Вы находитесь на странице: 1из 65

FIRST DIVISION latter as to create any suspicion that they were impelled by

[G.R. No. 111692. February 9, 1996] ill motives to falsely implicate him.

That it was another person who committed the


offense is too incredible. No less than petitioners own
ALEJANDRO FUENTES, JR., petitioner, vs. COURT OF witness, Nerio Biscocho who claimed he also saw the
APPEALS and PEOPLE OF THE killing, testified that Alejandro Fuentes, Jr., the petitioner,
PHILIPPINES, respondents. and Jonie Fuentes are one and the same person. Thus -

COURT:
DECISION
Q. Who is this Joni Fuentes and Alejandro
Still professing innocence and insisting that he is a
Fuentes?
victim of mistaken identity, petitioner Alejandro Fuentes,
Jr., seeks reversal of the decision of the Court of Appeals A. That Joni Fuentes is the same of that or the
affirming his conviction for murder.[1] accused Alejandro Fuentes. I do not know
his real name but he is called as Joni, sir, x
At four o clock in the morning of 24 June 1989 Julieto
x x[7]
Malaspina together with Godofredo Llames, Honorio Osok
and Alberto Toling, was at a benefit dance at Dump Site, On cross-examination witness Biscocho further
Tudela, Trento, Agusan del Sur. Petitioner called Malaspina admitted that he himself would call petitioner Alejandro
and placed his right arm on the shoulder of the latter Fuentes, Jr., as Joni or Jonie Fuentes, as some of his friends
saying, Before, I saw you with a long hair but now you have did, but victim Malaspina occasionally called petitioner
a short hair.[2]Suddenly petitioner stabbed Malaspina in the Junior.[8]
abdomen with a hunting knife. Malaspina fell to the ground
and his companions rushed to his side. Petitioner fled. Petitioner would make much of the alleged confession
Before the victim succumbed to the gaping wound on his of Zoilo Fuentes, Jr., since it is a declaration against penal
abdomen he muttered that Alejandro Fuentes, Jr., stabbed interest and therefore an exception to the hearsay rule. The
him.[3] so-called confession of Zoilo was allegedly given to
Felicisimo Fuentes, the uncle of petitioner and Zoilo, who
Dr. Porfirio L. Salubre, the Rural Health Physician who in turn relayed the matter to P/Sgt. Benjamin Conde, Jr.
autopsied the cadaver of Julieto Malaspina on 24 July 1989, Felicisimo testified that on 24 June 1989 while he was at
reported that death was due to stab wound at left lumbar Barangay San Isidro, Zoilo Fuentes, Jr., confessed that he
region I V2 in. in length with extracavitation of the small killed Malaspina in retaliation; that he even showed him the
and large intestines.[4] knife he used and asked his help in finding a lawyer, in
securing bail and, if possible, in working out a settlement
Petitioner claims on the other hand that it was his
with the relatives of the deceased. The following day
cousin Zoilo Fuentes, Jr., alias Jonie who knifed Malaspina;
however he learned that the self-confessed killer was gone
that when the victim was killed he was conversing with
and that petitioner had been arrested for a crime he did not
him; that he was compelled to run away when he heard that
commit.[9]
somebody with a bolo and spear would kill all those from
San Isidro because Jonie, the killer, was from that place; For his part, Station Commander P/Sgt. Conde, Jr.,
that since he was also from San Isidro he sought refuge in testified that after the criminal information for murder was
his brothers house where he met Jonie; that Jonie admitted filed on 26 July 1989, petitioner met Felicisimo who
spontaneously that he stabbed Malaspina because after a informed him of the disclosure by Zoilo. Conde then
boxing match before the latter untied his gloves and advised Felicisimo that if it was true that it was Zoilo who
punched him; that as there were many persons milling fatally stabbed Malaspina Felicisimo must persuade Zoilo to
around the house Jonie jumped out and escaped through surrender. Conde then personally went to Barangay San
the window; that he was arrested at eight oclock in the Isidro to investigate. There he was told by the townsfolk
morning of 24 June 1989 while he was in a store in the that Zoilo had already fled).[10]
barangay.[5]
One of the recognized exceptions to the hearsay rule
The Regional Trial Court of Prosperidad, Agusan del is that pertaining to declarations made against interest.
Sur, found petitioner guilty of murder qualified by Sec. 38 of Rule 130 of the Rules of Court provides that (t)he
treachery and imposed on him an indeterminate prison declaration made by a person deceased, or unable to
term of ten (10) years and one (1) day of prision mayor as testify, against the interest of the declarant, if the fact
minimum to seventeen (17) years and four (4) months asserted in the declaration was at the time it was made so
of reclusion temporal as maximum, to indemnify the heirs far contrary to declarants own interest, that a reasonable
of the victim Julieto Malaspina the amount of P50,000.00 man in his position would not have made the declaration
and to pay P8,300.00 as actual damages plus costs.[6] unless he believed it to be true, may be received in
evidence against himself or his successors in interest and
The Court of Appeals affirmed the judgment of the
against third persons. The admissibility in evidence of such
trial court; hence, this petition for review.
declaration is grounded on necessity and
Petitioner contends that the appellate court erred trustworthiness.[11]
when it held that petitioner was positively and
There are three (3) essential requisites for the
categorically identified as the killer of Malaspina, in
admissibility of a declaration against interest: (a) the
affirming the judgment of conviction and in holding
declarant must not be available to testify; (b) the
petitioner liable for damages to the heirs of the victim.
declaration must concern a fact cognizable by the
Petitioner points to an alleged inconsistency between declarant; and (c) the circumstances must render it
the testimonies of prosecution witnesses Alberto Toling improbable that a motive to falsify existed.
and Honorio Osok to the effect that they saw petitioner
In the instant case, we find that the declaration
stab Malaspina on the right lumbar region, and the
particularly against penal interest attributed to Zoilo
testimony of the attending physician that the victim was
Fuentes Jr. is not admissible in evidence as an exception to
stabbed on the left lumbar region.
the hearsay rule. We are not unaware of People Toledo,[12] a
This discrepancy is inconsequential. What is material 1928 case, where Justice Malcolm writing for the Court
is that Malaspina was stabbed to death and that three (3) endeavored to reexamine the declaration of third parties
prosecution witnesses positively identified petitioner as made contrary to their penal interest. In that case, the
the knife wielder. It must be stressed that these witnesses protagonists Holgado and Morales engaged in a bob duel.
had known petitioner for quite some time and never had Morales was killed almost instantly. Holgado who was
any personal misunderstanding nor altercation with the seriously wounded gave a sworn statement (Exh. 1) before
the municipal president declaring that when he and
Morales fought there was nobody else present. One (1)
month later Holgado died from his wounds. While the Court recourse as explained in Toledo -The purpose of all
was agreed that Toledo, who reportedly intervened in the evidence is to get at the truth. The reason for the hearsay
fight and dealt the mortal blow, should be exonerated on rule is that the extrajudicial and unsworn statement of
reasonable doubt, the members did not reach an accord on another is not the best method of serving this purpose. In
the admissibility of Exh. 1. One group would totally other words, the great possibility of the fabrication of
disregard Exh. 1 since there was ample testimonial falsehoods, and the inability to prove their untruth,
evidence to support an acquittal. The second group requires that the doors be closed to such evidence.[15]
considered Exh. 1 as part of the res gestae as it was made
on the same morning when the fight occurred. A third The Court of Appeals as well as the trial court
group, to which Justice Malcolm belonged, opined that the correctly determined the crime to be murder qualified by
court below erred in not admitting Exh. 1 as the statement treachery. The suddenness of the attack, without any
of a fact against penal interest. provocation from the unsuspecting victim, made the
stabbing of Malaspina treacherous.[16] However, the court a
For all its attempt to demonstrate the arbitrariness quo erred in imposing an indeterminate prison term of ten
behind the rejection in certain cases of declarations against (10) years and one (1) day of prision mayor as minimum to
penal interest, the Toledo case cannot be applied in the seventeen (17) years and four (4) months of reclusion
instant case which is remarkably different. Consider this temporal as maximum. Murder under Art. 248 of The
factual scenario: the alleged declarant Zoilo Fuentes Jr., a Revised Penal Code is punishable by reclusion temporal in
cousin of accused-appellant, verbally admitted to the latter, its maximum period to death. Since aside from treachery
and later to their common uncle Felicisimo Fuentes, that he qualifying the crime to murder there is no other modifying
(Zoilo) killed the victim because of a grudge, after which he circumstance proved, the medium period of the penalty,
disappeared. One striking feature that militates against the i.e. reclusion perpetua, should have been imposed on
acceptance of such a statement is its patent petitioner.[17]
untrustworthiness. Zoilo who is related to accused-
appellant had every motive to prevaricate. The same can be Petitioner maintains that assuming that he committed
said of accused-appellant and his uncle Felicisimo. the crime it is error to hold him answerable for P8,300.00
Secondly, we need not resort to legal rhetorics to find that as actual damages on the basis of the mere testimony of
the admission of such a statement may likewise be, the victims sister, Angelina Serrano, without any tangible
according to Wigmore, shocking to the sense of document to support such claim. This is a valid point. In
justice.[13] Let us assume that the trial court did admit the crimes and quasi-delicts, the defendant is liable for all
statement of Zoilo and on that basis acquitted accused- damages which are the natural and probable consequences
appellant. Let us assume further that Zoilo was of the act or omission complained of.[18] To seek recovery
subsequently captured and upon being confronted with his for actual damages it is essential that the injured party
admission of guilt readily repudiated the same. There is proves the actual amount of loss with reasonable degree of
nothing, absolutely nothing, that can bind Zoilo legally to certainty premised upon competent proof and on the best
that statement. evidence available.[19] Courts cannot simply rely on
speculation, conjecture or guesswork in determining the
But more importantly, the far weightier reason why fact and amount of damages.[20]
the admission against penal interest cannot be accepted in
the instant case is that the declarant is not unable to The award by the court a quo of P8,300.00 as actual
testify. There is no showing that Zoilo is either dead, damages is not supported by the evidence on record. We
mentally incapacitated or physically incompetent which have only the testimony of the victims elder sister stating
Sec. 38 obviously contemplates. His mere absence from the that she incurred expenses of P8,300.00 in connection with
jurisdiction does not make him ipso facto unavailable under the death of Malaspina.[21] However, no proof of the actual
this rule.[14] For it is incumbent upon the defense to produce damages was ever presented in court. Of the expenses
each and every piece of evidence that can break the alleged to have been incurred, the Court can only give
prosecution and assure the acquittal of the accused. Other credence to those supported by receipts and which appear
than the gratuitous statements of accused-appellant and to have been genuinely expended in connection with the
his uncle to the effect that Zoilo admitted having killed death of the victim. Since the actual amount was not
Malaspina, the records show that the defense did not exert substantiated, the same cannot be granted.[22]
any serious effort to produce Zoilo as a witness. Lest we be
WHEREFORE, the judgment appealed from finding
misunderstood, the Court is always for the admission of
petitioner ALEJANDRO FUENTES JR. guilty of MURDER and
evidence that would let an innocent declaration of guilt by
directing him to indemnify the heirs of Julieto Malaspina in
the real culprit. But this can be open to abuse, as when the
the amount of P50,000.00 plus costs is AFFIRMED with the
extrajudicial statement is not even authenticated thus
modification that the penalty imposed should be as it is
increasing the probability of its fabrication; it is made to
corrected to reclusion perpetua, and the award of actual
persons who have every reason to lie and falsify; and it is
damages is deleted.
not altogether clear that the declarant himself is unable to
testify. Thus, for this case at least, exclusion is the prudent

The Case

THIRD DIVISION
[G.R. No. 143819. January 29, 2002]
Gerry Cuenca and Crisanto Agon[1] appeal the February
7, 2000 Decision[2] of the Regional Trial Court (RTC)
PEOPLE OF THE PHILIPPINES, appellee, vs. GERRY of Lipa City (Branch 12) in Criminal Case No. 0132-98,
CUENCA y MEDRANO, JACKSON CUENCA (at which found them guilty of murder beyond reasonable
large), CRISANTO AGON y MAGPANTAY, and doubt.
BERNIE AGON (at large), accused,
The RTC disposed of the case as follows:
GERRY CUENCA y MEDRANO and CRISANTO
AGON y MAGPANTAY, appellants. WHEREFORE, the Court finds the accused GERRY CUENCA
and CRISANTO AGON, guilty beyond reasonable doubt, both
DECISION as principals by direct participation for having conspired
and confederated with one another in the commission of
The testimony of a single eyewitness, if credible and the crime of [m]urder, as alleged in the Information dated
positive, is sufficient to support a conviction for murder. March 27, 1998, and defined and penalized under Article
Truth is established by the quality, not necessarily by the 248 of the Revised Penal Code, as amended by Republic Act
quantity, of the evidence. 7659 and sentences each of them to suffer the penalty
of RECLUSION PERPETUA, to pay the heirs
of Wilfredo Castillo the sum of P50,000.00 as indemnity for Thereafter, Marcial returned to his house but did not tell
his death, the sum of P38,800.00, as actual damages, the his wife about the incident because she was nerbiyosa. He
sum of P4,800,000.00 for loss of earning capacity, the sum did not want the members of his family to get involved in
of P20,000.00, as moral damages and to pay their the incident because he feared for their safety. The mauling
proportionate share of the costs. incident lasted approximately twenty (20) minutes. The
place where the incident happened was illuminated by the
light coming from the moon and the electric bulb at the
The period during which both accused are under
electric post which was at the top of the roof of a house
preventive imprisonment shall be deducted from their
near the place of the incident.
sentence.

The following morning, February 15, 1998, Marcial met


Finally, let also warrants of arrest be issued against the
Feliciano Castillo, Edoks brother, who told him that they
accused Jackson Cuenca and Bernardo Bernie Agon for their
were looking for Edok.Marcial did not mention to Feliciano
immediate apprehension.[3]
that he had witnessed the mauling of Edok because he was
afraid that he might be implicated and involved in the
On March 17, 1998, Lipa City Assistant City incident.
Prosecutor Mario G. Mayuga filed the Information charging
appellants and their co-accused as follows:
On February 15, 1998, around 2:30 in the afternoon, a
neighbor named Silo passed by Marcials house and told
That on or about the 14th day of February, 1998 at about him that they were looking for Edoks body. Marcial joined
9:30 oclock in the evening, at Barangay Tambo, Lipa City, in the search in the forest for about one hour and then he
Philippines and within the jurisdiction of this Honorable went home.
Court, the above-named accused, then armed with
bladed/pointed and hard instruments, conspiring and
About 4 oclock in the afternoon of February 15, 1998,
confederating together, acting in common accord and
Feliciano dropped by the house of Marcial and said
mutually aiding one another, with intent to kill, with
that Edoks body had been found and
treachery and grave abuse of superior strength and taking
borrowed Marcials flashlight in order to help in the
advantage of nighttime, did then and there wilfully,
recovery of Edoks body which was found inside a well in
unlawfully and feloniously attack, assault, beat and stab
the forest. The body was retrieved from the well which was
with the use of said bladed/pointed and hard instruments,
about fifteen (15) meters deep. There were blood stains
suddenly and without warning, one Wilfredo Castillo,
around the well. Coconut trees surrounded the area. The
thereby inflicting upon the latter stab wounds, which
body was recovered between Masagana Subdivision
directly caused his death.[4]
and Adelina Subdivision, which was a forested area and
about one-half (1/2) kilometer from where the mauling
When arraigned on April 27, 1998, appellants -- with incident took place.
the assistance of their lawyers -- entered a plea of not
guilty.[5]Because their co-accused were at large, trial on the
Around 4:30 in the afternoon of February 15, 1998,
merits proceeded only as against them.
Feliciano reported to the Desk Officer, SPO2
The Facts Alberto Libao of the Lipa Police Satation, that the body of
his brother, Wilfredo Castillo, had been found in the
Version of the Prosecution forested area in Barangay Tambo. Thereafter, Police
Inspector Romeo Mitra, PO2 Enrico Tapalla, SPO4
Renaldo Saludo and SPO3 Pablo de Luna were dispatched to
In its Brief,[6] the Office of the Solicitor General the crime scene to investigate the incident. Feliciano went
summarized the prosecutions version of the facts as with them. When Edoks body was retrieved,
follows: SPO4 Saludo noticed the presence of stab wounds, blows
and hematomas on his body. The cadaver was then taken
to Funeraria San Sebastian at Balagbag, Lipa City.
On February 14, 1998, around 9:30 in the evening, while
lying down with his wife and family in his house at Module
Subdivision, BarangayTambo, Lipa City, Batangas, Marcial M About 7:30 in the evening of February 15, 1998, Dr.
orillo[7] heard a commotion taking place outside his house. Corazon Sabile, Health Officer of Lipa City, conducted an
Dogs were barking loudly, so he decided to go out of the autopsy on Edoks body. The physical examniation yielded
house to see what was happening outside. He then saw a the following results: there were nine (9) injuries on the
man being mauled and beaten by four (4) persons. Upon head, two (2) of which were stab wounds, one stab wound
seeing the incident, he hid himself behind a PLDT on the right frontal area of the right ear which reached the
telephone post. From a distance of about ten (10) meters, skull and the second stab wound also at his right ear; one
he recognized the four (4) assailants as Gerry Cuenca, (1) lacerated gaping wound on the head; there were several
Jackson Cuenca, Crisanto Agon and Bernie Agon, while the contusions and hematoma on both eyes which could have
person being mauled been caused by mauling, and hematomas on the
was Wilfredo Edok Castillo. Marcial knew the four middle mandibular area and the lateral mandibular area
assailants and the victim for eight (8) years since they were (chin) which could have been caused by mauling or the
all neighbors, Gerry and Jackson being brothers dumping of the cadaver in to the well; there are also linear
and Crisanto and Bernie being father and son. He abrasions on the right lateral neck area that could have
witnessed Crisanto hold Edoks left hand while Bernie held been caused by forcible contact; there were nine (9)
his right hand. Gerry was at Edoks front and to the right wounds on the body, that is, four (4) stab wounds and five
while Jackson was at Edoks front and to the left and both (5) abrasions; the first stab wound was on the
were beating Edok continuously. Gerry and Jackson each third intercostalspace midelavicular area, the second on
used a piece of wood in hitting Edok several times on the the fifth intercostal space, right midelavicular area, the
face, head, chest and other parts of his body. Edok tried to third on the 8th intercostal space midelavicular area, and the
struggle but his efforts proved futile. Edok then gave in, fourth [was] on the right lumbar area; the said wounds were
stooped down and eventually lost consciousness almost of the same depth, that is 5 cms; all of the said
(Lumug[m]ok na po siya). The four (4) assailants then wounds could have been caused by a sharp pointed
carried Edoks body with one holding on to his right arm, instrument; she also found five (5) abrasion on the body,
the other one x x x his left arm and the other two each held i.e., in the left midscapulararea, left infrascapular area, on
the right and left leg[s] of Edok towards the direction the vertebral line, on the right midscapular area and on the
of Calabarzon Highway. vertebral line; that the abrasions are called gasgasand
could have been caused by forcible contact; she also found
in the extrem[i]ties of the cadaver two (2) stab wounds on
the right anterior thigh 4 to 5 cms. deep; she also found
three (3) abrasions on the right forearm, left posterior arm signs of artificiality, but also because it vibrates with truth
and left posterior hand which could have been caused by and sincerity.[11]
forcible contact. The internal examination on the victims
body revealed that 200 ml. of blood were found in The court a quo held that conspiracy attended the
the fleuralcavity which could have come from the killing:
perforations of the right ventricle of the heart; the liver and
upper lobe of the right lung were perforated; there were In this case, Crisanto and Bernie Agon were each holding
complete fractures on the 2nd, 3rd, 4th, 5th, 6th, 7th of both ribs the hands of Wilfredo Castillo, while the brothers Gerry and
which alone were sufficient to cause death. The mauling Jackson Cuencahelped each other in beating him with a
was aggravated by the dumping of the Edoks body in the piece of [wood] about one (1) meter long x x x. After
well. Considering the nature and number of Castillo slumped and lost consciousness, the four (4)
injuries Edok sustained, no medical attention and accused helped each other in carrying Wilfredo Castillo
assistance could have saved his life. The cause towards the Calabarzon Highway going to the direction
of Edoks death was Hypovolemia secondary to multiple of Batangas City. Verily, at the precise moment of the
stab wounds. execution of the crime, the accused acted in concert to
accomplish a common objective to take the life
On February 16, 1998, Marcial Morillo told Ruben Castillo of Wilfredo Castillo. The fact that Marcial Morillo did not
about the mauling incident which (Morillo) had witnessed witness the actual stabbing and killing of Wilfredo Castillo
on the night of February 14, 1998. is of no moment.[12]

Bothered by his conscience, on February 17, It disbelieved the defenses of denial and alibi.
1998, Morillo went to the Lipa Police Station to report the
Hence, this appeal.[13]
incident.[8] (Citations omitted)

Version of the Defense Issues

Appellants gave the following narration of the facts:[9] In their Brief, appellants fault the trial court with the
following alleged errors:
The defense maintained that in the evening of February 14, 1. The honorable trial court erred in giving
1998 accused Jackson Cuenca and Bernie Agon together weight to the testimony of the alleged lone
with three [V]isayan[C]alabarzon workers identified eyewitness, Marcial Mor[c]illo.
as Obet, Nognog and Ruel were in the house of
Yolanda Cuenca in the evening of February 14, 1998 2. The honorable trial court erred in not
at Brgy. Tambo, Lipa City about one kilometer away from considering that the victim died of multiple
the place of Marcial Morillo, the alleged eyewitness, in stab wounds and not due to injuries caused
whose place according to Marcial Morillo the crime was by a piece of wood.
committed. While these persons were in said house of
Yolanda Cuenca, they heard a voice calling for Jackson who 3. The honorable trial court erred in not
was identified as Wilfredo Castillo. Jackson Cuenca came considering the defense of alibi of accused-
out [of] the house and asked Wilfredo Castillo what was the appellants in the appreciation of the whole
problem[;] however, Wilfredo Castillo immediately hacked evidence presented by the prosecution and
him who was wounded at the right side of his back. Witness defense.[14]
Yolanda Cuenca brought him inside her house and attended
to his wound. While bringing him inside the This Courts Ruling
house, Jackson was struggling to be free, [and] the
three Visayan[C]alabarzon workers visitors went outside After reviewing the records of this case, we find no
and thereafter a commotion took place. During the cogent basis to reverse appellants conviction. We however
commotion, Yolanda Cuenca heard somebody [utter] the modify the award of civil liabilities.
words sobra-
sobra na ang ginagawa mo sa mga tao dito. The following
day, February 15, 1998, two of the
three VisayanCalabarzon Workers First Issue: Credibility of Lone Prosecution Witness
namely Obet and Nognog arrived at the house of
Appellants assail the credibility of Marcial Morcillo,
Yolanda Cuenca and told her that she [would] say that she
the lone prosecution witness. They contend that the trial
saw and heard nothing about the commotion.
court erred in giving full credence to Morcillos testimony,
because it was not in accordance with common experience
Accused Gerry Cuenca and Crisanto Agon were not in the and observation of mankind.[15] We disagree.
house of Yolanda Cuenca where the commotion took place
[o]n the evening of February 14, 1998 and they were not We carefully reviewed the testimonies of both the
also near the house of Marcial Morillo where the crime took prosecution and the defense witnesses, as well as the other
place allegedly [o]n the evening of February 14, 1998. On pieces of evidence on record. We are convinced that the
that time and date, they were at the house of trial court did not err in giving full faith and credence
Roger Dimaculangan at Normanz Village, Tambo, Lipa City to Morcillos testimony, which we reproduce in part as
helping in the preparation of food for the baptismal party follows:
on February 15, 1998. Other than accused-appellants
Q On February 14, 1998, around 9:30 oclock in
Andy Obille, Benjamin Anterola and Romy Anterola and
the evening, do you remember where you
other people were there. Accused-appellants vehemently
were?
denied that they were the ones who killed Wilfredo Castillo
alias Edok in the evening of February 14, 1998.[10] A I was inside my house sir.

Q Where was your house on that date, February


The Trial Courts Ruling
14, 1998, 9:30 oclock in the evening?

A At Module Subdivision, Tambo, Lipa City sir.


The RTC convicted appellants because the lone
prosecution witness, Marcial Morcillo, was credible. It said: Q What were you doing around that time, 9:30
the Court believes and gives weight to the candid, vivid oclock in the evening of February 14,
and detailed account of the incident and positive 1998 inside your house in Module
identification of all the accused by Marcial Morcillo, not Subdivision, Tambo, Lipa City?
only because it is clear, straight-forward and devoid of any
A We were already lying down sir. Jackson Cuenca, Crisanto Agon and
Bernie Agon?
Q You said we, who were with you in your
house? A Edok Castillo sir.

A My wife and my family sir. Q Do you know the complete name of


this Edok Castillo?
Q While you were then already lying down on
that date, February 14, 1998 around 9:30 A I quite remember, it is Alfredo Castillo, sir.
oclock in the evening, do you remember
x x x any unusual incident that transpired? Q And how were Gerry Cuenca,
Jackson Cuenca, Crisanto Agon and
A Yes sir. Bernie Agon beating this Edok Castillo?

Q What was that unusual incident that A The father and son were holding Edok Castillo
transpired? and the brothers were beating him sir.

A There was a commotion of people sir. Q When you said that the father and son were
holding Edok Castillo while the brothers
Q How did you come to know that there was a were beating him, who are you referring to
commotion of people? when you said the father and son?
A My dog and the dogs of my neighbors were A Crisanto Agon and Bernie Agon sir.
barking sir.
Q How was Crisanto Agon holding Edok Castillo
Q What did you do when you heard this while the brothers were
commotion of people and barking of the beating Edok Castillo?
dog and the dogs of your neighbors?
A The father and son were holding [both hands
A I went out of the house and looked for [what] of] Edok Castillo.
the commotion was all about[,] sir.
Q What hand was Crisanto Agon holding?
Q What did you see when you looked [for] where
this commotion [was] coming [from] or A Left hand sir.
what was causing this commotion?
Q How about Bernie Agon, what hand
A I saw a person being beaten by four (4) of Edok Castillo was he holding?
persons sir.
A The right hand sir.
Q Were these four (4) persons or in what place in
relation to your house where these four (4) Q How about Gerry Cuenca? Where was he
persons beating one person? positioned in relation to Edok Castillo when
he was beating Edok?
A In the street sir.
A Right front portion of Edok Castillo sir.
Q How far is that place from your own house?
Q How about Jackson Cuenca, where was he
A About ten (10) meters sir. positioned in relation to Edok Castillo while
he was beating Edok Castillo?
Q Where were you when you saw four (4) persons
beating one (1) person? A He was standing towards the left front
of Edok Castillo sir.
A I was hiding behind [a] PLDT Telephone post
sir. xxxxxxxxx

Q From the place where you were hiding behind Q Aside from stooping down, what else
a PLDT Telephone Post, how far [away from was Edok Castillo doing while he was being
you] were these four (4) persons who were beaten by Gerry Cuenca and
beating another person x x x? Jackson Cuenaand while
Bernie Agon and Crisanto Agon were
A 10 meters sir. holding his two hands?
Q Were you able to recognize these four (4) A He lost consciousness sir.
persons who were beating another person?
Q Why do say that he lost consciousness?
A Yes, sir.
A Lumugmok na po siya.
Q Who were these four (4) persons whom you
saw were beating another person. Q But before Edok Castillo actually fe[l]l
or lumugmok what was he doing while he
A Crisanto Agon, Bernie Agon, was being beaten up?
Jackson Cuenca and Gerry Cuenca sir.
A He could not do anything anymore sir.
Q Of these (4) persons whom you named
Gerry Cuenca and Crisanto Agon were the Q After Wilfredo Castillo [fell] or lumugmok,
persons whom you pointed [to] a while ago what did Gerry Cuenca,
[among them]? Jackson Cuenca, Crisanto Agon and
Bernie Agon do to him if they did anything
A Yes sir. more?
Q Were you able to recognize the person whom A [T]hey carried him towards Calabarzon, sir.
these four (4) accused were beating?
Q By the way, how many times did
A Yes, sir. I recognized him. Gerry Cuenca and
Jackson Cuenca hit Edok Castillo?
Q Who was that person who was being beaten by
these four (4) accused, Gerry Cuenca, A I could not remember, but he was hit several
times, sir.
Q In what part or parts of the body Circumstantial evidence suffices to convict if the
of Edok Castillo was he hit by th[o]se following requisites concur: (1) more than one
beating [him up], if he was ever hit? circumstance is present, (2) the facts from which the
inferences are derived are proven, and (3) the combination
xxxxxxxxx of all the circumstances produces a conviction beyond
reasonable doubt. The totality of the evidence must
Witness pointing his face, to his head, to
constitute an unbroken chain showing beyond reasonable
his chest and to his right face below the
doubt the guilt of the accused, to the exclusion of all
eye.
others. [23]
Q You said that after Gerry Cuenca and
To require direct eyewitness testimony when
Jackson Cuenca [beat] up Edok Castillo
circumstantial evidence is sufficiently established would,
while he was being held [by] his two (2)
in many cases, expose society to felons who would be
hands by Crisanto and Bernie Agon, he fell
unreasonably set free.[24]
down or lumugmok [and] he was carried
to Calabarzon[;] what do you mean by In the present case, the postmortem examination
this Calabarzon? shows that the victim sustained multiple lacerations and
abrasions plus eight stab wounds.[25] The following pieces of
A The highway going to Batangas sir.
circumstantial evidence show beyond reasonable doubt
Q How did the four (4) carry Edok Castillo that appellants are responsible for the killing:
towards the Calabarzo[n] which is the road
First, Morcillo positively identified appellants as
according to you going to Batangas City?
members of the group that had ganged up on the victim
A They help[ed] each other in carrying him sir. and mauled him near his residence around 9:30 in the
evening on February 14, 1998.
Q How did they carry actually this Edok Castillo?
Second, the witness saw appellants acting in unison --
A The two (2) were carrying him by [both his] beating up then carrying towards the Calabarzon Highway -
hands[,] one [holding] on each hand and the - the unconscious body of the victim.
other two (2) were holding on [both his]
feet sir.[16] Third, the victims corpse was recovered the next day
inside a well, which was less than a kilometer away from
On cross-examination Morcillo consistently the place of the mauling.
maintained, despite intense grilling and repeated attempts
of the defense counsel to discredit him, that appellants Fourth, the victim suffered from multiple stab
were the ones who had mauled the victim. True, the wounds, abrasions, contusions and lacerations, all of which
defense counsel tried to impeach his credibility during the indicated that he had been heavily beaten up. This was
cross-examination by leading him through an intricate and consistent with the narration of Morcillo on how he saw
annoying maze of questions that resulted in minor appellants maul the victim less than 24 hours before the
inconsistencies in his testimonial dead body was discovered.
declarations. Nevertheless, Morcillo remained steadfast in
Fifth, appellants were the last persons seen with the
his narration of what he had witnessed on the night
victim before he died.
of February 14, 1998.
Sixth, the other accused, Jackson Cuenca (brother of
So long as the witnesses testimonies agree on
Appellant Gerry Cuenca) and Bernie Agon (son of
substantial matters, inconsequential inconsistencies and
Appellant CrisantoAgon) fled from their residence
contradictions dilute neither their credibility nor the verity
in Lipa City, and they have continuously evaded arrest up
of their testimonies.[17] In the instant case, the
to the present.
inconsistencies cited by appellants are insignificant and
immaterial to the essential fact testified to -- the killing of Finally, Morcillo had no ill motive to testify against
the victim.[18] appellants.
As a rule, this Court will not disturb the factual From the foregoing circumstances, it is undisputed
findings of the trial court, because it had a better that appellants were physically present at
opportunity to observe the demeanor and conduct of the the locus criminis and its immediate vicinity, and that an
witnesses while they were testifying. Indeed, its eyewitness positively identified them to be members of the
assessment of the witnesses and their credibility is entitled group that had mauled and removed the victim from the
to great weight and is even conclusive and binding, if not crime scene prior to the discovery of his corpse.
tainted with arbitrariness or oversight of some fact or
circumstance of significance and value.[19]
Third Issue: Defense of Alibi
This Court has ruled in a number of cases[20] that the
testimony of a single witness, if credible and positive, is Well-settled is the rule that alibi is the weakest of all
sufficient for conviction because truth is established not by defenses, because it is easy to concoct and difficult to
the quantity, but by the quality of the evidence. disprove. For alibi to prosper, it is not enough for the
accused to prove that they were somewhere else when the
crime was committed; they must likewise demonstrate that
it was physically impossible for them to have been at the
Second Issue: Cause of the Victims Death
scene of the crime at the time.[26]
Appellants also contend that Morcillo did not see how
In the case before us, appellants claim that at the time
the victim was stabbed. All he said was that he saw them
the crime happened, they were at the residence of
beat up the victim with a piece of wood. Thus, they said
Roger Dimaculangan, which was located also
that the trial court erred in concluding that the deceased
at Barangay Tambo, Lipa City. Dismissing this claim, the
had succumbed, not to multiple stab wounds, but to
RTC said:
injuries caused by a piece of wood.[21]

In the absence of direct evidence, appellants may be Alibi and denial are inherently weak and easily contrived.
convicted on the basis of circumstantial evidence. The This is why the accused must prove with clear and
latter is defined as that which indirectly proves a fact in convincing evidence that it was physically impossible for
issue through an inference which the factfinder draws from him to have been present at the place and time the felony
the evidence established. Resort thereto is essential when was committed. This the accused failed to do. The distance
the lack of direct testimony would result in setting a felon between the house of Roger Dimaculangan, where both
free.[22] accused claimed to be at the time the f[e]lony was
committed and the locus criminis is just a few kilometers The prosecution was likewise able to show that there
away. It can be travelled in a few minutes by bicycle. Thus, was conspiracy. Conspiracy exists when two or more
it was not impossible for persons come to an agreement and decide on the
Gerry Cuenca and Crisanto Agon to leave and, after commission of a felony.[29] It is not necessary that there be
killing Wilfredo Castillo, return to the house direct proof that the co-conspirators had any prior
of Dimaculangan without anybody noticing their absence. agreement to commit the crime; it is sufficient that they
In any event, alibi and denial cannot overcome the acted in concert pursuant to the same objective.[30]
categorical and credible testimony
of Marcial Morcillo identifying both accused as among Despite affirming appellants conviction, we
those whom he saw helping each other in holding and nonetheless modify the monetary awards.
beating Wilfredo Castillo and thereafter carrying him
The award of P50,000 as indemnity ex delicto for the
towards [C]alabarzon Highway going to the direction
loss of the victims life is in accord with prevailing
of Batangas City. Basic is the rule that positive
jurisprudence.[31]Likewise, the award of P20,000 as moral
identification prevails over denial and alibi.[27]
damages is reasonable. However, the actual damages
granted is improper and should be reduced from P38,800
Thus, it was not physically impossible for appellants to P7,300 considering that only the latter amount,
to have been at the scene of the crime on the evening representing burial expenses, was duly supported by
of February 14, 1998, notwithstanding their friends receipts. The unsubstantiated balance of P31,500 should be
testimonies that they were also at deleted.[32]
the Dimaculangan residence.
We also find the court a quos award of P4,800,000 for
loss of earning capacity to be improper. True, in People v.
Conspiracy and Treachery Verde,[33]we granted an award for the loss of earning
capacity to the heirs of the deceased despite the absence of
The trial court did not err in finding appellants guilty documentary evidence to substantiate such claim. We
of murder because treachery, which was alleged in the deemed the testimony of the victims wife sufficient to
Information, had attended the killing. establish the basis for the grant. However, the new ruling
in People v. Panabang[34] modifies this principle and now
On this point, the trial court aptly explained:
precludes an award for loss of earning capacity without
adequate proof. The bare testimony of the brother of the
Article 14 (16) of the Revised Penal Code provides that deceased Felicisimo Castillo that, at the time of his
there is treachery when the offender commits any of the death, Wilfredo Castillo was earning P250.00 daily as
crimes against persons, employing means, methods o[r] carpenter[35] is not sufficient proof.
forms in the execution thereof which tend directly and
specifically to insure its execution without risk to himself In Panabang, we held that the indemnification for loss
arising from the defense which the offended party might of earning capacity must be duly proven. Justice Jose
make. In the instant case, Crisanto and Bernie Agon were C. Vitug, expressing the current view of the Court, wrote:
holding both hands of Wilfredo Castillo, while Gerry and
Jackson Cuenca were beating him with a piece of wood on Indemnification for loss of earning capacity partakes of the
the different parts of his body.Wilfredo Castillo was nature of actual damages which must be duly proven. A
unarmed and defenseless. Hence, treachery was present.[28] self-serving statement, being unreliable, is not enough. The
father of the victim has testified on the latters monthly
Treachery is present when the following conditions income of P12,000.00. But for lost income to be recovered,
are present: (1) the means of execution employed gives the there must likewise be an unbiased proof of the
victims no opportunity to defend themselves or to deceaseds average, not just gross, income. An award for
retaliate, and (2) the means of execution are deliberately or lost of earning capacity refers to the net income of the
consciously adopted. In this case, the prosecution deceased, i.e., his total income net of expenses.
succeeded in showing that appellants, together with their x x x.[36] (Emphasis in the original, citations omitted)
co-accused (who are still at large), helped each other in
ensuring the execution of their nefarious intention to beat WHEREFORE, the assailed Decision is AFFIRMED but
up and kill the victim who was unarmed and with no the actual damages awarded by the RTC
opportunity to defend himself. is REDUCED from P35,850 to P7,300 while the grant
of P4,800,000 for loss of earning capacity is DELETED.
therewith.

FIRST DIVISION 3. ID.; ACTUAL AND COMPENSATORY DAMAGES; ONLY


PARTIES TO CONTRACTS BREACHED ARE ENTITLED TO
[G.R. No. L-11037. December 29, 1960.] COMPENSATORY DAMAGES RESULTING THEREFROM. —
Since the present action is based upon a breach of contract
EDGARDO CARIAGA, ET AL., plaintiffs and appellants, v. of carriage and plaintiff’s parents were not a party thereto
LAGUNA TAYABAS BUS COMPANY, defendant and and were not themselves injured as a result of the collision,
appellant. MANILA RAILROAD COMPANY, defendant and their claim for actual and compensatory damages is
appellee. without merit.

SYLLABUS 4. ATTORNEYS-AT-LAW; ATTORNEY’S FEES; CASE NOT


FALLING UNDER ANY OF THE INSTANCES ENUMERATED IN
ART. 2208 OF THE CIVIL CODE. — The present case not
1. DAMAGES; MORAL DAMAGES; RECOVERABLE ONLY IN falling under any of the instances enumerated in Article
INSTANCES ENUMERATED IN ART. 2219 OF THE CIVIL CODE. 2208 of the Civil Code, plaintiff’s are not entitled to
— Article 2219 of the Civil Code enumerated the instances recover attorney’s fees.
when moral damages may be recovered. Plaintiff’s claim for
moral damages not falling under any one of them, the same
cannot be granted. DECISION

2. ID.; ID.; WHEN RECOVERABLE FOR BREACH OF CONTRACT


UNDER ART. 2220 OF THE CIVIL CODE. — Neither could At about 1:00 p.m. on June 18, 1952, Bus No. 133 of the
defendant LTB be held liable to pay moral damages to Laguna Tayabas Bus Company — hereinafter referred to as
plaintiffs under Art. 2220 of the Civil Code on account of the LTB — driven by Alfredo Moncada, left its station at
breach of its contract of carriage because said defendant Azcarraga St., Manila for Lilio, Laguna, with Edgardo
did not act fraudulently or in bad faith in connection Cariaga, a fourth-year medical student of the University of
Santo Tomas, as one of it passengers. At about 3:00 p.m., ". . . While the train was approximately 300 meters from the
as the bus reached that part of the población of Bay, crossing, the engineer sounded two long and two short
Laguna, where the national highway crossed a railroad whistles and upon reaching a point about 100 meters from
track, it bumped against the engine of a train then passing the highway, he sounded a long whistle which lasted up to
by with such terrific force that the first six wheels of the the time the train was about to cross it. The bus proceeded
latter were derailed, the engine and front part of the body on its way without slackening its speed and it bumped
of the bus were wrecked, the driver of the bus died against the train engine, causing the first six wheels of the
instantly, while many of its passengers, Edgardo among latter to be derailed."cralaw virtua1aw library
them, were severely injured. Edgardo was first confined at
the San Pablo City Hospital from 5:00 p.m., June 18, 1952, x x x
to 8:25 a.m., June 20 of the same year when he was taken
to the De los Santos Clinic, Quezon City. He left that clinic
on October 14 to be transferred to the University of Santo ". . . that the train whistle had been sounded several times
Tomas Hospital where he stayed up to November 15. On before it reached the crossing. All witnesses for the
this last date he was taken back to the De los Santos Clinic plaintiffs and the defendants are uniform in stating that
where he stayed until January 15, 1953. He was they heard the train whistle sometime before the impact
unconscious during the first 35 days after the accident: at and considering that some of them were in the bus at the
the De los Santos Clinic Dr. Gustilo removed the fractured time, the driver thereof must have heard it because he was
bones which lacerated the right frontal lobe of his brain seated on the left front part of the bus and its was his duty
and at the University of Santo Tomas Hospital Dr. Gustilo and concern to observe such fact in connection with the
performed another operation to cover a big hole on the safe operation of the vehicle. The other L.T.B. bus which
right frontal part of the head with a tantalum plate. arrived ahead at the crossing, heeded the warning by
stopping and allowing the train to pass and so nothing
The LTB paid the sum of P16,964.45 for all the hospital, happened to said vehicle. On the other hand, the driver of
medical and miscellaneous expenses incurred from June the bus No. 133 totally ignored the whistle and noise
18, 1952 to April 1953. From January 15, 1953 up to April produced by the approaching train and instead he tried to
of the same year Edgardo stayed in a private house in make the bus pass the crossing before the train by not
Quezon City, the LTB having agreed to give him a stopping a few meters from the railway track and in
subsistence allowance of P10.00 daily during his proceeding ahead."cralaw virtua1aw library
convalescence, having spent in this connection the total
sum of P775.30 in addition to the amount already referred The above findings of the lower court are predicated
to. mainly upon the testimony of Gregorio Ilusondo, a witness
for the Manila Railroad Company. Notwithstanding the
On April 24, 1953 the present action was filed to recover efforts exerted by the LTB to assail his credibility, we do no
for Edgardo Cariaga, from the LTB and the MRR Co., the find in the record any fact or circumstance sufficient to
total sum of P312,000.00 as actual, compensatory, moral discredit his testimony. We have, therefore, no other
and exemplary damages, and for his parents, the sum of alternative but to accept the findings of the trial court to
P18,000.00 in the same concepts. The LTB disclaimed the effect, firstly, that the whistle of the locomotive was
liability claiming that the accident was due to the sounded four times — two long and two short — "as the
negligence of it s co-defendant, the Manila Railroad train was approximately 300 meters from the crossing" ;
Company, for not providing a crossing bar at the point secondly, that another LTB bus which arrived at the
where the national highway crossed the railway track, and crossing ahead of the one where Edgardo Cariaga was a
for this reason filed the corresponding cross-claim against passenger, paid heed to the warning and stopped before
the latter company to recover the total sum of P18,194.75 the "crossing", while — as the LTB itself now admits (Brief
representing the expenses paid to Edgardo Cariaga. The p. 5) — the driver of the bus in question totally disregarded
Manila Railroad Company, in turn, denied liability upon the the warning.
complaint and cross-claim, alleging that it was the reckless
negligence of the bus driver that caused the accident. But to charge the MRR Co. with contributory negligence, the
LTB claims that the engineer of the locomotive failed to
The lower court held that it was the negligence of the bus ring the bell altogether, in violation of section 91 of Article
driver that caused the accident and, as a result, rendered 1459, incorporated in the charter of the said MRR Co. This
judgment sentencing the LTB to pay Edgardo Cariaga the contention — as is obvious — is the very foundation of the
sum of P10,490.00 as compensatory damages, with interest cross-claim interposed by the LTB against its co-defendant.
at the legal rate from the filing of the complaint, and The former, therefore, had the burden to proving it
dismissing the cross-claim against the Manila Railroad affirmatively because a violation of law is never presumed.
Company. From this decision the Cariagas and the LTB The record discloses that this burden has not been
appealed. satisfactorily discharged.

