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Title XVIII. - DAMAGES

reasonably attributed to the non-performance of the obligation.

(1107a)

CHAPTER 1
GENERAL PROVISIONS
Art. 2195. The provisions of this Title shall be
applicable to all obligations mentioned in Article 1157.

respectively

Art. 2196. The rules under this Title are without prejudice to special
provisions on damages formulated elsewhere in this Code.
Compensation for workmen and other employees in case of death,
injury or illness is regulated by special laws. Rules governing
damages laid down in other laws shall be observed insofar as they
are not in conflict with this Code.
Art. 2197.
(1)
(2)
(3)
(4)
(5)
(6)

Cases: 40, 80, 285,

Damages may be:

Actual or compensatory;
Moral;
Nominal;
Temperate or moderate;
Liquidated; or
Exemplary or corrective.

Art. 2198. The principles of the general law on damages are hereby
adopted insofar as they are not inconsistent with this Code.
CHAPTER 2
ACTUAL OR COMPENSATORY DAMAGES
Art. 2199. Except as provided by law or by stipulation, one is
entitled to an adequate compensation only for such pecuniary loss
suffered by him as he has duly proved. Such compensation is
referred to as actual or compensatory damages.
Art. 2200. Indemnification for damages shall comprehend not only
the value of the loss suffered, but also that of the profits which the
obligee failed to obtain. (1106)
Art. 2201. In contracts and quasi-contracts, the damages for which
the obligor who acted in good faith is liable shall be those that are
the natural and probable consequences of the breach of the
obligation, and which the parties have foreseen or could have
reasonably foreseen at the time the obligation was constituted.
In case of fraud, bad faith, malice or wanton attitude, the
obligor shall be responsible for all damages which may be

Art. 2202. In crimes and quasi-delicts, the defendant shall be liable

for all damages which are the natural and probable consequences of
the act or omission complained of. It is not necessary that such
damages have been foreseen or could have reasonably been
foreseen by the defendant.
Art. 2203. The party suffering loss or injury must exercise the
diligence of a good father of a family to minimize the damages
resulting from the act or omission in question.
Art. 2204. In crimes, the damages to be adjudicated may be
respectively increased or lessened according to the aggravating or
mitigating circumstances.
Art. 2205. Damages may be recovered:
(1) For loss or impairment of earning capacity in cases of
temporary or permanent personal injury;
(2) For injury to the plaintiff's business standing or
commercial credit.
Art. 2206. The amount of damages for death caused by a crime or
quasi-delict shall be at least three thousand pesos, even though
there may have been mitigating circumstances. In addition:
(1) The defendant shall be liable for the loss of the earning
capacity of the deceased, and the indemnity shall be paid to the
heirs of the latter; such indemnity shall in every case be assessed
and awarded by the court, unless the deceased on account of
permanent physical disability not caused by the defendant, had no
earning capacity at the time of his death;
(2) If the deceased was obliged to give support according to
the provisions of Article 291, the recipient who is not an heir called
to the decedent's inheritance by the law of testate or intestate
succession, may demand support from the person causing the
death, for a period not exceeding five years, the exact duration to
be fixed by the court;
(3) The spouse, legitimate and illegitimate descendants and
ascendants of the deceased may demand moral damages for mental
anguish by reason of the death of the deceased.
Art. 2214. In quasi-delicts, the contributory negligence of the
plaintiff shall reduce the damages that he may recover.

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Art. 2215. In contracts, quasi-contracts, and quasi-delicts, the court

may equitably mitigate the damages under circumstances other
than the case referred to in the preceding article, as in the following
instances:
(1) That the plaintiff himself has contravened the terms of the
contract;
(2) That the plaintiff has derived some benefit as a result of the
contract;
(3) In cases where exemplary damages are to be awarded, that the
defendant acted upon the advice of counsel;
(4) That the loss would have resulted in any event;
(5) That since the filing of the action, the defendant has done his
best to lessen the plaintiff's loss or injury.
40. SANITARY STEAM LAUNDRY V. CA
Facts: This case involves a collision between a Mercedes Bent panel truck of
petitioner Sanitary Steam Laundry and a Cimarron which caused the death of
three persons and the injuries of several others (Cimarron passengers are
the respondents). All the victims were riding in the Cimarron. One of those
who died was the driver.
The passengers of the Cimarron were mostly employees of the Project
Management Consultants, Inc. (PMCI). The other passengers were family
members and friends whom they invited to an outing. The Cimarron was
owned by Salvador Salenga, father of one of the employees of PMCI. Driving
the vehicle was Rolando Hernandez. It appears that on its way back to
Manila, the Cimarron was hit on its front portion by Sanitary's panel truck,
which was traveling in the opposite direction.
The trucks driver, Herman Hernandez, claimed that a jeepney in front of him
suddenly stopped. He said he stepped on the brakes to avoid hitting the
jeepney and that this caused his vehicle to swerve to the left and encroach
on a portion of the opposite lane. As a result, his panel truck collided with the
Cimarron on the north-bound lane.
The driver of the Cimarron, Rolando Hernandez, and two of his passengers,
namely, Jason Bernabe and Dalmacio Salunoy, died. Several of the other
passengers of the Cimarron were injured and taken to various hospitals.
They filed an action against Sanitary for damages. The RTC sided with the
victims and granted moral damages to 14 of them, in amounts ranging from
2k to 20k. The heirs of Salunoy were also awarded 100k for moral damages
and unearned income. (The respondents also received actual damages,
attorneys fees and a 50k civil indemnity for the heirs of Bernabe )

Cases: 40, 80, 285,

On appeal, the CA affirmed the decision.

Issue: Whether or not the moral damages were justly awarded.
Held: To those injured Yes!
To the heirs of Salunoy No!
Doctrine: As to the moral damages awarded, we find them to be reasonable
and necessary in view of the circumstances of this case. Moral damages are
awarded to allow the victims to obtain means, diversion, or amusement to
alleviate the moral suffering they had undergone due to the defendant's
culpable action. In this case, private respondents doubtless suffered some
ordeal because some of them lost their loved ones, while others lost their
future. Within the meaning of Art. 2217 of the Civil Code, they suffered
sleepless night, mental anguish, serious anxiety, and wounded feelings. An
award of moral damages in their favor is thus justified.
However, the award of P100,000 to the heirs of Dalmacio Salunoy,
denominated in the decision of the trial court as "moral damages and
unearned income" cannot be upheld. The heirs were already included among
those awarded moral damages. Marilyn Salunoy was ordered to be paid
P10,000, Jack Salunoy, P10,000, and their mother Nenita Salunoy, P20,000,
as moral damages. The amount of P100,000 was presumably awarded
primarily for loss of earning capacity but even then the amount must be
modified.
The SC awarded Salunoys heirs P50k as death indemnity and P124, 300 as
compensatory damages based on the formula we studied in class.
80. CAPILI v. CARDENA
FACTS:
On Feb 1993, Jasmin Cardena, a 12 year old school girl, was walking along
the fence of San Roque Elementary School when a branch of a caimito tree
located within the school premises fell on her. It caused her death. Hence,
her parents filed a case for damages against Capili, the principal of the
school.
The spouses allege that as early as Dec 1992, a certain Lerios reported on
the possible danger of the tree to passersby but it was not acted upon by the
principal whose office even stood near the office. The spouses averred
principals gross negligence and lack of foresight as the cause of their
daughters death. Capili denied knowledge of the trees rotting condition.
The TC dismissed the complaint for failure to establish Capilis negligence.
The CA reversed the decision and found Capilli liable for Jasmins death. The
CA ordered Capili to pay to the spouses the following amounts:

for the life of Jasmin D. Cardena - P50,000

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for burial expenses - 15,010

for moral damages - 50,000

for attorney's fees and litigation - 10,000.

