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September 7, 2016

Can Corporations Get Hurt?

A recent article by the editors of ManilaSpeak (See HERE) got this representation to think. Can corporations or in legal terms “juridical entities” sue for libel or defamation?

First, even if a corporation is only a “person” on paper, a corporation has rights. A corporation can sue and be sued. It can own property. It can buy and sell properties both for profit and for accumulation of assets. While a natural person is born from two consenting adults, corporations are “born” by the association of least five (5) persons who file their “birthing” at the Securities Exchange Commission. A corporation pays taxes and receives income from natural persons and other juridical persons. It obtains permits, clearances, licenses and sometimes awards. A corporation even “dies” a corporate death after fifty (50) years. A corporation can feel loved. Just ask the hamburger chain.

Can corporations feel pain? This writer submits that it can feel pain although it does have not feelings. When a person maligns a corporation, the reputation or goodwill of that corporation will definitely diminish. The reputation or goodwill which a corporation took pains to develop and earn will be greatly affected. Customers and suppliers of these corporations might re-think their dealings with that corporation.

But there is a distinction between libel as a crime and defamation as a tort. As a crime, the government, through the public prosecutors have to present their case. The degree of a conviction carries a standard of proof beyond reasonable doubt. Defamation as a tort is not that strict. The proof must be a preponderance of evidence. Meaning, where the evidence is “leaning” towards, that side wins.

Take the case of the example above. The courier company took years to get to where they are now. One fake photograph, then boom. The courier took the time and effort to do damage control. What makes it worse is that when the photograph went viral, it wasn’t them.

Libel is an offense of injuring a person’s character, fame or reputation through false and malicious statements. It is that which tends to injure reputation or to diminish esteem, respect, goodwill or confidence in the plaintiff, or to excite derogatory feelings or opinions about the plaintiff. It is the publication of anything that is injurious to the good name or reputation of another or tends to bring him into disrepute. In determining whether certain utterances are defamatory, the words used are to be construed in their entirety and taken in their plain, natural and ordinary meaning, as they would naturally be understood by persons hearing (or reading, as in libel) them, unless it appears that they were used and understood in another sense.

Libelous words must refer to an ascertained or ascertainable person, and that person must be the plaintiff. Statements are not libelous unless they refer to an ascertained or ascertainable person. However, the obnoxious writing need not mention the libeled party by name. It is sufficient if it is shown that the offended party is the person meant or alluded to. (Yuchengco vs. Manila Chronicle, G.R. No. 184315, November 25, 2009)

The only question now is: Are corporations regarded as persons? With regard to the action of libel, I submit they are.


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