J. L. Ruiz, President, Contractor, Pablo
D. Panlilio, Architect.”

Appellants maintain that their
claim for recognition is divisible and separable from their allegations
regarding the non-payment by the government of a portion of the architectural
fees; thereby concluding that what the lower court should have done, should
have been merely to order the striking out of the moot, portion of appellants
cause of action, and should have proceeded with .hearing their claim for
recognition. But the allegations in pars. 18 and 19 of
the amended complaint, show otherwise. There is an indivisible and single cause
of action which is primarily to prevent payment exclusively to defendant Panlilio of the amount of P34,740.00,
which said appellants contend should be paid to appellee.
Allied Technologists, Inc.; the matter of recognizing them
together with Pablo Panlilio as architects of the
hospital, being merely incidental thereto. The case of Pacal vs. Ramos, 81 Phil. 30, cited by appellants is not
applicable. In this case, the grounds for quo warrant are separable from the
grounds for election irregularities which are distinct and separate causes of
action, entitling the petitioner to separate and unrelated reliefs.
These two grounds were alleged under separate paragraphs and they were two
independent actions improperly joined in one proceeding. In the case at bar, in
one paragraph, (par. 19 of the amended complaint), as first cause of action,
the claim for recognition is inseparably linked with their allegations
regarding alleged threatened, payment of the P34,740.00
to Panlilio alone, because “they will not only
be deprived of the monetary value of the services legally due them, but that
their professional prestige and standing will be seriously impaired”. When
the very defendant Allied Technologists, Inc. itself asserted in its answer to
the amended complaint, that the amount was paid to it, an assertion which was
not at all denied, plaintiffs-appellants’ cause of action under said par. 19
dissipated entirely.

There is a veiled insinuation that
appellants’ thesis would fall under the provisions of the Rules on declaratory
relief, because appellants wanted merely a declaration of their rights in a
contract in which they were interested. The trial court, however, was correct
in refusing to make such declaration, because it was not necessary and proper
under the circumstances (Sec. 6, Rule 66). Appellants were not parties to the
construction agreement. The sole object of the appeal is only to secure for
them a recognition, that they were allegedly the
co-architects of Panlilio, in the construction of the
hospital, so as to enhance their professional prestige and not to impair their
standing. If this is the goal of appellants, a judicial declaration to that
effect would seem unnecessary. Let us ponder over the thought that a brilliant
professional enjoys the respect and esteem of his fellowmen, even without any
court declaration of such fact, and that an incompetent one may summon all the
tribunals in the world, to proclaim his genius in vain.

But appellants invoke Article 21 of
the Civil Code, which states—

“Any person
who wilfully cause loss or injury to another
in a manner that is contrary to morals, good customs or public policy shall
compensate the latter for the damages.”

contending that the word “injury”
in the said article, refers not only to any indeterminate right or property,
but also to honor or credit (I Tolentino Civ. Code, p. 67). It may be added, however, that this
article also envisions a. situation where a person has a legal right, and such
right is violated by another in a manner contrary to morals, good customs or
public policy; it presupposes losses or injuries, material or otherwise, which
one may suffer as a result of said violation. The pleadings do not show that
damages were ever asked or alleged in connection with this case, predicted upon
the article aforecited. And under the facts and
circumstances obtaining in this case, one cannot plausibly sustain the
contention that the failure or refusal to extend the recognition,
was an act contrary to morals, good customs or public policy.

In view hereof, the Order appealed from, is
affirmed, with costs against plaintiffs-appellants.

Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Barrera, Dizon, Regala and Makalintal,
JJ., concur.