Capili now avers that she was not negligent and she in fact assigned the
person next in rank to her to dispose of the tree. And that she did not
observe any indication that the tree was already rotten. She also claims that
oral damages should not be granted since there was no fraud or bad faith on
her part.
ISSUE: W/N Capili the principal was negligent and is liable for the
death of Jasmin Cardena.
HELD/RATIO: Yes, negligent. But NOT liable for moral damages. No
bad faith or fraud.
The fact that respondents' daughter, Jasmin, died as a result of the dead and
rotting tree within the school's premises shows that the tree was indeed an
obvious danger to anyone passing by and calls for application of the principle
of res ipsa loquitur.
As the school principal, petitioner was tasked to see to the maintenance of
the school grounds and safety of the children within the school and its
premises. That she was unaware of the rotten state of the tree calls for an
explanation on her part as to why she failed to be vigilant.
Moral damages are awarded if the following elements exist in the case:(1) an
injury clearly sustained by the claimant; (2) a culpable act or omission
factually established; (3) a wrongful act or omission by the defendant as the
proximate cause of the injury sustained by the claimant; and (4) the award of
damages predicated on any of the cases stated in Article 2219 of the Civil
Code. However, the person claiming moral damages must prove the
existence of bad faith by clear and convincing evidence for the law always
presumes good faith. It is not enough that one merely suffered sleepless
nights, mental anguish, and serious anxiety as the result of the actuations of
the other party. Invariably, such action must be shown to have been willfully
done in bad faith or with ill motive. Under the circumstances, we have to
concede that petitioner was not motivated by bad faith or ill motive vis--vis
respondents' daughter's death. The award of moral damages is therefore not
proper.
285. MCC INDUSTRIAL vs. SSANGYONG CORPORATION
FACTS:
MCC Industrial Sales is engaged in the business of importing and wholesaling
stainless steel produce. Ssyangyong was one of its suppliers, whose head
office was in S. Korea and has a HQ in Makati.
The 2 corporations conducted business through telephone calls and
facsimile or telecopy transmissions. Ssangyong would send pro forma

Cases: 40, 80, 285,

invoices containeing the details of the order to MCC and the latter conforms
to it through its representative by affixing the latters signature on the faxed
copy and sending it again by fax.
On April 13, 2000, Ssangyong Mla Office sent a letter through fax
addressed to MCCs manager (who is also Sanyo Seiki Corps president) to
confirm Sanyo Seikis order of 220 metric tons of hot rolled stainless steel.
Mr. Chan assented and affixed his signature in the letter.
On April 17, 2000, Ssangyong forwarded to MCC a pro forma invoice
that contained the terms and conditions of the transaction. MCC agains sent
back by fax the invoice to Ssangyong with Chans conformity signature.
Stated in the invoice was that payment for the ordered steel products would
be made through an irrevocable letter of credit in favor of Ssangyong. The
goods would be delivered after the L/C had been opened.
Pursuant to MCCs order, Ssangyong placed the said order with its
steel manufacturer, Pohang Iron Corp in S. Korea and paid in full.
MCC could only open a partial L/C so the 220 metric tons of steel
order was split in 2. (2 orders of 110 tons each) On June 20, 2000, Ssangyong
informed Sanyo Seiki and Chan through fax that it was ready to ship 193 tons
of steel to the Phil. It requested for the opening of the L/C.
Despite several letters of requests to open the L/C, MCC failed to so.
Even though it was granted an extension of time, it still failed to set up the
L/C. So on Aug 15, 2000, Ssangyong wrote Sanyo Seike that if the L/C's were
not opened, Ssangyong would be compelled to cancel the contract and hold
MCC liable for damages for breach, inclusive of warehouse expenses, related
interests and charges.
On Aug 17, MCC was able to open an L/C with PCIBank for payment
of half of the stainless steel order. As to the other half, MCC requested
through fax letter, for a price adjustment. Ssangyong rejected this request.
Exasperated, Ssangyong through counsel wrote a letter to MCC, on
September 11, 2000, canceling the sales contract and demanding payment
of US$97,317.37 representing losses, warehousing expenses, interests and
charges.
Ssangyong then filed, on November 16, 2001, a civil action for damages due
to breach of contract against defendants MCC, Sanyo Seiki and Gregory
Chan. Ssangyong alleged that defendants breached their contract when they
refused to open the L/C for the remaining 100 tons of steel.
RTC ruled in favor of Ssangyong and ordered MCC too pay actual
damages amounting to $93,493.87 representing the outstanding principal
claim plus interest at the rate of 6% per annum from March 30, 2001, and
attys fees.
CA affirmed but absolved Chan of liability.
ISSUE: W/N the award of actual damages and attorney's fees in
favor of Ssangyong is proper and justified.
HELD/RATIO: No.

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It is axiomatic that actual or compensatory damages cannot be presumed,

but must be proven with a reasonable degree of certainty.
Actual or compensatory damages are those awarded in order to compensate
a party for an injury or loss he suffered. They arise out of a sense of natural
justice and are aimed at repairing the wrong done. Except as provided by law
or by stipulation, a party is entitled to an adequate compensation only for
such pecuniary loss as he has duly proven.
In the instant case, the trial court awarded to respondent Ssangyong
US$93,493.87 as actual damages. On appeal, the same was affirmed by the
appellate court. Noticeably, however, the trial and the appellate courts, in
making the said award, relied on the statements of account and details of
losses presented by Ssangyong which are at best, self-serving. There were
no official receipts to substantiate them.
Ssangyong contended that it resold the items at a loss but it did not show
actual proof of the assertion.
Nonetheless, the Court finds that petitioner knowingly breached its
contractual obligation and obstinately refused to pay despite repeated
demands from respondent. Petitioner even asked for several extensions of
time for it to make good its obligation. But in spite of respondent's
continuous accommodation, petitioner completely reneged on its contractual
duty. For such inattention and insensitivity, MCC must be held liable for
nominal damages. "Nominal damages are 'recoverable where a legal right is
technically violated and must be vindicated against an invasion that has
produced no actual present loss of any kind or where there has been a
breach of contract and no substantial injury or actual damages whatsoever
have been or can be shown.'" Accordingly, the Court awards nominal
damages of P200,000.00 to respondent Ssangyong.
213. SILVERIO MARCHAN vs. ARSENIO MENDOZA
FACTS:
One evening, a passenger bus of the Philippine Rabbit Bus Lines which was
then driven by Silverio Marchan fell into a ditch while travelling on its way to
Manila. As a result of which, Arsenio Mendoza, his wife and child, were
thrown out to the ground resulting in their multiple injuries.
Arsenio Mendoza damaged his vertebrae causing the paralysis of his
lower extremities. The physician who attended and treated him opined that
he may never walk again.
Consequently, Silverio Marchan was convicted in the RTC for serious,
less serious and slight physical injuries through reckless imprudence.
Arsenio Mendoza, his wife and child sought to recover damages
against Arsenio Marchan and Philippine Rabbit Bus Lines, predicated not only

Cases: 40, 80, 285,

on a breach of contract of carriage for failure to safely convey them to their

destination, but also on account of a criminal negligence resulting to
Mendozas multiple physical damages.
The Court of Appeals affirmed the amount of P40,000.00 awarded by the RTC
as compensatory damages modifying the appealed lower court decision by
holding petitioners to pay the amount of P30,000.00 as exemplary damages
and sustaining the award of attorney's fees in the amount of P5,000.00.
The errors assigned would dispute the holding of the Court of
Appeals in imposing liability in the respective amounts of P40,000.00 for
compensatory damages and P30,000.00 for exemplary damages.
ISSUE: W/N the amounts are proper.
HELD/RATIO: YES. The amount of P40,000.00 as compensatory damages is
quite reasonable and fair, considering that Arsenio Mendoza had suffered
paralysis on the lower extremities, which will incapacitate him to engage in
his customary occupation throughout the remaining years of his life,
especially so if we take into account that plaintiff Arsenio Mendoza was only
26 years old when he met an accident on January 22, 1954; and taking the
average span of life of a Filipino, he may be expected to live for 30 years
more; and bearing in mind the earning capacity of Arsenio Mendoza who
before the happening of this accident derived an income of almost P100.00 a
month from the business of his father-in-law as Assistant Supervisor of the
small [fairs] and his income of P100.00 a month which he derived as a
professional boxer.
Considering that respondent Arsenio Mendoza was only in his middle
twenties when he lost the use of his limbs, being condemned for the
remainder of his life to be a paralytic, in effect leading a maimed, well-nigh
useless existence, the fixing of such liability in the amount of P40,000.00 as
compensatory damages was well within the discretion of the Court of
Appeals.
As to the finding of liability for exemplary damages, exemplary damages
may be imposed by way of example or correction only in addition, among
others, to compensatory damages, but that they cannot be recovered as a
matter of right, their determination depending upon the discretion of the
court. It further appears that the amount of exemplary damages need not be
proved, because its determination depends upon the amount of
compensatory damages that may be awarded to the claimant. If the amount
of exemplary damages need not be proved, it need not also be alleged, and
the reason is obvious because it is merely incidental or dependent upon what
the court may award as compensatory damages. Unless and until this
premise is determined and established, what may be claimed as exemplary
damages would amount to a mere surmise or speculation. It follows as a
necessary consequence that the amount of exemplary damages need not be