The Cariagas claim that the trial court erred: in awarding The Cariagas, as appellants, claim that the award of
only P10,490. as compensatory damages to Edgardo; in not P10,000.00 compensatory damages to Edgardo is
awarding them actual and moral damages, and in not inadequate considering the nature and the after effects of
sentencing appellant LTB to pay attorney’s fees. the physical injuries suffered by him. After a careful
consideration of the evidence on this point we find their
On the other hand, the LTB’s principal contention in this contention to be well founded.
appeal is that the trial court should have held that the
collision was due to the fault of both the locomotive driver From the deposition of Dr. Romeo Gustilo, a neurosurgeon,
and the bus driver and erred, as a consequence, in not it appears that, as a result of the injuries suffered by
holding the Manila Railroad Company liable upon the cross- Edgardo, his right forehead was fractured necessitating the
claim filed against it. removal of practically all of the right frontal lobe of his
brain. From the testimony of Dr. Jose A. Fernandez, a
We shall first dispose of the appeal of the bus company. Its psychiatrist, it may be gathered that, because of the
first contention is that the driver of the train locomotive, physical injuries suffered by Edgardo, his mentality has
like the bus driver, violated the law, first, in sounding the been so reduced that he can no longer finish his studies as
whistle only when the collision was about to take place a medical student; that he has become completely misfit
instead of at a distance at least 300 meters from the for any kind of work; that he can hardly walk around
crossing, and second, in not ringing that locomotive bell at without someone helping him, and has to use a brace on
all. Both contentions are without merits. his left leg and feet.

After considering the evidence presented by both parties Upon the whole evidence on the matter, the lower court
the lower court expressly found:jgc:chanrobles.com.ph found that the removal of the right frontal lobe of the brain
of Edgardo reduced his intelligence by about 50%; that due
to the replacement of the right frontal bone of his head destination, and it is to be noted that the chauffeur of
with a tantalum plate Edgardo has to lead a quite and defendant’s taxicab that plaintiff used when be received
retired life because "if the tantalum plate is pressed in or the injuries involved herein, Gregorio Mira, had not even
dented it would cause his death."cralaw virtua1aw library been made a party defendant to this case.

The impression one gathers from this evidence is that, as a "Considering, therefore, the nature of plaintiff’s action in
result of the physical injuries suffered by Edgardo Cariaga, this case, is he entitled to compensation for moral
he is now in a helpless condition, virtually an invalid, both damages? Article 2219 of the Civil Code says the
physically and mentally. following:chanrob1es virtual 1aw library

Appellant LTB admits that under Art. 2201 of the Civil Code ‘Art. 2219. Moral damages may be recovered in the
the damages for which the obligor, guilty of a breach of following and analogous cases:chanrob1es virtual 1aw
contract but who acted in good faith, is liable shall be those library
that are the natural and probable consequences of the
breach and which the parties had foreseen or could have (1) A criminal offense resulting in physical injuries;
reasonably foreseen at the time the obligation was
constituted, provided such damages, according to Art. 2199 (2) Quasi-delicts causing physical injuries;
of the same Code, have been duly proved. Upon this
premise it claims that only the actual damages suffered by
(3) Seduction, abduction, rape, or other lascivious acts;
Edgardo Cariaga consisting of medical, hospital and other
expenses in the total sum of P17,719.75 are within this
category. We are of the opinion, however, that the income (4) Adultery or concubinage;
which Edgardo Cariaga could earn if he should finish the
medical course and pass the corresponding board (5) Illegal or arbitrary detention or arrest;
examinations must be deemed to be within the same
category because they could have reasonably been foreseen (6) Illegal search;
by the parties at the time he boarded the bus No. 133
owned and operated by the LTB. At that time he was
already a fourth-year student in medicine in a reputable (7) Libel, slander or any other form of defamation;
university. While his scholastic record may not be first rate
(Exhibits 4, 4-A to 4-C), it is, nevertheless, sufficient to (8) Malicious prosecution;
justify the assumption that he could have finished the
course and would have passed the board test in due time. (9) Acts mentioned in Article 309;
As regards the income that he could possibly earn as a
medical practitioner, it appears that, according to Dr.
(10) Acts and actions referred to in Articles 21, 26, 27, 28,
Amado Doria, a witness for the LTB, the amount of P300.00
29, 30, 32, 34 and 35.
could easily be expected as the minimum monthly income
of Edgardo had he finished his studies.
x x x
Upon consideration of all the facts mentioned heretofore,
this Court is of the opinion, and so holds, that the
compensatory damages awarded to Edgardo Cariaga should "Of the cases enumerated in the just quoted Article 2219
be increased to P25,000.00. only the first two may have any bearing on the case at bar.
We find, however, with regard to the first that the
Edgardo Cariaga’s claim for moral damages and attorney’s defendant herein has not committed in connection with
fees was denied by the trial court, the pertinent portion of this case any ‘criminal offense resulting in physical
its decision reading as follows:jgc:chanrobles.com.ph injuries’. The one that committed the offense against the
plaintiff is Gregorio Mira, and that is why he has been
"Plaintiffs’ claim for moral damages cannot also be granted. already prosecuted and punished therefor. Altho (a) owners
Article 2219 of the Civil Code enumerated the instances and managers of an establishment or enterprise are
when moral damages may be covered and the case under responsible for damages caused by their employees in the
consideration does not fall under any one of them. The service of the branches in which the latter are employed or
present action cannot come under paragraph 2 of said on the occasion of their functions; (b) employers are
article because it is not one of the quasi-delict and cannot likewise liable for damages caused by their employees and
be considered as such because of the pre-existing household helpers acting within the scope of their assigned
contractual relations between the Laguna Tayabas Bus task (Article 218 of the Civil Code); and (c) employers and
Company and Edgardo Cariaga. Neither could defendant corporations engaged in any kind of industry are
Laguna Tayabas Bus Company be held liable to pay moral subsidiary civilly liable for felonies committed by their
damages to Edgardo Cariaga under Article 2220 of the Civil employees in the discharge of their duties (Art. 103,
Code on account of breach of its contract of carriage Revised Penal Code), plaintiff herein does not maintain this
because said defendant did not act fraudulently or in bad action under the provisions of any of the articles of the
faith in connection therewith. Defendant Laguna Tayabas codes just mentioned and against all the persons who
Bus Company had exercised due diligence in the selection might be liable for the damages caused, but as a result of
and supervision of its employees like the drivers of its an admitted breach of contract of carriage and against the
buses in connection with the discharge of their duties and defendant employer alone. We, therefore, hold that the case
so it must be considered an obligor in good faith. at bar does not come within the exception of paragraph 1,
Article 2219 of the Civil Code.
"The plaintiff Edgardo Cariaga is also not entitled to
recover for attorney’s fees, because this case does not fall "The present complaint is not based either on a ‘quasi-
under any of the instances enumerated in Article 2208 of delict causing physical injuries’ (Art. 2219, par. 2, of the
the Civil Code."cralaw virtua1aw library Civil Code). From the report of the Code Commission on
the new Civil Code. We copy the following:chanrob1es
We agree with the trial court and, to the reasons given virtual 1aw library
above, we add those given by this Court in Cachero v.
Manila Yellow Taxicab Co., Inc. (101 Phil., 523, 530, ‘A question of nomenclature confronted the Commission.
533):jgc:chanrobles.com.ph After a careful deliberation, it was agreed to use the term
‘quasi-delict’ for those obligations which do not arise from
"A mere perusal of plaintiff’s complaint will show that his law, contracts, quasi- contracts, or criminal offenses. They
action against the defendant is predicated on an alleged are known in Spanish legal treatises as ‘culpa aquiliana’,
breach of contract of carriage, i.e., the failure of the culpa-extra-contractual’ or ‘quasi- delitos’. The phrase
defendant to bring him ‘safely and without mishaps’ to his ‘culpa-extra contractual’ or its translation ‘extra-
contractual-fault’ was eliminated because it did not exclude SECOND DIVISION
quasi-contractual or penal obligations.’Aquilian fault’ might
have been selected, but it was thought inadvisable to refer
G.R. No. 89684 September 18, 1990
to so ancient a law as the ‘Lex Aquilia’. So ‘quasi-delict’ was
chosen, which more nearly corresponds to the Roman Law
classification of obligations, and is in harmony with the PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
nature of this kind of liability.’ vs.
GERARDO SAZON, alias "INSIK," accused-appellant.
‘The Commission also thought of the possibility of
adopting the word "tort" from Anglo-American law. But
For the death of Wilfredo Longno, alias, "Inday," on
"tort" under that system is much broader than the Spanish-
September 17, 1983 at Barangay Progreso, Lapuz, La Paz,
Philippine concept of obligations arising from non-
Iloilo City, herein accused-appellant Gerardo Sazon, alias
contractual negligence.’Tort’ in Anglo-American
"Insik," and Cornelio Altejos, alias "Toto," were charged
jurisprudence includes not only negligence, but also
with murder before the Regional Trial Court of Iloilo, 1 in an
intentional criminal act, such as assault and battery, false
amended information dated October 18, 1983.2 However,
imprisonment and deceit. In the general plan of the
only herein accused was arraigned, and pleaded not guilty,
Philippine legal system, intentional and malicious acts are
since Cornelio Altejos was not apprehended and has since
governed by the Penal Code, although certain exceptions
remained at large.
are made in the Project.’ (Report of the Code Commission,
pp. 161-162).
After trial, appellant was found guilty and sentenced to
"In the case of Cangco, v. Manila Railroad, 38 Phil. 768, We serve the penalty of reclusion perpetua. He was further
established the distinction between obligation derived from ordered to pay the heirs of the deceased the amount of
negligence and obligation as a result of a breach of P16,628.40 representing hospital bills, expenses for the
contract. Thus, we said:chanrob1es virtual 1aw library coffin, tomb, wake and attorney's fees, and P30,000.00 as
indemnity for the death of the victim.
‘It is important to note that the foundation of the legal
liability of the defendant is the contract of carriage, and
The antecedental facts which led to the filing of the
that the obligation to respond for the damage which
criminal action below are herein under set forth as
plaintiff has suffered arises, if at all, from the breach of synthesized by the court a quo from the testimonies of the
that contract by reason of the failure of defendant to
witnesses, 3 and as clarified and amplified by us from the
exercise due case in its performance. That is to say, its
transcripts of the notes of the hearings.
liability is direct and immediate, differing essentially in the
legal viewpoint from that presumptive responsibility for
the negligence of its servants, imposed by Article 1903 of On September 15, 1983, in the barangay aforementioned, a
the Civil Code (Art. 2180 of the new), which can be rebutted certain Ernesto Romualdez was accosted by appellant near
by proof of the exercise of due care in their selection of the barangay hall for allegedly circulating the rumor that
supervision. Article 1903 is not applicable to obligations appellant and his companions were engaged in stealing.
arising EX CONTRACTU, but only to extra- contractual Upon confrontation, appellant boxed Romualdez which
obligations — or to use the technical form of expression, caused the latter to fall. Wilfredo Longo, who was then
that article relates only to CULPA AQUILIANA.’ and not to present at the scene, approached and helped the fallen
CULPA CONTRACTURAL.’ Romualdez and pushed appellant away. This apparently
angered appellant who, in his native dialect said "Andam ka
"The decisions in the cases of Castro v. Acro Taxicab Co., lang Inday kay patyon ta guid," ("Watch out Inday for I will
(82 Phil., 359; 46 Off. Gaz., No. 5, p. 2023); Lilius Et. Al. v. kill you") to which Longno retorted, "Just do it."
Manila Railroad, 59 Phil., 758) and others, wherein moral
damages were awarded to the plaintiffs, are not applicable Two days later, or on September 17, 1983, at about 8:00
to the case at bar because said decisions were rendered o'clock P.M., appellant and his cousin, Cornelio Altejos,
before the effectivity of the new Civil Code (August 30, were drinking softdrinks at the shire of Gloria Aposaga
1950) and for the further reason that the complaints filed when Longno passed by. Thereupon, appellant and Altejos
therein were based on different causes of action. left their softdrinks half-assumed and followed Longno.
"In view of the foregoing the sum of P2,000 awarded as
moral damages by the trial court has to be eliminated, for Longno eventually reached the bench near the public faucet
under the law it is not a compensation awardable in a case where the group of Massulini Dullete, Samuel Canoso and
like the one at bar."cralaw virtua1aw library Nathaniel Ramos were sitting. He joined the group in their
conversation by saying, "Upon ako dira." ("I'll go with what
What has been said heretofore relative to the moral you say."). Shortly thereafter, appellant and Altejos arrived
damages claimed by Edgardo Cariaga obviously applies and appellant accosted and pointed a gun at Longno,
with greater force to a similar claim (4th assignment of saying, "Maano ka?" ("What are you going to do?"). Longno
error) made by his parents. then faced appellant and said, "Brod, tiruha lang." ("Brod,
just shoot.")
The claim made by said spouses for actual and
compensatory damages is likewise without merits. As held Apparently irked by the response, appellant fired the gun,
by the trial court, in so far as the LTB is concerned, the hitting Longno in the left forearm. Dullete, Canoso and
present action is based upon a breach of contract of Ramos then scampered for safety as appellant and the
carriage to which said spouses were not a party, and wounded Longno grappled for the gun. It was while the two
neither can they premise their claim upon the negligence or were thus struggling that Altejos stabbed Longno in the
quasi- delict of the LTB for the simple reason that they chest, after which both appellant and Altejos ran away.
were not themselves injured as a result of the collision
between the LTB bus and the train owned by the Manila
Railroad Company. Longno then came out of the footwalk shouting, "Tay tiniro
ako ni Insik, binuno ako ni Toto." ("Father, I was shot by
Wherefore, modified as above indicated, the appealed Insik and stabbed by Toto."). He was able to run about
judgment is hereby affirmed in all other respects, with thirty (30) meters before he fell. His father, Julio Longno,
costs against appellant LTB. ran to his son who was then lying sprawled on the ground.
Rushed to the St. Paul's Hospital, Wilfredo Longno died.
Later, it was established that the cause of death was
hemorrhage, secondary to stab wound.
Appellant's version of the incident, however, differs. He not able to recognize
admits having shot Longno but pleads self-defense. He what kind of a gun was
claims that on September 17, 1983, he left the house of his that allegedly used by
father-in-law at about 8:00 o'clock P.M. with his cousin, Inday Longno?
Altejos. The latter had asked for help to have a .22 caliber
revolver repaired and appellant was taking the revolver to a
A No, sir, at first I only
policeman friend of his. On their way, appellant saw
saw the handle of the
Longno from a distance. Upon his approach, Longno
gun and I did not see
allegedly said, "Insik, I heard that you are not afraid of me.
the body of the gun.
Maybe you want to be taught a lesson." 4

Q But you can recognize


Appellant claims that the deceased had a revolver tucked in
between a pistol and a
his waist and was about to draw the same. He, therefore,
revolver?
parried the gun but it fired hitting one of appellant's left
fingers which was later amputated. It was then that
appellant pulled out his gun and shot Longno in the A Yes, sir.
forearm. Appellant and Longno afterwards grappled for the
gun. Altejos allegedly tried to separate appellant and
Q What was that
Longno but he was brushed aside by the latter. In the
allegedly used by Inday
course of their struggle, Altejos then shouted to appellant,
Longno, was that a
"I stabbed Inday, run," and so he and Altejos ran away. 5
pistol or a revolver?

Appellant, in his brief, makes the following assignment of


A Because immediately
errors:
after he said those
words 'Maybe you want
1. The trial court erred in not acquitting to learn a lesson he
the accused-appellant for having acted in immediately drew his
complete self-defense. gun and I was able to
parry.
2. The trial court erred in convicting the
accused-appellant of the crime of murder xxx xxx xxx
and in imposing the penalty of reclusion
perpetua when the prosecution has not
Q When you fired at
established by competent evidence the
Inday Longno hitting
existence of conspiracy and the presence
him on his left arm near
of the aggravating circumstances of
the elbow, was he still
evident premeditation and abuse of
holding that gun he
superior strength. 6
used in shooting you
hitting you at the left
Appellant's version does not inspire credence. Well- palm?
entrenched is the rule that where the accused invokes self-
defense, it is incumbent upon him to prove by clear and
A No, sir, because of too
convincing evidence that he indeed acted in defense of
much force the gun fell.
himself. He must rely on the strength of his own evidence
and not on the weakness of the prosecution. For, even if
the prosecution evidence is weak, it could not be Q Did you not pick up
disbelieved after the accused himself had admitted the the gun?
killing. 7
A No, sir.9
It is a statutory and doctrinal requirement that for the
justifying circumstance of self-defense, the presence of On the other hand, defense eyewitness Jose Randera stated
unlawful aggression is a condition sine qua non. There can
in his testimony:
be no self-defense, complete or incomplete, unless the
victim has committed an unlawful aggression against the
person defending himself.8 ATTY. SORONGON: (To the witness)

In the present case, the burden of evidence having been Q While Wilfredo
shifted, we hold that the defense failed to establish the Longno alias Inday was
primary element of unlawful aggression on the part of the pointing a gun at
victim and, therefore, the plea of self-defense must fail. Gerardo Sazon alias
The narrations of the sequence of events by the accused, Insik, what was Gerardo
and by the lone alleged eyewitness for the defense, Jose Sazon doing?
Randera, are unconvincing primarily on account of their
inherent inconsistency and conflict with each other. WITNESS JOSE RANDERA:

Appellant on cross-examination testified as follows: A When Inday said


something, Insik Sazon
Q How far were you brushed aside the gun
from Inday Longno and the gun fired.
when he allegedly fired
a shot at you? xxx xxx xxx

A One (1) meter. Q You said, that


Wilfredo Longno alias
Q At one (1) meter Inday pointed a gun at
distance did (sic) you Gerardo Sazon alias
Insik, with what hand ATTY. SORONGON (To
was he holding that gun the witness)
when he was pointing
that gun to Gerardo
Q When Cornelio
Sazon?
Artejos (sic) stabbed
Wilfredo Longno alias
WITNESS JOSE RANDERA: Inday, what was
Gerardo Sazon and
Wilfredo Longno doing
A His right hand.
if they were doing
anything.?
ATTY. SORONGON (To
the witness)
A They were graffling of
(sic) the weapon.
Q You said that Gerardo
Sazon brushed aside the
Q You are referring to
gun which was being
whose weapon they
pointed to him, what
were graffling (sic) at
hand did Gerardo Sazon
that time?
used (sic) in brushing
that gun?
A Inday's weapon.10
A His left hand.
The testimonies aforequoted reveal an inconsistency on the
matter of the gun for which appellant and the victim
Q When Gerardo Sazon
supposedly grappled. While appellant claimed that the
brushed aside the gun
victim's weapon fell to the ground, witness Randera stated
pointed to him, what
that appellant and the victim still grappled for the latter's
else if any did he do?
gun. The latter statement is itself difficult to imagine since
appellant at that precise moment was also allegedly
A Insik also drew a gun holding with his right hand the gun which he used in
and shot Inday, shooting Longno.

COURT: (To the witness) It is necessary to stress that such inconsistency cannot be
considered a minor detail since the homogeneity of the
answers to the inquiry could very well have established the
Q What hand?
existence of not only a single gun. Had this prevarication
not been exposed, said testimonies could have bolstered
A Right hand. He drew a the defense theory that the victim himself carried a gun
gun with his right hand which he used to assault the appellant and thus establish
and shot Inday. the element of unlawful aggression contrived by the
defense.
xxx xxx xxx
Furthermore, the credibility of witness Randera is shattered
by this finding of the trial court which is sustained by the
ATTY. SORONGON (To
the witness) evidence:

The testimony of security guard Jose


Q You said that there
Randera deserves scant consideration not
was a brushing, who
only because he admitted that he was one
was brushing aside and
of those threatened by the deceased
who was brushed aside?
Wilfredo Longno but also because he
wilfully falsified the truth when he
WITNESS JOSE testified that the deceased was shot and
RANDERA: hit by the accused on the body and that
he saw blood come out just below the
Q Inday parried right breast of the deceased. The physical
Cornelio Artejos (sic). evidence in this case showed that there
was no wound on the right breast of the
deceased nor on any part of his body. The
COURT: (To the witness) gunshot wound sustained by the
deceased was only on his left forearm.
Q And, what happened Considering that he testified that there
next? were no other persons there during the
incident except the accused, the deceased
and Cornelio Altejos when the
Cornelio Artejos (sic) overwhelming weight of evidence is that
pulled out a knife and there were a lot of other people during
stabbed Inday. the incident (this) showed that this
witness had small regard for the truth. 11
Q This happened when
Inday was already hit by Coming back to appellant's representations in court, his
Sazon? vacillation as to what he allegedly did after Altejos stabbed
the victim is another instance which renders his version
A Yes, sir. highly suspect. While stating on direct examination that he
ran to the main road, 12 he claimed on cross-examination
that he only walked a short distance and then went to the
hospital upon seeing that his hand was wounded. 13 The
latter statement is itself inconsistent with his earlier your possession
declaration during the same proceeding that he was whether it is the same?
brought by a policeman to the hospital. 14 This irresolution
on the part of the appellant was obviously to avoid any
A The same.
imputation of guilt against him arising from his flight. 15

xxx xxx xxx


At any rate, unlawful aggression on the part of the victim is
further negated by the physical evidence in the case. Again,
we quote the trial court with approval: Q This report says
specimen submitted,
one pair of paraffin
The testimony of the accused Gerardo
casts taken from the left
Sazon that the deceased was armed with a
and right hands of the
gun and fired at him is not borne out by
cadaver of one Wilfredo
the physical evidence in this case. The
Longno, one piece of
paraffin test conducted on the cadaver of
paraffin cast taken from
the deceased showed that the hands of
left forearm of same
the deceased were negative for
subject and one piece
gunpowder residues indicating that he
paraffin last taken from
did not fire a gun during the incident.
the left side of the
The other parts of his body like his
abdomen. Purpose of
forearm and his abdomen bore strong
laboratory examination:
traces of gunpowder residues because of
to determine the
the burst of the gun of the accused. The
presence of gunpowder
court is convinced beyond reasonable
residues (nitrates) on
doubt that there was only one gun during
the above-mentioned
the incident and that the gun belonged to
specimens. Findings,
and/or was used by the accused Gerardo
cast from hands-
Sazon. That a part of one of his fingers
negative for the
was blown off at very close range,
presence of gunpowder
according to Dr. Ely Canja strongly
residues (nitrates). Cast
indicated that the accused accidentally
from forearm-positive
hit his finger when he and the deceased
for the presence of
grappled for the possession of the gun. 16
gunpowder residues
(nitrates) in the 1 1/2
In contrast, appellant was found positive for the presence in, 2 1/2 in, 3 in, and 4
of gunpowder residues (nitrates). While the presence or in radius. Cast from the
absence of nitrates cannot indeed be considered conclusive left side of the
proof that one has or has not fired a gun, the following abdomen-positive for
testimony on direct examination by prosecution witness the presence of
Zenaida Sinfuego a forensic chemist whose expertise on the gunpowder residues
matter was sufficiently established, yields this verification: (nitrates) in the center
and in the 1 and 2 in
radius. In the layman's
Atty. E. Original:
language Mrs. Sinfuego,
will you please explain
Q Now, have you to the Honorable Court
conducted also a these findings 1, 2 and
paraffin examination on 3?
the person of Wilfredo
Longno?
A Casts from the hands,
negative for the
COURT: presence of gunpowder
residues that means
that, no blue specks
Q On the cadaver?
were found in the hands
of the cadaver.
Atty. E. Original:
COURT:
Q On the cadaver?
Q Before we go on, what
A Yes, Sir. is the implication when
the finding is negative?
Q Have you brought
with you the result of A Probably, the subject
that examination? never fired a gun.

A Yes, Sir. Q Within what time-


span?
Q Now I have here a
carbon original of A The gunpowder will
Chemistry Report No. C- stay only within three
200-83, result of the days.
paraffin test on the
cadaver of Wilfredo
Q When was this
Longno, please compare
examination conducted?
this carbon original to
the original copy in
A Last September Q In what instance?
18,1983.
A For example, if he is
Q Now before we go on, near to the person firing
on that Chemistry a gun it is possible that
Report which has been it was carried by the
marked as Exhibit 'D' wind.
regarding the paraffin
test conducted on the
Q So that is the only
right hand of the
case wherein you find
accused Gerardo Sazon,
nitrates on the person
your finding there
who has not fired a
states, positive for
gun?
gunpowder residues,
what is the implication?
A Also from the
fertilizer.
A The implication states
positive, that Sazon
have (sic) fired a gun. Q You mean, a person
handling fertilizers
could also be positive
Q Within what time-
for nitrates?
span?

A Yes, Sir but we have


A Within three days.
to consider also the
time of reaction, from
Q Within three days? contaminance (sic) for
the nitrates will take
effect between two to
A Within three days.
three minutes.

Q From the
COURT:
examination?

Q Can you determine on


A Three days from the
your examination
subject firing of a gun.
whether the nitrates
found was (sic) the
Q And when was the nitrates left by
examination conducted? gunpowder residues or
by fertilizer can you
distinguish that?
A Last September
19,1983, Your Honor.
A Yes, Sir.
Q September?
Q And this (sic) nitrates
found on the hands of
A Nineteen.
the accused, could you
determine where did it
Q So he could have fired (sic) come from?
a gun on September
17,1983?
A Gunpowder
residues. 18

A I think that depends,


Your Honor on the
Parenthetically, it is true that the bad moral character of
requesting party.
the offended party may be proven in evidence to establish
in any reasonable degree the probability of the offense
Q I am asking you if it charged, 19 e.g., the quarrelsome nature of the victim may
was possible that he tend to establish that he started the unlawful aggression.
fired a gun which left Nonetheless, such evidence, seeking to establish as it does
the powder burns, was only a probability, cannot prevail over facts sufficiently
it possible that he fired proven by the prosecution during the trial belying such
a gun on September 17? aggression. These observations find application in the
instant case where the defense presented and now argue on
A Yes, Your Honor. 17 character evidence consisting of criminal charges involving
minor offenses which had been filed against the deceased,
but not one of which resulted in conviction and were in
On cross-examination, Sinfuego further testified as follows: fact dismissed except for one case which was sent to the
archives. 20
Q Is it possible for a
person who has not Obviously, whether or not appellant acted in self-defense is
fired a firearm and essentially a question of fact. Being so and in the absence
could be (sic) positive of any showing that the Court a quo failed to appreciate
for nitrates? facts or circumstances of weight and substance that would
have altered its conclusion, the court below, having seen
A Yes, Sir. and heard the witnesses during the trial, is in a better
position to evaluate their testimonies. No compelling
reason, therefore, lies for this Court to disturb the trial agreement to commit the crime is not absolutely essential
court's finding that appellant did not act in self-defense. 21 to establish a conspiracy. It is sufficient that the accused
be shown to have acted in concert pursuant to the same
objective, 27 as such circumstance is invariably indicative of
The Court, however, holds that appellant, albeit guilty, can
a conspiratorial agreement.
only be convicted of homicide and not murder. The trial
court correctly held that the killing was not accompanied
by treachery. It, however, ruled that there was evident It bears mention, at this point, that while we have ruled out
premeditation on the part of appellant. We find the records evident premeditation in the case, this does not negate the
sorely wanting in evidence to support the latter conclusion. existence of a conspiracy. True, conspiracy generally
involves evident premeditation, but this circumstance
requires for its raison d' etre a sufficient time in a juridical
The fact that appellant told the deceased that he would kill
sense for the accused to meditate and reflect on the
him and that two days later, after the deceased passed by
consequences of his intended action. Such time element is
the store where appellant and Altejos were drinking
not an indispensable requirement for a conspiracy to
softdrinks the latter followed the former and inflicted the
exist. 28 Consequently, we find that there was a conspiracy
fatal blows, cannot adequately sustain a conclusion of
between appellant and Altejos although, for lack of
premeditated killing.
conclusive showing, we cannot consider evident
premeditation against appellant.
To justify its attendance, the prosecution must prove (1)
the time when the offender determined to commit the
The rule is that where a conspiracy is proven, a showing as
crime, (2) an act manifestly indicating that the culprit has
to who inflicted the fatal wound is not required to sustain a
clung to his determination, and (3) a sufficient lapse of
conviction. 29 The act of one in killing the victim becomes
time between the determination and the execution to allow
the act of all the accused. Insofar as Cornelio Altejos is
him to reflect upon the consequences of his act. 22
concerned, however, the trial court never acquired
jurisdiction over him and he can neither be convicted nor
In the case at bar, the first and second elements are exculpated herein. References in this judgment to him are,
lacking. The angry outburst of appellant in that incident of therefore, obiter and with no binding effect on him. 30
September 15, 1983, warning the victim that the former
would kill him, does not convince us that, under the
WHEREFORE, the judgment of the trial court is MODIFIED.
circumstances therein, appellant as of that time had
Accused-appellant Gerardo Sazon is declared GUILTY
already decided to kill the victim. A homicidal
beyond reasonable doubt of the crime of homicide and is
premeditation is studiedly conceived and not impulsively
hereby sentenced to suffer the indeterminate penalty of
adopted just like that and, worse, publicly announced. It
eight (8) years and one (1) day of prision mayor to fourteen
was more of a spontaneous expression of resentment or
(14) years, eight (8) months and one (1) day of reclusion
bravado on the part of appellant.
temporal.

Again, the circumstance that appellant and Altejos were by


The award by the lower court of the items of civil liability
chance at the store when the victim passed by cannot be
to be paid by accused-appellant to the heirs of the
taken as manifestly indicating that appellant had clung to
deceased is hereby MODIFIED by disallowing the grant of
his determination to kill the victim. No evidence was
attorney's fees for lack of basis, and increasing the death
presented to show that appellant purposely waited there
indemnity to P50,000.00 in accordance with the policy
for the deceased. Nor was there any showing that the
adopted by the Court en banc on August 30,1990.
deceased frequently passed by the same route as to
warrant and explain appellant's waiting for the former at
that place. Indeed, that the meeting may have been purely EN BANC
accidental is not a remote possibility. We are more inclined
to believe that it was the belligerent and defiant demeanor
G.R. No. L-25913 February 29, 1969
of the victim when confronted by appellant near the public
faucet that precipitated assault.
HEIRS OF RAYMUNDO CASTRO, petitioners,
vs.
Under such considerations and there being no other
APOLONIO BUSTOS, respondent.
evidence to prove that the death of the victim was the
result of meditation, calculation or reflection, evident
premeditation cannot be appreciated to qualify the killing Appeal from the Court of Appeals.
to murder. 23The circumstances qualifying or aggravating
the act must be proved in an evident and incontestable
Respondent Apolonio Bustos was charged in the Court of
manner. They must be proved as conclusively as the acts
First Instance of Pampanga on October 26, 1962 with the
constituting the offense.24 Thus, for the same reason, the
crime of murder for the killing of Raymundo Castro whose
aggravating circumstance of abuse of superior strength
heirs are now the petitioners. The trial court found Bustos
cannot be appreciated in this case. Superior strength may
guilty only of homicide and, crediting him with two
aggravate or qualify a crime, only if it is clearly shown that
mitigating circumstances, namely, passion or obfuscation
there was deliberate intent to take advantage of it. 25 In the
and voluntary surrender, sentenced him to an
absence of any evidence to show that the accused
indeterminate prison term of 2 years, 4 months and 1 day
purposely sought to use their superior strength to their
of prision correccional, as minimum, to 8 years and 1 day
advantage in the present case, a finding to that effect by
of prision mayor, as maximum, and to indemnify the
the trial court cannot be sustained.
petitioners, who were represented in the case by a private
prosecutor, in the sum of six thousand pesos (P6,000)
Finally, the fact that appellant did not inflict the mortal "without prejudice to whatever the accused (respondent) is
wound upon the deceased is of no moment, since the entitled from the Government Service Insurance System
existence of conspiracy was satisfactorily shown by the (GSIS) for his services of around twenty-six (26) years as a
evidence. The coordinated acts of appellant and Altejos of public school teacher, prior to October 20, 1962." Both
immediately following the victim and jointly confronting respondent and petitioners appealed to the Court of
him thereafter reveal a concordance and unity of thought Appeals, respondent asking that appellate, court acquit him
which resulted in the encounter. The circumstances that and petitioners praying, on the other hand, that respondent
after the accused shot the victim in the forearm and, while be convicted of murder, that the portion regarding what
he and the victim were grappling for appellant's gun, said respondent will receive from the GSIS be deleted and
Altejos stabbed the victim to death, indicate closeness and that he be ordered to pay petitioners "the aggregate sum of
coordination of their action geared towards a common P50,764.00 as indemnity and actual, moral, temperate and
purpose, that is, to kill the victim. 26 Proof of a previous exemplary damages." For the purposes of their appeal,
petitioners even filed unnecessarily a printed record on Coming now to the damages asked by the heirs of
appeal. On October 18, 1965, the Court of Appeals the deceased: Aside from the P6,000.00 indemnity
rendered judgment modifying that of the trial court insofar awarded by the trial court which we uphold, we
as it concerned (1) the amount of damages to be awarded feel justified, in the exercise of our discretion, to
petitioners thus: award to the heirs of the deceased moral damages
in the amount of P6,000 plus P13,380.00 to
compensate for the loss of earning of the decedent
... Aside from the P6,000 indemnity awarded by
at the annual salary of P2,676.00 (Exh. V; p. 42
the trial court, which we uphold, we feel justified,
t.s.n. Vergara).
in the exercise of our discretion, to award to the
heirs of the deceased moral damages in the
amount of P6,000 plus P13,380.00 to compensate WHEREFORE, the appealed judgment is modified as
for the loss of earning of the decedent at the above indicated in so far as it concerns the
annual salary of P2,676.00 .... amount of indemnity and damages to be awarded
to the heirs of the deceased, and the mitigating
circumstance of vindication of a grave offense
and (2) the mitigating circumstance of "obfuscation",
which takes the place of the circumstance of
appreciated as such by the trial court, which was changed
obfuscation appreciated by the trial court; and
to "vindication of a grave offense", but affirming it in all
affirmed in all other respects. Costs against the
other respects. Upon motion, however, of respondent for
appellant.
the reconsideration of said decision, reiterating his plea for
acquittal, or, in the alternative, praying for the elimination
of the award of moral and compensatory damages, the As can be seen, no legal or factual basis is stated therein
Court of Appeals promulgated on November 13, 1965, an for the award of indemnity and damages to petitioners;
amended decision, the pertinent portions of which are: worse, the impression is given that the said award is purely
a matter of discretion on the part of the court. Clearly, this
is not in accordance with the law. Indeed, it must have
The arguments interposed by the appellant in his
been this failure to refer to the pertinent legal provisions
Motion for consideration to support the complete
which induced the appellate court, at the mere invocation
reversal of the judgment appealed from, have
by respondent of Art. 2204 of the Civil Code, to commit the
been considered and passed upon in our decision,
error of readily eliminating in the amended decision the
and we see no reason to alter the same in so far as
items on moral damages and compensation for loss of
the appellant's guilt of the crime is concerned. On
earning of the decedent which its original decision had
the other hand, we agree with the appellant that in
correctly contained. Having held that it had discretion in
the interest of justice and equity and in view of
the premises, the court easily yielded to the argument that
the presence of two mitigating circumstances,
simply because it had credited the respondent with two
without any aggravating one to offset them, the
mitigating circumstances, it was already justified in
award of moral and compensatory damages should
eliminating the items of damages already adverted to,
be eliminated.
presumably having in mind said Art. 2204 which provides
that:
WHEREFORE, the decision promulgated October
18, 1965, is hereby amended by eliminating
In crimes, the damages to be adjudicated may be
therefrom the award of P6,000.00 representing
respectively increased or lessened according to
moral damages, and of P13,380.00 representing
the aggravating or mitigating circumstances.
the decedent's loss of earnings.

Of course, this was clear error, inasmuch as construed


From this amended decision, only petitioners have
literally or otherwise, the quoted provision does not
appealed to Us. The prayer in their petition for certiorari
warrant a complete deletion of said items of damages. In
asks for nothing more than that the amended decision of
any event the court evidently failed to take into account
the Court of Appeals be revoked and reversed, and its
that several other provisions can come into play
original decision be affirmed in toto insofar as the award of
considering the circumstances in this case.
indemnity and damages is concerned. Since We find the
grounds of the appeal meritorious, We grant fully the
prayer in the petition. When the commission of a crime results in death, the civil
obligations arising therefrom are governed by the penal
laws, "... subject to the provisions of Art. 2177, and of the
This case affords this Court as appropriate an opportunity,
pertinent provisions of Chapter 2, Preliminary Title on
as any other, to restate, in a more comprehensive way, the
Human Relations, and of Title XVIII of this Book (Book IV)
law regarding the items of damages that are recoverable in
regulating damages." (Art. 1161, Civil Code)
cases of death caused by a crime, whether the claim
therefor is made in the criminal proceedings itself or in a
separate civil action. In the instant case, recovery of such Thus, "every person criminally liable for a felony is also
damages is being sought in the criminal proceedings but civily liable." (Art. 100, Revised Penal Code). This civil
even if it were claimed otherwise, the indemnity and liability, in case the felony involves death, includes
damages would be the same, for generally, the items of indemnification for consequential damages (Art. 104, id.)
damages are identical in both procedures, except with and said consequential damages in turn include "... those
respect to attorney's fees and expenses of litigation which suffered by his family or by a third person by reason of the
can be awarded only when a separate civil action is crime." (Art. 107, id.) Since these provisions are subject,
instituted. (Art. 2208, Civil Code) With the clarifications We however, as above indicated, to certain provisions of the
are making herein, at least the writer of this opinion Civil Code, We will now turn to said provisions.
expects that litigations regarding the aspects of the law
herein passed upon may be minimized.
The general rule in the Civil Code is that:

As a start, it is to be noted that in the matter of damages,


In crimes and quasi-delicts, the defendant shall be
the original decision of the Court of Appeals, while correct
liable for all damages which are the natural and
in making a particularization in the award of indemnity and
probable consequences of the act or omission
damages, nonetheless, still failed to comply strictly with
complained of. It is not necessary that such
the constitutional requirement that all decisions of courts
damages have been foreseen or could have
of record must state both the facts and the law on which
reasonably been foreseen by the defendant. (Art.
they are based. (Sec. 12, Art. VIII, Constitution) In said
2202)
original decision, the Court of Appeals held:
When, however, the crime committed involves death, there 2. As indemnity for loss of earning capacity of the
is Art. 2206 which provides thus: deceased — an amount to be fixed by the Court
according to the circumstances of the deceased
related to his actual income at the time of death
The amount of damages for death caused by a
and his probable life expectancy, the said
crime or quasi-delict shall be at least three
indemnity to be assessed and awarded by the
thousand pesos, even though there may have been
court as a matter of duty, unless the deceased had
mitigating circumstances. In addition:
no earning capacity at said time on account of
permanent disability not caused by the accused. If
(1) The defendant shall be liable for the loss of the the deceased was obliged to give support, under
earning capacity of the deceased, and the Art. 291, Civil Code, the recipient who is not an
indemnity shall be paid to the heirs of the latter; heir, may demand support from the accused for
such indemnity shall in every case be assessed not more than five years, the exact duration to be
and awarded by the court, unless the deceased on fixed by the court.
account of permanent physical disability not
caused by the defendant, had no earning capacity
3. As moral damages for mental anguish, — an
at the time of his death;
amount to be fixed by the court. This may be
recovered even by the illegitimate descendants
(2) If the deceased was obliged to give support and ascendants of the deceased.
according to the provisions of article 291, the
recipient who is not an heir called to the
4. As exemplary damages, when the crime is
decedent's inheritance by law of testate or
attended by one or more aggravating
intestate succession may demand support from
circumstances, — an amount to be fixed in the
the person causing the death, for a period not
discretion of the court, the same to be considered
exceeding five years, the exact duration to be fixed
separate from fines.
by the court;

5. As attorney's fees and expresses of litigation, —


(3) The spouse, legitimate and illegitimate
the actual amount thereof, (but only when a
descendants and ascendants of the deceased may
separate civil action to recover civil liability has
demand moral damages for mental anguish by
been filed or when exemplary damages are
reason of the death of the deceased.
awarded).

