SECOND DIVISION

[G.R. No. 116100. February 9, 1996]

SPOUSES CRISTINO and BRIGIDA CUSTODIO and SPOUSES

LITO and MARIA CRISTINA SANTOS, petitioners,
vs. COURT OF APPEALS, HEIRS OF PACIFICO C.
MABASA and REGIONAL TRIAL COURT OF PASIG,
METRO MANILA, BRANCH 181, respondents.
DECISION
REGALADO, J.:

This petition for review on certiorari assails the decision of respondent

Court of Appeals in CA-G.R. CV No. 29115, promulgated on November 10,
1993, which affirmed with modification the decision of the trial court, as well
as its resolution dated July 8, 1994 denying petitioners motion for
reconsideration.[1]
On August 26, 1982, Civil Case No. 47466 for the grant of an easement
of right of way was filed by Pacifico Mabasa against Cristino Custodio, Brigida
R. Custodio, Rosalina R. Morato, Lito Santos and Maria Cristina C. Santos
before the Regional Trial Court of Pasig and assigned to Branch 22 thereof. [2]
The generative facts of the case, as synthesized by the trial court and
adopted by the Court of Appeals, are as follows:

Perusing the record, this Court finds that the original plaintiff Pacifico
Mabasa died during the pendency of this case and was substituted by Ofelia
Mabasa, his surviving spouse [and children].
The plaintiff owns a parcel of land with a two-door apartment erected
thereon situated at Interior P. Burgos St., Palingon, Tipas, Taguig, Metro
Manila. The plaintiff was able to acquire said property through a contract of
sale with spouses Mamerto Rayos and Teodora Quintero as vendors last
September 1981. Said property may be described to be surrounded by other
immovables pertaining to defendants herein. Taking P. Burgos Street as the
point of reference, on the left side, going to plaintiffs property, the row of
houses will be as follows: That of defendants Cristino and Brigido Custodio,
then that of Lito and Maria Cristina Santos and then that of Ofelia Mabasa.
On the right side (is) that of defendant Rosalina Morato and then a Septic
Tank (Exhibit D). As an access to P. Burgos Street from plaintiffs property,
there are two possible passageways. The first passageway is approximately
one meter wide and is about 20 meters distan(t) from Mabasas residence
to P. Burgos Street. Such path is passing in between the previously
mentioned row of houses. The second passageway is about 3 meters in
width and length from plaintiff Mabasas residence to P. Burgos Street; it is
about 26 meters. In passing thru said passageway, a less than a meter wide
path through the septic tank and with 5-6 meters in length has to be
traversed.
When said property was purchased by Mabasa, there were tenants
occupying the premises and who were acknowledged by plaintiff Mabasa as
tenants. However, sometime in February, 1982. one of said tenants vacated
the apartment and when plaintiff Mabasa went to see the premises, he saw
that there had been built an adobe fence in the first passageway making it

narrower in width. Said adobe fence was first constructed by defendants

Santoses along their property which is also along the first passageway.
Defendant Morato constructed her adobe fence and even extended said
fence in such a way that the entire passageway was enclosed (Exhibit 1Santoses and Custodios, Exh. D for plaintiff, Exhs. 1-C, 1-D and I -E) And
it was then that the remaining tenants of said apartment vacated the area.
Defendant Ma. Cristina Santos testified that she constructed said fence
because there was an incident when her daughter was dragged by a bicycle
pedalled by a son of one of the tenants in said apartment along the first
passageway. She also mentioned some other inconveniences of having (at)
the front of her house a pathway such as when some of the tenants were
drunk and would bang their doors and windows. Some of their footwear
were even lost. x x x[3] (Italics in original text; corrections in parentheses
supplied)
On February 27, 1990, a decision was rendered by the trial court, with
this dispositive part:
Accordingly, judgment is hereby rendered as follows:

1) Ordering defendants Custodios and Santoses to give plaintiff permanent

access - ingress and egress, to the public street;
2) Ordering the plaintiff to pay defendants Custodios and Santoses the sum
of Eight Thousand Pesos (P8,000) as indemnity for the permanent use of the
passageway.
The parties to shoulder their respective litigation expenses. [4]
Not satisfied therewith, therein plaintiff represented by his heirs, herein
private respondents, went to the Court of Appeals raising the sole issue of

whether or not the lower court erred in not awarding damages in their
favor. On November 10, 1993, as earlier stated, the Court of Appeals
rendered its decision affirming the judgment of the trial court with
modification, the decretal portion of which disposes as follows:

WHEREFORE, the appealed decision of the lower court is hereby

AFFIRMED WITH MODIFICATION only insofar as the herein grant of
damages to plaintiffs-appellants. The Court hereby orders defendantsappellees to pay plaintiffs-appellants the sum of Sixty Five
Thousand (P65,000) Pesos as Actual Damages, Thirty Thousand (P30,000)
Pesos as Moral Damages, and Ten Thousand (P10,000) Pesos as Exemplary
Damages. The rest of the appealed decision is affirmed to all respects. [5]
On July 8, 1994, the Court of Appeals denied petitioners motion for
reconsideration.[6] Petitioners then took the present recourse to us, raising two
issues, namely, whether or not the grant of right of way to herein private
respondents is proper, and whether or not the award of damages is in order.
With respect to the first issue, herein petitioners are already barred from
raising the same. Petitioners did not appeal from the decision of the court a
quo granting private respondents the right of way, hence they are presumed
to be satisfied with the adjudication therein. With the finality of the judgment of
the trial court as to petitioners, the issue of propriety of the grant of right of
way has already been laid to rest.
For failure to appeal the decision of the trial court to the Court of Appeals,
petitioners cannot obtain any affirmative relief other than those granted in the
decision of the trial court. That decision of the court below has become final
as against them and can no longer be reviewed, much less reversed, by this
Court. The rule in this jurisdiction is that whenever an appeal is taken in a civil
case, an appellee who has not himself appealed may not obtain from the
appellate court any affirmative relief other than what was granted in the
decision of the lower court. The appellee can only advance any argument that

he may deem necessary to defeat the appellants claim or to uphold the

decision that is being disputed, and he can assign errors in his brief if such is
required to strengthen the views expressed by the court a quo. These
assigned errors, in turn, may be considered by the appellate court solely to
maintain the appealed decision on other grounds, but not for the purpose of
reversing or modifying the judgment in the appellees favor and giving him
other affirmative reliefs.[7]
However, with respect to the second issue, we agree with petitioners that
the Court of Appeals erred in awarding damages in favor of private
respondents. The award of damages has no substantial legal basis. A reading
of the decision of the Court of Appeals will show that the award of damages
was based solely on the fact that the original plaintiff, Pacifico Mabasa,
incurred losses in the form of unrealized rentals when the tenants vacated the
leased premises by reason of the closure of the passageway.
However, the mere fact that the plaintiff suffered losses does not give rise
to a right to recover damages. To warrant the recovery of damages, there
must be both a right of action for a legal wrong inflicted by the defendant, and
damage resulting to the plaintiff therefrom. Wrong without damage, or
damage without wrong, does not constitute a cause of action, since damages
are merely part of the remedy allowed for the injury caused by a breach or
wrong.[8]
There is a material distinction between damages and injury. Injury is the
illegal invasion of a legal right; damage is the loss, hurt, or harm which results
from the injury; and damages are the recompense or compensation awarded
for the damage suffered. Thus, there can be damage without injury in those
instances in which the loss or harm was not the result of a violation of a legal
duty. These situations are often calleddamnum absque injuria.[9] in order that a
plaintiff may maintain an action for the injuries of which he complains, he
must establish that such injuries resulted from a breach of duty which the
defendant owed to the plaintiff - a concurrence of injury to the plaintiff and
legal responsibility by the person causing it. [10] The underlying basis for the
award of tort damages is the premise that an individual was injured in

contemplation of law. Thus, there must first be the breach of some duty and
the imposition of liability for that breach before damages may be awarded; it
is not sufficient to state that there should be tort liability merely because the
plaintiff suffered some pain and suffering)[11]
Many accidents occur and many injuries are inflicted by acts or omissions
which cause damage or loss to another but which violate no legal duty to
such other person, and consequently create no cause of action in his favor. In
such cases, the consequences must be borne by the injured person
alone. The law affords no remedy for damages resulting from an act which
does not amount to a legal injury or wrong. [12]
In other words, in order that the law will give redress for an act causing
damage, that act must be not only hurtful, but wrongful. There must
be damnum et injuria.[13] If, as may happen in many cases, a person sustains
actual damage, that is, harm or loss to his person or property, without
sustaining any legal injury, that is, an act or omission which the law does not
deem an injury, the damage is regarded as damnum absque injuria.[14]
In the case at bar, although there was damage, there was no legal injury.
Contrary to the claim of private respondents, petitioners could not be said to
have violated the principle of abuse of right. In order that the principle of
abuse of right provided in Article 21 of the Civil Code can be applied, it is
essential that the following requisites concur: (1) The defendant should have
acted in a manner that is contrary to morals, good customs or public
policy; (2) The acts should be willful; and (3) There was damage or injury to
the plaintiff.[15]
The act of petitioners in constructing a fence within their lot is a valid
exercise of their right as owners, hence not contrary to morals, good customs
or public policy. The law recognizes in the owner the right to enjoy and
dispose of a thing, without other limitations than those established by law. [16] It
is within the right of petitioners, as owners, to enclose and fence their
property. Article 430 of the Civil Code provides that (e)very owner may
enclose or fence his land or tenements by means of walls, ditches, live or

dead hedges, or by any other means without detriment to servitudes

constituted thereon.
At the time of the construction of the fence, the lot was not subject to any
servitudes. There was no easement of way existing in favor of private
respondents, either by law or by contract. The fact that private respondents
had no existing right over the said passageway is confirmed by the very
decision of the trial court granting a compulsory right of way in their favor after
payment of just compensation. It was only that decision which gave private
respondents the right to use the said passageway after payment of the
compensation and imposed a corresponding duty on petitioners not to
interfere in the exercise of said right.
Hence, prior to said decision, petitioners had an absolute right over their
property and their act of fencing and enclosing the same was an act which
they may lawfully perform in the employment and exercise of said right. To
repeat, whatever injury or damage may have been sustained by private
respondents by reason of the rightful use of the said land by petitioners
is damnum absque injuria.[17]
A person has a right to the natural use and enjoyment of his own property,
according to his pleasure, for all the purposes to which such property is
usually applied. As a general rule, therefore, there is no cause of action for
acts done by one person upon his own property in a lawful and proper
manner, although such acts incidentally cause damage or an unavoidable
loss to another, as such damage or loss is damnum absque injuria.[18] When
the owner of property makes use thereof in the general and ordinary manner
in which the property is used, such as fencing or enclosing the same as in this
case, nobody can complain of having been injured, because the
inconvenience arising from said use can be considered as a mere
consequence of community life.[19]
The proper exercise of a lawful right cannot constitute a legal wrong for
which an action will lie, [20] although the act may result in damage to another,
for no legal right has been invaded [21] One may use any lawful means to

accomplish a lawful purpose and though the means adopted may cause
damage to another, no cause of action arises in the latters favor. Any injury or
damage occasioned thereby is damnum absque injuria. The courts can give
no redress for hardship to an individual resulting from action reasonably
calculated to achieve a lawful end by lawful means.[22]
WHEREFORE, under the compulsion of the foregoing premises, the
appealed decision of respondent Court of Appeals is hereby REVERSED and
SET ASIDE and the judgment of the trial court is correspondingly
REINSTATED.
SO ORDERED.
Romero and Puno, JJ., concur.
Mendoza, J., took no part.