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pleaded in the complaint because the same cannot be predetermined. One

can merely ask that it be determined by the court if in the use of its
discretion the same is warranted by the evidence, and this is just what
appellee has done.
No such reproach can be hurled at the decision and resolution now under
review. No such indictment would be justified. As noted earlier, both the
second and the third assignments of error are devoid of merit.
Nor is there any occasion to consider further the fourth assigned error,
petitioner being dissatisfied with the award of P5,000.00 as attorney's fees to
respondents. On its face, such an assignment of an alleged error is
conspicuously futile.
The judgment, however, must be modified in accordance with the ruling of
this Court in Soberano v. Manila Railroad Co. Respondents are entitled to
interest for the amount of compensatory damages from the date of the
decision of the lower court and legal interest on the exemplary damages
from the date of the decision of the Court of Appeals.
WHEREFORE, as thus modified, the decision is affirmed, petitioners being
liable for the sum of P40,000.00 in the concept of compensatory damages
with interest at the legal rate from and after January 26, 1960, and the sum
of P30,000.00 as exemplary damages with interest at the legal rate from and
after December 14, 1964, as well as for the sum of P5,000.00 as attorney's
fees, likewise earning a legal rate of interest from and after January 26, 1960.
214. PEOPLE V. TAAN
FACTS: Accused-appellant Eduardo Taan was found guilty of murder
aggravated by the use of an unlicensed firearm and sentenced to death by
the RTC. In view of penalty imposed, Taans case was elevated to SC for
automatic review. Case was transferred to the CA. Taan argues that the trial
court, among others (other issues not related to torts), erred in: sentencing
him to indemnify the heirs of Ladaga P75,000 as moral damages and another
P50,000 as exemplary damages. CA affirmed the trial court.
Issue: W/N Taan should pay the damages as imposed by the trial court.
Held & Ratio: Regarding damages, when death occurs due to a crime, the
following may be recovered: (1) civil indemnity ex delicto for the death of the
victim; (2) actual or compensatory damages; (3) moral damages; (4)
exemplary damages; (5) attorneys fees and expenses of litigation; and (6)
interest in proper cases. SC affirmed the monetary awards granted by the CA
but modified the awards of civil indemnity ex delicto to P75,000 and moral
damages to P50,000 for the heirs of Ladaga, based on recent case of People
v. Elberto Tubungbanua.

Cases: 40, 80, 285,

215. PEOPLE VS. BARLAAN

Suetos(victim) and Barlaan and company were drinking along Otek street in
Baguio City. After drinking a heated discussion ensued as to who will pay the
bill of P200.00. Barlaan and company threatened Suetos with a fan knife so
Suetos ran away from the establishment for his safety. Suetos stumbled and
fell into the pavement, while he was lying Barlaan and company stabbed
him. Barlaan was found guilty and was ordered by the lower court to
indemnify the heirs of Suetos 67,806 for actual damages, 50,000 as
indemnity to his death, 50,000 for moral damages and 2,040,000 as
unearned income.
As to damages:
The Court upheld the CAs award of P50,000 as civil indemnity and another
P50,000 for moral damages in line with jurisprudence. Civil indemnity is
mandatory and granted to the heirs of the victim without need of proof other
than the commission of the crime. Moral damages on the other hand are
awarded in a criminal offense resulting in physical injuries including death.
The award of actual damages was lessened to 43,306 since it was the only
amount supported by official receipts.
Art. 2206 of the Civil Code entitles heirs to indemnity for loss of earning
capacity. Documentary evidence is necessary to prove such claim, except (1)
when the victim was self employed earning less than the minimum wage and
judicial notice may be taken of the fact that in the victims line of work, no
documentary evidence is available; (2) if the victim was employed as a daily
wage worker earning less than the minimum wage under current labor laws.

216. PEOPLE VS. ELING

Facts: Mohammad Noh Tuttoh was in his nipa hut with Alangan Sakandal.
Mukim Eling, Sakandals brother, then shot Tuttoh from behind with an
unlicensed .45 caliber pistol. Eling was angry with Tutoh for scolding him for
a relationship with a relative. Tuttoh died of hemorrhage secondary to the
gushot wound.
Tuttoh's mother, Jaihan Abu, testified that Tuttoh was her only son. At the
time of Tuttoh's death, he and his wife had five (5) children, and the wife was
pregnant with child. The wife had given birth after the demise of Tuttoh.
Jaiham Abu further testified that she incurred expenses in connection with
the death of her son in the total amount of P54,075.00. She said that in
connection with Tuttoh's funeral, they spent 10 sacks of rice in the total
amount of P8,500.00. They also slaughtered a cow, and bought cigarettes
and fish.

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However, no receipts were shown to support the claim of expenses incurred

for the wake and the burial of the victim.
The Zamboanga RTC found Eling guilty of murder aggravated with the use of
an unlicensed firearm. Eling was sentenced to death and ordered to pay to
pay the heirs of the victim P50,000.00 as indemnity for his death;
P54,075.00 as actual damages; P50,000.00 as moral damages; P30,000.00
as exemplary damages; and to pay the costs.
Because of the death penalty imposed, the case was brought to the SC, but
there, it was then brought to the CA pursuant to jurisprudence.
The SC affirmed the conviction but because of Republic Act No. 9346, which
prohibited the imposition of the death penalty, it downgraded the penalty
from death to reclusion perpetua and awarded temperate damages in lieu of
actual damages. It deleted the award of actual damages for the reason that
no receipts were shown to support the claim of expenses incurred for the
wake and the burial of the victim.
The awards then were:
P50,000.00 as civil indemnity; P50,000.00 as moral damages; P30,000.00 as
exemplary damages; and P25,000.00 as temperate damages in lieu of actual
damages.
Issue: Whether or not the temperate damages should have been granted in
lieu of actual damages.
Held: Yes! (The SC affirmed Elings conviction)
Doctrine: We are in accord with the grant by the Court of Appeals of civil
indemnity; however, in accordance with prevailing jurisprudence, we
increase the same to P75,000.00. The amount of P75,000.00 as civil
indemnity is awarded only if the crime is qualified by circumstances which
warrant the imposition of the death penalty. Though the penalty imposed on
appellant was reduced to reclusion perpetua pursuant to Republic Act No.
9346, civil indemnity to be awarded remains at P75,000.00. We also agree
with the award of moral damages in the amount of P50,000.00. We award
the same as the circumstances surrounding the untimely and violent death,
in accordance with human nature and experience, could have brought
nothing but emotional pain and anguish to the victim's family.
We retain the award of exemplary damages but reduced the amount to
P25,000.00 following current jurisprudence. Exemplary damages in the
amount of P25,000.00 must be awarded, given the presence of treachery
which qualified the killing to murder. Article 2230 of the Civil Code allows the
award of exemplary damages as part of the civil liability when the crime was

Cases: 40, 80, 285,

committed with one or more aggravating circumstances. The term

aggravating circumstance as used therein should be construed in its generic
sense since it did not specify otherwise.
Notwithstanding the absence of receipts to prove actual damages, we affirm
the grant of the Court of Appeals of temperate damages in the
amount of P25,000.00, in lieu of actual damages. The award of
P25,000.00 in temperate damages in homicide or murder cases is
proper when no evidence of burial and funeral expenses is
presented in the trial court. Under Article 2224 of the Civil Code,
temperate damages may be recovered as it cannot be denied that the heirs
of the victim suffered pecuniary loss although the exact amount was not
proved.