The amount of P3,000 referred to in the above article has


6. Interests in the proper cases.
already been increased by this Court first, to P6,000.00
in People v. Amansec, 80 Phil. 426, and lately to P12,000.00
in the case of People v. Pantoja, G. R. No. L-18793, 7. It must be emphasized that the indemnities for
promulgated October 11, 1968, and it must be stressed that loss of earning capacity of the deceased and for
this amount, as well as the amount of moral damages, may moral damages are recoverable separately from
be adjudicated even without proof of pecuniary loss, the and in addition to the fixed sum of P12,000.00
assessment of the moral damages being "left to the corresponding to the indemnity for the sole fact of
discretion of the court, according to the circumstances of death, and that these damages may, however, be
each case." (Art. 2216) respectively increased or lessened according to
the mitigating or aggravating circumstances,
except items 1 and 4 above, for obvious reasons.
Exemplary damages may also be imposed as a part of this
civil liability when the crime has been committed with one
or more aggravating circumstances, such damages being In the light of the foregoing discussion, it is clear that the
"separate and distinct from fines and shall be paid to the Court of Appeals erred in eliminating in its amended
offended party," (Art. 2230). Exemplary damages cannot decision, the items of moral damages and compensation
however be recovered as a matter of right; the court will for loss of earning capacity of the deceased. Indeed, as to
decide whether or not they should be given. (Art. 2233) the award of moral damages in case of death, this Court
has already held in Mercado v. Lira, etc., G. R. Nos. L-
13328-29, September 29, 1961, that once the heirs of the
In any event, save as expressly provided in connection with
deceased claim moral damages and are able to prove they
the indemnity for the sole fact of death (1st par., Art. 2206)
are entitled thereto, it becomes the duty of the court to
and in cases wherein exemplary damages are awarded
make the award. We held:
precisely because of the attendance of aggravating
circumstances, (Art. 2230) "... damages to be adjudicated
may be respectively increased or lessened according to the Art. 2206 states further that "In addition" to the
aggravating or mitigating circumstances," (Art. 2204) but amount of at least P3,000.00 to be awarded for the
"the party suffering the loss or injury must exercise the death of a passenger, the spouse, legitimate and
diligence of a good father of a family to minimize the illegitimate descendants and ascendants of the
damages resulting from the act or omisson in question." deceased may demand moral damages as a
(Art. 2203) "Interest as a part of the damages, may, in a consequence of the death of their deceased kin,
proper case, be adjudicated in the discretion of the Court." which simply means that once the above-
(Art. 2211) As to attorneys' fees and expenses of litigation, mentioned heirs of the deceased claim
the same may be recovered only when exemplary damages compensation for moral damages and are able to
have been granted (Art. 2208, par. 1) or, as We have already prove that they are entitled to such award, it
stated, when there is a separate civil action. becomes the duty of the court to award moral
damages to the claimant in an amount
commensurate with the mental anguish suffered
Stated differently, when death occurs as a result of a crime,
by them.
the heirs of the deceased are entitled to the following items
of damages:
This doctrine was reiterated in Maranan v. Perez, G. R. No.
L-22272, June 26, 1967:
1. As indemnity for the death of the victim of the
offense — P12,000.00, without the need of any
evidence or proof of damages, and even though In connection with the award of damages, the
there may have been mitigating circumstances court a quo granted only P3,000 to plaintiff-
attending the commission of the offense. appellant. This is the minimum compensatory
damages amount recoverable under Art. 1764 in
connection with Art. 2206 of the Civil Code when a repeatedly asserted in the briefs of petitioners in the Court
breach of contract results in the passenger's of Appeals and in this Court. No denial was ever made by
death. As has been the policy followed by this the respondent. When respondent moved for the
Court, this minimal award should be increased to reconsideration of the original decision of the Court of
P6,000 .... Still, Art. 2206 and 1764 award moral Appeals, (Annex E of Petition for Certiorari) he only argued
damages in addition to compensatory damages, to that in view of the mitigating circumstances credited to
the parents of the passenger killed to compensate him by said court, petitioners were not entitled to moral
for the mental anguish they suffered. A claim damages and to indemnity for loss of earning capacity of
therefor, having been properly made, it becomes the deceased; the amounts fixed therefor by said court —
the court's duty to award moral damages. Plaintiff he never questioned. When petitioners filed their motion
demands P5,000 as moral damages; however, in for reconsideration of the amended decision of the Court of
the circumstances, We consider P3,000 moral Appeals, these facts (relationship, earnings, etc.) were
damages, in addition to the P6,000 damages reiterated. (Annex G, id.) Respondent did not file any
aforestated, as sufficient. Interest upon such answer to said motion despite the resolution requiring him
damages are also due to plaintiff-appellant. to do so. (Par. 12, Petition for Certiorari) Neither has
respondent filed any brief in the present instance,
notwithstanding repeated requests on his part for
Likewise, in the matter of the compensatory damages for
extension to file the same, which, incidentally, were all
the loss of earning capacity of the deceased, We also held
granted. Under these circumstances, We feel justified in
in the case of Daniel Bulante v. Chu Liante, G.R. Nos. L-
brushing aside strict technicalities of procedure in order to
21583 and L-21591-92, May 20, 1968 that:
accomplish substantial justice more expeditiously. Anyway,
as We said at the outset, petitioners are asking Us, in the
The next item objected to refers to the damages prayer of their petition for certiorari, for nothing more
awarded to the heirs of the deceased passengers than to affirm "in toto" the original decision of the Court of
for loss of earning capacity, separately from the Appeals, and in their lone assignment of error in the
indemnities by reason of death. The ground for present instance, their only claim is that "the Court of
the objection is that loss of earning capacity was Appeals erred when it issued the amended decision
not specifically pleaded or claimed in the eliminating the award of P6,000 moral damages and the
complaint. This item, however, may be considered award of P13,380.00 loss of earnings of the deceased
included in the prayer for "actual damages" and Raymundo Castro." In these circumstances, even if We
for other "just and equitable reliefs", especially if should award the amounts of damages just mentioned,
taken in the light of Art. 2206, in connection with inspite of the absence of the pertinent findings of fact by
Art. 1764, of the Civil Code, which allows, in the Court of Appeals, We would not have to reach beyond
addition to an indemnity of at least P3,000 by amounts that are undisputed by the respondent.
reason of death, recovery for loss of earning
capacity on the part of the deceased, the same to
We, therefore, overrule the prayer for additional damages
be paid to his heirs "in every case ... unless the
in petitioners' brief and We hold that, on the basis of the
deceased on account of permanent physical
facts not questioned by respondent, they are entitled only
disability not caused by the defendant, had no
to the P6,000.00 as moral damages and the P13,380.00 as
earning capacity at the time of his death."
compensatory damages for the loss of earning capacity of
the deceased awarded in the original decision of the Court
To be sure, these cases of Mercado v. Lira, Maranan v. of Appeals in addition, of course, to the indemnity for
Perez and Bulante v. Chu Liante from which We have death fixed also by said court at P6,000.00. This amount of
quoted, were actions based on contracts of common P6,000.00 We cannot increase to P12,000.00, as allowed
carriers. But the above-mentioned doctrines are equally in People v. Pantoja, supra, and the subsequent cases,
applicable to civil liability ex delicto because, after all, Art. (People v. Mongaya G. R. No. L-23708, October 31, 1968,
2206 of the Civil Code which was applied in said cases is and People v. Ramos, G. R. No. L-19143, November 29,
precisely the provision pertinent to liability arising from 1968) because in the instant suit, neither party has
crimes (and quasi-delicts). No doubt, said Article must have appealed in relation thereto. This case is now before Us on
been relied upon by the court in the above cases only appeal by the offended party only as to specific portions of
because Art. 1764 of the Civil Code provides that said "Art. the civil indemnity to be paid by the respondent. It would
2206 shall also apply to the death of a passenger caused by have been different if the whole criminal case were up for
the breach of contract of a common carrier." Accordingly, our review because then, even without any appeal on the
the interpretation given to said article in those cases are part of the offended party, We could have still increased
applicable to the case at bar. In other words, this must be the said liability of the accused, here-in respondent. (See
so because under the Civil Code, the same rules on Mercado v. Lira, supra.)
damages are generally to be observed, whether death
results from a crime or a quasi-delict or a breach of the
At this juncture, for the guidance of parties similarly
contract of common carriage.
situated as petitioners herein, and so that there may be no
useless expenses in appeals by offended parties in regard
As to the amount of the indemnity for moral damages and to the civil aspect of a criminal case when no separate civil
loss of earning capacity of the deceased in the present action has been filed by them, it should be made clear that
case, the original decision of the Court of Appeals awarding when there is no such separate civil action and the claim
them, does not afford sufficient basis for Us to increase the for civil indemnity is joined with the criminal case, no
amounts fixed by said court, as prayed for by appellants. record on appeal, whether printed, typewritten or
As has already been stated, the said decision failed to mimeographed, is necessary, except perhaps when formal
follow the Constitution, not only in not stating the law on pleading raising complicated questions are filed in
which it is based but also in not making the necessary connection therewith, and still, this would be purely
findings of fact on which it based its discretion in fixing optional on the appellant because anyway the whole
the respective amounts it awarded for moral and original record of the case is elevated in appeals in criminal
compensatory damages. Legally, therefore, We can, if We cases. It is already settled that appeals relating to the civil
wish to, return this case to that court for it to supply these aspects of a criminal case should follow the procedure for
constitutional omissions. We opt however, to save time and appeal required by rules of criminal procedure. (People vs.
further difficulties for and damages to, the petitioners. Lorredo, 50 Phil. 209, 220-221; People v. ViIlanueva, G.R.
Extant in the records before Us is the fact that the No. L-18769, May 27, 1966)lawphi1.nêt
respondent has never disputed that petitioners are the
widow and seven children of the deceased, three of whom
WHEREFORE, the amended decision of the Court of Appeals
were still minors at the time of his death, nor that the said
is modified as hereinabove indicated, in so far as the civil
deceased was a public school teacher, 56 years old, and
liability of respondent is concerned, with costs against him
earning P2,276.00 a year. These facts appear to have been
in this instance.
EN BANC No. L-14849, but because questions of fact were involved,
and the amount involved was less than P200,000, the case
was certified, on August 25, 1960, to the Court of Appeals
G.R. No. L-22183 August 30, 1968
and docketed in the latter court as Case No. 28608-R.

THE RECEIVER FOR NORTH NEGROS SUGAR COMPANY,


The Court of Appeals, on October 14, 1963, reversed the
INC., petitioner,
judgment of the lower court and held the North Negros
vs.
Sugar Company, Inc. liable for the death of Cesar V.
PEDRO V. YBAÑEZ ET AL., respondents.
Ybañez, ordering it to pay plaintiff-appellant Pedro V.
Ybañez damages consisting of P9,600.00 as compensatory
A petition for review of the decision of the Court of Appeal, damages for lost earnings of the deceased; P6,000.00 for
rendered on October 14, 1963, in CA-G.R. No. 28608-R, death indemnity; P1,000.00 for funeral expenses; P5,000.00
entitled "Pedro V. Ybañez, and Rosario V. Ybañez, "as moral damages for the mental anguish suffered by the
represented by her legal guardian, Pedro V. Ybañez, heir"; P5,000.00 "for attorney's fees, considering the years
plaintiffs-appellants, versus North Negros Sugar Company, and extensive work — the protracted litigation had
Inc., Primitivo Gustilo, and Loreto Perez, defendants- taken;"2 and costs. A motion for reconsideration filed by
appellees." defendant North Negros Sugar Company, Inc., upon the
grounds, among others, that the awards of moral damages
and attorney's fees were not warranted under the law and
Plaintiffs-appellants Pedro V. Ybañez and Rosario V.
the circumstances attending the litigation, was denied.
Ybañez, named respondents in the instant petition,1 are the
Hence this petition for review.
brother and sister, respectively, and immediate heirs of
Cesar V. Ybañez who was one of two persons who died as a
result of the collision between the car, where said Cesar V. In this appeal, or petition for review petitioner limits itself
Ybañez was riding and being driven by Gil Dominguez, and to questioning the correctness of the decision of the Court
train No. 5, owned by the North Negros Sugar Company, of Appeals in so far as it awards moral damages and
Inc., in the evening of August 31, 1937 in the railroad attorney's fees. In its brief, petitioner contents that the
intersection at Hacienda Santa Teresa, Manapla, Occidental Court of Appeals erred:
Negros, while the car was on its way from Bacolod City to
Cadiz. Criminal prosecution for double homicide and
1. "in ordering petitioner to pay P5,000 "as moral damages
serious physical injuries through reckless imprudence was
for mental anguish suffered" by plaintiffs who were brother
instituted against Gil Dominguez, driver of the car, and
and sister of the deceased"; and
Primitivo Gustilo and Loreto Perez, operator and brakeman,
respectively, of the locomotive. The offended parties
reserved their right to institute separate civil actions for 2. "in awarding attorney's fees in the sum of P5,000 to the
damages. Primitivo Gustilo and Loreto Perez were tried heirs of the deceased."3
together and acquitted of the crime charged. Gil
Dominguez was also acquitted in a separate trial.
1. In support of the first assignment of error, petitioner
cites paragraph 3 of Article 2206 of the new Civil Code,
Thereafter, a civil action based on culpa aquiliana was which provides that in case of death caused by a crime or
instituted, on May 15, 1940, in the Court of First Instance quasi-delict, only the spouse, legitimate and illegitimate
of Negros Occidental by Pedro V. Ybañez and Rosario V. descendants and ascendants of the deceased may demand
Ybañez against Primitivo Gustilo, Loreto Perez, and their moral damages for mental anguish by reason of the death
employer, North Negros Sugar Company, Inc., docketed as of the deceased. Petitioner urges that in the instant case
Civil Case No. 8367, seeking to recover damages for the the heirs of the deceased Cesar V. Ybañez, being his
death of the deceased. In their answer, defendants brother, Pedro V. Ybañez, and his sister, Rosario V. Ybañez
interposed as special defense the previous acquittal of (now deceased), are not among those entitled to moral
defendants Primitivo Gustilo and Loreto Perez in the damages; consequently, the award to them of moral
criminal case, and prayed for the dismissal of the damages was not authorized by law.
complaint.
Respondent Pedro V. Ybañez, on the contrary, contends
At the pre-trial, on August 5, 1940, the parties agreed to that the law applicable is in the old Civil Code, and not
reproduce in the civil case all the evidence submitted in the Article 2206 of the new Civil Code, because the accident
criminal case, as well as the decision in and the transcript that caused the death happened in 1937, and the case was
of the stenographic notes taken during the trial of, the filed in 1940. Said respondent maintains that the award of
criminal case. Defendants filed a motion for summary moral damages is authorized particularly under Articles
judgment, praying for the dismissal of the civil case. The 1902, 1903, 1103, 1104, 1106 and 1107 of the old Civil
trial court, without any further hearing, considered the Code, and as ruled by this Court in the decisions in Lilius
case submitted, and rendered a decision dismissing the vs. Manila Railroad;4 Gutierrez vs. Gutierrez;5 and Castro vs.
case. Appeal was taken by the plaintiffs to the Court of Acro Taxicab Inc.6 Moral damages, respondent urges, should
Appeals, but the appeal was certified to this Court on the be paid to the injured person; but if the injured person
ground that the appeal merely involved questions of law. died as a consequence of the culpable act and the victim
This Court, in G.R. No. L-6790, on March 28, 1955, reversed left no descendants or ascendants, the damages must be
the decision of the lower court and remanded the case for paid — taking into consideration the principles of the
further proceedings. general law on damages, of the law on succession, and the
fact that under the old Civil Code no specific persons are
indicated to be the only ones entitled to recover moral
During the pendency of the case in the lower court,
damages — to the heirs or next of kin of the victim.
plaintiff Rosario V. Ybañez died, leaving as her only heir,
Respondent further cites the rulings of this Court in the
co-plaintiff Pedro V. Ybañez, to continue the case. On the
cases of Bernal vs. House, et al.7; Astudillo vs. Manila Electric
other hand, the North Negros Sugar Company, Inc. was
Co.8; and Manzanares vs. Moreta9, wherein the fact of
dissolved and was accordingly substituted by its receiver
heirship, as viewed from the general principle of
Dr. Claudio R. Luzurriaga. One of the defendants, Loreto
succession of the deceased victim, was taken into
Perez, also died in the interim and the case against him was
consideration in determining who would be paid the
dismissed.
indemnity for damages.

After having received additional evidence, the Court of


In reply, petitioner points out that although the cases cited
First Instance of Negros Occidental rendered judgment, on
by respondent show that moral damages were awarded
July 23, 1958, dismissing the case anew. Appeal was taken
even before the new Civil Code took effect, in none of the
by plaintiff Pedro V. Ybañez to this Court, docketed as G.R.
cases cited, however, were moral damages awarded to a
brother or sister of the deceased, but only to either the We have not come across, and herein respondent has not
victim himself, the surviving spouses, the children or the cited, any case in this jurisdiction where a brother and/or
parents. sister of the victim of culpa aquiliana was awarded moral
damages. In our search for persuasive authority, however,
we came across decisions by the courts of France whose
To resolve the issue, we have to determine, what law is a
Civil Code, in its article 1383, provides substantially the
applicable — whether the provisions of the old Civil Code
same as article 1902 of the Civil Code of Spain, as follows:
or of the new Civil Code. We believe that the old Civil Code
is the law applicable to the case at bar, subject to such
modifications as are suggested, or are warranted, under the Cada uno es responsable del daño que ha causado
transitional provisions of the new Civil Code, as we may no solamente por su hecho, sino tambien por su
show at the later part of this opinion. This is so, because negligencia o por su imprudencia. (Ripert and
the acts and events that gave rise to the instant action took Boulanger, Tratado de Derecho Civil, Vol. V, 2nd
place in 1937, and the action was commenced in 1940. part, p. 50).
Article 2253 of the new Civil Code, provides:
On the basis of the above-quoted article, in France, moral
The Civil Code of 1889 and other previous laws damages for mental anguish (sentimientos afectivos) have
shall govern rights originating, under said laws, been awarded not only to parents, children and spouse, of
from acts done or events which took place under the victim of culpa aquiliana but also to brothers and
their regime; even though this Code may regulate sisters, natural grandparents, and godchildren. 15
them in a different manner, or may not recognize
them . . . .
We thus see that a provision in the Civil Code of France
which is substantially similar to the provision of the Civil
The pertinent provisions of the old Civil Code are Articles Code of Spain, relating to culpa aquiliana is so applied by
1902 and 1903. The first article provides: the courts of France as to hold a person guilty of culpa
aquiliana liable for moral damages to the person injured,
or to his spouse, children, parents, brothers and sisters,
Art. 1902. Any person who by act or omission
and even to godchildren. If the provision of our old Civil
causes damage to another by his fault or
Code — which was itself the Civil Code of Spain of 1889 —
negligence shall be liable for the damage so done.
relating to culpa aquiliana were to be applied as it had
been applied in France, then the person guilty of culpa
and the second article in part, provides: aquiliana under our old Civil Code would be liable for
moral damages to the person injured, or to his spouse,
children, parents, brothers and sisters and even to his
Art. 1903. The obligation imposed by the next
godchildren. This would mean that under our old Civil
preceding article is enforcible not only for
Code the liability for moral damages for mental anguish
personal acts and omissions, but also for those of
due to culpa aquiliana was to more persons than what our
persons for whom another is responsible.
new Civil Code now provides in its Article 2206 which
limits the liability for moral damages to the spouse and
xxx xxx xxx legitimate and illegitimate descendants and ascendants of
the deceased. And so, under the new Civil Code, a less
severe sanction — at least as regards the persons entitled
Owners or directors of an establishment or
business are equally liable for any damages to moral damages — is provided for, than under the old
Civil Code.
caused by their employees while engaged in the
branch of the service in which employed, or on the
occasion of the performance of their duties. Article 2257 of the new Civil Code — one of the transitional
provisions — provides as follows:
This Court said: "Article 1902 of the Civil Code declares
that any person who by an act or omission, characterized Art. 2257. Provisions of this Code which attach a
by fault or negligence, causes damage to another shall be civil sanction or penalty or a deprivation of rights
liable for the damage done . . . a person is liable for to acts or omissions which were not penalized by
damage done to another by any culpable act; and by the former laws, are not applicable to those who,
culpable act is meant any act which is blameworthy when when said laws were in force, may have executed
judged by accepted legal standards. The idea thus the act or incurred in the omission forbidden or
expressed is undoubtedly broad enough to include any condemned by this Code.
rational conception of liability for the tortious acts likely to
be developed in any society." 10 The word "damage" in said
If the fault is also punished by the previous
article, comprehending as it does all that are embraced in
legislation, the less severe sanction shall be applied.
its meaning, includes any and all damages that a human
being may suffer in any and all the manifestations of his
life: physical or material, moral or psychological, mental or xxx xxx xxx
spiritual, financial, economic, social, political, and
religious. 11
(Emphasis supplied.)

It is particularly noticeable that Article 1902 stresses the


It may well be said that culpa aquiliana, or quasi-delict, is
passive subject of the obligation to pay damages caused by
punished both by the old Civil Code — the previous
his fault or negligence. The article does not limit or specify
legislation — and by the new Civil Code. But, as we have
the active subjects, much less the relation that must exist
pointed out, a less severe sanction, or penalty, for culpa
between the victim of the culpa aquiliana and the person
aquiliana is provided for in the new Civil Code. It follows,
who may recover damages, thus warranting the inference
therefore, that Article 2206 of the new Civil Code — which
that, in principle, anybody who suffers any damage
provides that only the spouse, legitimate and illegitimate
from culpa aquiliana whether a relative or not of the
descendants and ascendants may demand moral damages
victim, may recover damages from the person responsible
for mental anguish by reason of the death of the deceased
therefor. This Court had granted moral damages not only to
caused by quasi-delict — should be applied in the instant
the person who himself was injured, 12 but also to the
case. Hence, petitioner herein, who claims moral damages
legitimate children and heirs of the deceased. 13 Parents,
for the death of his brother Cesar V. Ybañez caused
even natural, have also been awarded damages for the
by quasi-delict, is not entitled to, and should not have been
death of their children. 14
awarded, moral damages, by the Court of Appeals. 16
2. Regarding the second error assigned, petitioner argues At common law, the successful party usually has
that the Court of Appeals had no special reason for no right to have the fees of his attorney, as such,
awarding attorney's fees because the petitioner had not taxed against his opponent (14 L. ed. 181). The
acted in gross and evident bad faith in resisting Court will not ordinarily allow counsel fees to the
respondent's claims for damages, and the claims of successful party. Each party to the action must
respondent herein could not be characterized as "plainly pay his own lawyer . . . . Counsel fees paid in prior
valid, just and demandable" claims as contemplated under action have been allowed . . . (where) the conduct
paragraph (5) of Article 2208 of the new Civil Code, of the party against whom they were allowed, so
considering that the two employees, for whose alleged directly and certainly caused the expenditure for
negligent acts herein petitioner is made to answer, were this purpose, that the loss of the amount so paid
acquitted in the criminal case, and the civil case for was easily within such causal relations to the
damages was dismissed by the trial court. defendant's wrong as to warrant the assessment of
the damages in compensation for it (Sears vs.
Inhabitants of Nahant, 102 N. E. 491.). Our rulings
Respondent, on the other hand, argues that the Court of
before the New Civil Code took effect (the present
Appeals gave as reason for the award of attorney's fees:
case having arisen before) have been as follows:
"considering the years and extensive work — the protracted
litigation had taken." Respondent also maintains that the
award must have been based by the Court of Appeals on "It is not sound public policy to place a
Article 2208 (11) and Article 2253 of the new Civil Code. penalty on the right to litigate. To compel
the defeated party to pay the fees of
counsel for his successful opponent
But petitioner urges that the issue is whether or not
would throw wide the door of temptation
attorney's fees might be recovered, and not the amount of
to the opposing party and his counsel to
attorney's fees in the determination of which the long years
swell the fees to undue proportions, and
of litigation given as reason by the Court of Appeals would
to apportion them arbitrarily between
be pertinent.
those pertaining properly to one branch
of the case from the other.
Respondent's argument that the award of attorney's fees
was justified under Article 2208 (11) of the new Civil Code
"This Court has already placed itself on
is untenable, because the instant case was filed on May 15,
record as favoring the view taken by
1940, or before the effectivity of the new Civil Code. This
those courts which hold that attorney's
Court, in the case of Bureau of Lands vs. Samia, et
fees are not a proper element of
al., 17 held:
damages." (Tan Ti vs. Alvear, 26 Phil. 566;
The Borden Co. vs. Doctors
That portion of the decision which awards P10,000 Pharmaceuticals, Inc., 90 Phil. 500).
to respondents as attorney's fees is untenable.
Although courts have, under paragraph (11) of
". . . Counsel fees, other than those fixed
Article 2208 of the Civil Code, authority to award
in the rules as costs, are not an element
attorney's fees whenever it may be "just and
of recoverable damages." (Jesswani vs.
equitable," said provision is inapplicable to the
Masaram Dialdas, G.R. No. L-4651, May
present case, the same having been instituted
12, 1952)."
before the effectivity of the said Code.

WHEREFORE, the decision of the Court of Appeals sought to


The refusal of herein petitioner to pay the damages asked,
be reviewed should be, as it is hereby, modified by
although the case was finally decided against it, cannot be
eliminating therefrom the award of P5,000.00 for moral
said to have been caused by bad faith. In the case of George
damages for mental anguish suffered by the heir, and the
Edward Koster Inc. vs. Zulueta, 18 this Court said:
award of P5,000.00 for attorney's fees. No pronouncement
as to costs. It is so ordered.

The factual and procedural antecedents of this instant


petition are as follows:
THIRD DIVISION

Candano Shipping is a domestic corporation engaged in the


G.R. No. 163212 March 13, 2007
business of coastwise trading within the Philippines.3On 7
March 1994, Melquiades Sugata-on was employed by
CANDANO SHIPPING LINES, INC., Petitioner, Candano Shipping as Third Marine Engineer on board its
vs. cargo vessel, M/V David, Jr., with the monthly salary of
FLORENTINA J. SUGATA-ON, Respondent. ₱7,800.00.4

DECISION On 25 March 1996, M/V David, Jr. left the port of Davao
City with its cargo and 20 crew members. The voyage was
initially uneventful until around seven o’clock in the
This is a Petition for Review on Certiorari under Rule 45 of
evening of 27 March 1996 when the vessel encountered
the Revised Rules of Court, seeking to reverse and set aside
rough seas and strong winds while traversing the waters of
the Court of Appeals Decision1 dated 23 May 2003 and its
Lianga Bay, Surigao del Sur, causing her to tilt at three
Resolution dated 1 April 2004, affirming with modification
degrees on its starboard side. Due to the violent waves
the Decision of the Regional Trial Court (RTC) of Manila,
which continuously hammered the tilting vessel, the
Branch 20, finding Candano Shipping Lines, Inc. (Candano
seawaters slowly swallowed up the main deck causing the
Shipping) liable for the death of Melquiades Sugata-on. The
tilting to worsen up to 30 degrees. In an effort to salvage
dispositive portion of the assailed decision of the appellate
the vessel, the ship captain changed its course from the
court reads:
north to the south but the tilting continued to grow to a
dangerously high level, rendering the vessel beyond
IN VIEW OF ALL THE FOREGOING, the appealed decision control. It was at this point when the ship captain ordered
is AFFIRMED, with the MODIFICATION that: (1) the the crew members to abandon the vessel. Despite the
awarded compensation for the death of Melquiades Sugata- efforts exerted by the crew members to save the vessel,
on is reduced to ₱608,400.00; and, (2) the award of moral M/V David, Jr. sank together with her cargo at around
and exemplary damages as well as attorney’s fees eleven o’clock in the evening at Bakulin Point, Lianga Bay,
is deleted. No pronouncement as to costs.2 Surigao del Sur. Among the 20 crew members, twelve
survived, one died and seven were missing. One of those
who were missing was Melquiades Sugata-on (Melquiades), monthly income benefit, plus ten percent thereof for each
the husband of herein respondent, Florentina Sugata-on, dependent child, but not exceeding five, beginning with the
(Florentina) as shown in the List of Surviving Crew of the youngest and without substitution, except as provided for
Ill-Fated David, Jr., prepared by Candano Shipping.5 in paragraph (j) of Article 167 hereof; Provided, however,
That the monthly income benefit shall be guaranteed for
five years: Provided, further, That if he has no primary
Upon learning of Melquiades’ fate, Florentina immediately
beneficiary, the System shall pay to his secondary
went to the office of Candano Shipping in Manila to claim
beneficiaries the monthly income benefit not to exceed
the death benefits of her husband but it refused to pay.6
sixty months; Provided, finally, That the minimum monthly
death benefit shall not be less that fifteen thousand pesos.
Such refusal prompted Florentina to institute on 31 January
1997, an action seeking indemnity for the death of her
In a Resolution16 issued on 1 April 2004, the Court of
husband against Candano Shipping before the RTC of
Appeals denied the Motion for Reconsideration filed by
Manila, Branch 20. She grounded her case on the provision
Candano Shipping for failure to offer any justifiable ground
of Article 17117 of the New Civil Code, which imposes upon
to modify, reverse or reconsider the questioned decision.
the employer liability for the death of his employee in the
course of employment, even if the death is caused by a
fortuitous event. Accordingly, Florentina prayed that Hence, this instant Petition for Review on Certiorari filed by
actual, moral and exemplary damages including attorney’s Candano Shipping raising the following issues:
fees, be awarded in her favor.8
WHETHER OR NOT THE FORMULA FOR FIXING THE
In its Answer,9 Candano Shipping countered that Florentina AMOUNT OF DEATH COMPENSATION IN ARTICLE
had no cause of action against it because the death of 194 OF THE LABOR CODE APPLIES IN DETERMINING
Melquiades was not yet an established fact since he was THE COMPENSATION CLAIMED BY THE HEIR OF
merely reported missing upon the sinking of M/V David, Jr. THE DECEASED EMPLOYEE AGAINST THE EMPLOYER
The filing of the case before the RTC therefore was UNDER ARTICLE 1711?
premature for she should have waited until the body of
Melquiades could be recovered or until the lapse of time
WHETHER OR NOT IT IS PERMITTED FOR THE
which would render the provision of Article 391 of the New
COURT OF APPEALS, ON ORDINARY APPEAL, TO
Civil Code10 on presumptive death operative.
APPLY ART. 194 OF THE LABOR CODE ON A CLAIM
FOR DEATH COMPENSATION OF AN EMPLOYEE
The RTC resolved the controversy in favor of Florentina AGAINST THE EMPLOYER FILED AND TRIED BEFORE
and ratiocinated that the provision of Article 391 of the THE REGULAR COURTS ON THE BASIS OF ARTICLE
New Civil Code on presumptive death had become 1711 OF THE CIVIL CODE AND THE DOCTRINE
operative since the period of four years had already ENUNCIATED IN THE VILLA REY TRANSIT CASE?
elapsed since Melquiades was reported missing upon the
sinking incident which occurred on 27 March 1996. In a
WHETHER OR NOT APPLICATION OF ARTICLE 194
Decision11promulgated on 15 February 2001, the RTC
OF THE LABOR CODE ON THE CLAIM FOR DEATH
ordered Candano Shipping to indemnify Florentina for the
COMPENSATION OF RESPONDENT OUSTS THE
death of her husband, in the following amounts:
REGULAR COURTS, INCLUDING THE COURT OF
APPEALS OF JURISDICTION OVER THE CASE?
WHEREFORE, premises considered, judgment is hereby
rendered ordering defendant Candano Shipping Lines, Inc.
IN THE EVENT THAT THE SUPREME COURT RULES
to indemnify plaintiff Forentina J. Sugata-on the amount of
THAT THE COURT OF APPEALS APPLICATION OF
₱988,400.00 as actual damages, ₱100,000.00 as moral
ARTICLE 194 OF THE LABOR CODE IN THIS CASE
damages ₱50,000.00 as exemplary damages and 10% of the
SHOULD BE SET ASIDE, IS RESPONDENT ENTITLED
amount due as and for attorney’s fees plus the cost of suit.
TO RECOVER DEATH COMPENSATION FROM
PETITIONER IN ACCORDANCE WITH HER THEORY
The award for actual damages amounting to ₱988,400.00 OF THE CASE AS ALLEGED, ARGUED AND TRIED
was computed by the lower court by adopting the formula BEFORE THE TRIAL COURT.17
in the computation of loss of earning capacity enunciated
in the case of Villa Rey Transit, Inc. v. Court of
Since the factual findings of the RTC and the Court of
Appeals,12wherein the annual expenses of the deceased are
Appeals that the non-recovery of Melquiades’ body for the
deducted from his gross annual income and multiplied by
period of four (4) years from 27 March 1996 creates a
life expectancy (gross annual income – annual expense x
presumption that he is already dead and that his death was
life expectancy).13
caused by a fortuitous event, were already settled, and
considering that these findings were not controverted by
The Motion for Reconsideration interposed by Candano the parties in this instant petition, we find no compelling
Shipping was denied by the RTC for lack of cogent reason reason to disturb the same. Henceforth, we will limit our
to disturb or reconsider its decision.14 discussion to the computation of the amount of
indemnification.
Aggrieved, Candano Shipping elevated the adverse RTC
decision to the Court of Appeals, which in turn, affirmed In its Petition, Candano Shipping argues that the
with modification the judgment of the lower court. The application of the measure stipulated under Article 194 of
award for actual damages was reduced from ₱998,400.00 to the Labor Code is erroneous since it applies only to death
₱608,400.00, while the awards for moral and exemplary compensation to be paid by the Social Security System to
damages including attorney’s fees were deleted for lack of the beneficiaries of a deceased member, to which
sufficient basis for their allowance.15 proposition Florentina concedes. We agree. The remedy
availed by Sugata-on in filing the claim under the New Civil
Code has been validly recognized by the prevailing
In arriving at the sum of ₱608,400.00, the appellate court
jurisprudence on the matter.
applied the standard prescribed by Article 194 of the Labor
Code of the Philippines, as amended, to wit:
In the case of Floresca v. Philex Mining Company,18 we
declared that the employees may invoke either the
ART. 194. DEATH. – (a) Under such regulations as the
Workmen’s Compensation Act or the provisions of the Civil
Commission may approve, the System shall pay to the
Code, subject to the consequence that the choice of one
primary beneficiaries upon the death of the covered
remedy will exclude the other and that the acceptance of
employee under this Title an amount equivalent to his
the compensation under the remedy chosen will exclude
the other remedy. The exception is where the claimant who employee’s lack of due care contributed to his death or
had already been paid under the Workmen’s Compensation injury, the compensation shall be equitably reduced.
Act may still sue for damages under the Civil Code on the
basis of supervening facts or developments occurring after
In the case of Philippine Air Lines, Inc. v. Court of
he opted for the first remedy.19
Appeals,21 this Court validated the strength of the
aforementioned provision and made the employer liable for
Stated differently, save for the recognized exception, an the injury suffered by its employee in the course of
employee cannot pursue both remedies simultaneously but employment. We thus ruled:
has the option to proceed by interposing one remedy and
waiving his right over the other. As we have explained
Having affirmed the gross negligence of PAL in allowing
in Floresca, this doctrinal rule is rooted on the theory that
Capt. Delfin Bustamante to fly the plane to Daet on January
the basis of the compensation under the Workmen’s
8, 1951 whose slow reaction and poor judgment was the
Compensation Act is separate and distinct from the award
cause of the crash-landing of the plane which resulted in
of damages under the Civil Code, thus:
private respondent Samson hitting his head against the
windshield and causing him injuries for which reason PAL
The rationale in awarding compensation under the terminated his services and employment as pilot after
Workmen’s Compensation Act differs from that in giving refusing to provide him with the necessary medical
damages under the Civil Code. The compensation acts are treatment of respondent’s periodic spells, headache and
based on a theory of compensation distinct from the general debility produced from said injuries, We must
existing theories of damages, payments under the acts necessarily affirm likewise the award of damages or
being made as compensation and not as damages (99 C.J.S. compensation under the provisions of Art. 1711 and Art.
53). Compensation is given to mitigate harshness and 1712 of the New Civil Code. x x x.
insecurity of industrial life for the workman and his family.
Hence, an employer is liable whether negligence exists or
As early as the case of Valencia v. Manila Yacht Club,
not since liability is created by law. Recovery under the Act
Inc.,22 this Court, speaking through the renowned civilist,
is not based on any theory of actionable wrong on the part
Mr. Justice J.B.L. Reyes, made a pronouncement that
of the employer (99 D.J.S. 36).
Article 1711 of the Civil Code imposes upon the
employer the obligation to compensate the employee for
In other words, under compensation acts, the employer is injury or sickness occasioned by his employment, and
liable to pay compensation benefits for loss of income, as thus articulated:
long as the death, sickness or injury is work-connected or
work-aggravated, even if the death or injury is not due to
>Appellant’s demand for compensation is predicated on
the fault of the employer (Murillo v. Mendoza, 66 Phil. 689).
employer’s liability for the sickness of, or injury to, his
On the other hand, damages are awarded to one as a
employee imposed by Article 1711 of the Civil Code, which
vindication of the wrongful invasion of his rights. It is the
reads:
indemnity recoverable by a person who has sustained
injury either in his person, property or relative rights,
through the act or default of another (25 C.J.S. 452). Article 1711. Owners of enterprises and other employers
are obliged to pay compensation for the death x x x.
The principle underscored in the case of Floresca was
further affirmed in the later case of Ysmael Maritime We find the abovequoted provision to be applicable and
Corporation v. Avelino,20 wherein we emphasized that once controlling in this case. The matter of the amount of
the claimant had already exercised his choice to pursue his compensation and allowable medical expenses should be
right under one remedy, he is barred from proceeding with properly determined by the Municipal Court after the
an alternative remedy. As eloquently laid down by Chief parties are heard accordingly.
Justice Marcelo Fernan:
Given that the right of the claimant arose from the contract
It is therefore clear that respondents had not only opted to of employment and the corresponding obligation imposed
recover under the Act but they had also been duly paid. At by the New Civil Code upon the employer to indemnify the
the very least, a sense of fair play would demand that if a former for death and injury of the employee circumstanced
person entitled to a choice of remedies made a first by his employment, necessarily, the provisions of the same
election and accepted the benefits thereof, he should no code on damages shall govern the extent of the employer’s
longer be allowed to exercise the second option. "Having liability.
staked his fortunes on a particular remedy, (he) is
precluded from pursuing the alternate course, at least
The pertinent provision on damages under the New Civil
until the prior claim is rejected by the Compensation
Code provides:
Commission."