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. L-56487 October 21, 1991
REYNALDA GATCHALIAN, petitioner,
vs.
ARSENIO DELIM and the HON. COURT OF
APPEALS, respondents.
Pedro G. Peralta for petitioner.
Florentino G. Libatique for private respondent.

FELICIANO, J.:p
At noon time on 11 July 1973, petitioner Reynalda Gatchalian
boarded, as a paying passenger, respondent's "Thames" mini bus
at a point in San Eugenio, Aringay, La Union, bound for Bauang, of
the same province. On the way, while the bus was running along
the highway in Barrio Payocpoc, Bauang, Union, "a snapping
sound" was suddenly heard at one part of the bus and, shortly

thereafter, the vehicle bumped a cement flower pot on the side of

the road, went off the road, turned turtle and fell into a ditch.
Several passengers, including petitioner Gatchalian, were injured.
They were promptly taken to Bethany Hospital at San Fernando,
La Union, for medical treatment. Upon medical examination,
petitioner was found to have sustained physical injuries on the leg,
arm and forehead, specifically described as follows: lacerated
wound, forehead; abrasion, elbow, left; abrasion, knee, left;
abrasion, lateral surface, leg, left. 1
On 14 July 1973, while injured. passengers were confined in the
hospital, Mrs. Adela Delim, wife of respondent, visited them and
later paid for their hospitalization and medical expenses. She also
gave petitioner P12.00 with which to pay her transportation
expense in going home from the hospital. However, before Mrs.
Delim left, she had the injured passengers, including petitioner,
sign an already prepared Joint Affidavit which stated, among other
things:
That we were passengers of Thames with Plate No.
52-222 PUJ Phil. 73 and victims after the said Thames
met an accident at Barrio Payocpoc Norte, Bauang, La
Union while passing through the National Highway No.
3;

That after a thorough investigation the said Thames

met the accident due to mechanical defect and went
off the road and turned turtle to the east canal of the
road into a creek causing physical injuries to us;
xxx xxx xxx
That we are no longer interested to file a complaint,
criminal or civil against the said driver and owner of
the said Thames, because it was an accident and the
said driver and owner of the said Thames have gone to
the extent of helping us to be treated upon our injuries.
xxx xxx xxx 2
(Emphasis supplied)

Notwithstanding this document, petitioner Gathalian filed with the

then Court of First Instance of La Union an action extra
contractu to recover compensatory and moral damages. She
alleged in the complaint that her injuries sustained from the
vehicular mishap had left her with a conspicuous white scar
measuring 1 by 1/2 inches on the forehead, generating mental
suffering and an inferiority complex on her part; and that as a
result, she had to retire in seclusion and stay away from her
friends. She also alleged that the scar diminished her facial beauty
and deprived her of opportunities for employment. She prayed for

an award of: P10,000.00 for loss of employment and other

opportunities; P10,000.00 for the cost of plastic surgery for
removal of the scar on her forehead; P30,000.00 for moral
damages; and P1,000.00 as attorney's fees.
In defense, respondent averred that the vehicular mishap was due
to force majeure, and that petitioner had already been paid and
moreover had waived any right to institute any action against him
(private respondent) and his driver, when petitioner Gatchalian
signed the Joint Affidavit on 14 July 1973.
After trial, the trial court dismissed the complaint upon the ground
that when petitioner Gatchalian signed the Joint Affidavit, she
relinquished any right of action (whether criminal or civil) that she
may have had against respondent and the driver of the mini-bus.
On appeal by petitioner, the Court of Appeals reversed the trial
court's conclusion that there had been a valid waiver, but affirmed
the dismissal of the case by denying petitioner's claim for
damages:
We are not in accord, therefore, of (sic) the ground of
the trial court's dismissal of the complaint, although we
conform to the trial court's disposition of the case its
dismissal.

IN VIEW OF THE FOREGOING considerations, there

being no error committed by the lower court in
dismissing the plaintiff-appellant's complaint, the
judgment of dismissal is hereby affirmed.
Without special pronouncement as to costs.
SO ORDERED. 3
In the present Petition for Review filed in forma pauperis, petitioner
assails the decision of the Court of Appeals and ask this Court to
award her actual or compensatory damages as well as moral
damages.
We agree with the majority of the Court of Appeals who held that
no valid waiver of her cause of action had been made by
petitioner. The relevant language of the Joint Affidavit may be
quoted again:
That we are no longer interested to file a complaint,
criminal or civil against the said driver and ownerof the
said Thames, because it was an accident and the said
driver and owner of the said Thames have gone to the
extent of helping us to be treated upon our injuries.
(Emphasis supplied)

A waiver, to be valid and effective, must in the first place be

couched in clear and unequivocal terms which leave no
doubt as to the intention of a person to give up a right or
benefit which legally pertains to him. 4 A waiver may not casually be attributed to
a person when the terms thereof do not explicitly and clearly evidence an intent to abandon a right vested in such
person.

The degree of explicitness which this Court has required in

purported waivers is illustrated in Yepes and Susaya v. Samar
Express Transit (supra), where the Court in reading and rejecting a
purported waiver said:
. . . It appears that before their transfer to the Leyte
Provincial Hospital, appellees were asked to sign as, in
fact, they signed the document Exhibit I wherein they
stated that "in consideration of the expenses which
said operator has incurred in properly giving us the
proper medical treatment, we hereby manifest our
desire to waive any and all claims against the operator
of the Samar Express Transit."
xxx xxx xxx
Even a cursory examination of the document
mentioned above will readily show that appellees did
not actually waive their right to claim damages from
appellant for the latter's failure to comply with their

contract of carriage. All that said document proves is

that they expressed a "desire" to make the waiver
which obviously is not the same as making an actual
waiver of their right. A waiver of the kind invoked by
appellant must be clear and unequivocal (Decision of
the Supreme Court of Spain of July 8, 1887) which
is not the case of the one relied upon in this appeal.
(Emphasis supplied)
If we apply the standard used in Yepes and Susaya, we
would have to conclude that the terms of the Joint Affidavit in
the instant case cannot be regarded as a waiver cast in
"clear and unequivocal" terms. Moreover, the circumstances
under which the Joint Affidavit was signed by petitioner
Gatchalian need to be considered. Petitioner testified that
she was still reeling from the effects of the vehicular
accident, having been in the hospital for only three days,
when the purported waiver in the form of the Joint Affidavit
was presented to her for signing; that while reading the
same, she experienced dizziness but that, seeing the other
passengers who had also suffered injuries sign the
document, she too signed without bothering to read the Joint
Affidavit in its entirety. Considering these circumstances
there appears substantial doubt whether petitioner
understood fully the import of the Joint Affidavit (prepared by

or at the instance of private respondent) she signed and

whether she actually intended thereby to waive any right of
action against private respondent.
Finally, because what is involved here is the liability of a common
carrier for injuries sustained by passengers in respect of whose
safety a common carrier must exercise extraordinary diligence, we
must construe any such purported waiver most strictly against the
common carrier. For a waiver to be valid and effective, it must not
be contrary to law, morals, public policy or good
customs. 5 To uphold a supposed waiver of any right to claim damages by an injured passenger, under
circumstances like those exhibited in this case, would be to dilute and weaken the standard of extraordinary diligence
exacted by the law from common carriers and hence to render that standard unenforceable. 6 We believe such a purported
waiver is offensive to public policy.