217. VILLA REY TRANSIT, INC. vs. CA

At about 1:30 in the morning of March 17, 1960, an Izuzu First Class
passenger bus owned and operated by Villa Rey Transit, Inc. d riven by
Laureano Casim, left Lingayen, Pangasinan, for Manila. Among its paying
passengers was the deceased, Policronio Quintos, Jr. who sat on the first
seat, second row, right side of the bus. At about 4:55 o'clock a.m. the vehicle
frontally hit the rear side of a bullcart filled with hay. As a result the end of a
bamboo pole placed on top of the hayload and tied to the cart to hold it in
place, hit the right side of the windshield of the bus. The protruding end of
the bamboo pole, about 8 feet long from the rear of the bullcart, penetrated
through the glass windshield and landed on the face of Policronio Quintos, Jr.
who, because of the impact, fell from his seat and was sprawled on the floor.
The pole landed on his left eye and the bone of the left side of his face was
fractured. He suffered other multiple wounds and was rendered unconscious
due, among other causes to severe cerebral concussion. Policronio Quintos,
Jr. died at 3:15 p.m. on the same day, March 17, 1960, due to traumatic
shock due to cerebral injuries.
The private respondents are the sisters and only surviving heirs of Policronio
Quintos Jr., who died single. Said respondents herein brought this action
against herein petitioner for breach of the contract of carriage between said
petitioner and the deceased Policronio Quintos, Jr., to recover the aggregate
sum of P63,750.00 as damages, including attorney's fees. Said petitioner
defendant in the court of first instance contended that the mishap was
due to a fortuitous event, but this pretense was rejected by the trial court
and the Court of Appeals.
Issue: Amount of damages recoverable by private respondents
The determination of such amount depends, mainly upon two (2) factors,
namely:

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(1) the number of years on the basis of which the damages shall be
computed
Trial Court: based upon the life expectancy of Policronio Quintos, Jr., which
was placed at 33-1/3 years he being over 29 years of age (or around 30
years for purposes of computation) at the time of his demise by applying
the formula (2/3 x [80-301 = life expectancy).
Petitioner: damages were computed on a four (4) year as held in the
Alcantara case.
(2) the rate at which the losses sustained by said respondents
should be fixed.
Held
(1)The Alcantara case cited is not controlling in the one at bar. In the
Alcantara case, none of the parties had questioned the propriety of the fouryear basis adopted by the trial court in making its award of damages. Both
parties appealed, but only as regards the amount thereof. On the contrary, it
declared:
"(t)here can be no exact or uniform rule for measuring the value of a human
life and the measure of damages cannot be arrived at by precise
mathematical calculation, but the amount recoverable depends on the
particular facts and circumstances of each case. The life expectancy of the
deceased or of the beneficiary, whichever is shorter, is an important factor.'
Other factors that are usually considered are: (1) pecuniary loss to plaintiff or
beneficiary; (2) loss of support; (3) loss of service; (4) loss of society; (5)
mental suffering of beneficiaries; and (6) medical and funeral expenses."
Thus, life expectancy is, not only relevant, but, also, an important element in
fixing the amount recoverable by private respondents herein. The Court of
Appeals has not erred in basing the computation of petitioner's liability upon
the life expectancy of Policronio Quintos, Jr.
(2) In fixing the amount of that support, We must reckon with the "necessary
expenses of his own living", which should be deducted from his earnings.
Thus, it has been consistently held that earning capacity, as an element of
damages to one's estate for his death by wrongful act is necessarily his net
earning capacity or his capacity to acquire money, "less the necessary
expense for his own living. Stated otherwise, the amount recoverable is not
loss of the entire earning, but rather the loss of that portion of the earnings
which the beneficiary would have received. In other words, only net earnings,
not gross earning, are to be considered that is, the total of the earnings less
expenses necessary in the creation of such earnings or income and less
living and other incidental expenses.
All things considered, We are of the opinion that it is fair and reasonable to
fix the deductible living and other expenses of the deceased at the sum of
P1,184.00 a year, or about P100.00 a month, and that, consequently, the
loss sustained by his sisters may be roughly estimated at P1,000.00 a year or

Cases: 40, 80, 285,

P33,333.33 for the 33-1/3 years of his life expectancy. To this sum of
P33,333.33, the following should be added: (a) P12,000.00, pursuant to Arts.
104 and 107 of the Revised Penal Code, in relation to Article 2206 of our Civil
Code, as construed and applied by this Court; (b) P1,727.95, actually spent
by private respondents for medical and burial expenses; and (c) attorney's
fee, which was fixed by the trial court, at P500.00, but which, in view of the
appeal taken by petitioner herein, first to the Court of Appeals and later to
this Supreme Court, should be increased to P2,500.00. In other words, the
amount adjudged in the decision appealed from should be reduced to the
aggregate sum of P49,561.28, with interest thereon, at the legal rate, from
December 29, 1961, date of the promulgation of the decision of the trial
court.
218. DAVILA VS. PAL
Facts: The case arose from the tragic crash of a passenger plane of PAL
which took the lives of all its crew and passengers. The plane took off from
the Manduriao Airport, Iloilo, on its way to Manila, with 33 people on board,
including the plane's complement. It did not reach its destination, but
crashed at Mt. Baco, Mindoro, one hour and fifteen minutes after take-off.
The plaintiffs, parents of Pedro T. Davila, Jr., who was one of the passengers,
had no definite news of what had happened to their son, getting what
information they could only from conflicting newspaper reports, until they
received a letter of condolence from PALs president, informing them that
their son had died in the crash.
Issue: WON PAL is liable for violation of its contract of carriage and if so, for
how much. -YES!
Ratio: It was undisputed that the pilot did not follow the route prescribed for
his flight, at least between Romblon and Manila. Since up to that point over
Romblon, the weather was clear, the most reasonable conclusion is that his
failure to do so was intentional, and that he probably wanted to fly on a
straight line to Manila. It was a violation of air-craft traffic rules to which,
under the circumstances, the accident may be directly attributable. In any
case, absent a satisfactory explanation on the part of the defendant as to
how and why the accident occurred, the presumption is that it was at fault,
under Article 1756 of the Civil Code.
The next question relates to the amount of damages that should be awarded
to the plaintiffs, parents of the deceased. The trial court fixed the indemnity
for his death in the amount of P6,000.00. Pursuant to current jurisprudence
on the point it should be increased to P12,000.00.
The deceased was employed as manager of a radio station, from which he
was earning P8,400.00 a year, consisting of a monthly salary of P600.00 and

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Cases: 40, 80, 285,

allowance of P100.00. As a lawyer and junior partner of his father in the law
office, he had an annual income of P3,600.00. From farming he was getting
an average of P3,000.00. All in all therefore the deceased had gross earnings
of P15,000.00 a year.

but the RTC rejected this and declared that the crime of murder was
established beyond reasonable doubt. RTC sentenced Baguio to reclusior
perpetua OR life imprisonment and to indemnify the heirs of Alfredo Paulino
in the amount of P12K. Baguio appealed to the SC.

According to Article 2206, paragraph (1), of the Civil Code, "the defendant
shall be liable for the loss of the earning capacity of the deceased and
indemnity shall be paid to the heirs of the latter." This Article, while referring
to "damages for death caused by crime or quasi-delict," is expressly made
applicable by Article 1764 "to the death of a passenger caused by the breach
of contract by a common carrier."

Issue:

What is the proper penalty for the crime of murder?

Held:

Reclusion perpetua!

The deceased, Pedro Davila, Jr., was single and 30 years of age when he
died. At that age one's normal life expectancy is 33-1/3 years, according to
the formula (2/3 x [80-30]) adopted in the case of Villa Rey Transit, Inc. vs.
Court of Appeals on the basis of the American Expectancy Table of Mortality
or the Actuarial of Combined Experience Table of Mortality. However,
although the deceased was in relatively good health, his medical history
shows that he had complained of and been treated for such ailments as
backaches, chest pains and occasional feelings of tiredness. It is reasonable
to make an allowance for these circumstances and consider, for purposes of
this case, a reduction of his life expectancy to 25 years.
Considering the fact that the deceased was getting his income from three (3)
different sources, namely from managing a radio station, from law practice
and from farming, the expenses incidental to the generation of such income
were necessarily more than if he had only one source. Together with his
living expenses, a deduction of P600.00 a month, or P7,200.00 a
year, seems reasonable, leaving a net yearly income of P7,800.00.
This amount, multiplied by 25 years, or P195,000.00 is the amount
which should be awarded to the plaintiffs in this particular respect.
Parents were also entitled to actual damages, moral damages, and attorneys
fees but the award of exemplary damages was eliminated.
219. PEOPLE VS BAGUIO
Facts: Alfredo Paulino as barangay tanod had unpleasant dealings with
Rodolfo Baguio, aka Bebot. So when a group of people passed by Alfredo and
his wife Lidovina, the wife recognized Baguio. Lidovina went inside the house
to get money when she suddenly heard her husband scream, aray ko po!.
She rushed out and found her husband sprawled and being stabbed by
Baguio and his companions. The assailants then fled. Alfredo later died on
the operating room.
Baguio was arraigned and tried before the RTC for murder with
treachery and abuse of superior strength. Baguio put up the defense of alibi