Art. 2199. Except as provided by law or by stipulation, one


In the case at bar, Florentina was forced to institute a civil
is entitled to an adequate compensation only for such
suit for indemnity under the New Civil Code, after Candano
pecuniary loss suffered by him as he has duly proved. Such
Shipping refused to compensate her husband’s death.
compensation is referred to as actual or compensatory
damages.
The pertinent provision of the New Civil Code reads:
Article 2200. Indemnification for damages shall
Article 1711. Owners of enterprises and other employers comprehend not only the value of the loss suffered, but
are obliged to pay compensation for the death of or also that of the profits which the obligee failed to obtain.
injuries to their laborers, workmen, mechanics or other
employees, even though the event may have been purely
In order to give breath to the aforestated provisions on
accidental or entirely due to a fortuitous cause, if the death
damages of the New Civil Code, they must be transformed
or personal injury arose out of and in the course of
into a more tangible and practical mathematical form, so
employment. The employer is also liable for compensation
that the purpose of the law to indemnify the employee or
if the employee contracts any illness or diseases caused by
his heirs for his death or injury occasioned by his
such employment or as the result of the nature of
employment, as envisioned by the Article 1711 of the same
employment. If the mishap was due to the employee’s own
code may be realized. We deem it best to adopt the formula
notorious negligence, or voluntary act, or drunkenness, the
for loss of earning capacity enunciated in the case of Villa
employer shall not be liable for compensation. When the
Rey v. Court of Appeals,23 in computing the amount of
actual damages to be awarded to the claimant under Article [(The award of damages for loss of earning capacity is)]
1711 of the New Civil Code. concerned with the determination of losses or damages
sustained by the private respondents, as dependents and
intestate heirs of the deceased, and that said damages
In Villa Rey, the common carrier was made liable for the
consist, not of the full amount of his earnings, but of the
death of its passenger on board a passenger bus owned and
support they received or would have received from him
operated by Villa Rey Transit, Inc. going to Manila from
had he not died in consequence of negligence of
Lingayen, Pangasinan. While the bus was nearing Sadsaran
petitioner’s agent. In fixing the amount of that support, we
Bridge in Barrio Sto. Domingo, Minalin, Pampanga, it
must reckon with the ‘necessary expenses of his own
frontally hit the rear side of bull cart filled with hay and
living’, which should be deducted from his earnings. Thus,
bamboo poles. The protruding end of one bamboo pole,
it has been consistently held that earning capacity, as an
about eight feet long, penetrated through the glass
element of damages to one’s estate for his death by
windshield of the bus and hit the face of Policarpio
wrongful act is necessarily his net earning capacity or his
Quintos, Jr., who was then sitting at the front row, causing
capacity to acquire money, ‘less necessary expense for his
his death.24
own living.’ Stated otherwise, the amount recoverable is
not the loss of entire earning, but rather the loss of that
The obligation of the common carrier to indemnify its portion of the earnings which the beneficiary would have
passenger or his heirs for injury or death arose from the received. In other words, only net earnings, and not gross
contract of carriage entered into by the common carrier earnings are to be considered that is, the total of the
and the passenger.25 By the very nature of the obligation earnings less expenses necessary in the creation of such
which is imbued with public interest,26 in contract of earnings or income and less living and other incidental
carriage the carrier assumes the express obligation to expenses.33
transport its passenger to his destination safely and to
observe extraordinary diligence with due regard to all the
In computing the third factor, the necessary living expense,
circumstances, and any injury that might be suffered by
a survey of more recent jurisprudence shows that this
the passenger is right away attributable to the fault or
Court consistently pegged the amount at 50% of the gross
negligence of the carrier and thus gives rise to the right of
annual income.34 We held in Smith Bell Dodwell Shipping
the passenger or his heirs for indemnity.27
Agency Corp. v. Borja,35 that when there is no showing that
the living expenses constituted the smaller percentage of
In the same breadth, the employer shall be liable for the the gross income, we fix the living expenses at half of the
death or personal injury of its employees in the course of gross income.
employment as sanctioned by Article 1711 of the New Civil
Code. The liability of the employer for death or personal
Applying the aforestated jurisprudential guidelines in the
injury of his employees arose from the contract of
computation of the amount of award for damages set out
employment entered into between the employer and his
in Villa Rey, we now proceed to determining Melquiades’
employee which is likewise imbued with public
life expectancy, thus:
interest.28 Accordingly, when the employee died or was
injured in the occasion of employment, the obligation of
the employer for indemnity, automatically attaches. The Life expectancy = 2 / 3 x [80 – age of deceased at the time
indemnity may partake of the form of actual, moral, of death]
nominal, temperate, liquidated or exemplary damages, as
the case may be depending on the factual milieu of the case
2 /3 x [80 – 56]
and considering the criterion for the award of these
damages as outlined by our jurisprudence.29 In the case at
bar, only the award of actual damages, specifically the 2 / 3 x [24]
award for unearned income is warranted by the
circumstances since it has been duly proven that the cause
Life expectancy = 16
of death of Melquiades is a fortuitous event for which
Candano Shipping cannot be faulted.
With 16 more years of life expectancy and a monthly
income of ₱7,800.00, as evidenced by the pay slips duly
The formula for the computation of unearned income is:
presented before the RTC, Melquiades’ earning capacity is
computed as follows:
Net Earning Capacity = life expectancy x (gross annual
income - reasonable and necessary living expenses).
Net Earning Capacity = life expectancy x (gross annual
income - reasonable and necessary living expenses).
Life expectancy is determined in accordance with the
formula:
= 16 x ( ₱93,600.00 – ₱ 46,800.00)

2 / 3 x [80 – age of deceased at the time of death]


= 16 x ( ₱ 46,800.00 )

Jurisprudence provides that the first factor, i.e., life


Net Earning Capacity = ₱ 748,800.00
expectancy, shall be computed by applying the formula
(2/3 x [80 - age at death]) adopted in the American
Expectancy Table of Mortality or the Actuarial of Combined The argument raised by Candano Shipping that the formula
Experience Table of Mortality.30 for determining the life expectancy under Villa Reycannot
be automatically applied without proof of the basis for the
expected length of life of a Filipino does not merit our
In the computation of the second factor, it is computed by
consideration. The formula for life expectancy has been
multiplying the life expectancy by the net earnings of the
repeatedly adopted in our jurisprudence in fixing the
deceased, i.e., the total earnings less expenses necessary in
amount of indemnity for the death of a party. This was
the creation of such earnings or income and less living and
adopted from the American Expectancy Table of Mortality
other incidental expenses.31 The loss is not equivalent to
or the Actuarial of Combined Experience Table of Mortality
the entire earnings of the deceased, but only such portion
which was used by insurers in determining the capital sum
that he would have used to support his dependents or
to be charged for annuity.36
heirs. Hence, we deduct from his gross earnings the
necessary expenses supposed to be used by the deceased
for his own needs.32 The Court explained in Villa Admittedly, in several cases, this Court reduced the life
Rey:1avvphi1 expectancy multiplier considering the medical history such
as when the deceased previously underwent a major
surgery37 or when it was shown that he was treated for October 9, 2009 denying petitioner’s motion for
chest pains, backache or occasional feeling of reconsideration.
tiredness38 and the fact that the deceased has been
consistently engaged in a dangerous and risky activity
The factual antecedents are undisputed.
tending to shorten his life.39 Failing to prove, however, that
any of these circumstances is attendant in the case at bar,
Candano Shipping cannot validly assert that the standard Petitioner Dario Nacar filed a complaint for constructive
life expectancy factor laid down in Villa Rey cannot be dismissal before the Arbitration Branch of the National
Labor Relations Commission (NLRC) against respondents
Gallery Frames (GF) and/or Felipe Bordey,
Jr., docketed as NLRC NCR Case No. 01-
SEPARATION PAY
00519-97.
Date Hired = August 1990
On October 15, 1998, the Labor Arbiter
Rate = ₱198/day rendered a Decision3 in favor of petitioner
and found that he was dismissed from
Date of Decision = Aug. 18, 1998 employment without a valid or just cause.
Thus, petitioner was awarded backwages
Length of Service = 8 yrs. & 1 month and separation pay in lieu of reinstatement
in the amount of ₱158,919.92. The
₱198.00 x 26 days x 8 months = ₱41,184.00 dispositive portion of the decision, reads:

BACKWAGES
With the foregoing, we find and so rule that
Date Dismissed = January 24, 1997 respondents failed to discharge the burden
of showing that complainant was dismissed
Rate per day = ₱196.00 from employment for a just or valid cause.
All the more, it is clear from the records
Date of Decisions = Aug. 18, 1998 that complainant was never afforded due
process before he was terminated. As such,
a) 1/24/97 to 2/5/98 = 12.36 mos. we are perforce constrained to grant
complainant’s prayer for the payments of
₱196.00/day x 12.36 mos. = ₱62,986.56 separation pay in lieu of reinstatement to
his former position, considering the
b) 2/6/98 to 8/18/98 = 6.4 months strained relationship between the parties,
and his apparent reluctance to be
Prevailing Rate per day = ₱62,986.00 reinstated, computed only up to
promulgation of this decision as follows:
₱198.00 x 26 days x 6.4 mos. = ₱32,947.20
xxxx
TOTAL = ₱95.933.76
applied in this case.
WHEREFORE, premises considered, judgment is hereby
rendered finding respondents guilty of constructive
Accordingly, Florentina is entitled to recover the amount of dismissal and are therefore, ordered:
₱748,800.00 as actual damages for the death of her
husband. The awards of moral and exemplary damages are
To pay jointly and severally the complainant the amount of
deleted. However, the award of costs of litigation and
sixty-two thousand nine hundred eighty-six pesos and
attorney’s fees are proper.40 56/100 (₱62,986.56) Pesos representing his separation pay;

WHEREFORE, in view of the foregoing, the instant petition


To pay jointly and severally the complainant the amount of
is DENIED and the Decision dated 23 May 2003 as well as
nine (sic) five thousand nine hundred thirty-three and
the Resolution dated 1 April 2004, rendered by the Court of
36/100 (₱95,933.36) representing his backwages; and
Appeals in CA-G.R. CV No. 70410, are hereby PARTIALLY
AFFIRMED in so far as it finds petitioner liable to
respondent for damages. All other claims are hereby dismissed for lack of merit.

Pursuant to the appropriate provisions of the New Civil SO ORDERED.4


Code and the prevailing jurisprudence on the matter,
petitioner Candano Shipping Lines, Inc., is ORDERED to pay
Respondents appealed to the NLRC, but it was dismissed
the amount of ₱748,800.00, as actual damages, plus 10% of
for lack of merit in the Resolution5 dated February 29,
the amount awarded as attorney’s fee plus cost of the suit.
2000. Accordingly, the NLRC sustained the decision of the
Labor Arbiter. Respondents filed a motion for
EN BANC reconsideration, but it was denied.6

G.R. No. 189871 August 13, 2013 Dissatisfied, respondents filed a Petition for Review on
Certiorari before the CA. On August 24, 2000, the CA issued
a Resolution dismissing the petition. Respondents filed a
DARIO NACAR, PETITIONER,
Motion for Reconsideration, but it was likewise denied in a
vs.
Resolution dated May 8, 2001.7
GALLERY FRAMES AND/OR FELIPE BORDEY,
JR., RESPONDENTS.
Respondents then sought relief before the Supreme Court,
docketed as G.R. No. 151332. Finding no reversible error on
DECISION
the part of the CA, this Court denied the petition in the
Resolution dated April 17, 2002.8
This is a petition for review on certiorari assailing the
Decision1 dated September 23, 2008 of the Court of Appeals
An Entry of Judgment was later issued certifying that the
(CA) in CA-G.R. SP No. 98591, and the Resolution2 dated
resolution became final and executory on May 27,
2002.9The case was, thereafter, referred back to the Labor Aggrieved, petitioner then sought recourse before the CA,
Arbiter. A pre-execution conference was consequently docketed as CA-G.R. SP No. 98591.
scheduled, but respondents failed to appear.10
On September 23, 2008, the CA rendered a
On November 5, 2002, petitioner filed a Motion for Correct Decision24 denying the petition. The CA opined that since
Computation, praying that his backwages be computed petitioner no longer appealed the October 15, 1998
from the date of his dismissal on January 24, 1997 up to Decision of the Labor Arbiter, which already became final
the finality of the Resolution of the Supreme Court on May and executory, a belated correction thereof is no longer
27, 2002.11 Upon recomputation, the Computation and allowed. The CA stated that there is nothing left to be done
Examination Unit of the NLRC arrived at an updated amount except to enforce the said judgment. Consequently, it can
in the sum of ₱471,320.31.12 no longer be modified in any respect, except to correct
clerical errors or mistakes.
On December 2, 2002, a Writ of Execution13 was issued by
the Labor Arbiter ordering the Sheriff to collect from Petitioner filed a Motion for Reconsideration, but it was
respondents the total amount of ₱471,320.31. Respondents denied in the Resolution25 dated October 9, 2009.
filed a Motion to Quash Writ of Execution, arguing, among
other things, that since the Labor Arbiter awarded
Hence, the petition assigning the lone error:
separation pay of ₱62,986.56 and limited backwages of
₱95,933.36, no more recomputation is required to be made
of the said awards. They claimed that after the decision I
becomes final and executory, the same cannot be altered or
amended anymore.14 On January 13, 2003, the Labor Arbiter WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS
issued an Order15 denying the motion. Thus, an Alias Writ SERIOUSLY ERRED, COMMITTED GRAVE ABUSE OF
of Execution16 was issued on January 14, 2003. DISCRETION AND DECIDED CONTRARY TO LAW IN
UPHOLDING THE QUESTIONED RESOLUTIONS OF THE NLRC
Respondents again appealed before the NLRC, which on WHICH, IN TURN, SUSTAINED THE MAY 10, 2005 ORDER OF
June 30, 2003 issued a Resolution17 granting the appeal in LABOR ARBITER MAGAT MAKING THE DISPOSITIVE PORTION
favor of the respondents and ordered the recomputation of OF THE OCTOBER 15, 1998 DECISION OF LABOR ARBITER
the judgment award. LUSTRIA SUBSERVIENT TO AN OPINION EXPRESSED IN THE
BODY OF THE SAME DECISION.26
On August 20, 2003, an Entry of Judgment was issued
declaring the Resolution of the NLRC to be final and Petitioner argues that notwithstanding the fact that there
executory. Consequently, another pre-execution conference was a computation of backwages in the Labor Arbiter’s
was held, but respondents failed to appear on time. decision, the same is not final until reinstatement is made
Meanwhile, petitioner moved that an Alias Writ of Execution or until finality of the decision, in case of an award of
be issued to enforce the earlier recomputed judgment separation pay. Petitioner maintains that considering that
award in the sum of ₱471,320.31.18 the October 15, 1998 decision of the Labor Arbiter did not
become final and executory until the April 17, 2002
Resolution of the Supreme Court in G.R. No. 151332 was
The records of the case were again forwarded to the
entered in the Book of Entries on May 27, 2002, the
Computation and Examination Unit for recomputation,
reckoning point for the computation of the backwages and
where the judgment award of petitioner was reassessed to
separation pay should be on May 27, 2002 and not when
be in the total amount of only ₱147,560.19.
the decision of the Labor Arbiter was rendered on October
15, 1998. Further, petitioner posits that he is also entitled
Petitioner then moved that a writ of execution be issued to the payment of interest from the finality of the decision
ordering respondents to pay him the original amount as until full payment by the respondents.
determined by the Labor Arbiter in his Decision dated
October 15, 1998, pending the final computation of his
On their part, respondents assert that since only separation
backwages and separation pay. pay and limited backwages were awarded to petitioner by
the October 15, 1998 decision of the Labor Arbiter, no more
On January 14, 2003, the Labor Arbiter issued an Alias Writ recomputation is required to be made of said awards.
of Execution to satisfy the judgment award that was due to Respondents insist that since the decision clearly stated
petitioner in the amount of ₱147,560.19, which petitioner that the separation pay and backwages are "computed only
eventually received. up to [the] promulgation of this decision," and considering
that petitioner no longer appealed the decision, petitioner
is only entitled to the award as computed by the Labor
Petitioner then filed a Manifestation and Motion praying for
Arbiter in the total amount of ₱158,919.92. Respondents
the re-computation of the monetary award to include the
added that it was only during the execution proceedings
appropriate interests.19
that the petitioner questioned the award, long after the
decision had become final and executory. Respondents
On May 10, 2005, the Labor Arbiter issued an contend that to allow the further recomputation of the
Order20 granting the motion, but only up to the amount of backwages to be awarded to petitioner at this point of the
₱11,459.73. The Labor Arbiter reasoned that it is the proceedings would substantially vary the decision of the
October 15, 1998 Decision that should be enforced Labor Arbiter as it violates the rule on immutability of
considering that it was the one that became final and judgments.
executory. However, the Labor Arbiter reasoned that since
the decision states that the separation pay and backwages
The petition is meritorious.
are computed only up to the promulgation of the said
decision, it is the amount of ₱158,919.92 that should be
executed. Thus, since petitioner already received The instant case is similar to the case of Session Delights
₱147,560.19, he is only entitled to the balance of Ice Cream and Fast Foods v. Court of Appeals (Sixth
₱11,459.73. Division),27 wherein the issue submitted to the Court for
resolution was the propriety of the computation of the
awards made, and whether this violated the principle of
Petitioner then appealed before the NLRC,21 which appeal immutability of judgment. Like in the present case, it was a
was denied by the NLRC in its Resolution22 dated September distinct feature of the judgment of the Labor Arbiter in the
27, 2006. Petitioner filed a Motion for Reconsideration, but above-cited case that the decision already provided for the
it was likewise denied in the Resolution23dated January 31, computation of the payable separation pay and backwages
2007. due and did not further order the computation of the
monetary awards up to the time of the finality of the It was at this point that the present case arose. Focusing on
judgment. Also in Session Delights, the dismissed the core illegal dismissal portion of the original labor
employee failed to appeal the decision of the labor arbiter. arbiter's decision, the implementing labor arbiter ordered
The Court clarified, thus: the award re-computed; he apparently read the figures
originally ordered to be paid to be the computation due
had the case been terminated and implemented at the labor
In concrete terms, the question is whether a re-
arbiter's level. Thus, the labor arbiter re-computed the
computation in the course of execution of the labor
award to include the separation pay and the backwages due
arbiter's original computation of the awards made, pegged
up to the finality of the CA decision that fully terminated
as of the time the decision was rendered and confirmed
the case on the merits. Unfortunately, the labor arbiter's
with modification by a final CA decision, is legally proper.
approved computation went beyond the finality of the CA
The question is posed, given that the petitioner did not
decision (July 29, 2003) and included as well the payment
immediately pay the awards stated in the original labor
for awards the final CA decision had deleted - specifically,
arbiter's decision; it delayed payment because it continued
the proportionate 13th month pay and the indemnity
with the litigation until final judgment at the CA level.
awards. Hence, the CA issued the decision now questioned
in the present petition.
A source of misunderstanding in implementing the final
decision in this case proceeds from the way the original
We see no error in the CA decision confirming that a re-
labor arbiter framed his decision. The decision consists
computation is necessary as it essentially considered the
essentially of two parts.
labor arbiter's original decision in accordance with its basic
component parts as we discussed above. To reiterate, the
The first is that part of the decision that cannot now be first part contains the finding of illegality and its monetary
disputed because it has been confirmed with finality. This consequences; the second part is the computation of the
is the finding of the illegality of the dismissal and the awards or monetary consequences of the illegal dismissal,
awards of separation pay in lieu of reinstatement, computed as of the time of the labor arbiter's original
backwages, attorney's fees, and legal interests. decision.28

The second part is the computation of the awards made. On Consequently, from the above disquisitions, under the
its face, the computation the labor arbiter made shows that terms of the decision which is sought to be executed by the
it was time-bound as can be seen from the figures used in petitioner, no essential change is made by a recomputation
the computation. This part, being merely a computation of as this step is a necessary consequence that flows from the
what the first part of the decision established and declared, nature of the illegality of dismissal declared by the Labor
can, by its nature, be re-computed. This is the part, too, Arbiter in that decision.29 A recomputation (or an original
that the petitioner now posits should no longer be re- computation, if no previous computation has been made) is
computed because the computation is already in the labor a part of the law – specifically, Article 279 of the Labor
arbiter's decision that the CA had affirmed. The public and Code and the established jurisprudence on this provision –
private respondents, on the other hand, posit that a re- that is read into the decision. By the nature of an illegal
computation is necessary because the relief in an illegal dismissal case, the reliefs continue to add up until full
dismissal decision goes all the way up to reinstatement if satisfaction, as expressed under Article 279 of the Labor
reinstatement is to be made, or up to the finality of the Code. The recomputation of the consequences of illegal
decision, if separation pay is to be given in lieu dismissal upon execution of the decision does not
reinstatement. constitute an alteration or amendment of the final decision
being implemented. The illegal dismissal ruling stands;
only the computation of monetary consequences of this
That the labor arbiter's decision, at the same time that it
dismissal is affected, and this is not a violation of the
found that an illegal dismissal had taken place, also made a
principle of immutability of final judgments.30
computation of the award, is understandable in light of
Section 3, Rule VIII of the then NLRC Rules of Procedure
which requires that a computation be made. This Section in That the amount respondents shall now pay has greatly
part states: increased is a consequence that it cannot avoid as it is the
risk that it ran when it continued to seek recourses against
the Labor Arbiter's decision. Article 279 provides for the
[T]he Labor Arbiter of origin, in cases involving monetary
consequences of illegal dismissal in no uncertain terms,
awards and at all events, as far as practicable, shall
qualified only by jurisprudence in its interpretation of
embody in any such decision or order the detailed and full
when separation pay in lieu of reinstatement is allowed.
amount awarded.
When that happens, the finality of the illegal dismissal
decision becomes the reckoning point instead of the
Clearly implied from this original computation is its reinstatement that the law decrees. In allowing separation
currency up to the finality of the labor arbiter's decision. pay, the final decision effectively declares that the
As we noted above, this implication is apparent from the employment relationship ended so that separation pay and
terms of the computation itself, and no question would backwages are to be computed up to that point.31
have arisen had the parties terminated the case and
implemented the decision at that point.
Finally, anent the payment of legal interest. In the
landmark case of Eastern Shipping Lines, Inc. v. Court of
However, the petitioner disagreed with the labor arbiter's Appeals,32 the Court laid down the guidelines regarding the
findings on all counts - i.e., on the finding of illegality as manner of computing legal interest, to wit:
well as on all the consequent awards made. Hence, the
petitioner appealed the case to the NLRC which, in turn,
II. With regard particularly to an award of interest in the
affirmed the labor arbiter's decision. By law, the NLRC
concept of actual and compensatory damages, the rate of
decision is final, reviewable only by the CA on
interest, as well as the accrual thereof, is imposed, as
jurisdictional grounds.
follows:

The petitioner appropriately sought to nullify the NLRC


1. When the obligation is breached, and it consists
decision on jurisdictional grounds through a timely filed
in the payment of a sum of money, i.e., a loan or
Rule 65 petition for certiorari. The CA decision, finding that
forbearance of money, the interest due should be
NLRC exceeded its authority in affirming the payment of
that which may have been stipulated in writing.
13th month pay and indemnity, lapsed to finality and was
Furthermore, the interest due shall itself earn legal
subsequently returned to the labor arbiter of origin for
interest from the time it is judicially demanded. In
execution.
the absence of stipulation, the rate of interest
shall be 12% per annum to be computed from annum shall be the prevailing rate of interest when
default, i.e., from judicial or extrajudicial demand applicable.
under and subject to the provisions of Article
1169 of the Civil Code.
Corollarily, in the recent case of Advocates for Truth in
Lending, Inc. and Eduardo B. Olaguer v. Bangko Sentral
2. When an obligation, not constituting a loan or Monetary Board,41 this Court affirmed the authority of the
forbearance of money, is breached, an interest on BSP-MB to set interest rates and to issue and enforce
the amount of damages awarded may be imposed Circulars when it ruled that "the BSP-MB may prescribe the
at the discretion of the court at the rate of 6% per maximum rate or rates of interest for all loans or renewals
annum. No interest, however, shall be adjudged on thereof or the forbearance of any money, goods or credits,
unliquidated claims or damages except when or including those for loans of low priority such as consumer
until the demand can be established with loans, as well as such loans made by pawnshops, finance
reasonable certainty. Accordingly, where the companies and similar credit institutions. It even
demand is established with reasonable certainty, authorizes the BSP-MB to prescribe different maximum rate
the interest shall begin to run from the time the or rates for different types of borrowings, including
claim is made judicially or extrajudicially (Art. deposits and deposit substitutes, or loans of financial
1169, Civil Code) but when such certainty cannot intermediaries."
be so reasonably established at the time the
demand is made, the interest shall begin to run
Nonetheless, with regard to those judgments that have
only from the date the judgment of the court is
become final and executory prior to July 1, 2013, said
made (at which time the quantification of damages
judgments shall not be disturbed and shall continue to be
may be deemed to have been reasonably
implemented applying the rate of interest fixed
ascertained). The actual base for the computation
therein.1awp++i1
of legal interest shall, in any case, be on the
amount finally adjudged.
To recapitulate and for future guidance, the guidelines laid
down in the case of Eastern Shipping Lines42 are
3. When the judgment of the court awarding a sum
accordingly modified to embody BSP-MB Circular No. 799,
of money becomes final and executory, the rate of
as follows:
legal interest, whether the case falls under
paragraph 1 or paragraph 2, above, shall be 12%
per annum from such finality until its satisfaction, I. When an obligation, regardless of its source, i.e.,
this interim period being deemed to be by then an law, contracts, quasi-contracts, delicts or quasi-
equivalent to a forbearance of credit.33 delicts is breached, the contravenor can be held
liable for damages. The provisions under Title
XVIII on "Damages" of the Civil Code govern in
Recently, however, the Bangko Sentral ng Pilipinas
determining the measure of recoverable
Monetary Board (BSP-MB), in its Resolution No. 796 dated
damages.1âwphi1
May 16, 2013, approved the amendment of Section 234 of
Circular No. 905, Series of 1982 and, accordingly, issued
Circular No. 799,35 Series of 2013, effective July 1, 2013, II. With regard particularly to an award of interest
the pertinent portion of which reads: in the concept of actual and compensatory
damages, the rate of interest, as well as the
accrual thereof, is imposed, as follows:
The Monetary Board, in its Resolution No. 796 dated 16 May
2013, approved the following revisions governing the rate
of interest in the absence of stipulation in loan contracts, When the obligation is breached, and it consists in the
thereby amending Section 2 of Circular No. 905, Series of payment of a sum of money, i.e., a loan or forbearance of
1982: money, the interest due should be that which may have
been stipulated in writing. Furthermore, the interest due
shall itself earn legal interest from the time it is judicially
Section 1. The rate of interest for the loan or forbearance of
demanded. In the absence of stipulation, the rate of
any money, goods or credits and the rate allowed in
interest shall be 6% per annum to be computed from
judgments, in the absence of an express contract as to such
default, i.e., from judicial or extrajudicial demand under
rate of interest, shall be six percent (6%) per annum.
and subject to the provisions of Article 1169 of the Civil
Code.
Section 2. In view of the above, Subsection X305.136 of the
Manual of Regulations for Banks and Sections
When an obligation, not constituting a loan or forbearance
4305Q.1,37 4305S.338 and 4303P.139 of the Manual of
of money, is breached, an interest on the amount of
Regulations for Non-Bank Financial Institutions are hereby
damages awarded may be imposed at the discretion of the
amended accordingly.
court at the rate of 6% per annum. No interest, however,
shall be adjudged on unliquidated claims or damages,
This Circular shall take effect on 1 July 2013. except when or until the demand can be established with
reasonable certainty. Accordingly, where the demand is
established with reasonable certainty, the interest shall
Thus, from the foregoing, in the absence of an express
begin to run from the time the claim is made judicially or
stipulation as to the rate of interest that would govern the
extrajudicially (Art. 1169, Civil Code), but when such
parties, the rate of legal interest for loans or forbearance of
certainty cannot be so reasonably established at the time
any money, goods or credits and the rate allowed in
the demand is made, the interest shall begin to run only
judgments shall no longer be twelve percent (12%) per
from the date the judgment of the court is made (at which
annum - as reflected in the case of Eastern Shipping
time the quantification of damages may be deemed to have
Lines40and Subsection X305.1 of the Manual of Regulations
been reasonably ascertained). The actual base for the
for Banks and Sections 4305Q.1, 4305S.3 and 4303P.1 of
computation of legal interest shall, in any case, be on the
the Manual of Regulations for Non-Bank Financial
amount finally adjudged.
Institutions, before its amendment by BSP-MB Circular No.
799 - but will now be six percent (6%) per annum effective
July 1, 2013. It should be noted, nonetheless, that the new When the judgment of the court awarding a sum of money
rate could only be applied prospectively and not becomes final and executory, the rate of legal interest,
retroactively. Consequently, the twelve percent (12%) per whether the case falls under paragraph 1 or paragraph 2,
annum legal interest shall apply only until June 30, 2013. above, shall be 6% per annum from such finality until its
Come July 1, 2013 the new rate of six percent (6%) per satisfaction, this interim period being deemed to be by
then an equivalent to a forbearance of credit.
And, in addition to the above, judgments that have become latter firmly reiterated that there was no accommodation
final and executory prior to July 1, 2013, shall not be for them in the first class, stating that they could not go in
disturbed and shall continue to be implemented applying that flight unless they took the tourist class therein.
the rate of interest fixed therein.
Due to pressing engagements awaiting Senator Lopez and
WHEREFORE, premises considered, the Decision dated his wife, in the United States — he had to attend a business
September 23, 2008 of the Court of Appeals in CA-G.R. SP conference in San Francisco the next day and she had to
No. 98591, and the Resolution dated October 9, 2009 are undergo a medical check-up in Mayo Clinic, Rochester,
REVERSED and SET ASIDE. Respondents are Ordered to Pay Minnesota, on May 28, 1960 and needed three days rest
petitioner: before that in San Francisco — Senator Lopez and party
were constrained to take PAN-AM's flight from Tokyo to San
Francisco as tourist passengers. Senator Lopez however
(1) backwages computed from the time petitioner
made it clear, as indicated in his letter to PAN-AM's Tokyo
was illegally dismissed on January 24, 1997 up to
office on that date (Exh. A), that they did so "under protest"
May 27, 2002, when the Resolution of this Court in
and without prejudice to further action against the
G.R. No. 151332 became final and executory;
airline.1äwphï1.ñët

(2) separation pay computed from August 1990 up


Suit for damages was thereafter filed by Senator Lopez and
to May 27, 2002 at the rate of one month pay per
party against PAN-AM on June 2, 1960 in the Court of First
year of service; and
Instance of Rizal. Alleging breach of contracts in bad faith
by defendant, plaintiffs asked for P500,000 actual and
(3) interest of twelve percent (12%) per annum of moral damages, P100,000 exemplary damages, P25,000
the total monetary awards, computed from May attorney's fees plus costs. PAN-AM filed its answer on June
27, 2002 to June 30, 2013 and six percent (6%) per 22, 1960, asserting that its failure to provide first class
annum from July 1, 2013 until their full accommodations to plaintiffs was due to honest error of its
satisfaction. employees. It also interposed a counterclaim for attorney's
fees of P25,000.
The Labor Arbiter is hereby ORDERED to make another
recomputation of the total monetary benefits awarded and Subsequently, further pleadings were filed, thus: plaintiffs'
due to petitioner in accordance with this Decision. answer to the counterclaim, on July 25, 1960; plaintiffs'
reply attached to motion for its admittance, on December
2, 1961; defendant's supplemental answer, on March 8,
EN BANC
1962; plaintiffs' reply to supplemental answer, on March
10, 1962; and defendant's amended supplemental answer,
G.R. No. L-22415 March 30, 1966 on July 10, 1962.

FERNANDO LOPEZ, ET AL., plaintiffs-appellants, After trial — which took twenty-two (22) days ranging from
vs. November 25, 1960 to January 5, 1963 — the Court of First
PAN AMERICAN WORLD AIRWAYS, defendant-appellant. Instance rendered its decision on November 13, 1963, the
dispositive portion stating:
Plaintiffs and defendant appeal from a decision of the
Court of First Instance of Rizal. Since the value in In view of the foregoing considerations, judgment
controversy exceeds P200,000 the appeals were taken is hereby rendered in favor of the plaintiffs and
directly to this Court upon all questions involved (Sec. 17, against the defendant, which is accordingly
par. 3[5], Judiciary Act). ordered to pay the plaintiffs the following: (a)
P100,000.00 as moral damages; (b) P20,000.00 as
exemplary damages; (c) P25,000.00 as attorney's
Stated briefly the facts not in dispute are as follows:
fees, and the costs of this action.
Reservations for first class accommodations in Flight No. 2
of Pan American World Airways — hereinafter otherwise
called PAN-AM — from Tokyo to San Francisco on May 24, So ordered.
1960 were made with
PAN-AM on March 29, 1960, by "Your Travel Guide" agency,
Plaintiffs, however, on November 21, 1963, moved for
specifically, by Delfin Faustino, for then Senator Fernando
reconsideration of said judgment, asking that moral
Lopez, his wife Maria J. Lopez, his son-in-law Alfredo
damages be increased to P400,000 and that six per cent
Montelibano, Jr., and his daughter, Mrs. Alfredo
(6%) interest per annum on the amount of the award be
Montelibano, Jr., (Milagros Lopez Montelibano). PAN-AM's
granted. And defendant opposed the same. Acting thereon
San Francisco head office confirmed the reservations on
the trial court issued an order on December 14, 1963,
March 31, 1960.
reconsidering the dispositive part of its decision to read as
follows:
First class tickets for the abovementioned flight were
subsequently issued by
In view of the foregoing considerations, judgment
PAN-AM on May 21 and 23, 1960, in favor of Senator Lopez
is hereby rendered in favor of the plaintiffs and
and his party. The total fare of P9,444 for all of them was
against the defendant, which is accordingly
fully paid before the tickets were issued.
ordered to pay the plaintiffs the following: (a)
P150,000.00 as moral damages; (b) P25,000.00 as
As scheduled Senator Lopez and party left Manila by exemplary damages; with legal interest on both
Northwest Airlines on May 24, 1960, arriving in Tokyo at from the date of the filing of the complaint until
5:30 P.M. of that day. As soon as they arrived Senator Lopez paid; and (c) P25,000.00 as attorney's fees; and the
requested Minister Busuego of the Philippine Embassy to costs of this action.
contact PAN-AM's Tokyo office regarding their first class
accommodations for that evening's flight. For the given
So ordered.
reason that the first class seats therein were all booked up,
however, PAN-AM's Tokyo office informed Minister Busuego
that PAN-AM could not accommodate Senator Lopez and It is from said judgment, as thus reconsidered, that both
party in that trip as first class passengers. Senator Lopez parties have appealed.
thereupon gave their first class tickets to Minister Busuego
for him to show the same to PAN-AM's Tokyo office, but the
Defendant, as stated, has from the start admitted that it office replied on April 22, 1960 that Senator Lopez and
breached its contracts with plaintiffs to provide them with party are waitlisted and that said office is unable to
first class accommodations in its Tokyo-San Francisco reinstate them (Annex B-Velasco's to Exh. 6).
flight of May 24, 1960. In its appeal, however, it takes issue
with the finding of the court a quo that it acted in bad
Since the flight involved was still more than a month away
faith in the branch of said contracts. Plaintiffs, on the other
and confident that reinstatement would be made, Herranz
hand, raise questions on the amount of damages awarded
forgot the matter and told no one about it except his co-
in their favor, seeking that the same be increased to a total
employee, either Armando Davila or Pedro Asensi or both
of P650,000.
of them (Tsn., 123-124, 127, Nov. 17, 1961).

Anent the issue of bad faith the records show the


Subsequently, on April 27, 1960, Armando Davila, PAN-AM's
respective contentions of the parties as follows.
reservations employee working in the same Escolta office
as Herranz, phoned PAN-AM's ticket sellers at its other
According to plaintiffs, defendant acted in bad faith office in the Manila Hotel, and confirmed the reservations
because it deliberately refused to comply with its contract of Senator Lopez and party.
to provide first class accommodations to plaintiffs, out of
racial prejudice against Orientals. And in support of its
PAN-AM's reservations supervisor Alberto Jose, discovered
contention that what was done to plaintiffs is an
Herranz's mistake after "Your Travel Guide" phone on May
oftrepeated practice of defendant, evidence was adduced
18, 1960 to state that Senator Lopez and party were going
relating to two previous instances of alleged racial
to depart as scheduled. Accordingly, Jose sent a telex wire
discrimination by defendant against Filipinos in favor of
on that date to PAN-AM's head office at San Francisco to
"white" passengers. Said previous occasions are what
report the error and asked said office to continue holding
allegedly happened to (1) Benito Jalbuena and (2) Cenon S.
the reservations of Senator Lopez and party (Annex B-
Cervantes and his wife.
Acker's to Exh. 6). Said message was reiterated by Jose in
his telex wire of May 19, 1960 (Annex C-Acker's to Exh. 6).
And from plaintiffs' evidence this is what allegedly San Francisco head office replied on May 19, 1960 that it
happened; Jalbuena bought a first class ticket from PAN-AM regrets being unable to confirm Senator Lopez and party
on April 13, 1960; he confirmed it on April 15, 1960 as to for the reason that the flight was solidly booked (Exh. 7).
the Tokyo-Hongkong flight of April 20, 1960; PAN-AM Jose sent a third telex wire on May 20, 1960 addressed to
similarly confirmed it on April 20, 1960. At the airport he PAN-AM's offices at San Francisco, New York (Idlewild
and another Oriental — Mr. Tung — were asked to step Airport), Tokyo and Hongkong, asking all-out assistance
aside while other passengers - including "white" passengers towards restoring the cancelled spaces and for report of
— boarded PAN-AM's plane. Then PAN-AM officials told cancellations at their end (Annex D-Acker's to Exh. 6). San
them that one of them had to stay behind. Since Mr. Tung Francisco head office reiterated on May 20, 1960 that it
was going all the way to London, Jalbuena was chosen to be could not reinstate the spaces and referred Jose to the
left behind. PAN-AM's officials could only explain by saying Tokyo and Hongkong offices (Exh. 8). Also on May 20, the
there was "some mistake". Jalbuena thereafter wrote PAN- Tokyo office of PAN-AM wired Jose stating it will do
AM to protest the incident (Exh. B). everything possible (Exh. 9).