Petitioner Gatchalian also argues that the Court of Appeals, having

by majority vote held that there was no enforceable waiver of her
right of action, should have awarded her actual or compensatory
and moral damages as a matter of course.
We have already noted that a duty to exercise extraordinary
diligence in protecting the safety of its passengers is imposed
upon a common carrier. 7 In case of death or injuries to passengers, a statutory presumption arises that
the common carrier was at fault or had acted negligently "unless it proves that it [had] observed extraordinary diligence as
prescribed in Articles 1733 and 1755." 8 In fact, because of this statutory presumption, it has been held that a court need not
even make an express finding of fault or negligence on the part of the common carrier in order to hold it liable. 9 To
overcome this presumption, the common carrier must slow to the court that it had exercised extraordinary diligence to
prevent the injuries. 10 The standard of extraordinary diligence imposed upon common carriers is considerably more
demanding than the standard of ordinary diligence,i.e., the diligence of a good paterfamilias established in respect of the
ordinary relations between members of society. A common carrier is bound to carry its passengers safely" as far as human

care and foresight can provide, using the utmost diligence of a very cautious person, with due regard to all the
circumstances". 11

Thus, the question which must be addressed is whether or not

private respondent has successfully proved that he had exercised
extraordinary diligence to prevent the mishap involving his minibus. The records before the Court are bereft of any evidence
showing that respondent had exercised the extraordinary diligence
required by law. Curiously, respondent did not even attempt,
during the trial before the court a quo, to prove that he had indeed
exercised the requisite extraordinary diligence. Respondent did try
to exculpate himself from liability by alleging that the mishap was
the result of force majeure. But allegation is not proof and here
again, respondent utterly failed to substantiate his defense of force
majeure. To exempt a common carrier from liability for death or
physical injuries to passengers upon the ground of force
majeure, the carrier must clearly show not only that the efficient
cause of the casualty was entirely independent of the human will,
but also that it was impossible to avoid. Any participation by the
common carrier in the occurrence of the injury will defeat the
defense of force majeure. InServando v. Philippine Steam
Navigation Company, 12 the Court summed up the essential characteristics of force majeure by quoting
with approval from the Enciclopedia Juridica Espaola:

Thus, where fortuitous event or force majeure is the

immediate and proximate cause of the loss, the obligor
is exempt from liability non-performance. The Partidas,

the antecedent of Article 1174 of the Civil Code,

defines "caso fortuito" as 'an event that takes place by
accident and could not have been foreseen. Examples
of this are destruction of houses, unexpected fire,
shipwreck, violence of robber.
In its dissertation on the phrase "caso fortuito" the
Enciclopedia Juridica Espaola says: 'In legal sense
and, consequently, also in relation to contracts, a "caso
fortuito" presents the following essential
characteristics: (1) the cause of the unforeseen and
unexpected occurence, or of the failure of the debtor to
comply with his obligation, must be independent of the
human will; (2) it must be impossible to foresee the
event which constitutes the "caso fortuito", or if it can
be foreseen, it must be impossible to avoid; (3) the
occurrence must be such as to render it impossible for
the debtor to fulfill his obligation in a normal manner;
and (4) the obligor must be free from any participation
in the aggravation of the injury resulting to the creditor.
Upon the other hand, the record yields affirmative evidence of fault
or negligence on the part of respondent common carrier. In her
direct examination, petitioner Gatchalian narrated that shortly
before the vehicle went off the road and into a ditch, a "snapping

sound" was suddenly heard at one part of the bus. One of the
passengers, an old woman, cried out, "What happened?" ("Apay
addan samet nadadaelen?"). The driver replied, nonchalantly,
"That is only normal" ("Ugali ti makina dayta"). The driver did not
stop to check if anything had gone wrong with the bus. Moreover,
the driver's reply necessarily indicated that the same "snapping
sound" had been heard in the bus on previous occasions. This
could only mean that the bus had not been checked physically or
mechanically to determine what was causing the "snapping sound"
which had occurred so frequently that the driver had gotten
accustomed to it. Such a sound is obviously alien to a motor
vehicle in good operating condition, and even a modicum of
concern for life and limb of passengers dictated that the bus be
checked and repaired. The obvious continued failure of
respondent to look after the roadworthiness and safety of the bus,
coupled with the driver's refusal or neglect to stop the mini-bus
after he had heard once again the "snapping sound" and the cry of
alarm from one of the passengers, constituted wanton disregard of
the physical safety of the passengers, and hence gross negligence
on the part of respondent and his driver.
We turn to petitioner's claim for damages. The first item in that
claim relates to revenue which petitioner said she failed to realize
because of the effects of the vehicular mishap. Petitioner
maintains that on the day that the mini-bus went off the road, she

was supposed to confer with the district supervisor of public

schools for a substitute teacher's job, a job which she had held off
and on as a "casual employee." The Court of Appeals, however,
found that at the time of the accident, she was no longer employed
in a public school since, being a casual employee and not a Civil
Service eligible, she had been laid off. Her employment as a
substitute teacher was occasional and episodic, contingent upon
the availability of vacancies for substitute teachers. In view of her
employment status as such, the Court of Appeals held that she
could not be said to have in fact lost any employment after and by
reason of the accident. 13 Such was the factual finding of the Court of Appeals, a finding entitled to due
respect from this Court. Petitioner Gatchalian has not submitted any basis for overturning this finding of fact, and she may
not be awarded damages on the basis of speculation or conjecture.14

Petitioner's claim for the cost of plastic surgery for removal of the
scar on her forehead, is another matter. A person is entitled to the
physical integrity of his or her body; if that integrity is violated or
diminished, actual injury is suffered for which actual or
compensatory damages are due and assessable. Petitioner
Gatchalian is entitled to be placed as nearly as possible in the
condition that she was before the mishap. A scar, especially one
on the face of the woman, resulting from the infliction of injury
upon her, is a violation of bodily integrity, giving raise to a
legitimate claim for restoration to her conditio ante. If the scar is
relatively small and does not grievously disfigure the victim, the
cost of surgery may be expected to be correspondingly modest.

In Araneta, et al. vs. Areglado, et al.,

15 this Court awarded actual or compensatory

damages for, among other things, the surgical removal of the scar on the face of a young boy who had been injured in a
vehicular collision. The Court there held:

We agree with the appellants that the damages

awarded by the lower court for the injuries suffered by
Benjamin Araneta are inadequate. In allowing not more
than P1,000.00 as compensation for the "permanent
deformity and something like an inferiority complex"
as well as for the "pathological condition on the left
side of the jaw" caused to said plaintiff, the court below
overlooked the clear evidence on record that to arrest
the degenerative process taking place in the mandible
and restore the injured boy to a nearly normal
condition, surgical intervention was needed, for which
the doctor's charges would amount to P3,000.00,
exclusive of hospitalization fees, expenses and
medicines.Furthermore, the operation, according to Dr.
Dio, would probably have to be repeated in order to
effectuate a complete cure, while removal of the scar
on the face obviously demanded plastic surgery.
xxx xxx xxx
The father's failure to submit his son to a plastic
operation as soon as possible does not prove that
such treatment is not called for. The damage to the jaw

and the existence of the scar in Benjamin Araneta's

face are physical facts that can not be reasoned out of
existence. That the injury should be treated in order to
restore him as far as possible to his original condition
is undeniable. The father's delay, or even his
negligence, should not be allowed to prejudice the son
who has no control over the parent's action nor impair
his right to a full indemnity.
. . . Still, taking into account the necessity and cost of
corrective measures to fully repair the damage;the pain
suffered by the injured party; his feelings of inferiority
due to consciousness of his present deformity, as well
as the voluntary character of the injury inflicted; and
further considering that a repair, however, skillfully
conducted, is never equivalent to the original state, we
are of the opinion that the indemnity granted by the
trial court should be increased to a total of P18,000.00.
(Emphasis supplied)
Petitioner estimated that the cost of having her scar surgically
removed was somewhere between P10,000.00 to
P15,000.00. 16 Upon the other hand, Dr. Fe Tayao Lasam, a witness presented as an expert by petitioner,
testified that the cost would probably be between P5,000.00 to P10,000.00. 17 In view of this testimony, and the fact that a
considerable amount of time has lapsed since the mishap in 1973 which may be expected to increase not only the cost but
also very probably the difficulty of removing the scar, we consider that the amount of P15,000.00 to cover the cost of such
plastic surgery is not unreasonable.

Turning to petitioner's claim for moral damages, the longestablished rule is that moral damages may be awarded where
gross negligence on the part of the common carrier is shown. 18 Since
we have earlier concluded that respondent common carrier and his driver had been grossly negligent in connection with the
bus mishap which had injured petitioner and other passengers, and recalling the aggressive manuevers of respondent,
through his wife, to get the victims to waive their right to recover damages even as they were still hospitalized for their
injuries, petitioner must be held entitled to such moral damages. Considering the extent of pain and anxiety which petitioner
must have suffered as a result of her physical injuries including the permanent scar on her forehead, we believe that the
amount of P30,000.00 would be a reasonable award. Petitioner's claim for P1,000.00 as atttorney's fees is in fact even more
modest. 19

WHEREFORE, the Decision of the Court of Appeals dated 24

October 1980, as well as the decision of the then Court of First
Instance of La Union dated 4 December 1975 are hereby
REVERSED and SET ASIDE.Respondent is hereby ORDERED to
pay petitioner Reynalda Gatchalian the following sums: 1)
P15,000.00 as actual or compensatory damages to cover the cost
of plastic surgery for the removal of the scar on petitioner's
forehead; 2) P30,000.00 as moral damages; and 3) P1,000.00 as
attorney's fees, the aggregate amount to bear interest at the legal
rate of 6% per annum counting from the promulgation of this
decision until full payment thereof. Costs against private
respondent.

FIRST DIVISION

OCEANEERING
(PHILS), INC. ,
Petitioner,

CONTRACTORS G.R. No. 184215

Present:
CORONA, C.J.,
Chairperson,
VELASCO, JR.,
LEONARDO-DE CASTRO
DEL CASTILLO, and
PEREZ, JJ.

- versus -

SO ORDERED.

NESTOR

N.

BARRETTO,

doing

business as N.N.B. LIGHTERAGE,

Respondents.