Ratio: (Note: the ratio actually focused on the admissibility of dying

declarations, alibis, evidences...etc., essentially, whether the crime of murder
was proven beyond reasonable doubt. Ill skip this since this isnt our topic)
The SC finds that Baguio committed the crime of murder beyond
reasonable doubt. The RTC sentenced Baguio to reclusion perpetua or life
imprisonment as if the two were one and the same. Crime of murder is
defined by the RPC. The RPC does not prescribe the penalty of life
imprisonment --- life imprisonment is imposed for serious offenses NOT
penalized by the RPC but by special laws. Reclusion perpetua carries with it
accessory penalties while life imprisonment does not. Moreover, life
imprisonment does not appear to have any definite extent or duration. The
proper penalty then is reclusion perpetua since murder is defined and
punishable under the RPC.
Indemnity payable to the heirs is increased from P12K to P50K
conformably with the current doctrine (no mention is made as to what
doctrine this is).

220. HEIRS OF CASTRO VS BUSTOS

The trial court found Bustos guilty of homicide, crediting him with 2
mitigating circumstances (passion or obfuscation and voluntary surrender).
Petitioners were awarded P6,000. Both parties appealed with the CA. CA
affirmed the decision of the trial court and adding P6,000 moral damages
and P13,380 to compensate for loss of earning.
Upon motion for
reconsideration, CA reversed itself and deleted the additional damages it
earlier awarded.
Petitioner prays that the first decision of the CA be reinstated
SC: First decision of CA reinstated
As a start, it is to be noted that in the matter of damages, the original
decision of the Court of Appeals, while correct in making a particularization in
the award of indemnity and damages, nonetheless, still failed to comply
strictly with the constitutional requirement that all decisions of courts of
record must state both the facts and the law on which they are based.
When death occurs as a result of a crime, the heirs of the deceased are
entitled to the ff items of damages:

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1.
2.

3.
4.
5.
6.
7.

Articles: 2195-2206, 2214-2215

As indemnity for the death of the victim of the offense P12,000.00,

without the need of any evidence or proof of damages
indemnity for loss of earning capacity of the deceased an amount
to be fixed by the Court according to the circumstances of the
deceased related to his actual income at the time of death and his
probable life expectancy
As moral damages for mental anguish, an amount to be fixed by
the court.
As exemplary damages, when the crime is attended by one or more
aggravating circumstances, an amount to be fixed in the
discretion of the court
As attorney's fees and expresses of litigation, the actual amount
thereof, (but only when a separate civil action to recover civil liability
has been filed or when exemplary damages are awarded).
Interests in the proper cases.
It must be emphasized that the indemnities for loss of earning
capacity of the deceased and for moral damages are recoverable
separately from and in addition to the fixed sum of P12,000.00
corresponding to the indemnity for the sole fact of death, and that
these damages may, however, be respectively increased or lessened
according to the mitigating or aggravating circumstances, except
items 1 and 4 above, for obvious reasons.

221. VICTORY LINER V. GAMMAD

Mrs. Gammad (respondents wife) was on board a Victory Liner bus from
Manila bound for Tugegarao. The bus, running at a high speed fell on a ravine
somewhere in Nueva Vizcaya, resulting to Mrs. Gammads (and others)
deaths. Her heirs, led by Mr. Gammad the husband filed a complaint for
damages based on culpa contractual. Victory claimed the incident was purely
accidental and that it did not fail to exercise extraordinary diligence.
Trial court ruled for Gammad, ordering Victory to pay the ff:
Actual damages 122K
Death Indemnity 50K
Exemplary and Moral Damages 400K
Compensatory Damages1.5M
Attys fees10%
Costs of the suit
On appeal by Victory, the CA modified the award:
Actual D
88K
Compensatory D
1.135M
Moral and Exemplary D
400K
Attys fees
10%
Victory argues that the grant of damages is without basis.

Cases: 40, 80, 285,

Issue: 1. w/n there was breach of contract of carriage

2. w/n amount of damages is proper
Ruling:
1. Yes, there was breach of contract
For breach of contract of carriage, the common carrier is presumed negligent
and upon him lies the burden of proving otherwise. In this case, because of
negligence of Victorys counsel, this burden of rebutting the presumption was
not satisfied (note: lawyer was repeatedly absent, no presentation of
evidence, no cross examination of respondents evidence. Negligence of
counsel binds the client).
2.

Yes, award of damages is proper, but it must be modified.

Under the CC, a common carrier that breached its contract of

carriage which results in death of a passenger is liable to pay: (1)
indemnity for death; (2) indemnity for loss of earning capacity; (3)
moral damages.
Under current jurisprudence, heirs of deceased are entitled to indemnity at a
fixed amount of 50K.
Compensatory damages must be deleted. To warrant compensatory
damages, there must have been documentary evidence presented
to prove loss of earning capacity. The exceptions to this rule are:
(1) deceased is self-employed earning less than minimum wage and
judicial notice may be taken of the fact that in the deceaseds line of
work no documentary evidence is available; (2) deceased is
employed as a daily wage worker earning less than the minumim
wage. In the present case, only Mr. Gammads testimony was the basis for
compensatory damages. Because the case does not fall under the
exceptions, no compensatory damages.
Temperate damages must be awarded. Under the CC, temperate damages
may be recovered when the court finds that pecuniary loss had been
suffered but its amount cannot be proved with certainty. 500K should
be awarded to respondents. In a number of cases, the SC awarded
temperate damages in lieu of damages for loss of earning capacity which
was not substantiated with the required documentary proof.
Moral and exemplary damages, having different bases, should not be
lumped together. Moral damages may be recovered when the
defendant acted in bad faith or with gross negligence in cases of
culpa contractual. By special rule, moral damages may also be

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Articles: 2195-2206, 2214-2215

awarded in cases where breach of contract of carriage results in the

death of passenger. Moral damages: 100K. Exemplary damages may be
recovered in contractual obligations if the defendant acted in
wanton, fraudulent, reckless, oppressive or malevolent manner. For
failure to exercise extraordinary diligence, 100K exemplary damages must be
awarded.
Actual damages should be reduced for failure to substantiate expenses
incurred. Actual damages genuinely incurred in connection with the
death, wake or burial of the victim are recognized, but must be
supported by competent proof. In this case, only 78K was supported by
official receipts.
Attys fees, 10% of all amounts due, is warranted. Pursuant to the Eastern
Shipping case, because this is a case of a judgment awarding a sum of
money that is final and executory, 12% interest must also be awarded, until
all amounts are fully paid.

222. GA MACHINERIES V YAPTINCHAY

Facts:
Yaptinchay (Y) bought a Fordson engine from GA Machineries (GAMI) for
P7,560. He relied on the representations of the latters representative that
the engine was brand-new.
Y was engaged in the trucking business. The engine was installed in one of
his trucks.
Within a week from delivery, the engine started to have malfunctions which
necessitated successive trips to GAMIs repair shop.

oil leak, clutch disc, release bearing hub and trunion bolt,
propeller shaftLEMON! LEMON! LEMON!