As to Cenon S. Cervantes it would appear that in Flight No. Expecting that some cancellations of bookings would be
6 of PAN-AM on September 29, 1958 from Bangkok to made before the flight time, Jose decided to withhold from
Hongkong, he and his wife had to take tourist class, Senator Lopez and party, or their agent, the information
although they had first class tickets, which they had that their reservations had been cancelled.
previously confirmed, because their seats in first class
were given to "passengers from London."
Armando Davila having previously confirmed Senator
Lopez and party's first class reservations to PAN-AM's ticket
Against the foregoing, however, defendant's evidence sellers at its Manila Hotel office, the latter sold and issued
would seek to establish its theory of honest mistake, thus: in their favor the corresponding first class tickets on the
21st and 23rd of May, 1960.
The first class reservations of Senator Lopez and party
were made on March 29, 1960 together with those of four From the foregoing evidence of defendant it is in effect
members of the Rufino family, for a total of eight (8) seats, admitted that defendant — through its agents — first
as shown in their joint reservation card (Exh. 1). cancelled plaintiffs, reservations by mistake and
Subsequently on March 30, 1960, two other Rufinos thereafter deliberately and intentionally withheld from
secured reservations and were given a separate reservation plaintiffs or their travel agent the fact of said cancellation,
card (Exh. 2). A new reservation card consisting of two letting them go on believing that their first class
pages (Exhs. 3 and 4) was then made for the original of reservations stood valid and confirmed. In so misleading
eight passengers, namely, Senator Lopez and party and plaintiffs into purchasing first class tickets in the
four members of the Rufino family, the first page (Exh. 3) conviction that they had confirmed reservations for the
referring to 2 Lopezes, 2 Montelibanos and 1 Rufino and same, when in fact they had none, defendant wilfully and
the second page (Exh. 4) referring to 3 Rufinos. On April 18, knowingly placed itself into the position of having to
1960 "Your Travel Guide" agency cancelled the reservations breach its a foresaid contracts with plaintiffs should there
of the Rufinos. A telex message was thereupon sent on that be no last-minute cancellation by other passengers before
date to PAN-AM's head office at San Francisco by Mariano flight time, as it turned out in this case. Such actuation of
Herranz, PAN-AM's reservations employee at its office in defendant may indeed have been prompted by nothing
Escolta, Manila. (Annex A-Acker's to Exh. 6.) In said more than the promotion of its self-interest in holding on
message, however, Herranz mistakenly cancelled all the to Senator Lopez and party as passengers in its flight and
seats that had been reserved, that is, including those of foreclosing on their chances to seek the services of other
Senator Lopez and party. airlines that may have been able to afford them first class
accommodations. All the time, in legal contemplation such
conduct already amounts to action in bad faith. For bad
The next day — April 1960 — Herranz discovered his
faith means a breach of a known duty through some motive
mistake, upon seeing the reservation card newly prepared
of interest or ill-will (Spiegel vs. Beacon Participations, 8 NE
by his co-employee Pedro Asensi for Sen. Lopez and party
2d 895, 907). As stated in Kamm v. Flink, 113 N.J.L. 582,
to the exclusion of the Rufinos (Exh. 5). It was then that
175 A. 62, 99 A.L.R. 1, 7: "Self-enrichment or fraternal
Herranz sent another telex wire to the San Francisco head
interest, and not personal ill-will, may well have been the
office, stating his error and asking for the reinstatement of
motive; but it is malice nevertheless."
the four (4) first class seats reserved for Senator Lopez and
party (Annex A-Velasco's to Exh. 6). San Francisco head
As of May 18, 1960 defendant's reservations supervisor, entries in the reservation cards (Exhs. 1 & 3) that the
Alberto Jose knew that plaintiffs' reservations had been reservations cancelled are those of the Rufinos only,
cancelled. As of May 20 he knew that the San Francisco Herranz made the mistake, after reading said entries, of
head office stated with finality that it could not reinstate sending a wire cancelling all the reservations, including
plaintiffs' cancelled reservations. And yet said reservations those of Senator Lopez and party (Tsn., pp. 108-109, Nov.
supervisor made the "decision" — to use his own, word — 17, 1961). Secondly, after sending a wire to San Francisco
to withhold the information from the plaintiffs. Said head office on April 19, 1960 stating his error and asking
Alberto Jose in his testimony: for reinstatement, Herranz simply forgot about the matter.
Notwithstanding the reply of San Francisco head Office on
April 22, 1960 that it cannot reinstate Senator Lopez and
Q Why did you not notify them?
party (Annex B-Velasco's to Exh. 6), it was assumed and
taken for granted that reinstatement would be made.
A Well, you see, sir, in my fifteen (15) years of Thirdly, Armando Davila confirmed plaintiff's reservations
service with the air lines business my experience in a phone call on April 27, 1960 to defendant's ticket
is that even if the flights are solidly booked sellers, when at the time it appeared in plaintiffs'
months in advance, usually the flight departs with reservation card (Exh. 5) that they were only waitlisted
plenty of empty seats both on the first class and passengers. Fourthly, defendant's ticket sellers issued
tourist class. This is due to late cancellation of plaintiffs' tickets on May 21 and 23, 1960, without first
passengers, or because passengers do not show up checking their reservations just before issuing said tickets.
in the airport, and it was our hope others come in And, finally, no one among defendant's agents notified
from another flight and, therefore, are delayed Senator Lopez and party that their reservations had been
and, therefore, missed their connections. This cancelled, a precaution that could have averted their
experience of mine, coupled with that wire from entering with defendant into contracts that the latter had
Tokyo that they would do everything possible already placed beyond its power to perform.
prompted me to withhold the information, but
unfortunately, instead of the first class seat that I
Accordingly, there being a clear admission in defendant's
was hoping for and which I anticipated only the
evidence of facts amounting to a bad faith on its part in
tourists class was open on which Senator and Mrs.
regard to the breach of its contracts with plaintiffs, it
Lopez, Mr. and Mrs. Montelibano were
becomes unnecessary to further discuss the evidence
accommodated. Well, I fully realize now the
adduced by plaintiffs to establish defendant's bad faith. For
gravity of my decision in not advising Senator and
what is admitted in the course of the trial does not need to
Mrs. Lopez, Mr. and Mrs. Montelibano nor their
be proved (Sec. 2, Rule 129, Rules of Court).
agents about the erroneous cancellation and for
which I would like them to know that I am very
sorry. Addressing ourselves now to the question of damages, it is
well to state at the outset those rules and principles. First,
moral damages are recoverable in breach of contracts
xxx xxx xxx
where the defendant acted fraudulently or in bad faith (Art.
2220, New Civil Code). Second, in addition to moral
Q So it was not your duty to notify Sen. Lopez and damages, exemplary or corrective damages may be
parties that their reservations had been cancelled imposed by way of example or correction for the public
since May 18, 1960? good, in breach of contract where the defendant acted in a
wanton, fraudulent, reckless, oppressive or malevolent
manner (Articles 2229, 2232, New Civil Code). And, third, a
A As I said before it was my duty. It was my duty
written contract for an attorney's services shall control the
but as I said again with respect to that duty I have
amount to be paid therefor unless found by the court to be
the power to make a decision or use my discretion
unconscionable or unreasonable (Sec. 24, Rule 138, Rules
and judgment whether I should go ahead and tell
of Court).
the passenger about the cancellation. (Tsn., pp.
17-19, 28-29, March 15, 1962.)
First, then, as to moral damages. As a proximate result of
defendant's breach in bad faith of its contracts with
At the time plaintiffs bought their tickets, defendant,
plaintiffs, the latter suffered social humiliation, wounded
therefore, in breach of its known duty, made plaintiffs
feelings, serious anxiety and mental anguish. For plaintiffs
believe that their reservation had not been cancelled. An
were travelling with first class tickets issued by defendant
additional indication of this is the fact that upon the face
and yet they were given only the tourist class. At stop-
of the two tickets of record, namely, the ticket issued to
overs, they were expected to be among the first-class
Alfredo Montelibano, Jr. on May 21, 1960 (Exh. 22) and that
passengers by those awaiting to welcome them, only to be
issued to Mrs. Alfredo Montelibano, Jr., on May 23, 1960
found among the tourist passengers. It may not be
(Exh. 23), the reservation status is stated as "OK". Such
humiliating to travel as tourist passengers; it is
willful-non-disclosure of the cancellation or pretense that
humiliating to be compelled to travel as such, contrary to
the reservations for plaintiffs stood — and not simply the
what is rightfully to be expected from the contractual
erroneous cancellation itself — is the factor to which is
undertaking.
attributable the breach of the resulting contracts. And, as
above-stated, in this respect defendant clearly acted in bad
faith. Senator Lopez was then Senate President Pro Tempore.
International carriers like defendant know the prestige of
such an office. For the Senate is not only the Upper
As if to further emphasize its bad faith on the matter,
Chamber of the Philippine Congress, but the nation's
defendant subsequently promoted the employee who
treaty-ratifying body. It may also be mentioned that in his
cancelled plaintiffs' reservations and told them nothing
aforesaid office Senator Lopez was in a position to preside
about it. The record shows that said employee — Mariano
in impeachment cases should the Senate sit as
Herranz — was not subjected to investigation and
Impeachment Tribunal. And he was former Vice-President
suspension by defendant but instead was given a reward in
of the Philippines. Senator Lopez was going to the United
the form of an increase of salary in June of the following
States to attend a private business conference of the
year (Tsn., 86-88, Nov. 20, 1961).
Binalbagan-Isabela Sugar Company; but his aforesaid rank
and position were by no means left behind, and in fact he
At any rate, granting all the mistakes advanced by the had a second engagement awaiting him in the United
defendant, there would at least be negligence so gross and States: a banquet tendered by Filipino friends in his honor
reckless as to amount to malice or bad faith (Fores vs. as Senate President Pro Tempore (Tsn., pp. 14-15, Nov. 25,
Miranda, L-12163, March 4, 1959; Necesito v. Paras, L- 1960). For the moral damages sustained by him, therefore,
10605-06, June 30, 1958). Firstly, notwithstanding the an award of P100,000.00 is appropriate.
Mrs. Maria J. Lopez, as wife of Senator Lopez, shared his In view of its nature, it should be imposed in such an
prestige and therefore his humiliation. In addition she amount as to sufficiently and effectively deter similar
suffered physical discomfort during the 13-hour trip,(5 breach of contracts in the future by defendant or other
hours from Tokyo to Honolulu and 8 hours from Honolulu airlines. In this light, we find it just to award P75,000.00 as
to San Francisco). Although Senator Lopez stated that "she exemplary or corrective damages.
was quite well" (Tsn., p. 22, Nov. 25, 1960) — he obviously
meant relatively well, since the rest of his statement is that
Now, as to attorney's fees, the record shows a written
two months before, she was attackedby severe flu and lost
contract of services executed on June 1, 1960 (Exh. F)
10 pounds of weight and that she was advised by Dr. Sison
whereunder plaintiffs-appellants engaged the services of
to go to the United States as soon as possible for medical
their counsel — Atty. Vicente J. Francisco — and agreedto
check-up and relaxation, (Ibid). In fact, Senator Lopez
pay the sum of P25,000.00 as attorney's fees upon the
stated, as shown a few pages after in the transcript of his
termination of the case in the Court of First Instance, and
testimony, that Mrs. Lopez was sick when she left the
an additional sum of P25,000.00 in the event the case is
Philippines:
appealed to the Supreme Court. As said earlier, a written
contract for attorney's services shall control the amount to
A. Well, my wife really felt very bad during the be paid therefor unless found by the court to be
entire trip from Tokyo to San Francisco. In the unconscionable or unreasonable. A consideration of the
first place, she was sick when we left the subject matter of the present controversy, of the
Philippines, and then with that discomfort which professional standing of the attorney for plaintiffs-
she [experienced] or suffered during that evening, appellants, and of the extent of the service rendered by
it was her worst experience. I myself, who was not him, shows that said amount provided for in the written
sick, could not sleep because of the discomfort. agreement is reasonable. Said lawyer — whose prominence
(Tsn., pp. 27-28, Nov. 25, 1960). in the legal profession is well known — studied the case,
prepared and filed the complaint, conferred with witnesses,
analyzed documentary evidence, personally appeared at
It is not hard to see that in her condition then a physical
the trial of the case in twenty-two days, during a period of
discomfort sustained for thirteen hours may well be
three years, prepared four sets of cross-interrogatories for
considered a physical suffering. And even without regard
deposition taking, prepared several memoranda and the
to the noise and trepidation inside the plane — which
motion for reconsideration, filed a joint record on appeal
defendant contends, upon the strengh of expert testimony,
with defendant, filed a brief for plaintiffs as appellants
to be practically the same in first class and tourist class —
consisting of 45 printed pages and a brief for plaintiffs as
the fact that the seating spaces in the tourist class are quite
appellees consisting of 265 printed pages. And we are
narrower than in first class, there beingsix seats to a row in
further convinced of its reasonableness because
the former as against four to a row in the latter, and that in
defendant's counsel likewise valued at P50,000.00 the
tourist class there is very little space for reclining in view
proper compensation for his services rendered to
of the closer distance between rows (Tsn., p. 24, Nov. 25,
defendant in the trial court and on appeal.
1960), will suffice to show that the aforesaid passenger
indeed experienced physical suffering during the trip.
Added to this, of course, was the painfull thought that she In concluding, let it be stressed that the amount of
was deprived by defendant — after having paid for and damages awarded in this appeal has been determined by
expected the same — of the most suitable, place for her, adequately considering the official, political, social, and
the first class, where evidently the best of everything financial standing of the offended parties on one hand, and
would have been given her, the best seat, service, food and the business and financial position of the offender on the
treatment. Such difference in comfort between first class other (Domingding v. Ng, 55 O.G. 10). And further
and tourist class is too obvious to be recounted, is in fact considering the present rate of exchange and the terms at
the reason for the former's existence, and is recognized by which the amount of damages awarded would
the airline in charging a higher fare for it and by the approximately be in U.S. dollars, this Court is all the more
passengers in paying said higher rate Accordingly, of the view that said award is proper and reasonable.
considering the totality of her suffering and humiliation, an
award to Mrs. Maria J. Lopez of P50,000.00 for moral
Wherefore, the judgment appealed from is hereby modified
damages will be reasonable.
so as to award in favor of plaintiffs and against defendant,
the following: (1) P200,000.00 as moral damages, divided
Mr. and Mrs. Alfredo Montelibano, Jr., were travelling as among plaintiffs, thus: P100,000.00 for Senate
immediate members of the family of Senator Lopez. They President Pro Tempore Fernando Lopez; P50,000.00 for his
formed part of the Senator's party as shown also by the wife Maria J. Lopez; P25,000.00 for his son-in-law Alfredo
reservation cards of PAN-AM. As such they likewise shared Montelibano, Jr.; and P25,000.00 for his daughter Mrs.
his prestige and humiliation. Although defendant contends Alfredo Montelibano, Jr.; (2) P75,000.00 as exemplary or
that a few weeks before the flight they had asked their corrective damages; (3) interest at the legal rate of 6% per
reservations to be charged from first class to tourist class annum on the moral and exemplary damages aforestated,
— which did not materialize due to alleged full booking in from December 14, 1963, the date of the amended decision
the tourist class — the same does not mean they suffered of the court a quo, until said damages are fully paid; (4)
no shared in having to take tourist class during the flight. P50,000.00 as attorney's fees; and (5) the costs.
For by that time they had already been made to pay for Counterclaim dismissed.So ordered.
first class seats and therefore to expect first class
accommodations. As stated, it is one thing to take the
tourist class by free choice; a far different thing to be
compelled to take it notwithstanding having paid for first
class seats. Plaintiffs-appellants now ask P37,500.00 each
for the two but we note that in their motion for
reconsideration filed in the court a quo, they were satisfied
with P25,000.00 each for said persons. (Record on Appeal,
p. 102). For their social humiliation, therefore, the award to
them of P25,000.00 each is reasonable.

The rationale behind exemplary or corrective damages is,


as the name implies, to provide an example or correction
for public good. Defendant having breached its contracts in
bad faith, the court, as stated earlier, may award exemplary
damages in addition to moral damages (Articles 2229,
2232, New Civil Code).
other emotional and mental suffering he purportedly
suffered to sustain his claim for moral damages. Mere
allegations do not suffice; they must be substantiated by
clear and convincing proof.[6] No other person could have
THIRD DIVISION
proven such damages except the respondent himself as
[G.R. No. 152753. January 13, 2004]
they were extremely personal to him.

In Keirulf vs. Court of Appeals,[7] we held:


IGLECERIO MAHINAY, petitioner, vs. ATTY. GABINO A.
VELASQUEZ, JR., respondent.
While no proof of pecuniary loss is necessary in order that
moral damages may be awarded, the amount of indemnity
DECISION being left to the discretion of the court, it is nevertheless
Before us is a petition for review of the essential that the claimant should satisfactorily show the
decision[1] dated December 20, 2001 of the Court of Appeals existence of the factual basis of damages and its causal
affirming with modification the order and resolution dated connection to defendants acts. This is so because moral
October 31, 1977 of the Regional Trial Court, Branch 16, damages, though incapable of pecuniary estimation, are in
Naval, Biliran in Civil Case No. B-0923, for damages. the category of an award designed to compensate the
claimant for actual injury suffered and not to impose a
The instant case arose from the alleged defamatory penalty on the wrongdoer. In Francisco vs. GSIS, the Court
remarks of petitioner Iglecerio Mahinay against respondent held that there must be clear testimony on the anguish and
Gabino A. Velasquez, Jr. other forms of mental suffering. Thus, if the plaintiff fails
to take the witness stand and testify as to his/her social
According to Olipio Machete, overseer of respondent, humiliation, wounded feelings and anxiety, moral damages
petitioner uttered the following malicious and insulting cannot be awarded. In Cocoland Development Corporation
statement against respondent: Your master, a candidate for vs. National labor Relations Commission, the Court held
Congressman, Ben Velasquez, is a land grabber. Machete that additional facts must be pleaded and proven to
informed respondent of what petitioner said about warrant the grant of moral damages under the Civil Code,
him. This impelled respondent to file a complaint for these being, x x x social humiliation, wounded feelings,
damages against petitioner, claiming that his utterances grave anxiety, etc. that resulted therefrom.
besmirched his and his familys reputation and caused him
anxiety, mental anguish and sleepless nights.
The testimony of Machete was not enough evidence of
As no amicable settlement could be reached by the the moral damages that the respondent supposedly
parties, trial on the merits ensued. The trial court suffered.Machete may have clearly testified on the specific
eventually ruled in favor of respondent on the basis of the words uttered by petitioner against respondent but he
sole testimony of Machete and awarded to respondent could not have testified on the wounded feelings
moral damages in the amount of P100,000 and exemplary respondent allegedly went through by reason of petitioners
damages in the amount of P50,000.[2] No other evidence was slanderous remark. The award of moral damages must be
adduced by either party. anchored to a clear showing that respondent actually
experienced mental anguish, besmirched reputation,
Petitioner appealed to the Court of Appeals alleging sleepless nights, wounded feelings or similar injury. There
that the trial court order lacked factual basis. The Court of was no better witness to this experience than respondent
Appeals, however, modified the award, as follows: himself.Since respondent failed to testify on the witness
stand, the trial court did not have any factual basis to
WHEREFORE, with the MODIFICATION that the award for award moral damages to him.
moral and exemplary damages is hereby reduced to Neither is respondent entitled to exemplary
P50,000.00 and P25,000.00, respectively, the decision damages. If the court has no proof or evidence upon which
appealed from is hereby AFFIRMED and this appeal the claim for moral damages could be based, such
DISMISSED. indemnity could not be outrightly awarded. The same holds
true with respect to the award of exemplary damages where
SO ORDERED.[3] it must be shown that the party acted in a wanton,
oppressive or malevolent manner.[8] Furthermore, this
specie of damages is allowed only in addition to moral
His motion for reconsideration having been denied, damages such that no exemplary damages can be awarded
petitioner comes to this Court arguing that the appellate unless the claimant first establishes his clear right to moral
court gravely erred in: (a) affirming the trial court order damages.
despite the lack of sufficient factual basis and (b) awarding
moral and exemplary damages to respondent despite his The affirmance of the Court of Appeals of the ruling
failure to take the witness stand.[4] of the trial court is therefore not in order as it lacked
sufficient factual basis.
We agree.
WHEREFORE, the decision of the Court of Appeals is
In order that moral damages may be awarded, there hereby REVERSED and SET ASIDE. The complaint for
must be pleading and proof of moral suffering, mental damages in Civil Case No. B-0923 against herein petitioner
anguish, fright and the like.[5] While respondent alleged in is hereby DISMISSED. No costs.
his complaint that he suffered mental anguish, serious
anxiety, wounded feelings and moral shock, he failed to SO ORDERED.
prove them during the trial. Indeed, respondent should
have taken the witness stand and should have testified on
the mental anguish, serious anxiety, wounded feelings and
SECOND DIVISION This is a petition for review on certiorari of the
[G.R. No. 110398. November 7, 1997] decision of the Court of Appeals affirming with
modification the Regional Trial Courts award of damages to
private respondents for the death of relatives as a result of
NEGROS NAVIGATION CO., INC., petitioner, vs. THE the sinking of petitioners vessel.
COURT OF APPEALS, RAMON MIRANDA, SPS.
RICARDO and VIRGINIA DE LA In April of 1980, private respondent Ramon Miranda
VICTORIA, respondents. purchased from the Negros Navigation Co., Inc. four special
cabin tickets (#74411, 74412, 74413 and 74414) for his
wife, daughter, son and niece who were going to Bacolod
DECISION
City to attend a family reunion. The tickets were for Voyage
No. 457-A of the M/V Don Juan, leaving Manila at 1:00 p.m. P158,899.00 as compensatory damages for loss of
on April 22, 1980. earning capacity;

The ship sailed from the port of Manila on schedule.


P30,000.00 as compensatory damages for wrongful death;
At about 10:30 in the evening of April 22, 1980,
the Don Juan collided off the Tablas Strait in Mindoro, with
P100,000.00 as moral damages;
the M/T Tacloban City, an oil tanker owned by the
Philippine National Oil Company (PNOC) and the PNOC
Shipping and Transport Corporation (PNOC/STC). As a P20,000.00 as exemplary damages, all in the total
result, the M/V Don Juan sank. Several of her passengers amount of P320,899.00; and
perished in the sea tragedy. The bodies of some of the
victims were found and brought to shore, but the four P15,000.00 as attorneys fees.
members of private respondents families were never found.

Private respondents filed a complaint on July 16, 1980 On appeal, the Court of Appeals[1] affirmed the
in the Regional Trial Court of Manila, Branch 34, against the decision of the Regional Trial Court with modification
Negros Navigation, the Philippine National Oil Company
(PNOC), and the PNOC Shipping and Transport Corporation 1. Ordering and sentencing defendants-
(PNOC/STC), seeking damages for the death of Ardita de la appellants, jointly and severally, to pay
Victoria Miranda, 48, Rosario V. Miranda, 19, Ramon V. plaintiff-appellee Ramon Miranda the amount
Miranda, Jr., 16, and Elfreda de la Victoria, 26. of P23,075.00 as actual damages instead
of P42,025.00;
In its answer, petitioner admitted that private
respondents purchased ticket numbers 74411, 74412, 2. Ordering and sentencing defendants-
74413 and 74414; that the ticket numbers were listed in appellants, jointly and severally, to pay
the passenger manifest; and that the Don Juan left Pier 2, plaintiff-appellee Ramon Miranda the amount
North Harbor, Manila on April 22, 1980 and sank that night of P150,000.00, instead of P90,000.00, as
after being rammed by the oil tanker M/T Tacloban City, compensatory damages for the death of his
and that, as a result of the collision, some of the wife and two children;
passengers of the M/V Don Juan died. Petitioner, however,
denied that the four relatives of private respondents 3. Ordering and sentencing defendants-
actually boarded the vessel as shown by the fact that their appellants, jointly and severally, to pay
bodies were never recovered. Petitioner further averred plaintiffs-appellees Dela Victoria spouses the
that the Don Juan was seaworthy and manned by a full and amount of P50,000.00, instead of P30,000.00,
competent crew, and that the collision was entirely due to as compensatory damages for the death of
the fault of the crew of the M/T Tacloban City. their daughter Elfreda Dela Victoria;

On January 20, 1986, the PNOC and petitioner Negros Hence this petition, raising the following issues:
Navigation Co., Inc. entered into a compromise agreement (1) whether the members of private respondents
whereby petitioner assumed full responsibility for the
families were actually passengers of the Don
payment and satisfaction of all claims arising out of or in Juan;
connection with the collision and releasing the PNOC and
the PNOC/STC from any liability to it. The agreement was (2) whether the ruling in Mecenas v. Court of
subsequently held by the trial court to be binding upon Appeals,[2] finding the crew members of
petitioner, PNOC and PNOC/STC. Private respondents did petitioner to be grossly negligent in the
not join in the agreement. performance of their duties, is binding in
this case;
After trial, the court rendered judgment on February
21, 1991, the dispositive portion of which reads as follows: (3) whether the total loss of the M/V Don
Juan extinguished petitioners liability; and
WHEREFORE, in view of the foregoing, judgment is hereby
(4) whether the damages awarded by the
rendered in favor of the plaintiffs, ordering all the
appellate court are excessive, unreasonable
defendants to pay jointly and severally to the plaintiffs
and unwarranted.
damages as follows:
First. The trial court held that the fact that the victims
To Ramon Miranda: were passengers of the M/V Don Juan was sufficiently
proven by private respondent Ramon Miranda, who
testified that he purchased tickets numbered 74411, 74412,
P42,025.00 for actual damages; 74413, and 74414 at P131.30 each from the Makati office of
petitioner for Voyage No. 47-A of the M/V Don Juan, which
P152,654.55 as compensatory damages for loss of was leaving Manila on April 22, 1980. This was
earning capacity of his wife; corroborated by the passenger manifest (Exh. E) on which
the numbers of the tickets and the names of Ardita Miranda
and her children and Elfreda de la Victoria appear.
P90,000.00 as compensatory damages for wrongful
death of three (3) victims; Petitioner contends that the purchase of the tickets
does not necessarily mean that the alleged victims actually
took the trip.Petitioner asserts that it is common
P300,000.00 as moral damages;
knowledge that passengers purchase tickets in advance but
do not actually use them.Hence, private respondent should
P50,000.00 as exemplary damages, all in the total also prove the presence of the victims on the ship. The
amount of P634,679.55; and witnesses who affirmed that the victims were on the ship
were biased and unreliable.
P40,000.00 as attorneys fees. This contention is without merit. Private respondent
Ramon Miranda testified that he personally took his family
To Spouses Ricardo and Virginia de la Victoria: and his niece to the vessel on the day of the voyage and
stayed with them on the ship until it was time for it to
leave. There is no reason he should claim members of his
P12,000.00 for actual damages; family to have perished in the accident just to maintain an
action. People do not normally lie about so grave a matter
as the loss of dear ones. It would be more difficult for 140 persons more than the maximum number that could be
private respondents to keep the existence of their relatives safely carried by it.
if indeed they are alive than it is for petitioner to show the
contrary. Petitioners only proof is that the bodies of the Taking these circumstances together, and the fact that
supposed victims were not among those recovered from the M/V Don Juan, as the faster and better-equipped vessel,
the site of the mishap. But so were the bodies of the other could have avoided a collision with the PNOC tanker, this
passengers reported missing not recovered, as this Court Court held that even if the Tacloban City had been at fault
noted in the Mecenas[3] case. for failing to observe an internationally-recognized rule of
navigation, the Don Juan was guilty of contributory
Private respondent Mirandas testimony was negligence. Through Justice Feliciano, this Court held:
corroborated by Edgardo Ramirez. Ramirez was a
seminarian and one of the survivors of the collision. He
The grossness of the negligence of the Don Juan is
testified that he saw Mrs. Miranda and Elfreda de la Victoria
underscored when one considers the foregoing
on the ship and that he talked with them. He knew Mrs.
circumstances in the context of the following facts: Firstly,
Miranda who was his teacher in the grade school. He also
the Don Juan was more than twice as fast as the Tacloban
knew Elfreda who was his childhood friend and
City. The Don Juans top speed was 17 knots; while that of
townmate. Ramirez said he was with Mrs. Miranda and her
the Tacloban City was 6.3. knots. Secondly, the Don Juan
children and niece from 7:00 p.m. until 10:00 p.m. when
carried the full complement of officers and crew members
the collision happened and that he in fact had dinner with
specified for a passenger vessel of her class. Thirdly, the
them. Ramirez said he and Elfreda stayed on the deck after
Don Juan was equipped with radar which was functioning
dinner and it was there where they were jolted by the
that night. Fourthly, the Don Juans officer on-watch had
collision of the two vessels. Recounting the moments after
sighted the Tacloban City on his radar screen while the
the collision, Ramirez testified that Elfreda ran to fetch
latter was still four (4) nautical miles away. Visual
Mrs. Miranda. He escorted her to the room and then tried to
confirmation of radar contact was established by the Don
go back to the deck when the lights went out. He tried to
Juan while the Tacloban City was still 2.7 miles away. In the
return to the cabin but was not able to do so because it was
total set of circumstances which existed in the instant case,
dark and there was a stampede of passengers from the
the Don Juan, had it taken seriously its duty of
deck.
extraordinary diligence, could have easily avoided the
Petitioner casts doubt on Ramirez testimony, claiming collision with the Tacloban City. Indeed, the Don Juan
that Ramirez could not have talked with the victims for might well have avoided the collision even if it had
about three hours and not run out of stories to tell, unless exercised ordinary diligence merely.
Ramirez had a storehouse of stories. But what is incredible
about acquaintances thrown together on a long journey It is true that the Tacloban City failed to follow Rule 18 of
staying together for hours on end, in idle conversation the International Rules of the Road which requires two (2)
precisely to while the hours away? power-driven vessels meeting end on or nearly end on each
to alter her course to starboard (right) so that each vessel
Petitioner also points out that it took Ramirez three
may pass on the port side (left) of the other.The Tacloban
(3) days before he finally contacted private respondent
City, when the two (2) vessels were only three-tenths (0.3)
Ramon Miranda to tell him about the fate of his family. But
of a mile apart, turned (for the second time) 15o to port side
it is not improbable that it took Ramirez three days before
while the Don Juan veered hard to starboard. . . . [But] route
calling on private respondent Miranda to tell him about the
observance of the International Rules of the Road will not
last hours of Mrs. Miranda and her children and niece, in
relieve a vessel from responsibility if the collision could
view of the confusion in the days following the collision as
have been avoided by proper care and skill on her part or
rescue teams and relatives searched for survivors.
even by a departure from the rules.
Indeed, given the facts of this case, it is improper for
petitioner to even suggest that private respondents In the petition at bar, the Don Juan having sighted the
relatives did not board the ill-fated vessel and perish in the Tacloban City when it was still a long way off was negligent
accident simply because their bodies were not recovered. in failing to take early preventive action and in allowing the
two (2) vessels to come to such close quarters as to render
Second. In finding petitioner guilty of negligence and the collision inevitable when there was no necessity for
in failing to exercise the extraordinary diligence required of passing so near to the Tacloban City as to create that
it in the carriage of passengers, both the trial court and the hazard or inevitability, for the Don Juan could choose its
appellate court relied on the findings of this Court own distance. It is noteworthy that the Tacloban City, upon
in Mecenas v. Intermediate Appellate Court,[4] which case turning hard to port shortly before the moment of
was brought for the death of other passengers. In that case collision, signalled its intention to do so by giving two (2)
it was found that although the proximate cause of the short blasts with its horn. The Don Juan gave no answering
mishap was the negligence of the crew of the M/T Tacloban horn blast to signal its own intention and proceeded to turn
City, the crew of the Don Juan was equally negligent as it hard to starboard.
found that the latters master, Capt. Rogelio Santisteban,
was playing mahjong at the time of collision, and the
officer on watch, Senior Third Mate Rogelio De Vera, We conclude that Capt. Santisteban and Negros Navigation
admitted that he failed to call the attention of Santisteban are properly held liable for gross negligence in connection
to the imminent danger facing them. This Court found that with the collision of the Don Juan and Tacloban City and
Capt. Santisteban and the crew of the M/V Don Juanfailed the sinking of the Don Juan leading to the death of
to take steps to prevent the collision or at least delay the hundreds of passengers. . . .[5]
sinking of the ship and supervise the abandoning of the
ship. Petitioner criticizes the lower courts reliance on
Petitioner Negros Navigation was found equally the Mecenas case, arguing that, although this case arose out
negligent in tolerating the playing of mahjong by the ship of the same incident as that involved in Mecenas, the
captain and other crew members while on board the ship parties are different and trial was conducted
and failing to keep the M/V Don Juan seaworthy so much so separately. Petitioner contends that the decision in this
that the ship sank within 10 to 15 minutes of its impact case should be based on the allegations and defenses
with the M/T Tacloban City. pleaded and evidence adduced in it or, in short, on the
record of this case.
In addition, the Court found that the Don Juan was
overloaded. The Certificate of Inspection, dated August 27, The contention is without merit. What petitioner
1979, issued by the Philippine Coast Guard Commander at contends may be true with respect to the merits of the
Iloilo City stated that the total number of persons allowed individual claims against petitioner but not as to the cause
on the ship was 864, of whom 810 are passengers, but of the sinking of its ship on April 22, 1980 and its liability
there were actually 1,004 on board the vessel when it sank, for such accident, of which there can only be one
truth. Otherwise, one would be subscribing to the carry. Petitioner is, therefore, clearly liable for damages to
sophistry: truth on one side of the Pyrenees, falsehood on the full extent.
the other!
Fourth. Petitioner contends that, assuming that
Adherence to the Mecenas case is dictated by this the Mecenas case applies, private respondents should be
Courts policy of maintaining stability in jurisprudence in allowed to claim only P43,857.14 each as moral damages
accordance with the legal maxim stare decisis et non quieta because in the Mecenas case, the amount of P307,500.00
movere (Follow past precedents and do not disturb what was awarded to the seven children of the Mecenas
has been settled.) Where, as in this case, the same couple. Under petitioners formula, Ramon Miranda should
questions relating to the same event have been put forward receive P43,857.14, while the De la Victoria spouses should
by parties similarly situated as in a previous case litigated receive P97,714.28.
and decided by a competent court, the rule of stare decisis
is a bar to any attempt to relitigate the same Here is where the principle of stare decisis does not
issue.[6] In Woulfe v. Associated Realties Corporation,[7] the apply in view of differences in the personal circumstances
Supreme Court of New Jersey held that where substantially of the victims. For that matter, differentiation would be
similar cases to the pending case were presented and justified even if private respondents had joined the private
applicable principles declared in prior decisions, the court respondents in theMecenas case. The doctrine of stare
was bound by the principle of stare decisis. Similarly, decisis works as a bar only against issues litigated in a
in State ex rel. Tollinger v. Gill,[8] it was held that under the previous case. Where the issue involved was not raised nor
doctrine of stare decisis a ruling is final even as to parties presented to the court and not passed upon by the court in
who are strangers to the original proceeding and not bound the previous case, the decision in the previous case is not
by the judgment under the res judicata doctrine. The stare decisis of the question presently presented.[16] The
Philadelphia court expressed itself in this wise: Stare decision in the Mecenas case relates to damages for which
decisis simply declares that, for the sake of certainty, a petitioner was liable to the claimants in that case.
conclusion reached in one case should be applied to those
In the case at bar, the award of P300,000.00 for moral
which follow, if the facts are substantially the same, even
damages is reasonable considering the grief petitioner
though the parties may be different.[9] Thus, in J. M. Tuason
Ramon Miranda suffered as a result of the loss of his entire
v. Mariano, supra, this Court relied on its rulings in other
family. As a matter of fact, three months after the collision,
cases involving different parties in sustaining the validity
he developed a heart condition undoubtedly caused by the
of a land title on the principle of stare decisis et non quieta
strain of the loss of his family. The P100,000.00 given to
movere.
Mr. and Mrs. de la Victoria is likewise reasonable and
Indeed, the evidence presented in this case was the should be affirmed.
same as those presented in the Mecenas case, to wit:
As for the amount of civil indemnity awarded to
private respondents, the appellate courts award
Document Mecenas case This case of P50,000.00 per victim should be sustained. The amount
of P30,000.00 formerly set in De Lima v. Laguna Tayabas
Co.,[17] Heirs of Amparo delos Santos v. Court of
Decision of Commandant Exh. 10[10] Exh. 11-B-
Appeals,[18] and Philippine Rabbit Bus Lines, Inc. v.
NN/X
Intermediate Appellate Court[19] as benchmark was
Phil. Coast Guard in BMI Case
subsequently increased to P50,000.00 in the case
No. 415-80 dated 3/26/81
of Sulpicio Lines, Inc. v. Court of Appeals,[20] which involved
the sinking of another interisland ship on October 24,
Decision of the Minister Exh. 11[11] Exh. ZZ 1988.
of National Defense dated 3/12/82
We now turn to the determination of the earning
capacity of the victims. With respect to Ardita Miranda, the
Resolution on the motion Exh. 13 Exh. AAA
[12]
trial court awarded damages computed as follows:[21]
for reconsideration of the (private respondents)
decision of the Minister of
National Defense dated 7/24/84 In the case of victim Ardita V. Miranda whose age at the
time of the accident was 48 years, her life expectancy was
computed to be 21.33 years, and therefore, she could have
Certificate of inspection Exh. 1-A[13] Exh. 19-NN lived up to almost 70 years old. Her gross earnings for
dated 8/27/79 21.33 years based on P10,224.00 per annum, would
be P218,077.92. Deducting therefrom 30% as her living
Certificate of Stability Exh. 6-A[14] Exh. 19-D-NN expenses, her net earnings would be P152,654.55, to which
dated 12/16/76 plaintiff Ramon Miranda is entitled to compensatory
damages for the loss of earning capacity of his wife. In
considering 30% as the living expenses of Ardita Miranda,
Nor is it true that the trial court merely based its the Court takes into account the fact that plaintiff and his
decision on the Mecenas case. The trial court made its own wife were supporting their daughter and son who were
independent findings on the basis of the testimonies of both college students taking Medicine and Law
witnesses, such as Senior Third Mate Rogelio de Vera, who respectively.
incidentally gave substantially the same testimony on
petitioners behalf before the Board of Marine Inquiry. The
trial court agreed with the conclusions of the then Minister In accordance with the ruling in Villa-Rey Transit, Inc. v.
of National Defense finding both vessels to be negligent. Court of Appeals,[22] we think the life expectancy of Ardita
Miranda was correctly determined to be 21.33 years, or up
Third. The next issue is whether petitioner is liable to to age 69. Petitioner contends, however, that Mrs. Miranda
pay damages notwithstanding the total loss of its ship. The would have retired from her job as a public school teacher
issue is not one of first impression. The rule is well- at 65, hence her loss of earning capacity should be
entrenched in our jurisprudence that a shipowner may be reckoned up to 17.33 years only.
held liable for injuries to passengers notwithstanding the
exclusively real and hypothecary nature of maritime law if The accepted formula for determining life expectancy
fault can be attributed to the shipowner.[15] is 2/3 multiplied by (80 minus the age of the deceased). It
may be that in the Philippines the age of retirement
In Mecenas, this Court found petitioner guilty of generally is 65 but, in calculating the life expectancy of
negligence in (1) allowing or tolerating the ship captain and individuals for the purpose of determining loss of earning
crew members in playing mahjong during the voyage, (2) in capacity under Art. 2206(1) of the Civil Code, it is assumed
failing to maintain the vessel seaworthy and (3) in allowing that the deceased would have earned income even after
the ship to carry more passengers than it was allowed to retirement from a particular job. In this case, the trial court
took into account the fact that Mrs. Miranda had a masters
degree and a good prospect of becoming principal of the the indemnity for death awarded to private respondents is
school in which she was teaching. There was reason to without merit. Indemnity for death is given to compensate
believe that her income would have increased through the for violation of the rights of the deceased, i.e., his right to
years and she could still earn more after her life and physical integrity.[26] On the other hand, damages
retirement, e.g., by becoming a consultant, had she not incidental to or arising out of such death are for pecuniary
died. The gross earnings which Mrs. Miranda could losses of the beneficiaries of the deceased.
reasonably be expected to earn were it not for her untimely
death was, therefore, correctly computed by the trial court As for the award of attorneys fees, we agree with the
to be P218,077.92 (given a gross annual income Court of Appeals that the amount of P40,000.00 for private
of P10,224.00 and life expectancy of 21.33 years). respondent Ramon Miranda and P15,000.00 for the de la
Victoria spouses is justified. The appellate court correctly
Petitioner contends that from the amount of gross held:
earnings, 60% should be deducted as necessary living
expenses, not merely 30% as the trial court
The Mecenas case cannot be made the basis for
allowed. Petitioner contends that 30% is unrealistic,
determining the award for attorneys fees. The award would
considering that Mrs. Mirandas earnings would have been
naturally vary or differ in each case. While it is admitted
subject to taxes, social security deductions and inflation.
that plaintiff-appellee Ramon Miranda who is himself a
We agree with this contention. In Villa-Rey Transit, Inc. lawyer, represented also plaintiffs-appellees Dela Victoria
v. Court of Appeals,[23] the Court allowed a deduction spouses, we note that separate testimonial evidence were
of P1,184.00 for living expenses from the P2,184.00 annual adduced by plaintiff-appellee Ramon Miranda (TSN,
salary of the victim, which is roughly 54.2% thereof. The February 26, 1982, p. 6) and plaintiffs-appellees spouses
deceased was 29 years old and a training assistant in the Dela Victoria (TSN, August 13, 1981, p. 43). Considering the
Bacnotan Cement Industries. In People v. Quilaton,[24] the amount of work and effort put into the case as indicated by
deceased was a 26-year old laborer earning a daily the voluminous transcripts of stenographic notes, we find
wage. The court allowed a deduction of P120,000.00 which no reason to disturb the award of P40,000.00 for plaintiff-
was 51.3% of his annual gross earnings appellee Ramon Miranda and P15,000.00 for plaintiffs-
of P234,000.00. In People v. Teehankee,[25] the court allowed appellees Dela Victoria spouses.[27]
a deduction of P19,800.00, roughly 42.4% thereof from the
deceaseds annual salary of P46,659.21. The deceased, The award of exemplary damages should be increased
Maureen Hultman, was 17 years old and had just received to P300,000.00 for Ramon Miranda and P100,000.00 for the
her first paycheck as a secretary. In the case at bar, we hold de la Victoria spouses in accordance with our ruling in
that a deduction of 50% from Mrs. Mirandas gross earnings the Mecenas case:
(P218,077.92) would be reasonable, so that her net earning
capacity should be P109,038.96. There is no basis for
supposing that her living expenses constituted a smaller Exemplary damages are designed by our civil law to permit
percentage of her gross income than the living expenses in the courts to reshape behaviour that is socially deleterious
the decided cases. To hold that she would have used only a in its consequence by creating negative incentives or
small part of her income for herself, a larger part going to deterrents against such behaviour. In requiring compliance
the support of her children would be conjectural and with the standard of extraordinary diligence, a standard
unreasonable. which is in fact that of the highest possible degree of
diligence, from common carriers and in creating a
As for Elfreda de la Victoria, the trial court found that, presumption of negligence against them, the law seeks to
at the time of her death, she was 26 years old, a teacher in compel them to control their employees, to tame their
a private school in Malolos, Bulacan, earning P6,192.00 per reckless instincts and to force them to take adequate care
annum. Although a probationary employee, she had already of human beings and their property. The Court will take
been working in the school for two years at the time of her judicial notice of the dreadful regularity with which
death and she had a general efficiency rating of 92.85% and grievous maritime disasters occur in our waters with
it can be presumed that, if not for her untimely death, she massive loss of life. The bulk of our population is too poor
would have become a regular teacher. Hence, her loss of to afford domestic air transportation. So it is that
earning capacity is P111,456.00, computed as follows: notwithstanding the frequent sinking of passenger vessels
in our waters, crowds of people continue to travel by
sea. This Court is prepared to use the instruments given to
net earning capacity (x) = life expectancy x [ gross annual
it by the law for securing the ends of law and public
income less reasonable & necessary living expenses (50%) ]
policy. One of those instruments is the institution of
exemplary damages; one of those ends, of special
x = [ 2 (80-26) ] x [P6,192.00 - P3,096.00] importance in an archipelagic state like the Philippines, is
the safe and reliable carriage of people and goods by sea.[28]
3
WHEREFORE, the decision of the Court of Appeals is
AFFIRMED with modification and petitioner is ORDERED to
= 36 x 3,096.00
pay private respondents damages as follows:

= P111,456.00
To private respondent Ramon Miranda:

On the other hand, the award of actual damages in the


P23,075.00 for actual damages;
amount of P23,075.00 was determined by the Court of
Appeals on the basis of receipts submitted by private
respondents. This amount is reasonable considering the P109,038.96 as compensatory damages for loss
expenses incurred by private respondent Miranda in of earning capacity of
organizing three search teams to look for his family, his wife;
spending for transportation in going to places such as
Batangas City and Iloilo, where survivors and the bodies of
P150,000.00 as compensatory damages for
other victims were found, making long distance calls,
wrongful death of three
erecting a monument in honor of the four victims,
(3) victims;
spending for obituaries in the Bulletin Today and for food,
masses and novenas.
P300,000.00 as moral damages;
Petitioners contention that the expenses for the
erection of a monument and other expenses for memorial
services for the victims should be considered included in
P300,000.00 as exemplary damages, all in the P100,000.00 as exemplary damages, all in the
total amount total amount
of P882,113.96; and of P373,456.00; and

P40,000.00 as attorneys fees. P15,000.00 as attorneys fees.

To private respondents Spouses Ricardo and Virginia de la Petitioners are further ordered to pay costs of suit.
Victoria:
In the event the Philippine National Oil Company
and/or the PNOC Shipping and Transport Corporation pay
P12,000.00 for actual damages; or are required to pay all or a portion of the amounts
adjudged, petitioner Negros Navigation Co., Inc. shall
P111,456.00 as compensatory damages for loss reimburse either of them such amount or amounts as either
of earning capacity; may have paid, and in the event of failure of Negros
Navigation Co., Inc., to make the necessary reimbursement,
PNOC and/or PNOC/STC shall be entitled to a writ of
P50,000.00 as compensatory damages for wrongful death; execution without need of filing another action.