Promulgated:
February 9, 2011

x-------------------------------------------------x
DECISION

PEREZ, J.:

order dated 28 April 2006 of the Regional Trial Court of Las Pias,
City, Branch 255, to the extent that it dismissed the counterclaims of
defendant-appellant, are hereby reversed and set aside. Plaintiffappellee is ordered to pay defendant-appellant the amount
of P306,000.00 as actual damages and P30,000.00 as attorneys fees.
SO ORDERED. [2]

The Facts

Doing business under the name and style of N.N. B. Lighterage,

respondent Nestor N. Barretto (Barretto) is the owner of the Barge
Antonieta[3] which was last licensed and permitted to engage in coastwise
trading for a period of one year expiring on 21 August 1998.[4] On 27

The requirements for an award of actual damages are central to this

November 1997, Barretto and petitioner Oceaneering Contractors

petition for review filed under Rule 45 of the 1997 Rules of Civil

(Phils.), Inc. (Oceaneering) entered into a Time Charter Agreement

Procedure, primarily assailing the Decision dated 12 December 2007

whereby, for the contract price of P306,000.00,[5] the latter hired the

rendered by the then Special Third Division of the Court of Appeals (CA)

aforesaid barge for a renewable period of thirty calendar days, for the

in CA-G.R. CV No. 87168,[1] the dispositive portion of which states:

purpose of transporting construction materials from Manila to Ayungon,

Negros Oriental.[6] Brokered by freelance ship broker Manuel Velasco,

WHEREFORE, premises considered, the instant appeal is

PARTIALLY GRANTED. The decision dated 27 December 2005 and

[7]

that may be occasioned by any storm, typhoon, tidal wave or

any similar events.[8]

the agreement included Oceaneerings acknowledgment of the

seaworthiness of the barge as well as the following stipulations, to wit:

a) [Barreto] shall be responsible for the salaries, subsistence, SSS
premium, medical, workmens compensation contribution and
other legal expenses of the crew;
b) [Oceaneering] shall be responsible for all port charges, insurance of
all equipments, cargo loaded to the above mentioned deck
barge against all risks (Total or Partial), or theft, security and
stevedoring during loading and unloading operations and all
other expenses pertinent to the assessment, fines and forfeiture
for any violation that may be imposed in relation to the
operation of the barge;

who loaded the barge with pipe piles, steel bollards, concrete mixers,
gravel, sand, cement and other construction materials in the presence of
and under the direct supervision of the broker Manuel Velasco and
Barrettos Bargemen.[9] In addition to the polythene ropes with which they
were lashed, the cargoes were secured by steel stanchions which
Oceaneering caused to be welded on the port and starboard sides of the

xxxx
(f) Delivery and re-delivery be made in Pasig River, Metro Manila;
(g) Damage to deck barge caused by carelessness or negligence of
stevedores hired by [Oceaneering] will be [Oceaneerings]
liability. Upon clear findings by owners or barge patron of any
damages to the barge that will endanger its seaworth(i)ness and
stability, such damage/s shall be repaired first before loading
and leaving port. Under such conditions, the Barge Patron has
the right to refuse loading and/or leaving port;

barge.[10] On 3 December 1997, the barge eventually left Manila for

Negros Oriental, towed by the tug-boat Ayalit" which, for said purpose,
was likewise chartered by Oceaneering from Lea Mer Industries, Inc.
[11]

On 5 December 1997, however, Barrettos Bargeman, Eddie La Chica,

executed a Marine Protest,[12]reporting the following circumstances under

which the barge reportedly capsized in the vicinity of Cape Santiago,
Batangas, viz.:

xxxx
(i)

In accordance with the agreement, Oceaneerings hired stevedores

[Barreto] reserves the right to stop, abort and deviate any

voyage in case of imminent danger to the crew and/or vessel

That on or about 1635 December 3, 1997, Barge Antonieta

departed Pico de Loro, Pasig River and towed by Tug-Boat Ayalit
bound for Ayungon, Negros Oriental with cargo onboard steel pipes
and various construction materials. While underway on or about 0245
December 4, 1997 encountered rough sea at the vicinity of Cape
Santiago, Batangas and ma(d)e the barge x x x roll and pitch which
caused the steel pipes and various construction materials to shift on the
starboardside causing the breakdown of the steel stanch(i)ons welded
on the deck of the barge leaving holes on the deck that cause(d) water
to enter the hold.
That on or about 1529 December 5, 199[7], with the
continuous entrance of sea water on the hold, the barge totally
capsized touch(ed) bottom.

On 9 December 1997, Barretto apprised Oceaneering of the

supposed fact that the mishap was caused by the incompetence and
negligence of the latters personnel in loading the cargo and that it was
going to proceed with the salvage, refloating and repair of the barge. [13] In
turn contending that the barge tilted because of the water which seeped
through a hole in its hull, Oceaneering caused its counsel to serve
Barretto a letter dated 12 March 1998, demanding the return of the
unused portion of the charter payment amounting to P224,400.00 as well
as the expenses in the sum of P125,000.00 it purportedly incurred in
salvaging its construction materials.

[14]

In a letter dated 25 March 1998,

however, Barrettos counsel informed Oceaneering that its unused charter

payment was withheld by his client who was likewise seeking
reimbursement for the P836,425.00 he expended in salvaging, refloating
and repairing the barge.[15] In response to Barrettos 29 June 1998 formal
demand for the payment of the same expenses, [16] Oceaneering reiterated
its demand for the return of the unused charter payment and the
reimbursement of its salvaging expenses as aforesaid.[17]

On 6 October 1998, Barretto commenced the instant suit with the filing
of his complaint for damages against Oceaneering, which was docketed
as Civil Case No. LP-98-0244 before Branch 255 of the Regional Trial
Court (RTC) of Las Pias City. Contending that the accident was
attributable to the incompetence and negligence which attended the
loading of the cargo by Oceaneerings hired employees, Barretto sought
indemnities for expenses incurred and lost income in the aggregate sum
of P2,750,792.50 and attorneys fees equivalent to 25% of said sum.
[18]

Specifically denying the material allegations of the foregoing

complaint in its 26 January 1999 answer, Oceaneering, on the other hand,

averred that the accident was caused by the negligence of Barrettos

presented the testimonies of the following witnesses: (a) Engr. Wenifredo

employees and the dilapidated hull of the barge which rendered it

Oracion, its Operations Manager, to prove, among other matters, the

unseaworthy. As a consequence, Oceaneering prayed for the grant of its

value of the cargo and the salvage operation it conducted in the premises;

counterclaims for the value of its cargo in the sum of P4,055,700.00,

[24]

salvaging expenses in the sum of P125,000.00, exemplary damages,

Pantaleon and San Jose Law Offices, to prove its claim for attorneys fees

attorneys fees and litigation expenses.[19]

and litigation expenses.[25]

and, (b) Maria Flores Escao, Accounting Staff at Castillo Laman Tan

The issues thus joined and the mandatory pre-trial conference

To disprove the rough sea supposedly encountered by the barge as

subsequently terminated upon the agreement of the parties, [20] the RTC

well as the negligence imputed against its employees, Oceaneering

proceeded to try the case on the merits. In support of his complaint,

further adduced the testimonies of the following witnesses: (a) Rosa

Barretto took the witness stand to prove the seaworthiness of the barge as

Barba, a Senior Weather Specialist at the Philippine Atmospheric,

well as the alleged negligent loading of the cargo by Oceaneerings

Geophysical and Astronomical Services Administration (PAGASA);

employees.[21] Barretto also presented the following witnesses: (a) Toribio

[26]

Barretto II, Vice President for Operations of N.B.B. Lighterage, who

Division at the National Mapping Resource Information Authority

primarily testified on the effort exerted to salvage the barge; [22] and, (b)

(NAMRIA);[27] and, (c) Engr. Carlos Gigante, a freelance marine surveyor

Manuel Velasco, who testified on his participation in the execution of the

and licensed naval architect.[28] Recalled as a rebuttal witness, Toribio

Time Charter Agreement as well as the circumstances before and after the

Barretto II, in turn, asserted that the hull of the barge was not damaged

sinking of the barge.[23] By way of defense evidence, Oceaneering in turn

and that the sinking of said vessel was attributable to the improper

(b) Cmdr. Herbert Catapang, Officer-in-Charge of the Hydrographic

loading of Oceaneerings construction materials.[29] Upon the formal offer

exemplary damages and attorneys fees further denied for lack of showing

respectively made by the parties, the pieces of documentary evidence

of bad faith on the part of Barretto,[32]Oceaneering filed the motion for

identified and marked in the course of the testimonies of the above

partial reconsideration of the foregoing decision[33] which was denied for

named witnesses[30] were, accordingly, admitted by the RTC.[31]

lack of merit in the RTCs 28 April 2006 order.[34]

On 27 December 2005, the RTC rendered a decision, dismissing

Dissatisfied, Oceaneering perfected its appeal from the aforesaid

both Barrettos complaint and Oceaneerings counterclaims for lack of

27 December 2005 decision on the ground that the RTC reversibly erred

merit. While finding that Barretto failed to adduce sufficient and

in not finding that the accident was caused by the unseaworthy condition

convincing evidence to prove that the accident was due to the negligence

of the barge and in denying its counterclaims for actual and exemplary

of Oceaneerings employees, the RTC nevertheless brushed aside the

damages as well as attorneys fees and litigation expenses. Docketed

latters claim that the barge was not seaworthy as acknowledged in the

before the CA as CA-G.R. CV No. 87168,[35] the appeal was partially

Time Charter Agreement. Alongside its claim for reimbursement of the

granted in the herein assailed 12 December 2007 decision upon the

sums expended for the salvage operation it conducted which was denied

finding, among others, that the agreement executed by the parties, by its

for lack of evidence to prove the same, Oceaneerings claim for the value

express terms, was a time charter where the possession and control of the

of its cargo was likewise denied on the ground, among other matters, that

barge was retained by Barretto; that the latter is, therefore, a common

the same was not included in the demand letters it served Barretto; and,

carrier legally charged with extraordinary diligence in the vigilance over

that it has no one but itself to blame for failing to insure its cargo against

the goods transported by him; and, that the sinking of the vessel created a

all risks, as provided in the parties agreement. With its claims for

presumption of negligence and/or unseaworthiness which Barretto failed

to overcome and gave rise to his liability for Oceaneerings lost cargo

Oceaneering urges the reversal of the assailed 12 December 2007

despite the latters failure to insure the same. Applying the rule, however,

decision and 11 August 2008 resolution on the ground that the CA erred

that actual damages should be proved with a reasonable degree of

in the following wise:

certainty, the CA denied Oceaneerings claim for the value of its lost cargo
and merely ordered the refund of the P306,000.00 it paid for the time
charter, with indemnity for attorneys fees in the sum of P30,000.[36]

Alongside

that

interposed

by

Barretto,

the

motion

for

reconsideration of the foregoing decision filed by Oceaneerings[37] was

denied for lack of merit in the CAs resolution dated 11 August 2008,
[38]

hence, this petition.

I. IN HOLDING THAT THERE WERE NO VALID

DOCUMENTS SHOWING THE REAL VALUE
OF THE MATERIALS LOST AND THOSE
ACTUALLY RECOVERED.
II. IN

DENYING
OCEANEERINGS
COUNTERCLAIMS FOR ACTUAL DAMAGES
AMOUNTING
TO
(A) P3,704,700.00
REPRESENTING THE VALUE OF THE
MATERIALS IT LOST DUE TO THE SINKING
OF [BARRETOS] BARGE; AND (b) P125,000.00
REPRESENTING
THE
EXPENSES
IT
INCURRED FOR SALVAGING ITS CARGO.