Upon investigation, the ff were discovered:

1)
Worn-out screw courtesy of Ys mechanic
2)
Tampered original motor number courtesy of
Capt. Garcias macro-etching test
3)
Two-tone paint (unlike brand-new engine
painted with single color) courtesy of Manila Trading Company

Y institutes action for indemnification

for damages. Trial Court orders GAMI to pay Y P54k in actual damages,
P7,590 as reimbursement for the purchase price of the engine, and P2k in
attorneys fees. CA affirms the decision. Hence, this petition.
Issue: WON award of damages is justified
Held: YES (reimbursement), NO (actual)

Cases: 40, 80, 285,

GAMI committed a breach of contract of sale. The misrepresentation of the

quality of the engine is tantamount to fraud or bad faith. Hence, the award
of P7,590 is justified.
ART 2200 CC entitles Y to recover compensatory damages for actual loss
suffered and prospective profits while Art 2201 entitles him to recover all
damages which may be attributed to non-performance of the obligation.
Such damages, however, have to be proven.
BEST EVIDENCE TEST: A person claiming damages lucro cessante must
produce the best evidence of which his case is susceptible and if that
evidence warrants the inference that he has been damaged by the loss of
profits which he might with reasonable certainty have anticipated but for
the defendants wrongful act, he is entitled to recover.
Award of actual damages is unwarranted under best evidence test.
Projected profit prepared by a Mr. Macasieb (P369.88 profit per trip
multiplied by the number of trips the truck allegedly was unable to
make)
Average actual profits of Ys trucks plying the Manila-Baguio route
would have provided a more reasonable basis for actual damages
DECISION MODIFIED: award of P54k deleted
***In the case of G. A. Machineries, Inc. v. Yaptinchay (126 SCRA 87), we
ruled that in order for damages under Article 2200 of the Civil Code to be
recovered, the best evidence obtainable by the injured party must be
presented, and thus, "the bare assertion of the respondent that he lost about
P54,000.00 and the accompanying documentary evidence presented to
prove the amount lost are inadequate if not speculative." We further ruled
that:
... To prove actual damages, it would have been easy to present the
average actual profits realized by the other freight trucks plying the
Manila-Baguio route. With the presentation of such actual income the
court could have arrived with reasonable certainty at the amount of
actual damages suffered by the respondent. We rule that the award
of actual damages in the amount of P54,000.08 is not warranted by
the evidence on record.

223 VDA. DE JAVELLANA V. COURT OF APPEALS

Facts:
Leonor de Javellana owned 3 parcels of land in Makati. She leased said
property to Mobil Oil Phils. Mobil had up to Feb. 18, 1970 to exercise its
option. On July 31, 1970, Javellana leased the same to Shell. Mobil, claiming
it had exercised the option, filed an action against Javellana and Shell to
declare the lease agreement between Javellana and Shell null and void and

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Articles: 2195-2206, 2214-2215

to compel Javellana to execute and sign a lease agreement in its favour. It

also prayed that both defendants be ordered to pay damages and attys fees
and that a writ of preliminary injunction be issued.
Issue: W/N the petitioner Javellana is entitled to an award of damages for the
wrongful filing of a case against her and the improvident issuance of a writ of
PI? YES.
Held:
Even if Javellana did not assign as error the failure of the trial court to
adjudge recovery and to award damages, SC feels there is sufficient
justification to set aside the judgment (denying her claim for damages) in
this respect. The error is patent.
Were it not for the filing of this case and the improvident issuance of
the writ of PI, Javellana would have received P912K from Shell. But since she
had been given an advance rental of P120K, the accrued rental due her is
P792K. Mobil is now directed to pay this amount of P792K to Javellana with
interest thereon at the legal rate from finality of judgment until the same is
fully paid, plus the amount of P7K per month, from July 31, 1983 until the
possession of the property in question is returned to Javellana. Mobil is also
ordered to pay P20K representing attys fees and expenses of litigation.

224. BAUTISTA V. MAXINO

Facts:
In 1956, Maxino and his wife sold their hacienda and fishponds, as
well as the agricultural tools and equipment used therein to Bautista for the
amount of P70,000.00, with the condition that the Bautista shall assume the
payment of an obligation, secured by mortgages on the property, in favor of
the Rehabilitation Finance Corporation (RFC), now Development Bank of the
Philippines.
Bautista sold the same property to the San Jose Development
Company, represented by its president, Francisco G. Guballa, for the amount
of P80,000.00, P20,000.00 of which shall be paid upon the execution of the
contract, and the balance to be paid in three (3) equal installments of
P20,000.00 each, per year, for three (3) years.
However, Maxino and his wife also sold the same property to
Guballa. As of 1961, Guballa had an outstanding obligation of P30,000.00 to
Bautista which he failed to pay, notwithstanding demands. Thus, Bautista
filed a collection suit as well as a complaint for damages against Guballa
and included the Maxino spouses as party defendant for having allegedly

Cases: 40, 80, 285,

conspired with their co-defendant, Guballa to defraud the Bautista when they
executed the deed of sale.
The Maxinos filed counterclaims for sums of money but it was
dismissed. The Court ruled in favor of Bautista and ordered Guballa (the
judgment did not include Maxino) to pay.
One of the contentions of Maxino in his counterclaim was that he
should be entitled to moral damages because they had suffered great mental
anguish serious anxiety, besmirched reputation, wounded feelings, moral
shock, and social humiliation and were compelled to litigate and contract
legal services based on the malicious filing of a completely groundless and
defamatory complaint.
Issue:Is Maxino entitled to damages?
Decision:No.
Guballa and his wife still owed Bautista the amount of P30,000.00. It
is not far-fetched that Bautista was disappointed and disturbed, and laid part
of the blame upon Maxino who negotiated the sale and transfer of the
property to Guballa and his wife and even suspected that there was a
conspiracy to defraud her.
Thus, the filing of the complaint by Bautista against Maxino was not
baseless. It cannot be said to have been motivated by, malice or spite to
warrant the payment of the damages claimed by the Maxino spouses.
225. BENGUET ELECTRIC COOPERATIVE, INC. VS. CA
Facts:
The deceased Jose Bernardo, a meat shop vendor, was 33 years old at the
time of his death and was survived by his spouse and 3 minor children.
When he was about to board a jeepney loaded with slaughtered pigs in order
to select the meat he would sell for that day, upon grasping the handlebars
he was electrocuted because the antenna of the jeepney was entangled with
an open electric wire. He died as a result of the incident.
His wife filed a complaint for damages against Benguet Electric Cooperative.
Issue: W/N damages awarded are appropriate?
Held/Ratio:
2 factors to be considered in determining loss of earning capacity: (1)
number of years on the basis of which the damages shall be computed (life

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Articles: 2195-2206, 2214-2215

expectancy); and (2) the rate at which the losses sustained by the widow and
her children should be fixed (net income).
Re: 1st factor

Cases: 40, 80, 285,

Trial Court and CA awarded damages in the following amounts:

1. actual damages - $5,417
2. moral damage P50,000
3. Exemplary damages P50,000
4. Attorneys fees P10,000

Life expectancy = 2/3 x (80-age at time of death)

Issue: W/N the damages are excessive
31.33 = 2/3 x (80-33)
HOWEVER, the SC held that taking into account the nature and quality of life
of a meat vendor, it is hard to conceive that Jose would still be working for
the entire 31.33 years. So SC found it reasonable to reduce the decedents
life expectancy to 25 years.
Re: 2nd factor
The SC ruled that although the widow failed to present documentary
evidence regarding the income of the deceased, the unrebutted testimony of
Joses sister supplied such deficiency considering that Joses meat stall used
to belong to his sister and that she only gave it to him. She testified that Jose
earned around P150-P200/day.
SC fixed Joses daily gross income to P150/day or P54k annually.
Net income = gross income necessary living expenses
P27,000 = P54,000 P27,000
*Necessary living expenses is fixed at 50% of gross income
So, the net earning capacity of Jose is:
Net Earning Capacity = Life expectancy x net income
P675,000 = 25 x P27,000

227. GLOBE-MACKAY CABLE V. BARRIOS

Facts: Petitioner Cable Company admittedly failed to deliver a telegram to
respondent spouses. The telegram came from Mercy Hospital in New York
and stated that it had admitted respondent-wife for a rotating internship in
the said hospital. Failure caused the respondent spouses financial difficulties
in New York, due to loss of earnings for 6 months, serious anxiety and
sleepless nights, for which petitioner should be held liable, and which should
be corrected for the public good. A telegraph company is a public service
corporation owing duties to the public and is liable to any member of the
public to whom it owes a duty for damages proximately flowing from a
violation of that duty.