P100,000.00 as moral damages;

Commodities). VILLANUEVA thereafter delivered the check


FIRST DIVISION to Helen Chu, his investment consultant at Kingly
[G.R. No. 141011. July 19, 2001] Commodities, with his express instruction to use said
check in placing a trading order at Kingly Commodities
CITYTRUST BANKING CORPORATION (now Bank of the future trading business as soon as a favorable opportunity
Philippine Islands), petitioner, vs. ISAGANI C. presented itself.[3]
VILLANUEVA, respondent.
Two days later, or on 19 June 1986, VILLANUEVA
[G.R. No. 141028. July 19, 2001] received a call from Helen Chu, informing him that she had
already placed a trading order in his behalf and delivered
ISAGANI C. VILLANUEVA, petitioner, vs. CITYTRUST the check to Kingly Commodities. The check was deposited
BANKING CORPORATION, respondent. with the China Banking Corporation.The next day, he
deposited P31,600 in cash to his savings account to cover
the full amount of the check he issued. His deposits in both
DECISION accounts totalled P51,304.91.[4]
In these consolidated cases, the Court is called upon However, on 23 June 1986, VILLANUEVAs Check No.
to determine whether the repeated dishonor of a check 396701 was dishonored due to insufficiency of funds and
drawn against a well-funded account but bearing the disparity in the signature. VILLANUEVA called Kingly
account number of another depositor with the same name Commodities and explained that there was a mistake in the
and surname as the drawer would entitle the drawer to dishonor of the check because he had sufficient
compensatory and moral damages and to attorneys fees. funds. Forthwith on the same day, VILLANUEVA called up
the BANKs Legaspi Village Branch Operations Manager,
The antecedent facts are as follows:
Maritess Gamboa, and inquired about the dishonor of his
Sometime in February 1984, Isagani C. Villanueva well-funded check. Gamboa promised to look into the
(hereafter VILLANUEVA) opened a savings account and a matter and instructed VILLANUEVA to advise his payee,
current account with Citytrust Banking Corporation Kingly Commodities, to re-deposit the check. Gamboa
(hereafter the BANK), which were assigned account assured VILLANUEVA that the check would be honored after
numbers 1-033-02337-1 and 33-00977-5, respectively, with the sufficiency of the funds was ascertained.[5]
an automatic transfer arrangement.
On 26 June 1986 at about 4:00 p.m., VILLANUEVA
On 21 May 1986, VILLANUEVA deposited some money learned that his check was again dishonored due to
in his savings account with the BANKs Legaspi Village insufficiency of funds and a stop- payment order he
Branch in Makati, Metro Manila. Realizing that he had run allegedly issued. Dismayed by the turn of events,
out of blank checks, VILLANUEVA requested a new VILLANUEVA called up the BANK and inquired from Gamboa
checkbook from one of the BANKs customer service the reason for the dishonor of his well-funded check and
representatives. He then filled up a checkbook requisition the alleged stop-payment order which he never
slip with the obligatory particulars, except for his current issued. Gamboa promised to investigate the matter and to
account number which he could not remember. He call VILLANUEVA in fifteen (15) minutes.[6] In the meantime,
expressed his predicament to a lady customer service she advised VILLANUEVA to re-deposit the check.
representative of the BANK, who in turn assured him that
VILLANUEVA then requested Lawrence Chin of Kingly
she could supply the information from the BANKs account
Commodities to give him until 5:30 p.m. that same day to
records. After signing the requisition slip, he gave it to
make good his P50,000 check. He then proceeded to the
her.[1]
BANKs Legaspi Village Branch Office, together with his
Pia Rempillo, another customer service representative investment consultant and his trading partner, to
of the BANK, saw VILLANUEVAs checkbook requisition personally inquire into the matter. They were met by
slip. She took it and proceeded to check the BANKs Marilou Genuino, the BANKs Branch Manager. There he
checkbook register which contained all the names and complained that his trading order was rejected because of
account numbers of the BANKs clients who were issued the dishonor of the check and that Kingly Commodities
checkbooks. Upon seeing the name Isagani Villanueva -- threatened to close his trading account unless his check
Account No. 33-00446-3 in the checkbook register, payment would be made good before 5:30 p.m. that
Rempillo copied the aforesaid account number on the space day. After making the necessary investigation, Genuino
intended for it in VILLANUEVAs requisition slip.[2] related to VILLANUEVA that the reason for the dishonor of
the check was that the account number assigned to his new
On 17 June 1986, VILLANUEVA received from the checkbook was the account number of another depositor
BANK his requested checkbook. On the same day, he also named Isagani Villanueva but with a different middle
immediately signed Check No. 396701 bearing the amount initial.[7]
of P50,000 payable to the order of Kingly Commodities
Traders and Multi Resources, Inc. (hereafter Kingly
To resolve the matter, Genuino promised to send to account number was pre-indicated; (d) give the requisition
Kingly Commodities a managers check for P50,000 before slip to the care and custody of a BANK officer or employee
5:30 p.m., the deadline given to VILLANUEVA. She also instead of leaving the requisition slip on top of one of the
personally called Kingly Commodities and explained the tables of the BANK; and (e) verify the account number of
reason for the dishonor of the check.[8] the new set of checks when it was delivered to him. These
omissions directly resulted in the dishonor of his check
On 30 June 1986, VILLANUEVA sent a letter[9] to the drawn from an account bearing the account number of
BANK addressed to the President, Jose Facundo, demanding another BANK client whose name and surname were similar
indemnification for alleged losses and damages suffered by to his. VILLANUEVA then must bear the consequent
him as a result of the dishonor of his well-funded check. He damages and losses he allegedly suffered.
demanded the amount of P70,000 as indemnification for
actual damages in the form of lost profits and P2 Million The trial court conceded, however, that the BANK was
for moral and other damages. negligent when it failed to supply VILLANUEVAs correct
account number despite its promise to do so; but its
On 10 July 1986, in answer to VILLANUEVAs letter, negligence was merely contributory, which would have
Gregorio Anonas III, the BANKs Senior Vice-President, reduced the damages recoverable by VILLANUEVA had the
apologized for the unfortunate oversight, but reminded latter proved his claims for actual, moral and exemplary
VILLANUEVA that the dishonor of his check was due to his damages, and attorneys fees.
failure to state his current account number in his
requisition slip. Anonas further stated that as soon as the Likewise, the trial court doubted that VILLANUEVA
mistake was discovered, the BANK promptly sent a sustained actual damages in the amount of P240,000 due to
managers check to Kingly Commodities before 5:30 p.m. on loss of profits as averred in the complaint considering that
26 June 1986 to avoid any damage the dishonor of the his initial claim against the BANK for actual loss was
check might have caused.[10] merely P70, 000[14] and the evidence presented in support
thereof was hearsay, unreliable and not the best evidence.
Failing to obtain from the BANK a favorable action on
his demand for indemnification, VILLANUEVA filed on 27 VILLANUEVA appealed to the Court of Appeals. The
August 1986 a complaint for damages based on breach of appeal was docketed as CA-G.R. CV No. 40931.
contract and/or quasi-delict before the Regional Trial Court
of Makati City. The case was docketed as Civil Case No. In his appeal, VILLANUEVA maintained that the BANK
14749 and was raffled to Branch 63 thereof. was guilty of gross or culpable negligence amounting to
bad faith when its customer service representative
VILLANUEVA alleged in his complaint that the BANK furnished an erroneous account number. He further
breached its contractual obligation to him as a depositor contended that the same was the proximate cause of the
because of its repeated dishonor of his valid and well- repeated dishonor of his check. He should, therefore, be
funded check. The breach arose from the BANKs gross entitled to an award of actual, moral and exemplary
negligence and culpable recklessness in supplying the damages, including attorneys fees and costs of the suit.
wrong account number. As a consequence, he suffered and
sustained (1) actual damages consisting of loss of profits in The Court of Appeals, in its decision of 2 February
the amount of at least P240,000, for he was not allowed to 1999,[15] ruled that when the BANK voluntarily processed the
trade by Kingly Commodities; and (2) P2 Million as moral requisition slip without the requisite account number being
damages because of the intolerable physical inconvenience, supplied by the applicant, it in effect took upon itself the
discomfort, extreme humiliation, indignities, etc., that he obligation to supply the correct account number. Thus,
had borne before his peers and colleagues in the firm, his when the new checkbook was released to VILLANUEVA on
trading partners, and the officers of Kingly 17 June 1986, the BANK was deemed to have waived any
Commodities. He prayed for an additional award defect in the requisition slip and estopped from putting the
of P500,000 for exemplary damages, attorneys fees, blame on VILLANUEVAs failure to indicate his account
litigation expenses and costs of the suit.[11] number. VILLANUEVA had every right to assume that
everything was in order in his application for a new
In its answer, the BANK alleged that VILLANUEVA checkbook; for, after all, he was banking with a world class
suffered no actionable injury, much less damages, universal bank. The banking industry is imbued with public
considering his blatant irresponsibility in not remembering interest and is mandated by law to serve its clients with
his current account number and in failing to bring his extraordinary care and diligence.
checkbook re-order slip form on which his account number
was inscribed when he requested a new set of checks. His The Court of Appeals also considered the BANKs
negligence in verifying the account number of the new set voluntary processing of the requisition slip as the cause
of checks issued to him also contributed to the dishonor of which in the natural and continuous sequence, unbroken
his check. The BANK claimed that it acted in good faith by any efficient intervening cause, produced the injury and
when it twice dishonored the check. It further asserted that without which the result would not have
VILLANUEVAs negligence was the proximate cause of his occurred.[16] However, although it conceded that the BANKs
self-proclaimed injury; and the alleged losses and damages negligence was not attended with malice and bad faith, it
could not likewise be deemed the natural and probable nonetheless awarded moral damages in the amount
consequences of the BANKs breach of obligation, had there of P100,000. It also awarded attorneys fees in the amount
been any.Finally, it claimed that VILLANUEVA acted with of P50,000, since VILLANUEVA was compelled to incur
malice in filing the case, and interposed counterclaims expenses to protect his interests by reason of the
of P500,000 as exemplary damages; P250,000 as attorneys unjustified act or omission of the BANK. However, it
fees; and actual damages as may be determined by the rejected VILLANUEVAs claim for compensatory damages
court.[12] and affirmed the trial courts finding thereon.

After due proceedings, the trial court rendered on 3 Upon the denial[17] of their respective motions for
July 1992 a decision[13] dismissing the complaint and the reconsideration, both VILLANUEVA and the BANK appealed
compulsory counterclaim for lack of merit. To the trial to us by way of petition for review.
court, the basic issue was whether it was VILLANUEVAs or
In its petition, the BANK ascribes to the Court of
the BANKs negligence which was the proximate cause of the
Appeals as reversible errors its (1) reversal of the court a
formers alleged injury. After an evaluation of the
quos decision; (2) declaration that the proximate and
respective allegations and evidence of the parties, the trial
efficient cause of the injury allegedly suffered by
court found that VILLANUEVAs negligence set the chain of
VILLANUEVA was the BANKs processing of the checkbook
events which resulted in his alleged losses and
and assigning an erroneous account number, and not the
damages. His negligence consisted in his failure to (a)
negligent act of VILLANUEVA in leaving the checkbook
indicate his current account number when he filled up his
requisition slip on top of one of the desks with the account
requisition slip for a new set of checks; (b) remember his
number entry blank; and (3) award of moral damages and
account number; (c) bring the used checkbook to which was
attached the pre-order requisition slip on which the
attorneys fees despite the absence of a finding of bad faith It is beyond cavil that VILLANUEVA had sufficient
on the part of the BANK. funds for the check. Had his account number been correct,
the check would not have been dishonored. Hence, we can
In his petition, VILLANUEVA asserts that the Court of say that VILLANUEVAs injury arose from the dishonor of his
Appeals erred in holding that his actual losses in the well-funded check. We have already ruled that the dishonor
amount of P234,059.04 was not sufficiently proved with of the check does not entitle him to compensatory
reasonable certainty. Had his fully-funded check not been damages. But, could the dishonor result in his alleged
dishonored twice, his four trading orders with Kingly intolerable physical inconvenience and discomfort, extreme
Commodities consisting of two (2) open sell positions on humiliation, indignities, etc, which he had borne before his
17 and 18 of June 1986 and two (2) settle buy orders on 26 peers, trading partners and officers of Kingly
June 1986 would have earned him profits in the amount he Commodities? True, we find that under the circumstances
claimed. He emphatically maintains that the loss had been of this case, VILLANUEVA might have suffered some form
satisfactorily proved by the testimony of Helen Chu, his of inconvenience and discomfort as a result of the dishonor
investment consultant. Ms. Chus testimony was not of his check. However, the same could not have been so
controverted; hence, it should have been considered and grave or intolerable as he attempts to portray or impress
admitted as factually true. Considering that his claim for upon us.
actual damages has been adequately established and that
the BANK committed gross negligence amounting to bad Further, it is clear from the records that the BANK was
faith, his concomitant demand for exemplary damages able to remedy the caveat of Kingly Commodities to
should likewise be awarded. VILLANUEVA that his trading account would be closed at
5:30 p.m. on 26 June 1986. The BANK was able to issue a
The issue of whether VILLANUEVA suffered actual or managers check in favor of Kingly Commodities before the
compensatory damages in the form of loss of profits is deadline. It was able to likewise explain to Kingly
factual. Both the Court of Appeals and the trial court have Commodities the circumstances surrounding the
ascertained that VILLANUEVA was unable to prove his unfortunate situation. Verily, the alleged embarrassment or
demand for compensatory damages arising from loss. His inconvenience caused to VILLANUEVA as a result of the
evidence thereon was found inadequate, uncorroborated, incident was timely and adequately contained, corrected,
speculative, hearsay and not the best evidence. Basic is the mitigated, if not entirely eradicated. VILLANUEVA, thus,
jurisprudential principle that in determining actual failed to support his claim for moral damages. In short,
damages, the court cannot rely on mere assertions, none of the circumstances mentioned in Article 2219 of the
speculations, conjectures or guesswork but must depend Civil Code exists to sanction the award for moral damages.
on competent proof and on the best obtainable evidence of
the actual amount of the loss.[18] Actual damages cannot be The award of attorneys fees should likewise be
presumed but must be duly proved with reasonable deleted. The general rule is that attorneys fees cannot be
certainty.[19] recovered as part of damages because of the policy that no
premium should be placed on the right to litigate. They are
It must also be stressed that the unanimity on the not to be awarded every time a party wins a suit.The power
factual ascertainment on this point by the trial court and of the court to award attorneys fees under Article 2208 of
the Court of Appeals bars us from supplanting their finding the Civil Code demands factual, legal and equitable
and substituting it with our own assessment. Well- justification. Even when a claimant is compelled to litigate
entrenched in our jurisprudence is the doctrine that the with third persons or to incur expenses to protect his
factual determinations of the lower courts are conclusive rights, still attorneys fees may not be awarded where there
and binding upon appellate courts and hence should not be is no sufficient showing of bad faith in the parties
disturbed. None of the recognized exceptions to said persistence of a case other than an erroneous conviction of
principle exists in this case to warrant a reexamination of the righteousness of his cause.[24]
such finding. Besides, our jurisdiction in cases brought
before us from the Court of Appeals is limited to the review In view of the foregoing discussion, we need not
of errors of law.[20] deliberate on the dispute as to whether it was the BANKs or
VILLANUEVAs negligence which was the proximate cause of
Nonetheless, is VILLANUEVA entitled to the moral the latters injury because, in the first place, he did not
damages and attorneys fees granted by the Court of sustain any compensable injury. If any damage had been
Appeals? suffered at all, it could be equivalent to damnum absque
injuria, i.e., damage without injury or damage or injury
Moral damages include physical suffering, mental
inflicted without injustice, or loss or damage without
anguish, fright, serious anxiety, besmirched reputation,
violation of a legal right, or a wrong done to a man for
wounded feelings, moral shock, social humiliation, and
which the law provides no remedy.[25]
similar injury.[21] Although incapable of pecuniary
computation, moral damages may be recovered if they are WHEREFORE, the decision of the Court of Appeals in
the proximate result of the defendants wrongful act or CA-G.R. CV No. 40931 is hereby REVERSED, and the
omission.[22] Thus, case law establishes the requisites for judgment of the Regional Trial Court of Makati City, Branch
the award of moral damages, viz: (1) there must be an 63, in Civil Case No. 14749 dismissing the complaint and
injury, whether physical, mental or psychological, clearly the counterclaim is hereby REINSTATED.
sustained by the claimant; (2) there must be a culpable act
or omission factually established; (3) the wrongful act or No costs.
omission of the defendant is the proximate cause of the
injury sustained by the claimant; and (4) the award of SO ORDERED.
damages is predicated on any of the cases stated in Article
2219 of the Civil Code.[23]
This petition for certiorari brings up for review question
whether the husband of a woman, who voluntarily
procured her abortion, could recover damages from
EN BANC
physician who caused the same.

G.R. No. L-16439 July 20, 1961


The litigation was commenced in the Court of First Instance
of Manila by respondent Oscar Lazo, the of Nita Villanueva,
ANTONIO GELUZ, petitioner, against petitioner Antonio Geluz, a physician. Convinced of
vs. the merits of the complaint upon the evidence adduced, the
THE HON. COURT OF APPEALS and OSCAR trial court rendered judgment favor of plaintiff Lazo and
LAZO, respondents. against defendant Geluz, ordering the latter to pay
P3,000.00 as damages, P700.00 attorney's fees and the
costs of the suit. On appeal, Court of Appeals, in a special
division of five, sustained the award by a majority vote of injury or violation of the rights of the deceased, his right to
three justices as against two, who rendered a separate life and physical integrity. Because the parents can not
dissenting opinion. expect either help, support or services from an unborn
child, they would normally be limited to moral damages for
the illegal arrest of the normal development of the spes
The facts are set forth in the majority opinion as follows:
hominis that was the foetus, i.e., on account of distress and
anguish attendant to its loss, and the disappointment of
Nita Villanueva came to know the defendant their parental expectations (Civ. Code Art. 2217), as well as
(Antonio Geluz) for the first time in 1948 — to exemplary damages, if the circumstances should warrant
through her aunt Paula Yambot. In 1950 she them (Art. 2230). But in the case before us, both the trial
became pregnant by her present husband before court and the Court of Appeals have not found any basis
they were legally married. Desiring to conceal her for an award of moral damages, evidently because the
pregnancy from her parent, and acting on the appellee's indifference to the previous abortions of his
advice of her aunt, she had herself aborted by the wife, also caused by the appellant herein, clearly indicates
defendant. After her marriage with the plaintiff, that he was unconcerned with the frustration of his
she again became pregnant. As she was then parental hopes and affections. The lower court expressly
employed in the Commission on Elections and her found, and the majority opinion of the Court of Appeals
pregnancy proved to be inconvenient, she had did not contradict it, that the appellee was aware of the
herself aborted again by the defendant in October second abortion; and the probabilities are that he was
1953. Less than two years later, she again became likewise aware of the first. Yet despite the suspicious
pregnant. On February 21, 1955, accompanied by repetition of the event, he appeared to have taken no steps
her sister Purificacion and the latter's daughter to investigate or pinpoint the causes thereof, and secure
Lucida, she again repaired to the defendant's clinic the punishment of the responsible practitioner. Even after
on Carriedo and P. Gomez streets in Manila, where learning of the third abortion, the appellee does not seem
the three met the defendant and his wife. Nita was to have taken interest in the administrative and criminal
again aborted, of a two-month old foetus, in cases against the appellant. His only concern appears to
consideration of the sum of fifty pesos, Philippine have been directed at obtaining from the doctor a large
currency. The plaintiff was at this time in the money payment, since he sued for P50,000.00 damages and
province of Cagayan, campaigning for his election P3,000.00 attorney's fees, an "indemnity" claim that, under
to the provincial board; he did not know of, nor the circumstances of record, was clearly exaggerated.
gave his consent, to the abortion.
The dissenting Justices of the Court of Appeals have aptly
It is the third and last abortion that constitutes plaintiff's remarked that:
basis in filing this action and award of damages. Upon
application of the defendant Geluz we granted certiorari.
It seems to us that the normal reaction of a
husband who righteously feels outraged by the
The Court of Appeals and the trial court predicated the abortion which his wife has deliberately sought at
award of damages in the sum of P3,000.06 upon the the hands of a physician would be highminded
provisions of the initial paragraph of Article 2206 of the rather than mercenary; and that his primary
Civil Code of the Philippines. This we believe to be error, concern would be to see to it that the medical
for the said article, in fixing a minimum award of P3,000.00 profession was purged of an unworthy member
for the death of a person, does not cover the case of an rather than turn his wife's indiscretion to personal
unborn foetus that is not endowed with personality. Under profit, and with that idea in mind to press either
the system of our Civil Code, "la criatura abortiva no the administrative or the criminal cases he had
alcanza la categoria de persona natural y en consscuencia filed, or both, instead of abandoning them in favor
es un ser no nacido a la vida del Derecho" (Casso-Cervera, of a civil action for damages of which not only he,
"Diccionario de Derecho Privado", Vol. 1, p. 49), being but also his wife, would be the beneficiaries.
incapable of having rights and obligations.
It is unquestionable that the appellant's act in provoking
Since an action for pecuniary damages on account of the abortion of appellee's wife, without medical necessity
personal injury or death pertains primarily to the one to warrant it, was a criminal and morally reprehensible act,
injured, it is easy to see that if no action for such damages that can not be too severely condemned; and the consent of
could be instituted on behalf of the unborn child on the woman or that of her husband does not excuse it. But
account of the injuries it received, no such right of action the immorality or illegality of the act does not justify an
could derivatively accrue to its parents or heirs. In fact, award of damage that, under the circumstances on record,
even if a cause of action did accrue on behalf of the unborn have no factual or legal basis.
child, the same was extinguished by its pre-natal death,
since no transmission to anyone can take place from on
The decision appealed from is reversed, and the complaint
that lacked juridical personality (or juridical capacity as
ordered dismissed. Without costs.
distinguished from capacity to act). It is no answer to
invoke the provisional personality of a conceived child
(conceptus pro nato habetur) under Article 40 of the Civil Let a copy of this decision be furnished to the Department
Code, because that same article expressly limits such of Justice and the Board of Medical Examiners for their
provisional personality by imposing the condition that the information and such investigation and action against the
child should be subsequently born alive: "provided it be appellee Antonio Geluz as the facts may warrant.
born later with the condition specified in the following
article". In the present case, there is no dispute that the
EN BANC
child was dead when separated from its mother's womb.

G.R. No. L-8721 May 23, 1957


The prevailing American jurisprudence is to the same
effect; and it is generally held that recovery can not had for
the death of an unborn child (Stafford vs. Roadway Transit TRANQUILINO CACHERO, plaintiff-appellant,
Co., 70 F. Supp. 555; Dietrich vs. Northampton, 52 Am. Rep. vs.
242; and numerous cases collated in the editorial note, 10 MANILA YELLOW TAXICAB CO., INC., defendant-appellant.
ALR, (2d) 639).
There is no dispute as to the following facts: on December
This is not to say that the parents are not entitled to collect 13, 1952, Atty. Tranquilino F. Cachero boarded a Yellow
any damages at all. But such damages must be those Taxicab, with plate No. 2159-52 driven by Gregorio Mira
inflicted directly upon them, as distinguished from the Abinion and owned by the Manila Yellow Taxicab Co., Inc.
On passing Oroquieta between Doroteo Jose and Lope de (b) The sum of P5,000 as attorney's fee; and the
Vega streets, Gregorio Mira Abinion bumped said taxicab costs of the suit; and
against a Meralco post, No. 1-4/387, with the result that the
cab was badly smashed and the plaintiff fell out of the
Plaintiff further respectfully prays for such other
vehicle to the ground, suffering thereby physical
and further reliefs as the facts and the law
injuries, slight in nature.
pertaining to the case may warrant.

The chauffeur was subsequently prosecuted by the City


The defendant answered the complaint setting forth
Fiscal and on February 26, 1963, upon his plea of guilty the
affirmative defenses and a counterclaim for P930 as
Municipal Court of Manila sentenced him to suffer 1 month
damages and praying for the dismissal of plaintiff's action.
and 1 day of arresto mayor, and to pay the costs. On
After hearing the Court rendered decision only July 20,
December 17, 1952, Tranquilino F. Cachero addressed a
1954, the dispositive part of which is as follows:
letter to the Manila Yellow Taxicab Co., Inc., which was
followed by another of January 6, 1953, which reads as
follows: IN VIEW OF THE FOREGOING, the Court hereby
renders judgment in favor of the plaintiff and
against the defendant, sentencing the latter to pay
MANILA, January 6, 1953 the former the following: (1) For medicine,
doctor's fees for services rendered and
transportation, P700; (2) professional fee as
attorney for the defendant in Criminal Case No.
The MANILA YELLOW TAXICAB CO., INC. 364, "People vs. Manolo Maddela et al." of the
1338 Arlegui, Manila Court of First Instance of Nueva Vizcaya, P3,000;
(3) professional fees as attorney for the defendant
Dear Sirs: in Civil Case No. 23891 of the Municipal Court of
Manila, "Virginia Tangulan vs. Leonel da Silva," and
for the taking of the deposition of Gabina
As you have been already advised by the letter Angrepan in a case against the Philippine National
dated December 17, 1952, on December 13, 1952, Bank, P200; and(4) moral damages in the amount
while I was a passenger of your taxicab bearing of P2,000.
plate No. 2159 and driven by your chauffeur
Gregorio Mira and through his negligence and the
bad condition of the said car, he bumped the same Defendant's counterclaim is hereby dismissed.
against the pavement on the street (Oroquieta —
between Doroteo Jose and Lope de Vega streets, Defendant shall also pay the costs."
Manila) and hit the Meralco post on said street,
resulting in the smashing of the said taxicab, and
as a result thereof I was gravely injured and From this decision both parties appealed to Us, plaintiff
suffered and is still suffering physical, mental and limiting his appeal to the part of the decision which refers
moral damages and not being able to resume my to the moral damages awarded to him which he considered
daily calling. inadequate, and to the failure of said judgment to grant the
attorney's fees asked for in the prayer of his complaint.
Defendant in turn alleges that the trial Court erred in
For the said damages, I hereby make a demand for awarding to the plaintiff the following:
the payment of the sum of P79,245.65, covering
expenses for transportation to the hospital for
medical treatment, medicines, doctors bills, actual (1) P700 — for medicine, doctor's fees and
monetary loss, moral, compensatory and transportation expenses;
exemplary damages, etc., within 5 days from date
of receipt hereof. (2) P3,000 — as supposedly unearned full
professional fees as attorney for the defendant in
I trust to hear from you on the matter within the Criminal Case No. 364, "People vs. Manolo Maddela
period of 5 days above specified. et al.";

(3) P200 — as supposedly unearned professional


Truly yours, fees as attorney for the defendant in Civil Case No.
23891 of the Manila Municipal Court, "Virginia
(Sgd.) TRANQUILINO F. CACHERO Tangulan vs. Leonel de Silva", and for failure to
2256 Int. B, Misericordia St., take the deposition of a certain Gabina Angrepan
Sta. Cruz, Manila in an unnamed case; and

(4) P2,000 — as moral damages, amounting to the


(Exhibit K) grand total of P5,900, these amounts being very
much greater than what plaintiff deserves.
The Taxicab Co. to avoid expenses and time of litigation
offered to settle the case amicably with plaintiff but the In connection with his appeal, plaintiff calls attention to
latter only agreed to reduce his demand to the sum of the testimonies of Dr. Modesto S. Purisima and of Dr.
P72,050.20 as his only basis for settlement which, of Francisco Aguilar, a member of the staff of the National
course, was not accepted by said company. So plaintiff Orthopedic Hospital, which he considers necessary as a
instituted this action on February 2, 1953, in the Court of basis for ascertaining not only the physical sufferings
First Instance of Manila, praying in the complaint that the undergone by him, but also for determining the adequate
defendant be condemned to pay him: compensation for moral damages that he should be
awarded by reason of said accident.
(a) The sum of P72,050.20, the total sum of the
itemized losses and/or damages under paragraph The exact nature of plaintiff's injuries, their degree of
7 of the complaint, with legal interest thereon seriousness and the period of his involuntary disability can
from the date of the filing of the complaint; be determined by the medical certificate (Exhibit D) issued
by the National Orthopedic Hospital on December 16, 1952,
and the testimonies of Dr. Francisco Aguilar, physician in
said hospital, and of Dr. Modesto Purisima, a private treatment given to the plaintiff was just exactly
practitioner. The medical certificate (Exhibit D) lists: (a) that Dr. Aguilar bandaged (strapped) plaintiff's
a subluxation of the right shoulder joint; (b) a contusion on right shoulder and chest (t.s.n., p. 31) in an
the right chest; and (c) a "suspicious fracture" of the upper elevated position (with the forearm horizontal to
end of the right humerus. Dr. Aguilar who issued the the chest (see photograph, Exhibit E), and certain
medical certificate admitted, however, with regard to the vitamins were prescribed for him (t.s.n., p. 131).
"suspicious fracture", that in his opinion with (the aid of) He also underwent massage for some time by Drs.
the x-ray there was no fracture. According to this doctor Aguilar and Purisima. The medicines and
plaintiff went to the National 0rthopedic Hospital at least appurtenances to treatment purchased by plaintiff
six times during the period from December 16, 1952, to from the Orthopedic Hospital, Botica Boie and
April 7, 1953; that he strapped plaintiffs body (see Exhibit Metro Drug Store were, by his own admission,
E), which strap was not removed until after a period of six adhesive plaster, bandage, gauze, oil and "tintura
weeks had elapsed Dr. Modesto Purisima, a private arnica" (t.s.n., p. 3 — continuation of transcript ),
practitioner, testified that he advised and treated plaintiff and Dr. Purisima also prescribed "Numotizin", a
from, December 14, 1952, to the end of March (1953). beat generating ointment (t.s.n., p. 23), all of
Plaintiff was never hospitalized for treatment of the which are indicated for a sprain, and by their
injuries he received in said accident. nature, can cure nothing more serious than a
sprain anyway. Fractures and true dislocations
cannot be cured by the kind of treatment and
Counsel for the defendant delves quite extensively on these
medicines which plaintiff received. A true
injuries. He says in his brief the following:
dislocation, for instance, is treated by means of
reduction through traction of the arm until the
Just what is a subluxation? Luxation is another humeral head returns to the proper position in the
term for dislocation (Dorland, W.A.N., The scapular socket (pulling the arm at a 60 degree
American Illustrated Medical Dictionary (13th ed.), angle and guiding the ball of the humerus into
p. 652), and hence, a sublaxation is an incomplete proper position, in its socket) while the patient is
or partial dislocation (Ibid., p. 1115). While a under deep anaesthesia, and then, completely
dislocation is the displacement of a bone or bones immobilizing the part until the injured capsule
from its or their normal setting (and, therefore, has healed (Christopher, F., A Textbook of Surgery,
applicable and occurs only to joints and not to pp. 343 and 344). No evidence was submitted that
rigid or non-movable parts of the skeletal system) plaintiff ever received the latter kind of treatment.
(Ibid., p. 358; Christopher, F., A Textbook of Dr. Purisima even declared that after the plaintiff's
Surgery (5th ed.), p. 342), it should be first visit to the Orthopedic Hospital the latter
distinguished from a fracture which is a break or informed him that there was no fracture or
rupture in a bone or cartilage, usually due to dislocation (t.s.n., p. 26). Dr. Purisima's statement
external violence (Christopher, F., A Textbook of is the truth of the matter as we have already
Surgery (5th Ed.) p. 194; Dorland, W.A.N., The explained — joints of the shoulder being only
American Illustrated Medical Dictionary (13th ed.), subject to total dislocation (due to their
P.459). Because, unlike fracture which may be anatomical design), not to partial ones, and any
partial (a crack in the bone) or total (a complete injury approximating dislocation but not
break in the bone), there can be no half-way completely, it being classified as mere sprains,
situations with regard to dislocations of the slight or bad.
shoulder joint (the head or ball of the humerus —
the humerus is the bone from the elbow to the
The second and last injury plaintiff sustained was
shoulder) must be either inside the socket of the
a contusion. What is a contusion? It is just a high
scapula or shoulder blade (in which case there is
flown expression for a bruise or the act of bruising
no dislocation) or out of the latter (in which event
(Dorland, W.A.N., The American Illustrated Medical
there is a dislocation), to denote a condition where
Dictionary (13th ed. p. 290). No further discussion
due to external violence, the muscles and
need be made on this particular injury since the
ligaments connecting the humerus to the scapula
nature of a bruise is of common knowledge (it's a
have subjected to strain intense enough to
bit uncomfortable but not disabling unless it
produce temporary distention or lessening of their
occurs on movable parts like the fingers or elbow
tautness and consequently resulting in the
which is not the case, herein having occurred in
loosening or wrenching of the ball of the humerus
the right chest) and the kind of medical treatment
from its snug fit in the socket of the scapula, by
or help it is also well known. (pp. 10-14,
using the terms subluxation or partial
defendant-appellant's brief).
dislocation(as used in the medical certificate), is to
fall into a misnomer — a term often used by
"chiropractors" and by those who would want to The trial Judge undoubtedly did not give much value to the
sound impressive, but generally unfavored by the testimonies of the doctors when in the statement of facts
medical profession. To describe the above made in his decision he referred to the physical injuries
condition more aptly, the medical profession received by the plaintiff as slight in nature and the latter is
usually employs the expression luxatio imperfecta, estopped from discussing the same in order to make them
or, in simple language, a sprain (Dorland, W.A.N., appear as serious, because in the statement of facts made
The American Illustrated Medical Dictionary (13th in his brief as appellant, he says the following:
ed.), p. 652). The condition we have described is a
paraphrase of the definition of a sprain. Plaintiff
The facts of the case as found by the lower court
suffered this very injury (a sprained or wrenched
in its decision, with the permission of this
shoulder joint) and a cursory scrutiny of his x-ray
Honorable Court, we respectfully quote them
plates (Exhibits A and B) by a qualified orthopedic
hereunder as our STATEMENT OF FACTS for the
surgeon or by a layman with a picture or x-ray
purpose of this appeal.
plate of a normal shoulder joint (found in any
standard textbook on human anatomy; the one we
used was Schemer, J.P., Morris' Human Anatomy Before entering into a discussion of the merits of plaintiff's
(10 ed., p. 194) for comparison will bear out our appeal, We will say a few words as to the nature of the
claim. action on which his demand for damages is predicated.

Treatment for a sprain is by the use of adhesive or The nature of an action as in contract or in tort is
elastic bandage, elevation of the joint, heat, determined from the essential elements of the
effleurage and later massage (Christopher, F., A complaint, taken as a whole, in the case of doubt a
Textbook of Surgery (5th ed., p. 116). The
construction to sustain the action being given to codes just mentioned and against all the persons who
it. might be liable for the damages caused, but as a result of
an admitted breach of contract of carriage and against the
defendant employer alone. We, therefore, hold that the case
While the prayer for relief or measure of damages
at bar does not come within the exception of paragraph 1,
sought does not necessarily determine the
Article 2219 of the Civil Code.
character of the action, it may be material in the
determination of the question and therefore
entitled to consideration and in case of doubt will The present complaint is not based either on a "quasi delict
open determine character of the action and indeed causing physical injuries" (Art. 2219 par. 2, of the Civil
there are actions whose character is necessarily Code). From the report of the Code Commission on the new
determined thereby. (1 C.J.S. 1100) Civil Code We copy the following:

A mere perusal of plaintiff complaint will show that his A question of nomenclature confronted the
action against the defendant is predicated on an alleged Commission. After a careful deliberation, it was
breach of contract of carriage, i.e., the failure of the agreed to use the term "quasi-delict" for those
defendant to bring him "safely and without mishaps" to his obligations which do not arise from law, contracts
destination, and it is to be noted that the chauffeur of quasi-contracts or criminal offenses. They are
defendant's taxicab that plaintiff used when he received the known in Spanish legal treatises as "culpa
injuries involved herein, Gregorio Mira, has not even been aquiliana", "culpa-extra-contractual" or "cuasi-
made a party defendant to this case. delitos". The phrase "culpa-extra-contractual" or its
translation "extra-contractual fault" was eliminated
because it did not exclude quasi-contractual or
Considering, therefore, the nature of plaintiff's action in
penal obligations. "Aquilian fault" might have been
this case, is he entitled to compensation for moral
selected, but it was thought inadvisable to refer to
damages? Article 2219 of the Civil Code says the following:
so ancient a law as the "Lex Aquilia". So "quasi-
delicts" was chosen, which more nearly
ART. 2219. Moral damages may be recovered in corresponds to the Roman Law classification of
the following and analogous cases: obligations, and is in harmony with the nature of
this kind of liability.
(1) A criminal offense resulting in physical
injuries; The Commission also thought of the possibility of
adopting the word "tort" from Anglo-American
Law. But "tort" under that system is much broader
(2) Quasi-delicts causing physical injuries;
than the Spanish-Philippine concept of obligations
arising from non-contractual negligence." "Tort" in
(3) Seduction, abduction, rape, or other lascivious Anglo-American jurisprudence includes not only
acts; negligence, but also intentional criminal acts, such
as assault and battery, false imprisonment and
deceit. In the general plan of the Philippine legal
(4) Adultery or concubinage;
system, intentional and malicious are governed by
the Penal Code, although certain exceptions are
(5) Illegal or arbitrary detention or arrest; made in the Project. (Report of the Code
Commission, pp. 161-162).
(6) Illegal search;
In the case of Cangco vs. Manila Railroad, 38 Phil. 768, We
(7) Libel, slander or any other form of defamation; established the distinction between obligation derived from
negligence and obligation as a result of a breach of a
contract. Thus, We said:
(8) Malicious prosecution;
It is important to note that the foundation of the
(9) Acts mentioned in Article 309; legal liability of the defendant is the contract of
carriage, and that the obligation to respond for the
(10) Acts and actions referred to in Articles 21, 26, damage which plaintiff has suffered arises, if at
27, 28, 29, 30, 32, 34 and 35. all, from the breach of that contract by reason of
the failure of defendant to exercise due care in its
performance. That is to say, its liability is direct
xxx xxx xxx and immediate, differing essentially in the legal
view point from that presumptive responsibility for
Of the cases enumerated in the just quoted Article 2219 the negligence of its servants, imposed by Article
only the first two may have any bearing on the case at bar. 1903 of the Civil Code (Art. 2180 of the new),
We find, however, with regard to the first that the which can be rebutted by proof of the exercise of
defendant herein has not committed in connection with due care in their selection or supervision. Article
this case any "criminal offense resulting in physical 1903 is not applicable to obligation arising EX
injuries". The one that committed the offense against the CONTRACTU, but only to extra-contractual
plaintiff is Gregorio Mira, and that is why he has been obligations or — to use the technical form of
already prosecuted and punished therefor. Although (a) expression, that article, relates only to CULPA
owners and managers of an establishment or enterprise are AQUILIANA and not to CULPA CONTRACTUAL.
responsible for damages caused by their employees in the
service of the branches in which the latter are employed or The decisions in the cases of Castro vs. Acro Taxicab (82
on the occasion of their functions; (b) employers are Phil., 359, 46 Off. Gaz., Na. 5, p. 2023); Lilius et al. vs.
likewise liable for damages caused by their employees and Manila Railroad, (59 Phil. 758) and others, wherein moral
household helpers acting within the scope of their assigned damages, are awarded to the plaintiffs, are not applicable
task (Article 2180 of the Civil Code); and (c) employers and to the case at bar because said decisions were rendered
corporations engaged in any kind of industry are before the effectivity of the new Civil Code (August 30,
subsidiarily civilly liable for felonies committed by their 1950) and for the further reason that the complaints filed
employees in the discharge of their duties (Art. 103, therein were based on different causes of action.
Revised Penal Code), plaintiff herein does not maintain this
action under the provisions of any of the articles of the
In view of the foregoing the sum of P2,000 awarded as (2) Reduces the award of P3,000 as attorney's fees to the
moral damages by the trial Court has to be eliminated, for sum of P2,000, as Manolo Maddela, defendant in Criminal
under the law it is not a compensation awardable in a case Case No. 364 of the Court of First Instance of Nueva
like the one at bar. Vizcaya testified that he has already paid to plaintiff part
of the latter's fees of P3,000, the amount of which was not
disclosed, though it was incumbent upon the plaintiff to
As to plaintiff's demand for P5,000 as attorney's fees, the
establish how much he had been paid of said fees;
Civil Code provides the following:

(3) Approves the award of P200 as unearned professional


ART, 2208. In the absence of stipulation,
fees as attorney for the defendant in Civil Case No. 238191
attorney's fees and expenses of litigation, other
of the Municipal Court of Manila whom plaintiff was unable
than judicial costs, cannot be recovered, except:
to represent, and for the latter's failure to take the
deposition of one Agripina Angrepan due to the automobile
(1) When exemplary damages are awarded; accident referred to in this case.