III. IN
AWARDING
OCEANEERINGS
COUNTERCLAIM FOR ATTORNEYS FEES IN
THE REDUCED AMOUNT OF P30,000.00 ONLY.
[39]

The Issues

The Courts Ruling

We find the modification of the assailed decision in order.

Oceaneering argues that, having determined Barrettos liability for

presumed negligence as a common carrier, the CA erred in disallowing its
counterclaims for the value of the construction materials which were lost
as a consequence of the sinking of the barge. Alongside the testimony
elicited from its Operations Manager, Engr. Winifredo Oracion,
Oceaneering calls attention to the same witness inventory which pegged
the value of said construction materials at P4,055,700.00, as well as the
various sales receipts, order slips, cash vouchers and invoices which were
formally offered before and admitted in evidence by the
RTC. Considering that it was able to salvage only nine steel pipes
amounting to P351,000.00, Oceaneering insists that it should be
indemnified the sum of P3,703,700.00 for the value of the lost cargo,
with legal interest at 12% per annum, from the date of demand until fully
paid. In addition, Oceaneering maintains that Barretto should be held
liable to refund the P306,000.00 it paid as consideration for the Time
Charter Agreement and to pay the P125,000.00 it incurred by way of

salvaging expenses as well as its claim for attorneys fees in the sum
of P750,000.00.
In finding Oceaneerings petition impressed with partial merit,
uppermost in our mind is the fact that actual or compensatory damages
are those damages which the injured party is entitled to recover for the
wrong done and injuries received when none were intended.
[40]
Pertaining as they do to such injuries or losses that are actually
sustained and susceptible of measurement,[41] they are intended to put the
injured party in the position in which he was before he was injured.
[42]
Insofar as actual or compensatory damages are concerned, Article
2199 of the Civil Code of the Philippines provides as follows:
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.

Conformably with the foregoing provision, the rule is long and well
settled that there must be pleading and proof of actual damages suffered
for the same to be recovered. [43] In addition to the fact that the amount of
loss must be capable of proof, it must also be actually proven with a
reasonable degree of certainty, premised upon competent proof or the
best evidence obtainable.[44] The burden of proof of the damage suffered

is, consequently, imposed on the party claiming the same [45] who should

for in the 26 January 1999 answer it filed a quo.[51] Rather than the

adduce the best evidence available in support thereof, like sales and

entire P4,055,700.00 worth of construction materials reflected in the

delivery receipts, cash and check vouchers and other pieces of

inventory[52] which Engr. Oracion claims to have prepared on 29

documentary

absence

November 1997, based on the delivery and official receipts from

of corroborative evidence, it has been held that self-serving statements of

Oceaneerings suppliers,[53] we are, however, inclined to grant only the

account are not sufficient basis for an award of actual damages.

following items which were duly proved by the vouchers and receipts on

[46]

Corollary to the principle that a claim for actual damages cannot be

record, viz.: (a) P1,720,850.00 worth of spiral welded pipes with coal tar

predicated on flimsy, remote, speculative, and insubstantial proof,

epoxy procured on 22 November 1997;[54] (b) P629,640.00 worth of spiral

[47]

welded steel pipes procured on 28 October 1997;[55] (c) P155,500.00

evidence

of

the

same

nature. In

the

courts are, likewise, required to state the factual bases of the award.[48]

worth of various stainless steel materials procured on 27 November 1997;

[56]

(d) P66,750.00 worth of gaskets and shackles procured on 20

Applying the just discussed principles to the case at bench, we find that

November 1997;[57] and, (e) P4,880.00 worth of anchor bolt procured on

Oceaneering correctly fault the CA for not granting its claim for actual

27 November 1997.[58]

damages or, more specifically, the portions thereof which were duly
pleaded and adequately proved before the RTC. While concededly not
included in the demand letters dated 12 March 1998
[50]

1998

[49]

and 13 July

Oceaneering served Barretto, the formers counterclaims for the

value of its lost cargo in the sum of P4,055,700.00 and salvaging

expenses in the sum of P125,000.00 were distinctly pleaded and prayed

The foregoing sums all add up to of P2,577,620.00 from which should be

deducted the sum of P351,000.00 representing the value of the nine steel
pipes salvaged by Oceaneering, or a total of P2,226,620.00 in actual
damages representing the value of the latters lost cargo. Excluded from

the computation are the following items which, on account of the dates of

Oceaneering, as and by way of refund of the consideration it paid

their procurement, could not have possibly been included in the 29

Barretto for the Time Charter Agreement. Aside from not being clearly

November 1997 inventory prepared by Engr. Oracion, to wit:

pleaded in the answer it filed a quo, said refund was claimed in

(a) P1,129,640.00 worth of WO#1995 and PO#OCPI-060-97 procured on

Oceaneerings demand letters only to the extent of the unused charter

9 December 1997;[59] and, (b) P128,000.00 worth of bollard procured on

payment in the reduced sum of P224,400.00[63] which, to our mind,

16 December 1997.[60] Likewise excluded are the anchor bolt with nut

should be the correct measure of the award. Having breached an

Oceaneering claims to have procured for an unspecified amount on 3

obligation which did not constitute a loan or forbearance of money,

November 1997[61] and the P109,018.50 worth of Petron oil it procured

moreover, Barretto can only be held liable for interest at the rate of 6%

on 28 November 1997[62] which does not fit into the categories of lost

per annum on said amount as well as the P2,226,620.00 value of the lost

cargo and/or salvaging expenses for which it interposed counterclaims a

cargo instead of the 12% urged by Oceaneering. Although the lost cargo

quo. Although included in its demand letters as aforesaid and pleaded in

was not included in the demand letters the latter served the former, said

its answer, Oceaneerings claim for salvaging expenses in the sum

interest rate of 6% per annum shall be imposed from the time of the filing

of P125,000.00 cannot, likewise, be granted for lack of credible evidence

of the complaint which is equivalent to a judicial demand. [64] Upon the

to support the same.

finality of this decision, said sums shall earn a further interest of 12% per
annum until full

Tested alongside the twin requirements of pleading and proof for

the grant of actual damages, on the other hand, we find that the CA also
erred in awarding the full amount of P306,000.00 in favor of

payment

in accordance with the following

pronouncements handed down in Eastern Shipping Lines, Inc. vs. Court

of Appeals,[65] to wit:
2. When an obligation, not constituting a loan or forbearance
of money, is breached, an interest on the amount of
damages awarded may be imposed at the discretion of

the court at the rate of 6% per annum. No interest,

however, shall be adjudged on unliquidated claims or
damages except when or until the demand can be
established with reasonable certainty. Accordingly,
where the demand is established with reasonable
certainty, the interest shall begin to run from the time
the claim is made judicially or extrajudicially (Art.
1169, Civil Code) but when such certainty cannot be so
reasonably established at the time the demand is made,
the interest shall begin to run only from the date of the
judgment of the court is made (at which time the
quantification of damages may be deemed to have been
reasonably ascertained). The actual base for the
computation of legal interest shall, in any case, be on
the amount of finally adjudged.

attorneys fees and expenses of litigation other than judicial costs except
in the instances enumerated under Article 2208 of theCivil Code.[66] Being
the exception rather than the rule,[67] attorneys fees are not awarded every
time a party prevails in a suit, [68] in view of the policy that no premium
should be placed on the right to litigate. [69] Even when a claimant is
compelled to litigate with third persons or to incur expenses to protect his
rights, still attorneys fees may not be awarded where, as here, no
sufficient showing of bad faith can be reflected in the partys persistence
in a case other than an erroneous conviction of the righteousness of his
cause.[70]

3. When the judgment of the court awarding a sum of money

becomes final and executory, the rate of legal interest,
whether the case falls under paragraph 1 or paragraph 2,
above, shall be 12% per annum from such finality until
its satisfaction, this interim period being deemed to be
by then an equivalent to a forbearance of credit.

WHEREFORE, premises considered, the petition is PARTIALLY

For lack of sufficient showing of bad faith on the part of Barretto, we find

value of its lost cargo in the sum of P2,226,620.00 with 6% interest per

that the CA, finally, erred in granting Oceaneerings claim for attorneys

annum computed from the filing of the complaint and to earn further

fees, albeit in the much reduced sum of P30,000.00. In the absence of

interest at the rate of 12% per annum from finality of the decision until

stipulation, after all, the rule is settled that there can be no recovery of

full payment; (b) to REDUCE the refund of the consideration for the

GRANTED and the assailed 12 December 2007 Decision is,

accordingly, MODIFIED: (a) to GRANT Oceaneerings claim for the

Time Charter Agreement from P306,000.00 to P224,400.00, with 6%

interest per annum computed from 12 March 1998, likewise to earn
further interest at the rate of 12% per annum from finality of this
decision; and, (c) to DELETE the CAs award of salvaging expenses and
attorneys fees, for lack of factual and legal basis. The rest
isAFFIRMED in toto.

APPEALS
and
MARIA
CORPORATION, respondents.