Held: YES. Taking into the facts and circumstances that the petitioner is
corporation vested with public interest. That respondents would have had to
incur living and sundry expenses, thereby reducing the net earnings which
they would have received, and that responded wife succeeded in securing
another better-paying job approximately 6 months afterwards, the judgment
should be modified reducing the awards to the following:
1. 1.actual damages - $2,703
2. moral damage P5,000
3. Exemplary damages P5,000
4. Attorneys fees P8,000

228. NELEN LAMBERT VS. HEIRS OF RAY CASTILLON

FACTS: Ray Castillon visited the house of his brother Joel and borrowed his
motorcycle. Ray then invited his friend Sergio to roam around the city.
At around 10:00 p.m., after eating supper at Honas Restaurant and drinking
a bottle of beer, they traversed the highway at a high speed and figured in
an accident with a Tamaraw jeepney, owned by petitioner Nelen Lambert and
driven by Reynaldo Gamot, which was traveling on the same direction but
made a sudden left turn. The incident resulted in the instantaneous death of
Ray and injuries to Sergio.
Heirs of Ray filed an action for damages with prayer for preliminary
attachment and Joel also included his claim for the damages caused to his
motorcycle.
RTC decided in favor of the heirs of Ray but reduced Nelens liability by 20%
in view of the contributory negligence of Ray. CA affirmed the decision.
Nelen insists that the negligence of Ray Castillon was the proximate cause of
his unfortunate death and therefore she is not liable for damages.
ISSUE: WON Ray contributed to his death? YES.
RULING:
While we agree with the trial court that Ray was likewise guilty of
contributory negligence as defined under Article 2179 of the Civil Code, we
find it equitable to increase the ratio of apportionment of damages on
account of the victims negligence.

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Articles: 2195-2206, 2214-2215

Cases: 40, 80, 285,

The underlying precept on contributory negligence is that a plaintiff who is

partly responsible for his own injury should not be entitled to recover
damages in full but must bear the consequences of his own negligence. The
defendant must thus be held liable only for the damages actually caused by
his negligence. The determination of the mitigation of the defendants liability
varies depending on the circumstances of each case.

formula with the net earnings computed at 50% of the gross earnings, a
detailed computation is as follows:
NET EARNING
CAPACITY (X)

= LIFE EXPECTANCY
[2/3 (80-age at the time
of death)]

x GROSS
ANNUAL
INCOME (GAI)

- LIVING
EXPENSES (50%
of GAI)

In the case at bar, it was established that Ray, at the time of the mishap: (1)
was driving the motorcycle at a high speed; (2) was tailgating the Tamaraw
jeepney; (3) has imbibed one or two bottles of beer; and (4) was not wearing
a protective helmet. These circumstances, although not constituting the
proximate cause of his demise and injury to Sergio, contributed to the same
result. The contribution of these circumstances are all considered and
determined in terms of percentages of the total cause. Hence,
pursuant to Rakes v. AG & P, the heirs of Ray Castillon shall recover
damages only up to 50% of the award. In other words, 50% of the
damage shall be borne by the private respondents; the remaining 50% shall
be paid by the petitioner.

= [2/3 (80-35)]

x [P31,876.00

-50% x
P31,876.00]

= [2/3 (45)]

x [P31,876.00

- P15,938.00]

= 30

x 15,938.00

= P478,140.00

Earning Capacity
In considering the earning capacity of the victim as an element of damages,
the following factors are considered in determining the compensable amount
of lost earnings: (1) the number of years for which the victim would
otherwise have lived; and (2) the rate of loss sustained by the heirs of the
deceased. Jurisprudence provides that the first factor, i.e., life expectancy, is
computed by applying the formula (2/3 x [80 - age at death]) adopted in the
American Expectancy Table of Mortality or the Actuarial Combined
Experience Table of Mortality. As to the second factor, it is computed by
multiplying the life expectancy by the net earnings of the deceased, i.e., the
total earnings less expenses necessary in the creation of such earnings or
income and less living and other incidental expenses. The net earning is
ordinarily computed at fifty percent (50%) of the gross earnings.
Thus, the formula used by this Court in computing loss of earning capacity is:
Net Earning Capacity = [2/3 x (80 age at time of death) x (gross
annual income reasonable and necessary living expenses)].
It was established that Ray was 35 at the time of his death and was earning
a gross annual income of P31,876.00 as a driver at the Mindanao State
University. In arriving at the net earnings, the trial court deducted from the
gross annual income the annual living expenses in the amount of P9,672.00,
broken down as follows: P20.00 a day for travel or P520.00 per month;
P60.00 a month for cigarettes; P26.00 for drinks; and other personal
expenses like clothing, toiletries, etc. estimated at P200.00 per month. The
amount of P9,672.00, however, appears unrealistic, and constitutes only
30.34% of the gross earnings. It even includes expenses for cigarettes which
by no means can be classified as a necessary expense. Using the cited

We sustain the awards of P33,215.00 as funeral and burial expenses being

supported with receipts; P50,000.00 as death indemnity; and P50,000.00 as
moral damages. However, the award of P20,000.00 as attorneys fees must
be deleted for lack of basis.
The indemnity for death caused by a quasi-delict used to be pegged at
P3,000.00, based on Article 2206 of the Civil Code. However, the amount has
been gradually increased through the years. At present, prevailing
jurisprudence fixes the amount at P50,000.00.

229. FLOREZA V. DE EVANGELISTA

FACTS:
Plaintiffs Maria de Evangelista and Sergio Evangelista, who are
mother and son, (the EVANGELISTAS, for short) are the owners of a
residential lot valued at P410.00. The EVANGELISTAS then borrowed from
FLOREZA the amount of P100.00. Thereafter, with the consent of the
EVANGELISTAS, FLOREZA occupied the said residential lot and built a house
of light materials without any agreement as to payment for the use of said
residential lot owing to the fact that the EVANGELISTAS has a standing loan
in favor of FLOREZA.
The EVANGELISTAS again borrowed different amounts on several
occasions totaling to P740.00, including the first loan.
The last three loans were evidenced by private documents stating
that the lot stands as security therefor and that the amounts covered
thereunder are payable within six years, without mention of interest.
FLOREZA then demolished the house of light materials and
constructed one of strong materials.
The EVANGELISTAS, for and in consideration of P1,000.00
representing the total outstanding loan of P740.00 plus P260.00 in cash, sold
their residential lot to FLOREZA, with a right to repurchase within a period of
6 years from date.

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Articles: 2195-2206, 2214-2215

Cases: 40, 80, 285,

Seven months before the expiry of the repurchase period, the

EVANGELISTAS paid in full the repurchase price of P1,000.00.
The EVANGELISTAS made a formal written demand to vacate, within
five days. FLOREZA refused to vacate unless he was first reimbursed the
value of his house.

Side Note: During the pendency of this appeal, Maria D. de Evangelista died
and was ordered substituted by her son, petitioner Sergio. Also, FLOREZA
had since died and that his heirs had voluntarily vacated the residential lot in
question. Thus, only the issue of the payment of rent was disposed of by the
SC.

ISSUE: W/N FLOREZA MUST PAY RENT BECAUSE OF HIS REFUSAL TO VACATE
W/N FLOREZA IS A BUILDER IN GOOD FAITH AND THEREFORE HAS A
RIGHT OF REIMBURSEMENT UNDER ARTICLE 448 OF THE CIVIL CODE.

229. PERFECTO v. GONZALES

HELD: YES, FLOREZA MUST PAY RENT. NO, HE DOESNT HAVE THE RIGHT TO
REIMBURSEMENT.
RATIO:
As regards the issue of rentals, it is clear that from the date that the
redemption price had been paid by the EVANGELISTAS on January 2, 1955,
petitioner's right to the use of the residential lot without charge had ceased.
Having retained the property although a redemption had been made, he
should be held liable for damages in the form of rentals for the continued use
of the subject residential lot at the rate of P10.00 monthly from January 3,
1955 until the house was removed and the property vacated by petitioner or
his heirs.
As regards the issue of reimbursement, Article 448 applies only when
the builder, planter, or sower believes he had the right so to build, plant or
sow because he thinks he owns the land or believes himself to have a claim
of title. Here, petitioner makes no pretensions of ownership whatsoever.
Petitioner contends that as vendee a retro he is entitled to the rights
granted under Article 1616 of the Civil Code. This is incorrect. It should be
noted that petitioner did not construct his house as a vendee a retro. The
house had already been constructed even before the pacto de retro sale.
Petitioner incurred no useful expense, therefore, after that sale. The
house was already there at the tolerance of the EVANGELISTAS in
consideration of the several loans extended to them. Since petitioner cannot
be classified as a builder in good faith within the purview of Article 448 of the
Civil Code, nor as a vendee a retro, who made useful improvements during
the lifetime of the pacto de retro, petitioner has no right to reimbursement of
the value of the house which he had erected on the residential lot of the
EVANGELISTAS, much less to retention of the premises until he is reimbursed.
The rights of petitioner are more akin to those of a usufructuary who,
under Article 579 of the Code, may make on the property useful
improvements but with no right to be indemnified therefor. He may,
however, remove such improvements should it be possible to do so without
damage to the property.