(2) When the defendant's act or omission has Before closing this decision We deem it convenient to quote
compelled the plaintiff to litigate with third the following passage of defendant's brief as appellant:
persons or to incur expenses to protect his
interest;
Realizing its obligation under its contract of
carriage with the plaintiff, and because the facts of
(3) In criminal cases of malicious prosecution the case, as have been shown, mark it as more
against the plaintiff; proper for the Municipal Court only, the
defendant, to avoid the expense and time of
litigation, offered to settle the case amicably with
(4) In case of a clearly unfounded civil action or
plaintiff, but the latter refused and insisted on his
proceeding against the plaintiff;
demand for P72,050.20 (Exhibit K) as the only
basis for settlement, thus adding a clearly petty
(5) Where the defendant acted in gross and evident case to the already overflowing desk of the
had faith in refusing to satisfy the plaintiff's Honorable Members of this Court.
plainly valid, just and demandable claim;
We admire and respect at all times a man for
(6) In actions for legal support; standing up and fighting for his rights, and when
said right consists in injuries sustained due to a
(7) In actions for the recovery of wages of breach of a contract of carriage with us, sympathy
and understanding are added thereto. But when a
household helpers, laborers and skilled workers;
person starts demanding P72,050.20 for a solitary
bruise and sprain, injuries for which the trial
(8) in actions for indemnity under workmen's court, even at its generous although erroneous
compensation and employers liability laws; best, could only grant P5,900, then respect and
sympathy give way to something else. It is time to
(9) In a separate civil action to recover civil fight, for, in our humble opinion, there is nothing
liability arising from a crime; more loathsome nor truly worthy of condemnation
than one who uses his injuries for other purposes
than just rectification. If plaintiff's claim is
(10) When at least double judicial costs are granted, it would be a blessing, not a misfortune,
awarded; to be injured. (p. 34-35)

(11) In any other case where the court deems it This case was instituted by a lawyer who, as an officer of
just and equitable that attorney's fees and the courts, should be the first in helping Us in the
expenses of litigation should be recovered. administration of justice, and after going over the record of
this case, we do not hesitate to say that the demand of
In all cases, the attorney's fees and expenses of litigation P72,050.20 for a subluxation of the right humerus bone
must be reasonable. and an insignificant contusion in the chest, has not even
the semblance of reasonableness. As a matter of fact, Dr.
Aguilar himself said that the x-ray plates (Exhibits A, Band
The present case does not come under any of exceptions C) " did not show anything significant except that it shows
enumerated in the preceding article, specially of paragraph a slight subluxation of the right shoulder, and that there is
2 thereof, because defendant's failure to meet its a suspicious fracture", which ultimately he admitted not to
responsibility was not the plaintiff to litigate or to incur exist. The plaintiff himself must have felt embarrassed by
expenses to protect his interests. The present action was his own attitude when after receiving defendant's brief as
instituted because plaintiff an exorbitant amount for appellant, he makes in his brief as appellee the categorical
damages (P60,000) and naturally the defendant did not and statement that he DOES NOT NOW INSIST NOR PRETEND IN
could not yield to such demand. This is neither a case that THE LEAST to Collect from the defendant all the damages
comes under paragraph 11 of Article 2208 because the he had claimed in his complaint, but instead he is
Lower Court did not deem it just and equitable to award submitting his case to the sound discretion of the
any amount for attorney's fees. As We agree with the trial Honorable Court for the award of a reasonable and
Judge on this point, We cannot declare that he erred for not equitable damages allowable by law, to compensate the
awarding to plaintiff any such fees in this case. plaintiff of the suffering and losses he had undergone and
incurred of the accident oftentimes mentioned in this brief
Coming now to the appeal of the defendant, the Court, in which plaintiff was injured" (p. 17-18).This
after due consideration of the evidence appearing on acknowledgment comes too late, for plaintiff has already
record: deprived the Court of Appeals of the occasion to exercise
its appellate jurisdiction over this case which he recklessly
dumped to this Court. We certainly cannot look with at
(1) Approves the award of P700 for medicine, doctors' fees favor at his attitude of plaintiff.
and transportation expenses;
WHEREFORE, the decision appealed from is hereby
modified by reducing the amount awarded as professional
fees from P3,000 to P2,000 and by eliminating the moral provoked instant and vehement protest on the part of the
damages of P2,000 awarded by the Lower Court to the passengers because of the attendant discomfort, and there
plaintiff. Said decision is in all other respects affirmed, is no trace of any such complaint in the records. We are
without pronouncement as to costs. It is so ordered. thus forced to assume that the proximate cause of the
accident was the reduced strength of the steering knuckle
of the vehicle caused by defects in casting it. While
EN BANC
appellants hint that the broken knuckle exhibited in court
was not the real fitting attached to the truck at the time of
G.R. No. L-10605 June 30, 1958 the accident, the records they registered no objection on
that ground at the trial below. The issue is thus reduced to
the question whether or not the carrier is liable for the
PRECILLANO NECESITO, ETC., plaintiff-appellant,
manufacturing defect of the steering knuckle, and whether
vs.
the evidence discloses that in regard thereto the carrier
NATIVIDAD PARAS, ET AL., defendants-appellees.
exercised the diligence required by law (Art. 1755, new
Civil Code).
x---------------------------------------------------------x
ART. 1755. A common carrier is bound to carry the
G.R. No. L-10606 June 30, 1958 passengers safely as far as human care and
foresight can provide, using the utmost diligence
of very cautious persons, with a due regard for the
GERMAN NECESITO, ET AL., plaintiffs-appellants,
all the circumstances.
vs.
NATIVIDAD PARAS, ET AL., defendants-appellees.
It is clear that the carrier is not an insurer of the
These cases involve ex contractu against the owners and passengers' safety. His liability rests upon negligence, his
operators of the common carrier known as Philippine failure to exercise the "utmost" degree of diligence that the
law requires, and by Art. 1756, in case of a passenger's
Rabbit Bus Lines, filed by one passenger, and the heirs of
another, who injured as a result of the fall into a river of death or injury the carrier bears the burden of satisfying
the court that he has duly discharged the duty of prudence
the vehicle in which they were riding.
required. In the American law, where the carrier is held to
the same degree of diligence as under the new Civil Code,
In the morning of January 28, 1964, Severina Garces and the rule on the liability of carriers for defects of equipment
her one-year old son, Precillano Necesito, carrying is thus expressed: "The preponderance of authority is in
vegetables, boarded passenger auto truck or bus No. 199 of favor of the doctrine that a passenger is entitled to recover
the Philippine Rabbit Bus Lines at Agno, Pangasinan. The damages from a carrier for an injury resulting from a
passenger truck, driven by Francisco Bandonell, then defect in an appliance purchased from a manufacturer,
proceeded on its regular run from Agno to Manila. After whenever it appears that the defect would have been
passing Mangatarem, Pangasinan truck No. 199 entered a discovered by the carrier if it had exercised the degree of
wooden bridge, but the front wheels swerved to the right; care which under the circumstances was incumbent upon
the driver lost control, and after wrecking the bridge's it, with regard to inspection and application of the
wooden rails, the truck fell on its right side into a creek necessary tests. For the purposes of this doctrine, the
where water was breast deep. The mother, Severina Garces, manufacturer is considered as being in law the agent or
was drowned; the son, Precillano Necesito, was injured, servant of the carrier, as far as regards the work of
suffering abrasions and fracture of the left femur. He was constructing the appliance. According to this theory, the
brought to the Provincial Hospital at Dagupan, where the good repute of the manufacturer will not relieve the carrier
fracture was set but with fragments one centimeter out of from liability" (10 Am. Jur. 205, s, 1324; see also
line. The money, wrist watch and cargo of vegetables were Pennsylvania R. Co. vs. Roy, 102 U. S. 451; 20 L. Ed. 141;
lost. Southern R. Co. vs. Hussey, 74 ALR 1172; 42 Fed. 2d 70;
and Ed Note, 29 ALR 788; Ann. Cas. 1916E 929).
Two actions for damages and attorney's fees totalling over
P85,000 having been filed in the Court of First Instance of The rationale of the carrier's liability is the fact that the
Tarlac (Cases Nos. 908 and 909) against the carrier, the passenger has neither choice nor control over the carrier in
latter pleaded that the accident was due to "engine or the selection and use of the equipment and appliances in
mechanical trouble" independent or beyond the control of use by the carrier. Having no privity whatever with the
the defendants or of the driver Bandonell. manufacturer or vendor of the defective equipment, the
passenger has no remedy against him, while the carrier
After joint trial, the Court of First Instance found that the usually has. It is but logical, therefore, that the carrier,
bus was proceeding slowly due to the bad condition of the while not in insurer of the safety of his passengers, should
road; that the accident was caused by the fracture of the nevertheless be held to answer for the flaws of his
right steering knuckle, which was defective in that its equipment if such flaws were at all discoverable. Thus
center or core was not compact but "bubbled and Hannen, J., in Francis vs. Cockrell, LR 5 Q. B. 184, said:
cellulous", a condition that could not be known or
ascertained by the carrier despite the fact that regular In the ordinary course of things, the passenger
thirty-day inspections were made of the steering knuckle, does not know whether the carrier has himself
since the steel exterior was smooth and shiny to the depth manufactured the means of carriage, or contracted
of 3/16 of an inch all around; that the knuckles are with someone else for its manufacture. If the
designed and manufactured for heavy duty and may last up carrier has contracted with someone else the
to ten years; that the knuckle of bus No. 199 that broke on passenger does not usually know who that person
January 28, 1954, was last inspected on January 5, 1954, is, and in no case has he any share in the
and was due to be inspected again on February 5th. Hence, selection. The liability of the manufacturer must
the trial court, holding that the accident was exclusively depend on the terms of the contract between him
due to fortuitous event, dismissed both actions. Plaintiffs and the carrier, of which the passenger has no
appealed directly to this Court in view of the amount in knowledge, and over which he can have no
controversy. control, while the carrier can introduce what
stipulations and take what securities he may think
We are inclined to agree with the trial court that it is not proper. For injury resulting to the carrier himself
likely that bus No. 199 of the Philippine Rabbit Lines was by the manufacturer's want of care, the carrier has
driven over the deeply rutted road leading to the bridge at a remedy against the manufacturer; but the
a speed of 50 miles per hour, as testified for the plaintiffs. passenger has no remedy against the
Such conduct on the part of the driver would have manufacturer for damage arising from a mere
breach of contract with the carrier . . . . Unless, was riding or not, the burden is then cast upon the
therefore, the presumed intention of the parties be carrier to show that it was due to a cause or causes
that the passenger should, in the event of his which the exercise of the utmost human skill and
being injured by the breach of the manufacturer's foresight could not prevent. And the carrier in this
contract, of which he has no knowledge, be connection must show, if the accident was due to
without remedy, the only way in which effect can a latent defect in the material or construction of
be given to a different intention is by supposing the car, that not only could it not have discovered
that the carrier is to be responsible to the the defect by the exercise of such care, but that
passenger, and to look for his indemnity to the the builders could not by the exercise of the same
person whom he selected and whose breach of care have discovered the defect or foreseen the
contract has caused the mischief. (29 ALR 789) result. This rule applies the same whether the
defective car belonged to the carrier or not.
And in the leading case of Morgan vs. Chesapeake & O. R.
Co. 15 LRA (NS) 790, 16 Ann. Cas. 608, the Court, in holding In the case now before us, the record is to the effect that
the carrier responsible for damages caused by the fracture the only test applied to the steering knuckle in question
of a car axle, due to a "sand hole" in the course of moulding was a purely visual inspection every thirty days, to see if
the axle, made the following observations. any cracks developed. It nowhere appears that either the
manufacturer or the carrier at any time tested the steering
knuckle to ascertain whether its strength was up to
The carrier, in consideration of certain well-known
standard, or that it had no hidden flaws would impair that
and highly valuable rights granted to it by the
strength. And yet the carrier must have been aware of the
public, undertakes certain duties toward the
critical importance of the knuckle's resistance; that its
public, among them being to provide itself with
failure or breakage would result in loss of balance and
suitable and safe cars and vehicles in which carry
steering control of the bus, with disastrous effects upon
the traveling public. There is no such duty on the
the passengers. No argument is required to establish that a
manufacturer of the cars. There is no reciprocal
visual inspection could not directly determine whether the
legal relation between him and the public in this
resistance of this critically important part was not
respect. When the carrier elects to have another
impaired. Nor has it been shown that the weakening of the
build its cars, it ought not to be absolved by that
knuckle was impossible to detect by any known test; on the
facts from its duty to the public to furnish safe
contrary, there is testimony that it could be detected. We
cars. The carrier cannot lessen its responsibility
are satisfied that the periodical visual inspection of the
by shifting its undertaking to another's shoulders.
steering knuckle as practiced by the carrier's agents did not
Its duty to furnish safe cars is side by side with its
measure up to the required legal standard of "utmost
duty to furnish safe track, and to operate them in
diligence of very cautious persons" — "as far as human care
a safe manner. None of its duties in these respects
and foresight can provide", and therefore that the knuckle's
can be sublet so as to relieve it from the full
failure can not be considered a fortuitous event that
measure primarily exacted of it by law. The carrier
exempts the carrier from responsibility (Lasam vs. Smith,
selects the manufacturer of its cars, if it does not
45 Phil. 657; Son vs. Cebu Autobus Co., 94 Phil., 892.)
itself construct them, precisely as it does those
who grade its road, and lay its tracks, and operate
its trains. That it does not exercise control over It may be impracticable, as appellee argues, to require of
the former is because it elects to place that matter carriers to test the strength of each and every part of its
in the hands of the manufacturer, instead of vehicles before each trip; but we are of the opinion that a
retaining the supervising control itself. The due regard for the carrier's obligations toward the traveling
manufacturer should be deemed the agent of the public demands adequate periodical tests to determine the
carrier as respects its duty to select the material condition and strength of those vehicle portions the failure
out of which its cars and locomotive are built, as of which may endanger the safe of the passengers.
well as in inspecting each step of their
construction. If there be tests known to the crafts
As to the damages suffered by the plaintiffs, we agree with
of car builders, or iron moulders, by which such
appellee that no allowance may be made for moral
defects might be discovered before the part was
damages, since under Article 2220 of the new Civil Code, in
incorporated into the car, then the failure of the
case of suits for breach of contract, moral damages are
manufacturer to make the test will be deemed a
recoverable only where the defendant acted fraudulently or
failure by the carrier to make it. This is not a
in bad faith, and there is none in the case before us. As to
vicarious responsibility. It extends, as the
exemplary damages, the carrier has not acted in a "wanton,
necessity of this business demands, the rule of
fraudulent, reckless, oppressive or malevolent manner" to
respondeat superior to a situation which falls
warrant their award. Hence, we believe that for the minor
clearly within its scope and spirit. Where an injury
Precillano Necesito (G. R. No. L-10605), an indemnity of
is inflicted upon a passenger by the breaking or
P5,000 would be adequate for the abrasions and fracture of
wrecking of a part of the train on which he is
the femur, including medical and hospitalization expenses,
riding, it is presumably the result of negligence at
there being no evidence that there would be any permanent
some point by the carrier. As stated by Judge
impairment of his faculties or bodily functions, beyond the
Story, in Story on Bailments, sec. 601a: "When the
lack of anatomical symmetry. As for the death of Severina
injury or damage happens to the passenger by the
Garces (G. R. No. L-10606) who was 33 years old, with seven
breaking down or overturning of the coach, or by
minor children when she died, her heirs are obviously
any other accident occurring on the ground, the
entitled to indemnity not only for the incidental loses of
presumption prima facie is that it occurred by the
property (cash, wrist watch and merchandise) worth P394
negligence of the coachmen, and onus probandi is
that she carried at the time of the accident and for the
on the proprietors of the coach to establish that
burial expenses of P490, but also for the loss of her
there has been no negligence whatever, and that
earnings (shown to average P120 a month) and for the
the damage or injury has been occasioned by
deprivation of her protection, guidance and company. In
inevitable casualty, or by some cause which
our judgment, an award of P15,000 would be adequate (cf
human care and foresight could not prevent; for
Alcantara vs. Surro, 49 Off. Gaz. 2769; 93 Phil., 472).
the law will, in tenderness to human life and limb,
hold the proprietors liable for the slightest
negligence, and will compel them to repel by The low income of the plaintiffs-appellants makes an award
satisfactory proofs every imputation thereof." for attorney's fees just and equitable (Civil Code, Art. 2208,
When the passenger has proved his injury as the par. 11). Considering that he two cases filed were tried
result of a breakage in the car or the wrecking of jointly, a fee of P3,500 would be reasonable.
the train on which he was being carried, whether
the defect was in the particular car in which he
In view of the foregoing, the decision appealed from is than that the plaintiff should suffer, without
reversed, and the defendants-appellees are sentenced to redress, from the defendant's wrongful act."
indemnify the plaintiffs-appellants in the following (Report of the Code Commission, p. 75)
amounts: P5,000 to Precillano Necesito, and P15,000 to the
heirs of the deceased Severina Garces, plus P3,500 by way
In awarding to the heirs of the deceased Severina Garces an
of attorney's fees and litigation expenses. Costs against
indemnity for the loss of her "guidance, protection and
defendants-appellees. So ordered.
company," although it is but moral damage, the Court took
into account that the case of a passenger who dies in the
course of an accident, due to the carrier's negligence
RESOLUTION constitutes an exception to the general rule. While, as
pointed out in the main decision, under Article 2220 of the
new Civil Code there can be no recovery of moral damages
September 11, 1958 for a breach of contract in the absence of fraud malice or
bad faith, the case of a violation of the contract of carriage
leading to a passenger's death escapes this general rule, in
view of Article 1764 in connection with Article 2206, No. 3
REYES, J. B. L., J.: of the new Civil Code.

Defendants-appellees have Submitted a motion asking this ART. 1764. Damages in cases comprised in this
Court to reconsider its decision of June 30, 1958, and that Section shall be awarded in accordance with Title
the same be modified with respect to (1) its holding the XVIII of this Book, concerning Damages. Article
carrier liable for the breakage of the steering knuckle that 2206 shall also apply to the death of a passenger
caused the autobus No. 199 to overturn, whereby the caused by the breach of contract by a comman
passengers riding in it were injured; (2) the damages carrier. ART. 2206. . . .
awarded, that appellees argue to be excessive; and (3) the
award of attorneys' fees.
(3) The spouse, legitimate and eligimate
descendants and ascendants of the deceased may
(1) The rule prevailing in this jurisdiction as established in demand moral damages for mental anguish by
previous decisions of this Court, cited in our main opinion, reason of the death of the deceased.
is that a carrier is liable to its passengers for damages
caused by mechanical defects of the conveyance. As early
as 1924, in Lasam vs. Smith, 45 Phil. 659 this Court ruled: Being a special rule limited to cases of fatal injuries, these
articles prevail over the general rule of Art. 2220. Special
provisions control general ones (Lichauco & Co. vs.
As far as the record shows, the accident was Apostol, 44 Phil. 138; Sancio vs. Lizarraga, 55 Phil. 601).
caused either by defects in the automobile or else
through the negligence of its driver. That is not
caso fortuito. It thus appears that under the new Civil Code, in case of
accident due to a carrier's negligence, the heirs of a
deceased passenger may recover moral damages, even
And in Son vs. Cebu Autobus Company, 94 Phil., 892, this though a passenger who is injured, but manages to survive,
Court held a common carrier liable in damages to is not entitled to them. There is, therefore, no conflict
passenger for injuries cause by an accident due to the between our main decision in the instant case and that
breakage of a faulty drag-link spring. of Cachero vs. Manila Yellow Taxi Cab Co., 101 Phil., 523,
where the passenger suffered injuries, but did not lose his
It can be seen that while the courts of the United States are life.
at variance on the question of a carrier's liability for latent
mechanical defects, the rule in this jurisdiction has been (3) In the Cachero case this Court disallowed attorneys' fees
consistent in holding the carrier responsible. This Court to the injured plaintiff because the litigation arose out of
has quoted from American and English decisions, not his exaggerated and unreasonable deeds for an indemnity
because it felt bound to follow the same, but merely in that was out of proportion with the compensatory damages
approval of the rationale of the rule as expressed therein, to which he was solely entitled. But in the present case,
since the previous Philippine cases did not enlarge on the plaintiffs' original claims can not be deemed a priori wholly
ideas underlying the doctrine established thereby. unreasonable, since they had a right to indemnity for moral
damages besides compensatory ones, and moral damages
The new evidence sought to be introduced do not warrant are not determined by set and invariable bounds.
the grant of a new trial, since the proposed proof available
when the original trial was held. Said evidence is not newly Neither does the fact that the contract between the
discovered. passengers and their counsel was on a contingent basis
affect the former's right to counsel fees. As pointed out for
(2) With regard to the indemnity awarded to the child appellants, the Court's award is an party and not to
Precilliano Necesito, the injuries suffered by him are counsel. A litigant who improvidently stipulate higher
incapable of accurate pecuniary estimation, particularly counsel fees than those to which he is lawfully entitled,
because the full effect of the injury is not ascertainable does not for that reason earn the right to a larger
immediately. This uncertainty, however, does not preclude indemnity; but, by parity of reasoning, he should not be
the right to an indemnity, since the injury is patent and not deprived of counsel fees if by law he is entitled to recover
denied (Civil Code, Art. 2224). The reasons behind this them.
award are expounded by the Code Commission in its
report: We find no reason to alter the main decision heretofore
rendered. Ultimately, the position taken by this Court is
There are cases where from the nature of the case, that a common carrier's contract is not to be regarded as a
definite proof of pecuniary loss cannot be offered, game of chance wherein the passenger stakes his limb and
although the court is convinced that there has life against the carrier's property and profits.
been such loss. For instance, injury to one's
commercial credit or to the goodwill of a business Wherefore, the motion for reconsideration is hereby
firm is often hard to show with certainty in terms denied. So ordered.
of money. Should damages be denied for that
reason? The judge should be empowered to
calculate moderate damages in such cases, rather SECOND DIVISION
G.R. No. 141761 July 28, 2006 alert or warning bulletin4 from Bank International
Indonesia. A fraud alert or warning bulletin is a notice by
telex5 or telephone addressed to the issuer of a card when a
BANKARD, INC., petitioner,
fraudulent or counterfeit use of the card has been detected
vs.
or suspected by an acquirer. In the June 13, 1995 fraud
DR. ANTONIO NOVAK FELICIANO, respondent.
alert, PCIBank Mastercard No. 5407-2611-0000-5863 was
listed as having had a suspected counterfeit transaction in
DECISION Indonesia on June 11, 1995. Petitioner's fraud analyst, Mr.
Ferdinand Lopez, then accessed petitioner's directory of
cardholders to identify the holder of PCIBank Mastercard
Before us is a petition for review under Rule 45 of the May
No. 5407-2611-0000-5863. The directory showed that the
31, 1999 Decision1 and January 28, 2000 Resolution2 of the
principal cardholder for PCIBank Mastercard No. 5407-
Court of Appeals in CA-G.R. CV No. 56734 which modified
2611-0000-5863 was respondent Dr. Antonio Novak
the July 22, 1997 Decision3 of the Regional Trial Court
Feliciano, and that the credit card was the extension card
(RTC) of Makati City, Branch 148, in Civil Case No. 95-1492.
issued to his wife, Marietta Feliciano. Mr. Lopez
immediately called respondent at his clinic but the latter
The facts are as follows: was not there. Neither he nor his wife was at home.
Consequently, Mr. Lopez left his name, telephone number,
and a message for respondent to return his call, to the
Respondent Dr. Antonio Novak Feliciano is the holder of
woman who answered the phone. He likewise inquired from
PCIBank Mastercard No. 5407-2610-0000-5864, issued and
the woman whether respondent and his wife were in the
managed by petitioner Bankard, Inc. An extension of the
country or whether they had just arrived from abroad. The
card, PCIBank Mastercard No. 5407-2611-0000-5863, was
woman answered "no." With that information and
issued to his wife, Mrs. Marietta N. Feliciano.
considering that Indonesia has a high incidence of
counterfeit credit card transactions, Mr. Lopez concluded
On June 19, 1995, respondent used his PCIBank Mastercard that the transaction involving PCIBank Mastercard No.
No. 5407-2610-0000-5864 to pay a breakfast bill in 5407-2611-0000-5863 was counterfeit. He sent a notice of
Toronto, Canada. The card was, however, dishonored for card account blocking to the Authorization Department. He
payment. Respondent's guests, Dr. Bellaflor Bumanlag and likewise sent a written notice to the Felicianos that PCIBank
three other Filipino doctors based in Canada, had to pay Mastercard No. 5407-2611-0000-5863 had a counterfeit
the bill. Respondent immediately called the US toll-free movement in another country and that petitioner is
number of petitioner to inquire on the cause of dishonor. temporarily suspending the services of the card including
He was informed that the reason was the nonpayment of the principal card, PCIBank Mastercard No. 5407-2610-
his last billing statement. Respondent denied that he failed 0000-5864, pending investigation on the matter. The
to pay, and requested the person on the line to verify the Felicianos were required to submit an affidavit of disclaim
correct status of his credit card again. Respondent likewise and photocopies of their passports. The Felicianos did not
called his secretary in the Philippines to confirm the fact of respond to the notification.
payment, and requested her to advise petitioner's office in
Manila.
On July 22, 1997, the trial court decided the case in favor
of respondent.6It found that petitioner's negligence was the
The following day, respondent met with Dr. Bumanlag to immediate and proximate cause of respondent's injury.
reimburse her for the cost of the breakfast the previous Although the claim for actual damages was disallowed for
day. Thereafter, Dr. Bumanlag accompanied the respondent lack of proof, petitioner was ordered to pay:
to the Eddie Bauer Fairview Mall, a prestigious mall in (1) P1,000,000.00 as moral damages, (2) P200,000.00 as
Toronto, where the latter bought several dressing items. exemplary damages, and (3) P100,000.00 for attorney's fees
Respondent presented his PCIBank Mastercard No. 5407- and costs of suit. Petitioner was likewise ordered to restore
2610-0000-5864 for payment. Again, the card was respondent's good name with the merchant establishment
dishonored to the embarrassment of the respondent. in Canada which confiscated his Mastercard, and to return
Worse, the manager of the department store confiscated the card with apologies to respondent.
the card in front of Dr. Bumanlag and other shoppers.
Respondent protested but the manager called security and
Petitioner assailed the decision in a petition for review with
forcibly retained the card. To end the commotion that
ensued, respondent just asked for a receipt for the the Court of Appeals. In its Decision dated May 31,
1999,7the Court of Appeals affirmed the trial court's finding
confiscated card.
of negligence on the part of the petitioner. However, the
appellate court modified the trial court's decision by
On October 5, 1995, respondent filed a complaint against deleting the award for exemplary damages, and by
petitioner Bankard, Inc. and Mastercard International for reducing moral damages to P800,000.00, and attorney's
breach of contractual rights and damages before the RTC- fees and costs of suit to P50,000.00. Actual damages was
Makati City, docketed as Civil Case No. 95-1492. still disallowed for lack of proof. Petitioner's motion for
Respondent alleged that he is a holder in good standing for partial reconsideration was denied. Hence, this petition.
more than ten (10) years of PCIBank Mastercard No. 5407-
2610-0000-5864, and that petitioner and Mastercard
Petitioner assigns the following errors:
International reneged on their agreement by suspending
the services of the card without notice to him. As a result
of the suspension and confiscation of his card in Toronto, I.
Canada, respondent suffered social humiliation,
embarrassment and besmirched reputation. The Canadian-
THE COURT OF APPEALS ERRED IN AWARDING
based doctors, who were his guests during the breakfast
RESPONDENT MORAL DAMAGES IN THE EXCESSIVE
meeting in Toronto and whom he expected to donate at
AND UNPRECEDENTED AMOUNT OF P800,000.00,
least fifty thousand Canadian dollars to his charitable clinic
WITHOUT ANY LEGAL OR FACTUAL BASIS,
in Makati, withdrew their contributions because of the
CONSIDERING THAT:
incidents. Respondent prayed for P1,000,000.00 in actual
damages representing the peso equivalent of the aborted
contributions, P1,000,000.00 for moral A. NO EVIDENCE WAS PRESENTED TO
damages, P200,000.00 for exemplary damages, SHOW THAT PETITIONER ACTED
and P100,000.00 for attorney's fees and costs of suit. FRAUDULENTLY OR IN BAD FAITH OR IN A
WANTON, RECKLESS AND OPPRESSIVE
MANNER IN SUSPENDING RESPONDENT'S
In defense, petitioner claimed due diligence before
CREDIT CARD.
suspending the privileges of respondent's credit card.
Petitioner alleged that on June 13, 1995, it received a fraud
B. EVEN AS IT WAS RESPONDENT'S DUTY find that, under the circumstances, such damages
TO AFFIRMATIVELY PROVE HIS CLAIM FOR are justly due. The same rule applies to breaches
MORAL DAMAGES, PETITIONER HAS DULY of contract where the defendant acted
ESTABLISHED THAT IT WAS PROMPTED TO fraudulently or in bad faith. (emphasis added)
SUSPEND THE CREDIT CARD OF
RESPONDENT SOLELY TO PROTECT ITSELF
Under the foregoing, moral damages may be recovered
AND THE RESPONDENT FROM ANYONE
in culpa contractual where the defendant acted in bad faith
WRONGFULLY USING HIS CREDIT CARD
or with malice in the breach of the contract.8Malice or bad
AND NOT OUT OF MALICE, OR ANY
faith implies moral obliquity or a conscious and intentional
DELIBERATE INTENT TO CAUSE HARM TO
design to do a wrongful act for a dishonest
RESPONDENT.

purpose.9However,a conscious or intentional design need


C. CONTRARY TO THE FINDINGS OF THE
not always be present since negligence may occasionally be
TRIAL COURT WHICH THE COURT OF
so gross as to amount to malice or bad faith.10 Bad faith, in
APPEALS AFFIRMED, PETITIONER WAS NOT
the context of Art. 2220 of the Civil Code,
GUILTY OF NEGLIGENCE IN SUSPENDING
includes gross negligence.11 Thus, we have held in a number
RESPONDENT'S CREDIT CARD.
of cases that moral damages may be awarded in culpa
ASSUMING ARGUENDO THAT PETITIONER
contractual or breach of contract when the defendant acted
WAS NEGLIGENT IN DOING SO, THE SAME
fraudulently or in bad faith, or is guilty of gross negligence
DOES NOT WARRANT A FINDING OF
amounting to bad faith, or in wanton disregard of his
MALICE OR BAD FAITH AS TO JUSTIFY
contractual obligations.12
GRANTING AN AWARD OF MORAL
DAMAGES IN THE STAGGERING AMOUNT
OF P800,000.00. Petitioner alleged that it suspended the privileges of
respondent's credit card only after it received the fraud
alert from Indonesia, and after its fraud analyst, Mr. Lopez,
D. IN THE ABSENCE OF AN AWARD OF
tried to contact both the respondent and his wife at his
ACTUAL DAMAGES, RESPONDENT IS NOT
clinic and at home. At first blush, bad faith or malice
ENTITLED TO MORAL DAMAGES.
appears not to be attributable to petitioner. However, we
find that its efforts at personally contacting respondent
E. THE HONORABLE COURT HAS regarding the suspension of his credit card fall short of the
REPEATEDLY ADMONISHED AGAINST degree of diligence required by the circumstances.
GRANTING EXCESSIVE MORAL DAMAGES
WHICH ARE NOT INTENDED TO ENRICH A
Petitioner received the fraud alert on June 13, 1995. The
COMPLAINANT AT THE EXPENSE OF A
following day, petitioner's fraud analyst tried to call up
DEFENDANT.
respondent at his clinic and at home, to no avail. Apart
from this attempt, however, no further effort was exerted
II. to personally inform respondent about the cancellation of
his card. Petitioner had more than enough time within
which to do so considering that it was not until four (4)
THE COURT OF APPEALS ERRED IN AWARDING
days later or June 18, 1995 that respondent left for Canada.
ATTORNEY'S FEES TO RESPONDENT CONSIDERING
But, petitioner's Mr. Lopez contented himself with just
THAT PETITIONER ACTED IN GOOD FAITH AND
leaving a message with an unidentified woman in
WITH DUE DILIGENCE IN SUSPENDING
respondent's house for the latter to return his call. Before
RESPONDENT'S CREDIT CARD.
receiving the return call, respondent's PCIBank Mastercard
No. 5407-2610-0000-5864 and that of his wife, PCIBank
III. Mastercard No. 5407-2611-0000-5863, had been blocked on
June 15, 1995. To be sure, a notice of card account
blocking was sent to respondent. However, by the ordinary
THE COURT OF APPEALS ERRED IN TOTALLY
course of mail, the notice was not expected to reach
DISREGARDING THE CONTRACT BETWEEN THE
respondent for several days yet. Despite the possibility
PARTIES WHICH, AMONG OTHERS, EXPRESSLY
that respondent or his wife may have occasion to use their
STIPULATES THAT RESPONDENT WOULD HOLD
credit cards, petitioner's fraud analyst made no further
PETITIONER "FREE AND HARMLESS FROM ANY
attempt to contact and warn them. Thus, respondent left
CLAIM OF DAMAGES ARISING FROM THE FAILURE
for Canada on June 18, 1995 armed with his PCIBank
OF ANY ACCREDITED ESTABLISHMENT TO HONOR"
Mastercard No. 5407-2610-0000-5864 but totally unaware
HIS CREDIT CARD.
that the card had been blocked three (3) days previously,
and that he was not to use the same.
IV.
Petitioner claims that it suspended respondent's card to
THE COURT OF APPEALS ERRED IN NOT FINDING protect him from fraudulent transactions. However, while
THAT RESPONDENT WAS CONTRIBUTORILY petitioner's motive has to be lauded, we find it lamentable
NEGLIGENT IN CONTINUING TO USE HIS CREDIT that petitioner was not equally zealous in protecting
CARD ON 20 JUNE 1995 DESPITE THE FACT THAT respondent from potentially embarrassing and humiliating
IT HAD ALREADY BEEN PREVIOUSLY DISHONORED situations that may arise from the unsuspecting use of his
THE DAY BEFORE WHEN HE FIRST ATTEMPTED TO suspended PCIBank Mastercard No. 5407-2610-0000-5864.
USE IT AFTER HIS PURPORTED BREAKFAST Considering the widespread use of access devices in
MEETING WITH SOME DOCTORS. commercial and other transactions,13 petitioner and other
issuers of credit cards should not only guard against
fraudulent uses of credit cards but should also be
We shall now resolve the issue of whether petitioner is
protective of genuine uses thereof by the true cardholders.
liable to respondent for moral damages and attorney's fees.
In the case at bar, the duty is much more demanding for
the evidence shows that respondent is a credit cardholder
The award of moral damages is governed by Section 1, for more than ten (10) years in good standing, and has not
Chapter 3, Title XVIII, Book IV of the Civil Code. Article been shown to have violated any of the provisions of his
2220 provides: credit card agreement with petitioner. Considering the
attendant circumstances, we find petitioner to have been
Willful injury to property may be a legal ground grossly negligent in suspending respondent's credit card.
for awarding moral damages if the court should To reiterate, moral damages may be awarded in a breach of
contract when the defendant acted fraudulently or in bad
faith, or is guilty of gross negligence amounting to bad card. However, since moral damages are patently not meant
faith.14 to enrich the complainant at the expense of the defendant
and should only be commensurate with the actual loss or
injury suffered,16 we reduce the amount awarded by the
With respect to the amount of moral damages to be
Court of Appeals from P800,000.00 to P500,000.00.
awarded, the well-entrenched principle is that the grant
thereof depends upon the discretion of the court
considering the circumstances of each case.15 In the case at We likewise affirm the award for attorney's fees. Plaintiff
bar, it is undisputed that respondent's PCIBank Mastercard was compelled to litigate to protect his interest, and the
No. 5407-2610-0000-5864 was dishonored in a foreign lower courts deemed it just and equitable to award him
country where the respondent was not expected to have attorney's fees.17 The respondent had to vindicate his rights
family members or close friends nearby to lend him a up to the highest court of the land.
helping hand. It was twice dishonored in public places.
Worse, the card was first dishonored during a breakfast-
IN VIEW WHEREOF, the petition is DENIED. The assailed
cum-business meeting with respected medical colleagues
Decision of the Court of Appeals, dated May 31, 1999,
based in that country. Respondent had absolutely no
granting moral damages and attorney's fees to respondent,
inkling then that there was a problem with his card.
as well as its Resolution dated January 28, 2000 in CA-G.R.
Moreover, he had no reason to think that something was
CV No. 56734, is AFFIRMED with the sole modification that
amiss since he is a member in good standing for more than
the amount of moral damages is REDUCED to P500,000.00.
ten (10) years and had no previous bad experience with the
2—
6,281.
00
00740
0—
4,716.
00

When presented for encashment upon maturity, all


the checks were dishonored due to "insufficient
funds." The last check No. 007400, however, was
personally redeemed by private respondent in
cash before it could be redeposited.

Petitioner, in its answer, asserted that it was due to private


respondent's fault that her checks were dishonored. It
THIRD DIVISION averred that instead of stating her correct account number,
i.e., 29000823, in her deposit slip, she inaccurately wrote
G.R. No. 84281 May 27, 1994 2900823.

CITYTRUST BANKING CORPORATION, petitioner, The Regional Trial Court (Branch XXXIV) of Calamba,
vs. Laguna, on
THE INTERMEDIATE APPELLATE COURT and EMME 27 February 1984, dismissed the complaint for lack of
HERRERO, respondents. merit; thus:

This case emanated from a complaint filed by private WHEREFORE, judgment is hereby
respondent Emme Herrero for damages against petitioner rendered in favor of the defendant and
Citytrust Banking Corporation. In her complaint, private against the plaintiff, DISMISSING the
respondent averred that she, a businesswoman, made complaint for lack of merit, plaintiff is
regular deposits, starting September of 1979, with hereby adjudged to pay the defendant
petitioner Citytrust Banking Corporation at its Burgos reasonable attorney's fee in the amount
branch in Calamba, Laguna. On 15 May 1980, she deposited of FIVE THOUSAND PESOS (P5,000.00)
with petitioner the amount of Thirty One Thousand Five plus cost of suit.
Hundred Pesos (P31,500.00), in cash, in order to amply
cover six (6) postdated checks she issued, viz: Private respondent went to the Court of Appeals, which
found the appeal meritorious. Hence, it rendered judgment,
Check on 15 July 1988, reversing the trial court's decision. The
No. appellate court ruled:
Amou
nt WHEREFORE, the judgment appealed from
is REVERSED and a new one entered
00738 thereby ordering defendant to pay
3— plaintiff nominal damages of P2,000.00,
P1,507 temperate and moderate damages of
.00 P5,000.00, and attorney's fees of
00738 P4,000.00.
4—
1,262. The counterclaim of defendant is
00 dismissed for lack of merit, with costs
00738 against him.
7—
4,299.
00 Petitioner Citytrust Banking Corporation is now before us
00738 in this petition for review on certiorari.
7—
2,204. Petitioner bank concedes that it is its obligation to honor
00 checks issued by private respondent which are sufficiently
00749 funded, but, it contends, private respondent has also the
duty to use her account in accordance with the rules of standard operating procedure of the
petitioner bank to which she has contractually acceded. bank's employees. On the other hand, the
Among such rules, contained in its "brochures" governing depositors are not concerned with
current account deposits, is the following printed banking procedure. That is the
provision: responsibility of the bank and its
employees. Depositors are only
concerned with the facility of depositing
In making a deposit . . . kindly insure
their money, earning interest thereon, if
accuracy in filing said deposit slip forms
any, and withdrawing therefrom,
as we hold ourselves free of any liability
particularly businessmen, like plaintiff,
for loss due to an incorrect account
who are supposed to be always "on-the-
number indicated in the deposit slip
go". Plaintiff's account is a "current
although the name of the depositor is
account" which should immediately be
correctly written.
posted. After all, it does not earn interest.
At least, the forbearance should be
Exactly the same issue was addressed by the appellate commensurated with prompt, efficient
court, which, after its deliberations, made the following and satisfactory service.
findings and conclusions:1
Bank clients are supposed to rely on the
We cannot uphold the position of services extended by the bank, including
defendant. For, even if it be true that the assurance that their deposits will be
there was error on the part of the plaintiff duly credited them as soon as they are
in omitting a "zero" in her account made. For, any delay in crediting their
number, yet, it is a fact that her name, account can be embarrassing to them as
"Emme E. Herrero", is clearly written on in the case of plaintiff.
said deposit slip (Exh. "B"). This is
controlling in determining in whose
We agree with plaintiff that —
account the deposit is made or should be
posted. This is so because it is not likely
to commit an error in one's name than . . . even in
merely relying on numbers which are computerized systems
difficult to remember, especially a of accounts, ways and
number with eight (8) digits as the means are available
account numbers of defendant's whereby deposits with
depositors. We view the use of numbers erroneous account
as simply for the convenience of the bank numbers are properly
but was never intended to disregard the credited depositor's
real name of its depositors. The bank is correct account
engaged in business impressed with numbers. They add that
public interest, and it is its duty to failure on the part of
protect in return its many clients and the defendant to do so
depositors who transact business with it. is negligence for which
It should not be a matter of the bank they are liable. As proof
alone receiving deposits, lending out thereof plaintiff alludes
money and collecting interests. It is also to five particular
its obligation to see to it that all funds incidents where
invested with it are properly accounted plaintiff admittedly
for and duly posted in its ledgers. wrongly indicated her
account number in her
deposit slips
In the case before Us, We are not
(Exhs. "J", "L", "N", "O"
persuaded that defendant bank was not
and "P"), but were
free from blame for the fiasco. In the first
nevertheless properly
place, the teller should not have accepted
credited her deposit
plaintiff's deposit without correcting the
(pp. 4-5, Decision).
account number on the deposit slip
which, obviously, was erroneous because,
as pointed out by defendant, it contained We have already ruled in Mundin v. Far
only seven (7) digits instead of eight (8). East Bank & Trust Co., AC-G.R. CV No.
Second, the complete name of plaintiff 03639, prom. Nov. 2, 1985, quoting the
depositor appears in bold letters on the court a quo in an almost identical set of
deposit slip (Exh. "B"). There could be no facts, that —
mistaking in her name, and that the
deposit was made in her name, "Emma E.
Having accepted a
Herrero." In fact, defendant's teller should
deposit in the course of
not have fed her deposit slip to the
its business
computer knowing that her account
transactions, it
number written thereon was wrong as it
behooved upon
contained only seven (7) digits. As it
defendant bank to see
happened, according to defendant,
to it and without
plaintiff's deposit had to be consigned to
recklessness — that the
the suspense accounts pending
depositor was
verification. This, indeed, could have
accurately credited
been avoided at the first instance had the
therefor. To post a
teller of defendant bank performed her
deposit in somebody
duties efficiently and well. For then she
else's name despite the
could have readily detected that the
name of the depositor
account number in the name of "Emma E.
clearly written on the
Herrero" was erroneous and would be
deposit slip is indeed
rejected by the computer. That is, or
sheer negligence which
should be, part of the training and
could have easily been
avoided if defendant In an information, dated 29 January 1998, the
bank exercised due accused, Danilo Catubig y Horio, was charged with the
diligence and crime of rape before the Regional Trial Court, Branch 78, of
circumspection in the Malolos, Bulacan; viz:
acceptance and posting
of plaintiff's deposit.
The undersigned Asst. Provincial Prosecutor on complaint
of the offended party Dannilyn Catubig y Lazaro accuses
We subscribe to the above disquisitions of the appellate Danilo Catubig y Horio of the crime of rape, penalized
court. In Simex International (Manila), Inc. vs. Court of under the provisions of Art. 335 of the Revised Penal Code,
Appeals, 183 SCRA 360, reiterated in Bank of Philippine committed as follows:
Islands vs. Intermediate Appellate Court, 206 SCRA 408, we
similarly said, in cautioning depository banks on their
That on or about the 27th day of November, 1997, in the
fiduciary responsibility, that —
municipality of San Jose del Monte, province of Bulacan,
Philippines, and within the jurisdiction of this Honorable
In every case, the depositor expects the Court, the above-named accused, did then and there
bank to treat his account with utmost wilfully, unlawfully and feloniously, by means of force,
fidelity, whether such account consists threats and intimidation and with lewd design have carnal
only of a few hundred pesos or of knowledge of the said offended party against her will.[1]
millions. The bank must record every
single transaction accurately, down to the
When arraigned on 16 July 1998, accused Catubig,
last centavo, and as promptly as possible.
represented by counsel de oficio, pleaded not guilty to the
This has to be done if the account is to
offense charged; forthwith, trial ensued.
reflect at any given time the amount of
money the depositor can dispose of as he The case for the prosecution was laid bare in
sees fit, confident that the bank will Appellees Brief submitted by the Office of the Solicitor
deliver it as and to whomever he directs. General.
A blunder on the part of the bank, such as
the dishonor of a check without good
reason, can cause the depositor not a On November 27, 1997, at around 4:00 oclock in the
little embarrassment if not also financial afternoon, private complainant Dannilyn Catubig, who was
loss and perhaps even civil and criminal born on August 9, 1985, and her four (4) younger siblings
litigation. were watching television in the sala of their house located
at Sunlife Subdivision, San Jose del Monte, Bulacan.