EFIGENIA

FISHING

DECISION
ROMERO, J.:
A party is entitled to adequate compensation only for such pecuniary loss
actually suffered and duly proved. Indeed, basic is the rule that to recover
actual damages, the amount of loss must not only be capable of proof but
must actually be proven with a reasonable degree of certainty, premised upon
competent proof or best evidence obtainable of the actual amount thereof.
The claimant is duty-bound to point out specific facts that afford a basis for
measuring whatever compensatory damages are borne. A court cannot
merely rely on speculations, conjectures, or guesswork as to the fact and
amount of damages as well as hearsay or uncorroborated testimony whose
truth is suspect. Such are the jurisprudential precepts that the Court now
applies in resolving the instant petition.
[1]

[2]

[3]

[4]

[5]

[6]

THIRD DIVISION
[G.R. No. 107518. October 8, 1998]

PNOC
SHIPPING
AND
TRANSPORT
CORPORATION, petitioner, vs. HONORABLE COURT OF

The records disclose that in the early morning of September 21, 1977,
the M/V Maria Efigenia XV, owned by private respondent Maria Efigenia
Fishing Corporation, was navigating the waters near Fortune Island in
Nasugbu, Batangas on its way to Navotas, Metro Manila when it collided with
the vessel Petroparcel which at the time was owned by the Luzon
Stevedoring Corporation (LSC).
After investigation was conducted by the Board of Marine Inquiry,
Philippine Coast Guard Commandant Simeon N. Alejandro rendered a
decision finding the Petroparcel at fault. Based on this finding by the Board

and after unsuccessful demands on petitioner, private respondent sued the

LSC and the Petroparcel captain, Edgardo Doruelo, before the then Court of
First Instance of Caloocan City, paying thereto the docket fee of one thousand
two hundred fifty-two pesos (P1,252.00) and the legal research fee of two
pesos (P2.00). In particular, private respondent prayed for an award
of P692,680.00, allegedly representing the value of the fishing nets, boat
equipment and cargoes of M/V Maria Efigenia XV, with interest at the legal
rate plus 25% thereof as attorneys fees. Meanwhile, during the pendency of
the case, petitioner PNOC Shipping and Transport Corporation sought to be
substituted in place of LSC as it had already acquired ownership of
the Petroparcel.
[7]

[8]

[9]

For its part, private respondent later sought the amendment of its
complaint on the ground that the original complaint failed to plead for the
recovery of the lost value of the hull of M/V Maria Efigenia XV. Accordingly,
in the amended complaint, private respondent averred that M/V Maria
Efigenia XV had an actual value of P800,000.00 and that, after deducting the
insurance payment of P200,000.00, the amount of P600,000.00 should
likewise be claimed. The amended complaint also alleged that inflation
resulting from the devaluation of the Philippine peso had affected the
replacement value of the hull of the vessel, its equipment and its lost cargoes,
such that there should be a reasonable determination thereof. Furthermore,
on account of the sinking of the vessel, private respondent supposedly
incurred unrealized profits and lost business opportunities that would
thereafter be proven.
[10]

on February 5, 1987, the lower court issued a pre-trial order containing,

among other things, a stipulations of facts, to wit:
[14]

1. On 21 September 1977, while the fishing boat `M/V MARIA

EFIGENIA owned by plaintiff was navigating in the vicinity of
Fortune Island in Nasugbu, Batangas, on its way to Navotas,
Metro Manila, said fishing boat was hit by the LSCO tanker
Petroparcel causing the former to sink.
2. The Board of Marine Inquiry conducted an investigation of
this marine accident and on 21 November 1978, the
Commandant of the Philippine Coast Guard, the Honorable
Simeon N. Alejandro, rendered a decision finding the cause of
the accident to be the reckless and imprudent manner in
which Edgardo Doruelo navigated the LSCO Petroparcel and
declared the latter vessel at fault.
3. On 2 April 1978, defendant Luzon Stevedoring Corporation
(LUSTEVECO), executed in favor of PNOC Shipping and
Transport Corporation a Deed of Transfer involving several
tankers, tugboats, barges and pumping stations, among which
was the LSCO Petroparcel.

[11]

Subsequently, the complaint was further amended to include petitioner as

a defendant which the lower court granted in its order of September 16,
1985. After petitioner had filed its answer to the second amended complaint,
[12]

[13]

4. On the same date on 2 April 1979 (sic), defendant PNOC

STC again entered into an Agreement of Transfer with codefendant Lusteveco whereby all the business properties and
other assets appertaining to the tanker and bulk oil

departments including the motor tanker LSCO Petroparcel of

defendant Lusteveco were sold to PNOC STC.
5. The aforesaid agreement stipulates, among others, that
PNOC-STC assumes, without qualifications, all obligations
arising from and by virtue of all rights it obtained over the
LSCO `Petroparcel.
6. On 6 July 1979, another agreement between defendant
LUSTEVECO and PNOC-STC was executed wherein Board
of Marine Inquiry Case No. 332 (involving the sea accident of
21 September 1977) was specifically identified and assumed
by the latter.
7. On 23 June 1979, the decision of Board of Marine Inquiry
was affirmed by the Ministry of National Defense, in its
decision dismissing the appeal of Capt. Edgardo Doruelo and
Chief mate Anthony Estenzo of LSCO `Petroparcel.

equipments (sic) and cargoes, which went down with the ship
when it sank the replacement value of which should be left to
the sound discretion of this Honorable Court.
After trial, the lower court rendered on November 18, 1989 its decision
disposing of Civil Case No. C-9457 as follows:
[15]

WHEREFORE, and in view of the foregoing, judgment is

hereby rendered in favor of the plaintiff and against the
defendant PNOC Shipping & Transport Corporation, to pay
the plaintiff:
a. The sum of P6,438,048.00 representing the value of the
fishing boat with interest from the date of the filing of the
complaint at the rate of 6% per annum;
b. The sum of P50,000.00 as and for attorneys fees; and
c. The costs of suit.

8. LSCO `Petroparcel is presently owned and operated by

PNOC-STC and likewise Capt. Edgardo Doruelo is still in their
employ.

The counterclaim is hereby DISMISSED for lack of

merit. Likewise, the case against defendant Edgardo Doruelo
is hereby DISMISSED, for lack of jurisdiction.

9. As a result of the sinking of M/V Maria Efigenia caused by

the reckless and imprudent manner in which LSCO
Petroparcel was navigated by defendant Doruelo, plaintiff
suffered actual damages by the loss of its fishing nets, boat

SO ORDERED.
In arriving at the above disposition, the lower court cited the evidence
presented by private respondent consisting of the testimony of its general

manager and sole witness, Edilberto del Rosario. Private respondents

witness testified that M/V Maria Efigenia XV was owned by private
respondent per Exhibit A, a certificate of ownership issued by the Philippine
Coast Guard showing that M/V Maria Efigenia XV was a wooden motor boat
constructed in 1965 with 128.23 gross tonnage. According to him, at the time
the vessel sank, it was then carrying 1,060 tubs (baeras) of assorted fish the
value of which was never recovered. Also lost with the vessel were two
cummins engines (250 horsepower), radar, pathometer and compass. He
further added that with the loss of his flagship vessel in his fishing fleet of
fourteen (14) vessels, he was constrained to hire the services of counsel
whom he paid P10,000 to handle the case at the Board of Marine Inquiry
and P50,000.00 for commencing suit for damages in the lower court.
As to the award of P6,438,048.00 in actual damages, the lower court took
into account the following pieces of documentary evidence that private
respondent proffered during trial:

(a) Exhibit A certified xerox copy of the certificate of

ownership of M/V Maria Efigenia XV;
(b) Exhibit B a document titled Marine Protest executed by
Delfin Villarosa, Jr. on September 22, 1977 stating
that as a result of the collision, the M/V Maria Efigenia
XV sustained a hole at its left side that caused it to
sink with its cargo of 1,050 baeras valued
at P170,000.00;

(c) Exhibit C a quotation for the construction of a 95-footer

trawler issued by Isidoro A. Magalong of I. A.
Magalong Engineering and Construction on January
26, 1987 to Del Rosario showing that construction of
such trawler would cost P2,250,000.00;
(d) Exhibit D pro forma invoice No. PSPI-05/87-NAV
issued by E.D. Daclan of Power Systems,
Incorporated on January 20, 1987 to Del Rosario
showing that two (2) units of CUMMINS Marine
Engine model N855-M, 195 bhp. at 1800 rpm. would
cost P1,160,000.00;
(e) Exhibit E quotation of prices issued by Scan Marine
Inc. on January 20, 1987 to Del Rosario showing that
a unit of Furuno Compact Daylight Radar, Model FR604D, would cost P100,000.00 while a unit of Furuno
Color Video Sounder, Model FCV-501 would
cost P45,000.00 so that the two units would
cost P145,000.00;
(f) Exhibit F quotation of prices issued by Seafgear Sales,
Inc. on January 21, 1987 to Del Rosario showing that
two (2) rolls of nylon rope (5 cir. X 300fl.) would
cost P140,000.00; two (2) rolls of nylon rope (3 cir. X
240fl.), P42,750.00; one (1) binocular (7 x

50), P1,400.00, one (1) compass (6), P4,000.00 and

50 pcs. of floats, P9,000.00 or a total of P197, 150.00;
(g) Exhibit G retainer agreement between Del Rosario and
F. Sumulong Associates Law Offices stipulating an
acceptance fee of P5,000.00, per appearance fee
of P400.00, monthly retainer of P500.00, contingent
fee of 20% of the total amount recovered and that
attorneys fee to be awarded by the court should be
given to Del Rosario; and
(h) Exhibit H price quotation issued by Seafgear Sales,
Inc. dated April 10, 1987 to Del Rosario showing the
cost of poly nettings as: 50 rolls of 400/18 3kts.
100md x 100mtrs., P70,000.00; 50 rolls of 400/18
5kts. 100md x 100mtrs., P81,500.00; 50 rolls of
400/18 8kts. 100md x 100mtrs., P116,000.00, and 50
rolls of 400/18 10kts. 100md x 100mtrs., P146,500
and banera (tub) at P65.00 per piece or a total
ofP414,065.00
The lower court held that the prevailing replacement value
of P6,438,048.00 of the fishing boat and all its equipment would regularly
increase at 30% every year from the date the quotations were given.
On the other hand, the lower court noted that petitioner only presented
Lorenzo Lazaro, senior estimator at PNOC Dockyard & Engineering

Corporation, as sole witness and it did not bother at all to offer any
documentary evidence to support its position. Lazaro testified that the price
quotations submitted by private respondent were excessive and that as an
expert witness, he used the quotations of his suppliers in making his
estimates. However, he failed to present such quotations of prices from his
suppliers, saying that he could not produce a breakdown of the costs of his
estimates as it was a sort of secret scheme. For this reason, the lower court
concluded:

Evidently, the quotation of prices submitted by the plaintiff

relative to the replacement value of the fishing boat and its
equipments in the tune of P6,438,048.00 which were lost due
to the recklessness and imprudence of the herein defendants
were not rebutted by the latter with sufficient evidence. The
defendants through their sole witness Lorenzo Lazaro relied
heavily on said witness bare claim that the amount afore-said
is excessive or bloated, but they did not bother at all to
present any documentary evidence to substantiate such
claim. Evidence to be believed, must not only proceed from
the mouth of the credible witness, but it must be credible in
itself. (Vda. de Bonifacio vs. B. L. T. Bus Co., Inc. L-26810,
August 31, 1970).
Aggrieved, petitioner filed a motion for the reconsideration of the lower
courts decision contending that: (1) the lower court erred in holding it liable for
damages; that the lower court did not acquire jurisdiction over the case by
paying only P1,252.00 as docket fee; (2) assuming that plaintiff was entitled
to damages, the lower court erred in awarding an amount greater than that

prayed for in the second amended complaint; and (3) the lower court erred
when it failed to resolve the issues it had raised in its memorandum.
Petitioner likewise filed a supplemental motion for reconsideration
expounding on whether the lower court acquired jurisdiction over the subject
matter of the case despite therein plaintiffs failure to pay the prescribed
docket fee.
[16]

[17]

On January 25, 1990, the lower court declined reconsideration for lack of
merit. Apparently not having received the order denying its motion for
reconsideration, petitioner still filed a motion for leave to file a reply to private
respondents opposition to said motion. Hence, on February 12, 1990, the
lower court denied said motion for leave to file a reply on the ground that by
the issuance of the order of January 25, 1990, said motion had become moot
and academic.
[18]

[19]

[20]

Unsatisfied with the lower courts decision, petitioner elevated the matter
to the Court of Appeals which, however, affirmed the same in toto on October
14, 1992. On petitioners assertion that the award of P6,438,048.00 was not
convincingly proved by competent and admissible evidence, the Court of
Appeals ruled that it was not necessary to qualify Del Rosario as an expert
witness because as the owner of the lost vessel, it was well within his
knowledge and competency to identify and determine the equipment installed
and the cargoes loaded on the vessel. Considering the documentary
evidence presented as in the nature of market reports or quotations, trade
journals, trade circulars and price lists, the Court of Appeals held, thus:
[21]

Consequently, until such time as the Supreme Court

categorically rules on the admissibility or inadmissibility of this
class of evidence, the reception of these documentary exhibits

(price quotations) as evidence rests on the sound discretion of

the trial court. In fact, where the lower court is confronted with
evidence which appears to be of doubtful admissibility, the
judge should declare in favor of admissibility rather than of
non-admissibility (The Collector of Palakadhari, 124 [1899], p.
43, cited in Francisco, Revised Rules of Court, Evidence,
Volume VII, Part I, 1990 Edition, p. 18). Trial courts are
enjoined to observe the strict enforcement of the rules of
evidence which crystallized through constant use and practice
and are very useful and effective aids in the search for truth
and for the effective administration of justice. But in
connection with evidence which may appear to be of doubtful
relevancy or incompetency or admissibility, it is the safest
policy to be liberal, not rejecting them on doubtful or technical
grounds, but admitting them unless plainly irrelevant,
immaterial or incompetent, for the reason that their rejection
places them beyond the consideration of the court. If they are
thereafter found relevant or competent, can easily be
remedied by completely discarding or ignoring them. (Banaria
vs. Banaria, et al., C.A. No. 4142, May 31, 1950; cited in
Francisco, Supra). [Underscoring supplied].
Stressing that the alleged inadmissible documentary exhibits were never
satisfactorily rebutted by appellants own sole witness in the person of
Lorenzo Lazaro, the appellate court found that petitioner ironically situated
itself in an inconsistent posture by the fact that its own witness, admittedly an
expert one, heavily relies on the very same pieces of evidence (price

quotations) appellant has so vigorously objected to as inadmissible

evidence. Hence, it concluded:

x x x. The amount of P6,438,048.00 was duly established at

the trial on the basis of appellees documentary exhibits (price
quotations) which stood uncontroverted, and which already
included the amount by way of adjustment as prayed for in the
amended complaint. There was therefore no need for
appellee to amend the second amended complaint in so far as
to the claim for damages is concerned to conform with the
evidence presented at the trial. The amount of P6,438,048.00
awarded is clearly within the relief prayed for in appellees
second amended complaint.
On the issue of lack of jurisdiction, the respondent court held that
following the ruling in Sun Insurance Ltd. v. Asuncion, the additional docket
fee that may later on be declared as still owing the court may be enforced as
a lien on the judgment.

documentary evidence only amount to P4,336,215.00; (4) private

respondents failure to adduce evidence to support its claim for unrealized
profit and business opportunities; and (5) private respondents failure to prove
the extent and actual value of damages sustained as a result of the 1977
collision of the vessels.
[23]

Under Article 2199 of the Civil Code, actual or compensatory damages

are those awarded in satisfaction of, or in recompense for, loss or injury
sustained. They proceed from a sense of natural justice and are designed to
repair the wrong that has been done, to compensate for the injury inflicted
and not to impose a penalty. In actions based on torts or quasi-delicts,
actual damages include all the natural and probable consequences of the act
or omission complained of. There are two kinds of actual or compensatory
damages: one is the loss of what a person already possesses (dao
emergente), and the other is the failure to receive as a benefit that which
would have pertained to him (lucro cesante). Thus:
[24]

[25]

[26]

[22]

Hence, the instant recourse.

In assailing the Court of Appeals decision, petitioner posits the view that
the award of P6,438,048 as actual damages should have been in light of
these considerations, namely: (1) the trial court did not base such award on
the actual value of the vessel and its equipment at the time of loss in 1977;
(2) there was no evidence on extraordinary inflation that would warrant an
adjustment of the replacement cost of the lost vessel, equipment and cargo;
(3) the value of the lost cargo and the prices quoted in respondents

Where goods are destroyed by the wrongful act of the

defendant the plaintiff is entitled to their value at the time of
destruction, that is, normally, the sum of money which he
would have to pay in the market for identical or essentially
similar goods, plus in a proper case damages for the loss of
use during the period before replacement. In other words, in
the case of profit-earning chattels, what has to be assessed is
the value of the chattel to its owner as a going concern at the
time and place of the loss, and this means, at least in the case
of ships, that regard must be had to existing and pending
engagements.x x x.

x x x. If the market value of the ship reflects the fact that it is in

any case virtually certain of profitable employment, then
nothing can be added to that value in respect of charters
actually lost, for to do so would bepro tanto to compensate the
plaintiff twice over. On the other hand, if the ship is valued
without reference to its actual future engagements and only in
the light of its profit-earning potentiality, then it may be
necessary to add to the value thus assessed the anticipated
profit on a charter or other engagement which it was unable to
fulfill. What the court has to ascertain in each case is the
`capitalised value of the vessel as a profit-earning machine
not in the abstract but in view of the actual circumstances,
without, of course, taking into account considerations which
were too remote at the time of the loss. [Underscoring
supplied].

In this case, actual damages were proven through the sole testimony of
private respondents general manager and certain pieces of documentary
evidence. Except for Exhibit B where the value of the 1,050 baeras of fish
were pegged at their September 1977 value when the collision happened, the
pieces of documentary evidence proffered by private respondent with respect
to items and equipment lost show similar items and equipment with
corresponding prices in early 1987 or approximately ten (10) years after the
collision. Noticeably, petitioner did not object to the exhibits in terms of the
time index for valuation of the lost goods and equipment. In objecting to the
same pieces of evidence, petitioner commented that these were not duly
authenticated and that the witness (Del Rosario) did not have personal
knowledge on the contents of the writings and neither was he an expert on
the subjects thereof. Clearly ignoring petitioners objections to the exhibits,
the lower court admitted these pieces of evidence and gave them due weight
to arrive at the award ofP6,438,048.00 as actual damages.
[31]

[27]

As stated at the outset, to enable an injured party to recover actual or

compensatory damages, he is required to prove the actual amount of loss
with reasonable degree of certainty premised upon competent proof and on
the best evidence available. The burden of proof is on the party who would
be defeated if no evidence would be presented on either side. He must
establish his case by a preponderance of evidence which means that the
evidence, as a whole, adduced by one side is superior to that of the other. In
other words, damages cannot be presumed and courts, in making an award
must point out specific facts that could afford a basis for measuring whatever
compensatory or actual damages are borne.
[28]

[29]

[30]

The exhibits were presented ostensibly in the course of Del Rosarios

testimony. Private respondent did not present any other witnesses especially
those whose signatures appear in the price quotations that became the bases
of the award. We hold, however, that the price quotations are ordinary private
writings which under the Revised Rules of Court should have been proffered
along with the testimony of the authors thereof. Del Rosario could not have
testified on the veracity of the contents of the writings even though he was the
seasoned owner of a fishing fleet because he was not the one who issued the
price quotations. Section 36, Rule 130 of the Revised Rules of Court provides
that a witness can testify only to those facts that he knows of his personal
knowledge.

For this reason, Del Rosarios claim that private respondent incurred
losses in the total amount of P6,438,048.00 should be admitted with extreme
caution considering that, because it was a bare assertion, it should be
supported by independent evidence. Moreover, because he was the owner of
private respondent corporation whatever testimony he would give with
regard to the value of the lost vessel, its equipment and cargoes should be
viewed in the light of his self-interest therein. We agree with the Court of
Appeals that his testimony as to the equipment installed and the cargoes
loaded on the vessel should be given credence considering his familiarity
thereto. However, we do not subscribe to the conclusion that his valuation of
such equipment, cargo and the vessel itself should be accepted as gospel
truth. We must, therefore, examine the documentary evidence presented to
support Del Rosarios claim as regards the amount of losses.
[32]

[33]

[34]

The price quotations presented as exhibits partake of the nature of

hearsay evidence considering that the persons who issued them were not
presented as witnesses. Any evidence, whether oral or documentary, is
hearsay if its probative value is not based on the personal knowledge of the
witness but on the knowledge of another person who is not on the witness
stand. Hearsay evidence, whether objected to or not, has no probative value
unless the proponent can show that the evidence falls within the exceptions to
the hearsay evidence rule. On this point, we believe that the exhibits do not
fall under any of the exceptions provided under Sections 37 to 47 of Rule 130.
[35]

[36]

[37]

categorically rules on the admissibility or inadmissibility of this class of

evidence because the reception of these documentary exhibits (price
quotations) as evidence rests on the sound discretion of the trial court.
Reference to Section 45, Rule 130, however, would show that the
conclusion of the Court of Appeals on the matter was arbitrarily arrived
at. This rule states:
[38]