Private respondent Juliana, a public school teacher, was appointed poll clerk
by the COMELEC during the 1965 Elections. Petitioner Perfecto, a
Congressional candidate, filed with the COMELEC an administrative
complaint against the members of the BEI and Juliana, charging them of
nonfeasance, malfeasance and misfeasance for willful failure to comply with
the orders and instructions of the COMELEC relative to the conduct of the
elections. Juliana then filed with the RTC an action for damages alleging that
the charges against her were false and without basis and instituted
maliciously to expose her to public ridicule, for which she suffered mental
torture, anguish, sleepless nights, besmirched reputation, wounded feelings,
mental shock and social humiliation which may be assessed as moral
damages in the amount of P120K. Further, she claims the sum of P15K as
exemplary damages and P10K for attorneys fees and litigation expenses.
The RTC ruled that there was no sufficient proof to sustain the administrative
charge against Juliana, who was awarded compensatory damages amounting
to P2K.
ISSUE: W/N the awarding of compensatory damages by the RTC was
proper.
NO. Respondent judge found no basis for actual or compensatory damages
and exemplary damages. Compensatory damages are those recoverable
because of pecuniary loss in business, trade, property, profession, job or
occupation, and the same must be provided, otherwise, if the proof is flimsy
and non-substantial, no damages will be given. Well settled is the rule that
even if the complaint filed by one against the other is clearly unfounded, this
does not necessarily mean, in the absence of specific facts proving damages,
that said defendant really suffered actual damage over and above, attorneys
fees and costs. The Court cannot rely on its speculations as to the fact and
the amount of damages. It must depend on actual proof of the damages
alleged to have been suffered.
231. RODRIGUEZ LUNA V. IAC
Facts: The petitioners are the heirs of Roberto R. Luna who was killed in a
vehicular collision at a go-kart practice. Those involved were the go-kart

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Articles: 2195-2206, 2214-2215

driven by the deceased, a business executive, and a Toyota car driven by

Luis dela Rosa, a minor of 13 years who had no driver's license.
In the suit for damages filed by the petitioners agains Luis dela Rosa and his
father, the latter were sentenced pay jointly and severally
P1,650,000.00 as unearned net earnings of Roberto Luna, P12,000.00 as
compensatory damages, P50,000.00 for the loss of his companionship, with
legal interest from the date of this decision.
The award of P1,650,000.00 was based on two factors: (a) that the deceased
Roberto R. Luna could have lived for 30 more years; and (b) that his annual
net income was P55,000.00, computed at P75,000.00 annual gross income
less P20,000.00 annual personal expenses.
Upon MR of the defendants, the decision was modified as to the unearned
net earnings, which was reduced to P450,000.00 with legal interest thereon
from the date of the filing of the complaint.
In reducing the amount, Court of Appeals took into account the fact that the
deceased had been engaged in car racing as a sport, a dangerous and risky
activity. The result was that the 30-year life expectancy of Luna was reduced
to 10 years only.
Considering the escalating price of automobile gas which is a key
expenditure in Roberto R. Luna's social standing, the personal expenses was
increased to P30,000.00. Thus P75,000.00 annual gross income less
P30,000.00 annual personal expenses leaves P45,000.00 multiplied by 10
years of life expectancy and the product is P450,000.00.
Issue: Was CA correct in reducing the unearned net earnings of Roberto Luna
from P1,650,000 to P450,000
Held: NO
Ratio: That Luna had engaged in car racing is not based on any evidence on
record, he was engaged in go-kart racing. This cannot be categorized as a
dangerous sport for go-karts are extremely low slung, low powered vehicles,
only slightly larger than foot-pedalled four wheeled conveyances.
It was error for the Court of Appeals to reduce the net annual income of the
deceased by increasing his annual personal expenses but without at the
same time increasing his annual gross income. It stands to reason that if his
annual personal expenses should increase because of the "escalating price of
gas which is a key expenditure in Roberto R. Luna's social standing" [a
statement which lacks complete basis], it would not be unreasonable to
suppose that his income would also increase considering the manifold
sources thereof.
232. HERBOSA V. CA:
Facts: Petitioner spouses contracted the services of PVE for the betamax
coverage of their then wedding celebration. .On the day of the wedding, the

Cases: 40, 80, 285,

PVE crew arrived at the residence of the bride. They recorded the predeparture activities of the bride before leaving for the church and the Manila
Hotel where the wedding reception followed. 2 days after the wedding
however, studio manager of PVE, informed the petitioners that the videotape
coverage of their wedding celebration was damaged due to mechanical
defect in their equipment.
Petitioners alleged that said failure on the part of PVE to perform its
obligation caused deep disappointment, anxiety and an irreparable break in
the continuity of an established family tradition of recording by film or slide
historical and momentous family events especially wedding celebrations and
for which they were entitled to be paid actual, moral and exemplary
damages including attorneys fees.
RTC rendered a decision ordering defendant to pay the plaintiffs actual,
moral and exemplary damages in the amount of P100,000.00, P10,000.00 for
attorneys fees and to pay the costs of these proceedings.
Issues: Whether or not the petitioners are entitled to award of damages
arising from breach of contract of service.
Held: PVE liable for damages.
Ratio:
PVE disclaimed any liability for the damaged videotape by invoking
force majeure or fortuitous event and asserted that a defective transistor
caused the breakdown in its video tape recorder, but failed to substantiate
its bare allegation by presenting in evidence the alleged defective transistor
before the trial court.
At any rate, in order that fortuitous event may exempt PVE from liability,
it is necessary that it be free from negligence. The PVE crew miserably failed
to detect the defect in the video tape recorder and this could have been
avoided by a timely exercise of minimum prudence by the crew of PVE.
The failure to record on videotape the wedding celebration of the
petitioners constitutes malicious breach of contract as well as gross
negligence on the part of respondent Solid Distributors, Inc.
However, the award of damages to the petitioners cannot be lumped
together as was done by the trial court. It is basic that the claim for actual,
moral and exemplary damages as well as attorneys fees must each be
independently identified and justified. Article 1170 of the New Civil Code
provides that those who in the performance of their obligations are guilty of
fraud, negligence or delay, and those who in any manner contravene the
tenor thereof, are liable for damages. For failure of PVE, to comply with its
obligation under the video tape coverage contract, petitioners are entitled to
actual damages at least in the amount of (P1,423.00) representing their
downpayment in that contract.
Ordinarily, moral damages cannot be recovered in an action for breach
of contract because such an action is not among those expressly mentioned

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213-232

Articles: 2195-2206, 2214-2215

Cases: 40, 80, 285,

in Article 2219. However, moral damages are recoverable for breach of

contract where the breach was wanton, reckless, malicious or in bad faith,
oppressive or abusive. The wanton and reckless failure and neglect to timely
check and remedy the video tape recorder by the PVE crew indicates a
malicious breach of contract and gross negligence on the part of said
respondent in the discharge of its contractual obligations. Consequently, the
petitioners who suffered mental anguish and tortured feelings thereby, are
entitled to an award of One Hundred Thousand Pesos (P100,000.00) as moral
damages.
In the case of Go v. Court of Appeals it was emphasized that (i)n our
society, the importance of a wedding ceremony cannot be underestimated as
it is the matrix of the family and, therefore, an occasion worth reliving in the
succeeding years. Considering the sentimental value of the tapes and the
fact that the event therein recordeda wedding which in our culture is a
significant milestone to be cherished and rememberedcould no longer be
reenacted and was lost forever.
The award of exemplary damages which is hereby fixed to (P40,000.00)
is justified, under the premises, to serve as a warning to all entities engaged
in the same business to observe good faith and due diligence in the
fulfillment of their contractual obligations. Additionally, the award of
attorneys fees in the amount of Ten Thousand Pesos (P10,000.00) is also
proper in accordance with Article 2208 of the Civil Code.

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