Commercial lists and the like. Evidence of statements of

matters of interest to persons engaged in an occupation
contained in a list, register, periodical, or other published
compilation is admissible as tending to prove the truth of any
relevant matter so stated if that compilation is published for
use by persons engaged in that occupation and is generally
used and relied upon by them there.
Under Section 45 of the aforesaid Rule, a document is a commercial list
if: (1) it is a statement of matters of interest to persons engaged in an
occupation; (2) such statement is contained in a list, register, periodical or
other published compilation; (3) said compilation is published for the use of
persons engaged in that occupation, and (4) it is generally used and relied
upon by persons in the same occupation.
Based on the above requisites, it is our considered view that Exhibits B,
C, D, E, F and H are not commercial lists for these do not belong to the
category
of
other
published
compilations
under
Section
45
aforequoted. Under the principle of ejusdem generis, (w)here general words
follow an enumeration of persons or things, by words of a particular and
specific meaning, such general words are not to be construed in their widest
extent, but are to be held as applying only to persons or things of the same
[39]

It is true that one of the exceptions to the hearsay rule pertains to

commercial lists and the like under Section 45, Rule 130 of the Revised Rules
on Evidence. In this respect, the Court of Appeals considered private
respondents exhibits as commercial lists. It added, however, that these
exhibits should be admitted in evidence until such time as the Supreme Court

kind or class as those specifically mentioned. The exhibits mentioned are

mere price quotations issued personally to Del Rosario who requested for
them from dealers of equipment similar to the ones lost at the collision of the
two vessels. These are not published in any list, register, periodical or other
compilation on the relevant subject matter. Neither are these market reports
or quotations within the purview of commercial lists as these are not standard
handbooks or periodicals, containing data of everyday professional need and
relied upon in the work of the occupation. These are simply letters
responding to the queries of Del Rosario. Thus, take for example Exhibit D
which reads:
[40]

[41]

January 20, 1987

PROFORMA INVOICE NO. PSPI-05/87-NAV
MARIA EFIGINIA FISHING CORPORATION
Navotas, Metro Manila
Attention: MR. EDDIE DEL ROSARIO
Gentlemen:
In accordance to your request, we are pleased to quote our
Cummins Marine Engine, to wit.
Two (2) units CUMMINS Marine Engine model N855-M,
195 bhp.

at 1800 rpm., 6-cylinder in-line, 4-stroke cycle,

natural aspirated, 5 in. x 6 in. bore and stroke,
855 cu. In. displacement, keel-cooled, electric
starting coupled with Twin-Disc Marine
gearbox model MG-509, 4.5:1 reduction ratio,
includes oil cooler, companion flange, manual
and standard accessories as per attached
sheet.
Price FOB Manila - - - - - - - - - - - - - - P 580,000.00/unit
Total FOB Manila - - - - - - - - - - - - - - P 1,160,000.00
vvvvvvvvv
T E R M S : CASH
DELIVERY : 60-90 days from date of order.
VALIDITY : Subject to our final confirmation.
WARRANTY : One (1) full year against factory defect.
To be sure, letters and telegrams are admissible in evidence but these
are, however, subject to the general principles of evidence and to various
rules relating to documentary evidence. Hence, in one case, it was held that
[42]

a letter from an automobile dealer offering an allowance for an automobile

upon purchase of a new automobile after repairs had been completed, was
not a price current or commercial list within the statute which made such
items presumptive evidence of the value of the article specified therein. The
letter was not admissible in evidence as a commercial list even though the
clerk of the dealer testified that he had written the letter in due course of
business upon instructions of the dealer.
[43]

But even on the theory that the Court of Appeals correctly ruled on
the admissibility of those letters or communications when it held that unless
plainly irrelevant, immaterial or incompetent, evidence should better be
admitted rather than rejected on doubtful or technical grounds, the same
pieces of evidence, however, should not have been given probative
weight. This is a distinction we wish to point out. Admissibility of evidence
refers to the question of whether or not the circumstance (or evidence) is to
considered at all. On the other hand, the probative value of evidence refers
to the question of whether or not it proves an issue. Thus, a letter may be
offered in evidence and admitted as such but its evidentiary weight depends
upon the observance of the rules on evidence. Accordingly, the author of the
letter should be presented as witness to provide the other party to the
litigation the opportunity to question him on the contents of the letter. Being
mere hearsay evidence, failure to present the author of the letter renders its
contents suspect. As earlier stated, hearsay evidence, whether objected to or
not, has no probative value. Thus:
[44]

[45]

[46]

The courts differ as to the weight to be given to hearsay

evidence admitted without objection. Some hold that when
hearsay has been admitted without objection, the same may
be considered as any other properly admitted

testimony. Others maintain that it is entitled to no more

consideration than if it had been excluded.
The rule prevailing in this jurisdiction is the latter one. Our
Supreme Court held that although the question of admissibility
of evidence can not be raised for the first time on appeal, yet if
the evidence is hearsay it has no probative value and should
be disregarded whether objected to or not. `If no objection is
made quoting Jones on Evidence - `it (hearsay) becomes
evidence by reason of the want of such objection even though
its admission does not confer upon it any new attribute in
point of weight. Its nature and quality remain the same, so far
as its intrinsic weakness and incompetency to satisfy the mind
are concerned, and as opposed to direct primary evidence,
the latter always prevails.
The failure of the defense counsel to object to the
presentation of incompetent evidence, like hearsay evidence
or evidence that violates the rules of res inter alios acta, or his
failure to ask for the striking out of the same does not give
such evidence any probative value. But admissibility of
evidence should not be equated with weight of
evidence. Hearsay evidence whether objected to or not has
no probative value.
[47]

Accordingly, as stated at the outset, damages may not be awarded on the

basis of hearsay evidence.
[48]

Nonetheless, the non-admissibility of said exhibits does not mean that it

totally deprives private respondent of any redress for the loss of its
vessel. This is because in Lufthansa German Airlines v. Court of Appeals,
the Court said:
[49]

In the absence of competent proof on the actual damage

suffered, private respondent is `entitled to nominal
damages which, as the law says, is adjudicated in order that a
right of the plaintiff, which has been violated or invaded by
defendant, may be vindicated and recognized, and not for the
purpose of indemnifying the plaintiff for any loss suffered.
[Underscoring supplied].

Applying now such principles to the instant case, we have on record the
fact that petitioners vessel Petroparcel was at fault as well as private
respondents complaint claiming the amount of P692,680.00 representing the
fishing nets, boat equipment and cargoes that sunk with the M/V Maria
Efigenia XV. In its amended complaint, private respondent alleged that the
vessel had an actual value of P800,000.00 but it had been paid insurance in
the amount of P200,000.00 and, therefore, it claimed only the amount
of P600,000.00. Ordinarily, the receipt of insurance payments should diminish
the total value of the vessel quoted by private respondent in his complaint
considering that such payment is causally related to the loss for which it
claimed compensation. This Court believes that such allegations in the
original and amended complaints can be the basis for determination of a fair
amount of nominal damages inasmuch as a complaint alleges the ultimate
facts constituting the plaintiff's cause of action. Private respondent should be
bound by its allegations on the amount of its claims.
[54]

Nominal damages are awarded in every obligation arising from law,

contracts, quasi-contracts, acts or omissions punished by law, and quasidelicts, or in every case where property right has been invaded. Under
Article 2223 of the Civil Code, (t)he adjudication of nominal damages shall
preclude further contest upon the right involved and all accessory questions,
as between the parties to the suit, or their respective heirs and assigns.
[50]

Actually, nominal damages are damages in name only and not in

fact. Where these are allowed, they are not treated as an equivalent of a
wrong inflicted but simply in recognition of the existence of a technical injury.
However, the amount to be awarded as nominal damages shall be equal or
at least commensurate to the injury sustained by private respondent
considering the concept and purpose of such damages. The amount of
nominal damages to be awarded may also depend on certain special reasons
extant in the case.
[51]

[52]

[53]

With respect to petitioners contention that the lower court did not acquire
jurisdiction over the amended complaint increasing the amount of damages
claimed to P600,000.00, we agree with the Court of Appeals that the lower
court acquired jurisdiction over the case when private respondent paid the
docket fee corresponding to its claim in its original complaint. Its failure to pay
the docket fee corresponding to its increased claim for damages under the
amended complaint should not be considered as having curtailed the lower
courts jurisdiction. Pursuant to the ruling in Sun Insurance Office, Ltd.
(SIOL) v. Asuncion, the unpaid docket fee should be considered as a lien
on the judgment even though private respondent specified the amount
of P600,000.00 as its claim for damages in its amended complaint.
[55]

Moreover, we note that petitioner did not question at all the jurisdiction of
the lower court on the ground of insufficient docket fees in its answers to both
the amended complaint and the second amended complaint. It did so only in
its motion for reconsideration of the decision of the lower court after it had
received an adverse decision. As this Court held in Pantranco North
Express, Inc. v. Court of Appeals, participation in all stages of the case
before the trial court, that included invoking its authority in asking for
affirmative relief, effectively barred petitioner by estoppel from challenging the
courts jurisdiction. Notably, from the time it filed its answer to the second
amended complaint on April 16, 1985, petitioner did not question the lower
courts jurisdiction. It was only on December 29, 1989 when it filed its motion
for reconsideration of the lower courts decision that petitioner raised the
question of the lower courts lack of jurisdiction. Petitioner thus foreclosed its
right to raise the issue of jurisdiction by its own inaction.

therefor. Considering the fact, however, that: (1) technically petitioner

sustained injury but which, unfortunately, was not adequately and properly
proved, and (2) this case has dragged on for almost two decades, we believe
that an award of Two Million (P2,000,000.00) in favor of private respondent
as and for nominal damages is in order.
[59]

[56]

No pronouncement as to costs.
SO ORDERED.

[57]

[58]

WHEREFORE, the challenged decision of the Court of Appeals dated

October 14, 1992 in CA-G. R. CV No. 26680 affirming that of the Regional
Trial Court of Caloocan City, Branch 121, is hereby MODIFIED insofar as it
awarded actual damages to private respondent Maria Efigenia Fishing
Corporation in the amount of P6,438,048.00 for lack of evidentiary bases

Kapunan, and Purisima, JJ., concur.

Narvasa, C.J., (Chairman), on leave.