The point is that as a business affected


with public interest and because of the After an hour, Dannilyns father, herein appellant Danilo
nature of its functions, the bank is under Catubig, arrived and told Dannilyns siblings to proceed, as
obligation to treat the accounts of its in fact they did proceed, to her aunts house which is just
depositors with meticulous care, always located nearby. Thereafter, appellant told Dannilyn to go
having in mind the fiduciary nature of inside a room and to lie down on the bed. After Dannilyn
their relationship. had complied, appellant removed Dannilyns shorts and
panty, while appellant, after removing his brief and t-shirt,
[laid] on top of Dannilyn. Afraid of appellant who beat and
We agree with petitioner, however, that it is wrong to raped her in the past, Dannilyn was not able to resist
award, along with nominal damages, temperate or appellant who succeeded in inserting his penis into
moderate damages. The two awards are incompatible and Dannilyns vagina.
cannot be granted concurrently. Nominal damages are
given in order that a right of the plaintiff, which has been
violated or invaded by the defendant, may be vindicated or However, Dannilyns aunt, who got suspicious of what
recognized, and not for the purpose of indemnifying the appellant was doing to Dannilyn, informed the latters
plaintiff for any loss suffered by him (Art. 2221, New Civil mother, Jocelyn Catubig, about the said suspicion. Thus,
Code; Manila Banking Corp. vs. Intermediate Appellate when confronted by her mother, Dannilyn was forced to
Court, 131 SCRA 271). Temperate or moderate damages, reveal that she was indeed raped by appellant. The sexual
which are more than nominal but less than compensatory assault was reported to the San Jose del Monte Police
damages, on the other hand, may be recovered when the Station where Dannilyns sworn statement was subsequently
court finds that some pecuniary loss has been suffered but taken on December 3, 1997.
its amount cannot, from the nature of the case, be proved
with reasonable certainty (Art. 2224, New Civil Code). Upon the request of the police authorities, Dannilyn was
examined on December 1, 1997 by Dr. Wilfredo E. Tiera,
In the instant case, we also find need for vindicating the Medico-Legal Officer of the National Bureau of
wrong done on private respondent, and we accordingly Investigation, who found out that Dannilyns healed
agree with the Court of Appeals in granting to her nominal laceration in the hymen was caused by sexual intercourse.[2]
damages but not in similarly awarding temperate or
moderate damages. The accused denied the accusation against him. He
claimed that the rape charge was brought about only
WHEREFORE, the appealed decision is MODIFIED by deleting because of the ill-will between him, on the one hand, and
the award of temperate or moderate damages. In all other his wife and daughter Dannilyn, on the other hand,
respects, the appellate court's decision is AFFIRMED. No following a quarrel. On 27 November 1997, he asseverated,
costs in this instance. he had fought with his wife, hitting her and his
daughter. His wife then threatened him that it was the last
time that she would allow him to harm her and that he
EN BANC would regret what he did. True to her foreboding, the next
[G.R. No. 137842. August 23, 2001] day, he was arrested and a complaint for rape was filed
against him.
PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs. DANILO CATUBIG y HORIO, accused- On 11 December 1998, the Regional Trial Court
appellant. rendered a decision holding the accused guilty of the crime
of rape; it adjudged:
DECISION
WHEREFORE, in view of the foregoing, the Court hereby Q In other words, that was not the first time your father
finds accused DANILO CATUBIG Y HORIO GUILTY beyond raped you on that particular date?
reasonable doubt of the crime of Rape defined and
penalized under Article 335 of the Revised Penal Code, as A No, sir.
amended by Republic Act No. 7659, and hereby sentences
Q When was the first time, if you remember?
him to suffer the penalty of DEATH, and to pay private
complainant Dannilyn Catubig the amount of Fifty A When I was still in grade 1.
Thousand Pesos (P50,000.00) as moral damages.[3]
Q How many times were you raped by your father?
With the imposition of the death penalty by the trial A I can no longer remember how many it was - several.
court, the records were elevated to this Court for automatic
review. Q When was the last time your father raped you?
In his brief, appellant submitted thusly: A November 27.

Q Now, when your father removed your short pants and


1. The lower court erred in finding the accused guilty of the panty, what did he do next?
crime of rape in violation of Article 335 of the Revised
Penal Code as amended by Republic Act 7659. A He removed his brief and shirt.

Q After removing his brief and shirt, what did he do?


2. The lower court erred in not taking into consideration
the fact that the information was defective for failure to A He [laid] on top me.
state that the accused is the father of the victim and that
the victim was under 18 years [of] age at the time of the Q When your father [laid] on top of you, what did he
commission of the alleged rape.[4] do?

A He was inserting his penis to my vagina.


Private complainant Dannilyn Catubig narrated how
she was repeatedly abused by her own father; she testified: Q At this juncture, may we make of record that witness
starts to cry.
Q Now, after your sisters and brother [went] to the
house of your aunt, what did your father do? Q How did you know your father inserted his penis to
your vagina?
A He instructed me to go inside the room.
A I can feel it and it is painful.
Q How many rooms were there in your house?
Q That was the time when your father was already lying
A Only one. on top of you?
Q Did you go to the room per instruction? A Yes, sir.
A Yes, sir. Q And what was the movement of the body of your
father while he was lying on top of you?
Q And what happened inside the room?
A Push and pull movement.
A My father entered the room.
Q For how long did your father stay on top of you doing
Q And when your father entered the room, what did he
that push and pull movement?
do next?
A That must be about 1 hour, but my aunt arrived.
A He removed my short [pants] and my panty.
Q Aside from the pain, what else did you feel?
Q What was your position at that time when your father
removed your short pants and panty? A Mahapdi at parang may pumipitik sa loob ng ari ko.
A I was lying. Q Did you not try to resist?
Q When you entered the room, did you lie immediately? A No, because I am afraid of him.
A No, I just sat. Q You are afraid of your father?
Q How come as you claimed a while ago, you were lying A Yes, sir.
when your father removed your short pants and
panty? Q Afraid of what?

A Once I entered the room, I was sitting then he A Because he was beating us, hitting us.
removed my short [pants] and panty.
Q Why, what was the reason why your father was hitting
Q You said upon entering the room, you sat and while you?
sitting, all of a sudden your father removed your
short pants and panty while already lying at that A To threaten us.
time, how come you were lying when according to
Q For what purpose?
you, you were sitting inside the room?
A Whenever my mother sided with us, my father and
A I was sitting first and he instructed me to lie down.
mother engaged in a fight.
Q While you were sitting inside the room and you were
Q In this case, you were raped and sexually abused by
instructed by your father to lie, what comes to
your father, what made you afraid of him?
your mind?
A Because we were afraid of my father since
A That he will rape me.
childhood.[5]
Q How did you come to know that?
Dannilyn has given her testimony in a plain,
A He was raping me before, doing that before. categorical, spontaneous and frank manner, remaining
consistent throughout, and there is hardly anything on
record that can cast doubt on her sincerity. The revelations
of an innocent child whose chastity has been abused, 7659, and for want of such allegations, the trial court erred
coupled with her willingness to face police investigation in imposing the death penalty on the accused.[9] Appellant
and to undergo the trouble and humiliation of a public could only thus be convicted under Article 335 of the
trial, should merit credence unless strong justifications Revised Penal Code, as amended, of simple rape punishable
dictate otherwise. Indeed, it would take a most senseless by reclusion perpetua.
kind of depravity for a young daughter to just make up a
story which could put her own father to an undeserved Anent the award of damages, the trial court has
indictment and to even possibly face death in the hands of correctly awarded P50,000.00 moral damages, an award
the law.[6] that rests on the jural foundation that the crime of rape
necessarily brings with it shame, mental anguish,
When rape is committed against ones own daughter, besmirched reputation, moral shock and social humiliation
the moral ascendancy and influence of the father, that to the offended party.[10] In addition, the offended party
necessarily flows from his parental authority, can deserves to receive the amount of P50,000.00 civil
sufficiently cow the child to submission and can rightly be indemnity,[11] the equivalent of compensatory damages, and
held to substitute for the requisite violence or intimidation exemplary damages in the amount of P25,000.00.
that, normally, would be characterized by physical acts and
uttered threats made on the victim. An apparent discord in the award of exemplary
damages in simple and qualified rape cases perhaps
The trite defenses of alibi and denial proferred by deserves more than just a passing remark.
appellant cannot prevail over the positive and categorical
statements of private complainant. Alibi is often viewed The Civil Code of the Philippines provides, in respect
with suspicion and received with caution not only because to exemplary or corrective damages, thusly:
it is inherently weak and unreliable but also because it is
easy to fabricate. In order that this defense can prosper, it ART. 2229. Exemplary or corrective damages are imposed,
must be convincing to preclude any doubt on the physical by way of example or correction for the public good, in
impossibility of the presence of the accused at the locus addition to the moral, temperate, liquidated or
criminis at the time of the incident. These conditions have compensatory damages.
not been met in the case at bar.

The contention of appellant that his wife and ART. 2230. In criminal offenses, exemplary damages as a
daughter Dannilyn have accused him merely because of his part of the civil liability may be imposed when the crime
violent ways is much too flimsy to be believed. The mere was committed with one or more aggravating
resentment of a wife and daughter is not so compelling as circumstances. Such damages are separate and distinct
to have motivated them to wrongly lodge a complaint for a from fines and shall be paid to the offended party.
crime much more serious than might, if at all, be expected.

It is likewise a settled doctrine that the assessment ART. 2231. In quasi-delicts, exemplary damages may be
made by the trial court on the credibility of witnesses granted if the defendant acted with gross negligence.
deserves great regard and weight on appeal. The rule is not
without reason; the trial judge has a unique position of ART. 2232. In contracts and quasi-contracts, the court may
hearing first hand the witnesses and observing their award exemplary damages if the defendant acted in a
deportment, conduct and attitude during the course of the wanton, fraudulent, reckless, oppressive, or malevolent
testimony in open court. There is no valid reason to now manner.
ignore this long accepted jurisprudence in this instance.

This Court, however, finds the second assignment of ART. 2233. Exemplary damages cannot be recovered as a
error impressed with merit. matter of right; the court will decide whether or not they
should be adjudicated.
Article 335 of the Revised Penal Code, as amended by
Section 11 of Republic Act No. 7659, at times also referred
to as the Death Penalty Law, states in part: ART. 2234. While the amount of the exemplary damages
need not be proved, the plaintiff must show that he is
entitled to moral, temperate or compensatory damages
Art. 335. When and how rape is committed. x x x before the court may consider the question of whether or
not exemplary damages should be awarded. In case
xxxxxxxxx liquidated damages have been agreed upon, although no
proof of loss is necessary in order that such liquidated
damages may be recovered, nevertheless, before the court
The death penalty shall also be imposed if the crime of may consider the question of granting exemplary in
rape is committed with any of the following attendant addition to the liquidated damages, the plaintiff must show
circumstances: that he would be entitled to moral, temperate or
compensatory damages were it not for the stipulation for
1. When the victim is under eighteen (18) years of age and liquidated damages.
the offender is a parent, ascendant, step-parent, guardian,
relative by consanguinity or affinity within the third civil ART. 2235. A stipulation whereby exemplary damages are
degree, or the common-law spouse of the parent of the renounced in advance shall be null and void.
victim.
The attendance of aggravating circumstances in the
The concurrence of the minority of the victim and her perpetration of the crime serves to increase the penalty
relationship to the offender are special qualifying (the criminal liability aspect),[12] as well as to justify an
circumstances that are needed to be alleged in the award of exemplary or corrective damages (the civil
complaint or information for the penalty of death to be liability aspect),[13] moored on the greater perversity of the
decreed.[7] The Constitution guarantees to be inviolable the offender manifested in the commission of the felony such
right of an accused to be informed of the nature and cause as may be shown by (1) the motivating power itself, (2) the
of the accusation against him.[8] It is a requirement that place of commission, (3) the means and ways employed,
renders it essential for every element of the offense with (4) the time, or (5) the personal circumstances of the
which he is charged to be properly alleged in the complaint offender or the offended party or both.There are various
or information. types of aggravating circumstances, among them, the
ordinary and the qualifying. Relationship is an alternative
Here, the information failed to state the minority of circumstance under Article 15 of the Revised Penal Code.
the victim and her relationship with the offender, both
special qualifying circumstances under Republic Act No.
Art. 15. Their concept. --Alternative circumstances are those wrongdoer and others like him from similar conduct in the
which must be taken into consideration as aggravating or future.[36]
mitigating according to the nature and effects of the crime
and other conditions attending its commission. They are The term aggravating circumstances used by the Civil
relationship, intoxication, and degree of instruction and Code, the law not having specified otherwise, is to be
education of the offender. understood in its broad or generic sense. The commission
of an offense has a two-pronged effect, one on the public
as it breaches the social order and the other upon the
The alternative circumstance of relationship shall be taken private victim as it causes personal sufferings, each of
into consideration when the offended party is the spouse, which is addressed by, respectively, the prescription of
ascendant, descendant, legitimate, natural, or adopted heavier punishment for the accused and by an award of
brother or sister, or relative by affinity in the same degree additional damages to the victim. The increase of the
of the offender. penalty or a shift to a graver felony underscores the
exacerbation of the offense by the attendance of
As a rule, relationship is held to be aggravating in aggravating circumstances, whether ordinary or qualifying,
crimes against chastity, such as rape and acts of in its commission. Unlike the criminal liability which is
lasciviousness, whether the offender is a higher or a lower basically a State concern, the award of damages, however,
degree relative of the offended party.[14] is likewise, if not primarily, intended for the offended
party who suffers thereby. It would make little sense for an
Under Section 11 of Republic Act No. 7659, amending award of exemplary damages to be due the private
Article 335 of the Revised Penal Code, the death penalty is offended party when the aggravating circumstance is
to be imposed in rape cases when the victim is under ordinary but to be withheld when it is qualifying. Withal,
eighteen (18) years of age and the offender is a parent, the ordinary or qualifying nature of an aggravating
ascendant, step-parent, guardian, relative by consanguinity circumstance is a distinction that should only be of
or affinity within the third civil degree, or the common-law consequence to the criminal, rather than to the civil,
spouse of the parent of the victim. The Court has since liability of the offender. In fine, relative to the civil aspect
held that the circumstances enumerated by the amendatory of the case, an aggravating circumstance, whether ordinary
law are to be regarded as special qualifying (aggravating) or qualifying, should entitle the offended party to an award
circumstances. Somehow doubts linger on whether of exemplary damages within the unbridled meaning of
relationship may then be considered to warrant an award Article 2230 of the Civil Code.
for exemplary damages where it is used to qualify rape as a
heinous crime, thereby becoming an element thereof, as Relevantly, the Revised Rules on Criminal Procedure,
would subject the offender to the penalty of made effective on 01 December 2000, requires aggravating
death. Heretofore, the Court has not categorically laid circumstances, whether ordinary or qualifying, to be stated
down a specific rule, preferring instead to treat the issue in the complaint or information. Sections 8 and 9 of Rule
on a case to case basis. 110 of the Rules of Court now provide:

In People vs. Fundano,[15] People vs. Ramos,[16] People


Sec. 8. Designation of the offense. - The complaint or
vs. Medina,[17] People vs. Dimapilis,[18] People vs.
information shall state the designation of the offense given
Calayca,[19] People vs. Tabion,[20] People vs. Bayona,[21] People
by the statute, aver the acts or omissions constituting the
vs. Bayya,[22] and People vs. Nuez,[23] along with still other
offense, and specify its qualifying and aggravating
cases, the Court has almost invariably appreciated
circumstances. If there is no designation of the offense,
relationship as an ordinary aggravating circumstance in
reference shall be made to the section or subsection of the
simple rape and thereby imposed exemplary damages upon
statute punishing it.
the offender whether or not the offense has been
committed prior to or after the effectivity of Republic Act
No. 7659. Exceptionally, as in People vs. Decena,[24] People Sec. 9. Cause of the accusations. - The acts or omissions
vs. Perez,[25] People vs. Perez,[26] and People vs. complained of as constituting the offense and the
Ambray,[27] the Court has denied the award of exemplary qualifying and aggravating circumstances must be stated
damages following the effectivity of that law. In qualified in ordinary and concise language and not necessarily in
rape cases, such as in People vs. Magdato,[28] People vs. the language used in the statute but in terms sufficient to
Arizapa,[29] and People vs. Alicante,[30] the Court decreed the enable a person of common understanding to know what
payment of exemplary damages to the offended party but it offense is being charged as well as its qualifying and
did not so do as in People vs. Alba,[31]People vs. aggravating circumstances and for the court to
Mengote,[32] and People vs. Maglente.[33] pronounce judgment.

It may be time for the Court to abandon its pro hac


vice stance and provide, for the guidance of the bar and the A court would thus be precluded from considering in its
bench, a kind of standard on the matter. judgment the attendance of qualifying or aggravating
circumstances if the complaint or information is bereft of
Also known as punitive or vindictive damages, any allegation of the presence of such circumstances.
exemplary or corrective damages are intended to serve as a
deterrent to serious wrong doings, and as a vindication of The retroactive application of procedural rules,
undue sufferings and wanton invasion of the rights of an nevertheless, cannot adversely affect the rights of the
injured or a punishment for those guilty of outrageous private offended party that have become vested prior to
conduct. These terms are generally, but not always, used the effectivity of said rules. Thus, in the case at bar,
interchangeably. In common law, there is preference in the although relationship has not been alleged in the
use of exemplary damages when the award is to account for information, the offense having been committed, however,
injury to feelings and for the sense of indignity and prior to the effectivity of the new rules, the civil liability
humiliation suffered by a person as a result of an injury already incurred by appellant remains unaffected thereby.
that has been maliciously and wantonly inflicted,[34] the
WHEREFORE, the decision of the court a quo is
theory being that there should be compensation for the
AFFIRMED with MODIFICATION in that appellant Danilo
hurt caused by the highly reprehensible conduct of the
Catubig y Horio is found guilty only of simple rape and not
defendant - associated with such circumstances as
in its qualified form, and he is hereby sentenced to suffer
willfulness, wantonness, malice, gross negligence or
the penalty of reclusion perpetua and to pay complainant
recklessness, oppression, insult or fraud or gross fraud [35]-
Dannilyn Catubig P50,000.00 civil indemnity, P50,000.00
that intensifies the injury. The terms punitive or vindictive
moral damages and P25,000.00 exemplary
damages are often used to refer to those species of
damages. Costs de oficio.
damages that may be awarded against a person to punish
him for his outrageous conduct. In either case, these SO ORDERED.
damages are intended in good measure to deter the
SECOND DIVISION
7. That due to the reckless and imprudent driving by
[G.R. No. 138060. September 1, 2004] defendant Virgilio Te Laspias of the said Rough Riders
passenger bus, plaintiff and his wife, Felisa Pepito
WILLIAM TIU, doing business under the name and style Arriesgado, failed to safely reach their destination which
of D Rough Riders, and VIRGILIO TE LAS was Cebu City, the proximate cause of which was
PIAS petitioners, vs. PEDRO A. ARRIESGADO, defendant-drivers failure to observe utmost diligence
BENJAMIN CONDOR, SERGIO PEDRANO and required of a very cautious person under all circumstances.
PHILIPPINE PHOENIX SURETY AND INSURANCE,
INC., respondents.
8. That defendant William Tiu, being the owner and
operator of the said Rough Riders passenger bus which
DECISION figured in the said accident, wherein plaintiff and his wife
were riding at the time of the accident, is therefore directly
This is a petition for review on certiorari under Rule
liable for the breach of contract of carriage for his failure
45 of the Rules of Court from the Decision[1] of the Court of
to transport plaintiff and his wife safely to their place of
Appeals in CA-G.R. CV No. 54354 affirming with destination which was Cebu City, and which failure in his
modification the Decision[2] of the Regional Trial Court,
obligation to transport safely his passengers was due to
7th Judicial Region, Cebu City, Branch 20, in Civil Case No. and in consequence of his failure to exercise the diligence
CEB-5963 for breach of contract of carriage, damages and
of a good father of the family in the selection and
attorneys fees, and the Resolution dated February 26, 1999 supervision of his employees, particularly defendant-driver
denying the motion for reconsideration thereof.
Virgilio Te Laspias.[9]
The following facts are undisputed:
The respondent prayed that judgment be rendered in
At about 10:00 p.m. of March 15, 1987, the cargo his favor and that the petitioners be condemned to pay the
truck marked Condor Hollow Blocks and General following damages:
Merchandise bearing plate number GBP-675 was loaded
with firewood in Bogo, Cebu and left for Cebu City. Upon
reaching Sitio Aggies, Poblacion, Compostela, Cebu, just as 1). To pay to plaintiff, jointly and severally, the amount
the truck passed over a bridge, one of its rear tires of P30,000.00 for the death and untimely demise of
exploded. The driver, Sergio Pedrano, then parked along plaintiffs wife, Felisa Pepito Arriesgado;
the right side of the national highway and removed the
damaged tire to have it vulcanized at a nearby shop, about 2). To pay to plaintiff, jointly and severally, the amount
700 meters away.[3] Pedrano left his helper, Jose Mitante, Jr. of P38,441.50, representing actual expenses incurred by
to keep watch over the stalled vehicle, and instructed the the plaintiff in connection with the death/burial of
latter to place a spare tire six fathoms away [4] behind the plaintiffs wife;
stalled truck to serve as a warning for oncoming vehicles.
The trucks tail lights were also left on. It was about 12:00
a.m., March 16, 1987. 3). To pay to plaintiff, jointly and severally, the amount
of P1,113.80, representing medical/hospitalization
At about 4:45 a.m., D Rough Riders passenger bus expenses incurred by plaintiff for the injuries sustained by
with plate number PBP-724 driven by Virgilio Te Laspias him;
was cruising along the national highway of Sitio Aggies,
Poblacion, Compostela, Cebu. The passenger bus was also
4). To pay to plaintiff, jointly and severally, the amount
bound for Cebu City, and had come from Maya,
of P50,000.00 for moral damages;
Daanbantayan, Cebu. Among its passengers were the
Spouses Pedro A. Arriesgado and Felisa Pepito Arriesgado,
who were seated at the right side of the bus, about three (3) 5). To pay to plaintiff, jointly and severally, the amount
or four (4) places from the front seat. of P50,000.00 by way of exemplary damages;

As the bus was approaching the bridge, Laspias saw


the stalled truck, which was then about 25 meters 6). To pay to plaintiff, jointly and severally, the amount
away.[5] He applied the breaks and tried to swerve to the left of P20,000.00 for attorneys fees;
to avoid hitting the truck. But it was too late; the bus
rammed into the trucks left rear. The impact damaged the 7). To pay to plaintiff, jointly and severally, the amount
right side of the bus and left several passengers injured. of P5,000.00 for litigation expenses.
Pedro Arriesgado lost consciousness and suffered a
fracture in his right colles.[6] His wife, Felisa, was brought to
the Danao City Hospital. She was later transferred to the PLAINTIFF FURTHER PRAYS FOR SUCH OTHER RELIEFS AND
Southern Island Medical Center where she died shortly REMEDIES IN LAW AND EQUITY.[10]
thereafter.[7]
The petitioners, for their part, filed a Third-Party
Respondent Pedro A. Arriesgado then filed a
Complaint[11] on August 21, 1987 against the following:
complaint for breach of contract of carriage, damages and
respondent Philippine Phoenix Surety and Insurance, Inc.
attorneys fees before the Regional Trial Court of Cebu City,
(PPSII), petitioner Tius insurer; respondent Benjamin
Branch 20, against the petitioners, D Rough Riders bus
Condor, the registered owner of the cargo truck; and
operator William Tiu and his driver, Virgilio Te Laspias on
respondent Sergio Pedrano, the driver of the truck. They
May 27, 1987. The respondent alleged that the passenger
alleged that petitioner Laspias was negotiating the uphill
bus in question was cruising at a fast and high speed along
climb along the national highway of Sitio Aggies, Poblacion,
the national road, and that petitioner Laspias did not take
Compostela, in a moderate and normal speed. It was
precautionary measures to avoid the accident.[8] Thus:
further alleged that the truck was parked in a slanted
manner, its rear portion almost in the middle of the
6. That the accident resulted to the death of the plaintiffs highway, and that no early warning device was displayed.
wife, Felisa Pepito Arriesgado, as evidenced by a Certificate Petitioner Laspias promptly applied the brakes and swerved
of Death, a xerox copy of which is hereto attached as to the left to avoid hitting the truck head-on, but despite
integral part hereof and marked as ANNEX A, and physical his efforts to avoid damage to property and physical
injuries to several of its passengers, including plaintiff injuries on the passengers, the right side portion of the bus
himself who suffered a COLLES FRACTURE RIGHT, per hit the cargo trucks left rear. The petitioners further
Medical Certificate, a xerox copy of which is hereto alleged, thus:
attached as integral part hereof and marked as ANNEX B
hereof.
5. That the cargo truck mentioned in the aforequoted
paragraph is owned and registered in the name of the third-
party defendant Benjamin Condor and was left unattended 4 - The sum of TWENTY THOUSAND PESOS (P20,000.00) as
by its driver Sergio Pedrano, one of the third-party attorneys fees;
defendants, at the time of the incident;
5 - The sum of FIVE THOUSAND PESOS (P5,000.00) as costs
6. That third-party defendant Sergio Pedrano, as driver of of suit;
the cargo truck with marked (sic) Condor Hollow Blocks &
General Merchandise, with Plate No. GBP-675 which was
SO ORDERED.[15]
recklessly and imprudently parked along the national
highway of Compostela, Cebu during the vehicular accident
in question, and third-party defendant Benjamin Condor, as According to the trial court, there was no dispute that
the registered owner of the cargo truck who failed to petitioner William Tiu was engaged in business as a
exercise due diligence in the selection and supervision of common carrier, in view of his admission that D Rough
third-party defendant Sergio Pedrano, are jointly and Rider passenger bus which figured in the accident was
severally liable to the third-party plaintiffs for whatever owned by him; that he had been engaged in the
liability that may be adjudged against said third-party transportation business for 25 years with a sole
plaintiffs or are directly liable of (sic) the alleged death of proprietorship; and that he owned 34 buses. The trial court
plaintiffs wife; ruled that if petitioner Laspias had not been driving at a
fast pace, he could have easily swerved to the left to avoid
hitting the truck, thus, averting the unfortunate incident. It
7. That in addition to all that are stated above and in the
then concluded that petitioner Laspias was negligent.
answer which are intended to show reckless imprudence on
the part of the third-party defendants, the third-party The trial court also ruled that the absence of an early
plaintiffs hereby declare that during the vehicular accident warning device near the place where the truck was parked
in question, third-party defendant was clearly violating was not sufficient to impute negligence on the part of
Section 34, par. (g) of the Land Transportation and Traffic respondent Pedrano, since the tail lights of the truck were
Code fully on, and the vicinity was well lighted by street
lamps.[16] It also found that the testimony of petitioner Tiu,
10. That the aforesaid passenger bus, owned and operated that he based the selection of his driver Laspias on
by third-party plaintiff William Tiu, is covered by a efficiency and in-service training, and that the latter had
common carrier liability insurance with Certificate of Cover been so far an efficient and good driver for the past six
No. 054940 issued by Philippine Phoenix Surety and years of his employment, was insufficient to prove that he
Insurance, Inc., Cebu City Branch, in favor of third-party observed the diligence of a good father of a family in the
plaintiff William Tiu which covers the period from July 22, selection and supervision of his employees.
1986 to July 22, 1987 and that the said insurance coverage
After the petitioners motion for reconsideration of the
was valid, binding and subsisting during the time of the
said decision was denied, the petitioners elevated the case
aforementioned incident (Annex A as part hereof);
to the Court of Appeals on the following issues:

11. That after the aforesaid alleged incident, third-party I WHETHER THIRD PARTY DEFENDANT SERGIO
plaintiff notified third-party defendant Philippine Phoenix PEDRANO WAS RECKLESS AND IMPRUDENT
Surety and Insurance, Inc., of the alleged incident hereto WHEN HE PARKED THE CARGO TRUCK IN AN
mentioned, but to no avail; OBLIQUE MANNER;

II WHETHER THE THIRD PARTY DEFENDANTS ARE


12. That granting, et arguendo et arguendi, if herein third- JOINTLY AND SEVERALLY LIABLE DIRECTLY
party plaintiffs will be adversely adjudged, they stand to TO PLAINTIFF-APPELLEE OR TO DEFENDANTS-
pay damages sought by the plaintiff and therefore could APPELLANTS FOR WHATEVER LIABILITY THAT
also look up to the Philippine Phoenix Surety and MAY BE ADJUDGED TO THE SAID
Insurance, Inc., for contribution, indemnification and/or DEFENDANTS-APPELLANTS;
reimbursement of any liability or obligation that they might
[be] adjudged per insurance coverage duly entered into by III WHETHER DEFENDANT-APPELLANT VIRGILIO
and between third-party plaintiff William Tiu and third- TE LASPIAS WAS GUILTY OF GROSS
party defendant Philippine Phoenix Surety and Insurance, NEGLIGENCE;
Inc.;[12]
IV WHETHER DEFENDANT-APPELLANT WILLIAM
TIU HAD EXERCISED THE DUE DILIGENCE OF A
The respondent PPSII, for its part, admitted that it had GOOD FATHER OF A FAMILY IN THE
an existing contract with petitioner Tiu, but averred that it SELECTION AND SUPERVISION OF HIS
had already attended to and settled the claims of those who DRIVERS;
were injured during the incident.[13] It could not accede to
the claim of respondent Arriesgado, as such claim was way V GRANTING FOR THE SAKE OF ARGUMENT THAT
beyond the scheduled indemnity as contained in the DEFENDANT-APPELLANT WILLIAM TIU IS
contract of insurance. [14] LIABLE TO PLAINTIFF-APPELLEE, WHETHER
THERE IS LEGAL AND FACTUAL BASIS IN
After the parties presented their respective evidence, AWARDING EXCESSIVE MORAL DAMAGES,
the trial court ruled in favor of respondent Arriesgado. The EX[E]MPLARY DAMAGES, ATTORNEYS FEES
dispositive portion of the decision reads: AND LITIGATION EXPENSES TO PLAINTIFF-
APPELLEE;
WHEREFORE, in view of the foregoing, judgment is hereby VI WHETHER THIRD PARTY DEFENDANT
rendered in favor of plaintiff as against defendant William PHILIPPINE PHOENIX SURETY AND
Tiu ordering the latter to pay the plaintiff the following INSURANCE, INC. IS LIABLE TO DEFENDANT-
amounts: APPELLANT WILLIAM TIU.[17]

1 - The sum of FIFTY THOUSAND PESOS (P50,000.00) as The appellate court rendered judgment affirming the
moral damages; trial courts decision with the modification that the awards
for moral and exemplary damages were reduced
to P25,000. The dispositive portion reads:
2 - The sum of FIFTY THOUSAND PESOS (P50,000.00) as
exemplary damages;
WHEREFORE, the appealed Decision dated November 6,
1995 is hereby MODIFIED such that the awards for moral
3 - The sum of THIRTY-EIGHT THOUSAND FOUR HUNDRED and exemplary damages are each reduced to P25,000.00 or
FORTY-ONE PESOS (P38,441.00) as actual damages;
a total of P50,000.00 for both. The judgment Finally, the petitioners contend that respondent PPSII
is AFFIRMED in all other respects. admitted in its answer that while it had attended to and
settled the claims of the other injured passengers,
respondent Arriesgados claim remained unsettled as it was
SO ORDERED.[18]
beyond the scheduled indemnity under the insurance
contract. The petitioners argue that said respondent PPSII
According to the appellate court, the action of should have settled the said claim in accordance with the
respondent Arriesgado was based not on quasi-delict but scheduled indemnity instead of just denying the same.
on breach of contract of carriage. As a common carrier, it
was incumbent upon petitioner Tiu to prove that On the other hand, respondent Arriesgado argues that
extraordinary diligence was observed in ensuring the safety two of the issues raised by the petitioners involved
of passengers during transportation. Since the latter failed questions of fact, not reviewable by the Supreme Court: the
to do so, he should be held liable for respondent finding of negligence on the part of the petitioners and
Arriesgados claim. The CA also ruled that no evidence was their liability to him; and the award of exemplary damages,
presented against the respondent PPSII, and as such, it attorneys fees and litigation expenses in his favor. Invoking
could not be held liable for respondent Arriesgados claim, the principle of equity and justice, respondent Arriesgado
nor for contribution, indemnification and/or pointed out that if there was an error to be reviewed in the
reimbursement in case the petitioners were adjudged CA decision, it should be geared towards the restoration of
liable. the moral and exemplary damages to P50,000 each, or a
total of P100,000 which was reduced by the Court of
The petitioners now come to this Court and ascribe Appeals to P25,000 each, or a total of only P50,000.
the following errors committed by the appellate court:
Respondent Arriesgado also alleged that respondents
I. THE HONORABLE COURT OF APPEALS ERRED IN Condor and Pedrano, and respondent Phoenix Surety, are
NOT DECLARING RESPONDENTS BENJAMIN parties with whom he had no contract of carriage, and had
CONDOR AND SERGIO PEDRANO GUILTY OF no cause of action against. It was pointed out that only the
NEGLIGENCE AND HENCE, LIABLE TO petitioners needed to be sued, as driver and operator of the
RESPONDENT PEDRO A. ARRIESGADO OR TO ill-fated bus, on account of their failure to bring the
PETITIONERS FOR WHATEVER LIABILITY THAT Arriesgado Spouses to their place of destination as agreed
MAY BE ADJUDGED AGAINST THEM. upon in the contract of carriage, using the utmost diligence
of very cautious persons with due regard for all
II. THE HONORABLE COURT OF APPEALS ERRED circumstances.
IN FINDING PETITIONERS GUILTY OF
NEGLIGENCE AND HENCE, LIABLE TO Respondents Condor and Pedrano point out that, as
RESPONDENT PEDRO A. ARRIESGADO. correctly ruled by the Court of Appeals, the proximate
cause of the unfortunate incident was the fast speed at
III. THE HONORABLE COURT OF APPEALS ERRED which petitioner Laspias was driving the bus owned by
IN FINDING PETITIONER WILLIAM TIU LIABLE petitioner Tiu. According to the respondents, the allegation
FOR EXEMPLARY DAMAGES, ATTORNEYS FEES that the truck was not equipped with an early warning
AND LITIGATION EXPENSES. device could not in any way have prevented the incident
from happening. It was also pointed out that respondent
IV.THE HONORABLE COURT OF APPEALS ERRED
Condor had always exercised the due diligence required in
IN NOT FINDING RESPONDENT
the selection and supervision of his employees, and that he
PHILIPPINE PHOENIX SURETY AND
was not a party to the contract of carriage between the
INSURANCE, INC. LIABLE TO RESPONDENT
petitioners and respondent Arriesgado.
PEDRO A. ARRIESGADO OR TO PETITIONER
WILLIAM TIU.[19] Respondent PPSII, for its part, alleges that contrary to
the allegation of petitioner Tiu, it settled all the claims of
According to the petitioners, the appellate court erred
those injured in accordance with the insurance contract. It
in failing to appreciate the absence of an early warning
further avers that it did not deny respondent Arriesgados
device and/or built-in reflectors at the front and back of
claim, and emphasizes that its liability should be within the
the cargo truck, in clear violation of Section 34, par. (g) of
scheduled limits of indemnity under the said contract. The
the Land Transportation and Traffic Code. They aver that
respondent concludes that while it is true that insurance
such violation is only a proof of respondent Pedranos
contracts are contracts of indemnity, the measure of the
negligence, as provided under Article 2185 of the New Civil
insurers liability is determined by the insureds compliance
Code. They also question the appellate courts failure to
with the terms thereof.
take into account that the truck was parked in an oblique
manner, its rear portion almost at the center of the road. As
such, the proximate cause of the incident was the gross
recklessness and imprudence of respondent Pedrano, The Courts Ruling
creating the presumption of negligence on the part of
respondent Condor in supervising his employees, which At the outset, it must be stressed that this Court is not
presumption was not rebutted. The petitioners then a trier of facts.[20] Factual findings of the Court of Appeals
contend that respondents Condor and Pedrano should be are final and may not be reviewed on appeal by this Court,
held jointly and severally liable to respondent Arriesgado except when the lower court and the CA arrived at diverse
for the payment of the latters claim. factual findings.[21]The petitioners in this case assail the
finding of both the trial and the appellate courts that
The petitioners, likewise, aver that expert evidence petitioner Laspias was driving at a very fast speed before
should have been presented to prove that petitioner the bus owned by petitioner Tiu collided with respondent
Laspias was driving at a very fast speed, and that the CA Condors stalled truck. This is clearly one of fact, not
could not reach such conclusion by merely considering the reviewable by the Court in a petition for review under Rule
damages on the cargo truck. It was also pointed out that 45.[22]
petitioner Tiu presented evidence that he had exercised the
diligence of a good father of a family in the selection and On this ground alone, the petition is destined to fail.
supervision of his drivers.
However, considering that novel questions of law are
The petitioners further allege that there is no legal likewise involved, the Court resolves to examine and rule
and factual basis to require petitioner Tiu to pay exemplary on the merits of the case.
damages as no evidence was presented to show that the
Petitioner LaspiasWas negligent in drivingThe Ill-fated bus
latter acted in a fraudulent, reckless and oppressive
manner, or that he had an active participation in the In his testimony before the trial court, petitioner
negligent act of petitioner Laspias. Laspias claimed that he was traversing the two-lane road at
Compostela, Cebu at a speed of only forty (40) to fifty (50)
kilometers per hour before the incident occurred. [23] He also Transportation and Traffic Code, Republic Act No. 4136, as
admitted that he sawthe truck which was parked in an amended:
oblique position at about 25 meters before impact,[24] and
tried to avoid hitting it by swerving to the left. However,
Sec. 35. Restriction as to speed. (a) Any person driving a
even in the absence of expert evidence, the damage
motor vehicle on a highway shall drive the same at a
sustained by the truck[25] itself supports the finding of both
careful and prudent speed, not greater nor less than is
the trial court and the appellate court, that the D Rough
reasonable and proper, having due regard for the traffic,
Rider bus driven by petitioner Laspias was traveling at a
the width of the highway, and or any other condition then
fast pace. Since he saw the stalled truck at a distance of 25
and there existing; and no person shall drive any motor
meters, petitioner Laspias had more than enough time to
vehicle upon a highway at such speed as to endanger the
swerve to his left to avoid hitting it; that is, if the speed of
life, limb and property of any person, nor at a speed
the bus was only 40 to 50 kilometers per hour as he
greater than will permit him to bring the vehicle to a stop
claimed. As found by the Court of Appeals, it is easier to
within the assured clear distance ahead.[30]
believe that petitioner Laspias was driving at a very fast
speed, since at 4:45 a.m., the hour of the accident, there
were no oncoming vehicles at the opposite direction. Under Article 2185 of the Civil Code, a person driving
Petitioner Laspias could have swerved to the left lane with a vehicle is presumed negligent if at the time of the
proper clearance, and, thus, could have avoided the mishap, he was violating any traffic regulation.[31]
truck.[26] Instinct, at the very least, would have prompted
him to apply the breaks to avert the impending disaster Petitioner Tiu failed toOvercome the presumptionOf
which he must have foreseen when he caught sight of the negligence against him asOne engaged in the businessOf
stalled truck. As we had occasion to reiterate: common carriage

The rules which common carriers should observe as


A man must use common sense, and exercise due reflection to the safety of their passengers are set forth in the Civil
in all his acts; it is his duty to be cautious, careful and Code, Articles 1733,[32] 1755[33] and 1756.[34] In this case,
prudent, if not from instinct, then through fear of recurring respondent Arriesgado and his deceased wife contracted
punishment. He is responsible for such results as anyone with petitioner Tiu, as owner and operator of D Rough
might foresee and for acts which no one would have Riders bus service, for transportation from Maya,
performed except through culpable abandon. Otherwise, Daanbantayan, Cebu, to Cebu City for the price
his own person, rights and property, and those of his of P18.00.[35] It is undisputed that the respondent and his
fellow beings, would ever be exposed to all manner of wife were not safely transported to the destination agreed
danger and injury.[27] upon. In actions for breach of contract, only the existence
of such contract, and the fact that the obligor, in this case
the common carrier, failed to transport his passenger
We agree with the following findings of the trial court,
safely to his destination are the matters that need to be
which were affirmed by the CA on appeal:
proved.[36] This is because under the said contract of
carriage, the petitioners assumed the express obligation to
A close study and evaluation of the testimonies and the transport the respondent and his wife to their destination
documentary proofs submitted by the parties which have safely and to observe extraordinary diligence with due
direct bearing on the issue of negligence, this Court as regard for all circumstances.[37] Any injury suffered by the
shown by preponderance of evidence that defendant passengers in the course thereof is immediately
Virgilio Te Laspias failed to observe extraordinary diligence attributable to the negligence of the carrier.[38] Upon the
as a driver of the common carrier in this case. It is quite happening of the accident, the presumption of negligence
hard to accept his version of the incident that he did not at once arises, and it becomes the duty of a common
see at a reasonable distance ahead the cargo truck that was carrier to prove that he observed extraordinary diligence in
parked when the Rough Rider [Bus] just came out of the the care of his passengers.[39] It must be stressed that in
bridge which is on an (sic) [more] elevated position than the requiring the highest possible degree of diligence from
place where the cargo truck was parked. With its headlights common carriers and in creating a presumption of
fully on, defendant driver of the Rough Rider was in a negligence against them, the law compels them to curb the
vantage position to see the cargo truck ahead which was recklessness of their drivers.[40]
parked and he could just easily have avoided hitting and
bumping the same by maneuvering to the left without While evidence may be submitted to overcome such
hitting the said cargo truck. Besides, it is (sic) shown that presumption of negligence, it must be shown that the
there was still much room or space for the Rough Rider to carrier observed the required extraordinary diligence,
pass at the left lane of the said national highway even if the which means that the carrier must show the utmost
cargo truck had occupied the entire right lane thereof. It is diligence of very cautious persons as far as human care and
not true that if the Rough Rider would proceed to pass foresight can provide, or that the accident was caused by
through the left lane it would fall into a canal considering fortuitous event.[41] As correctly found by the trial court,
that there was much space for it to pass without hitting and petitioner Tiu failed to conclusively rebut such
bumping the cargo truck at the left lane of said national presumption. The negligence of petitioner Laspias as driver
highway. The records, further, showed that there was no of the passenger bus is, thus, binding against petitioner
incoming vehicle at the opposite lane of the national Tiu, as the owner of the passenger bus engaged as a
highway which would have prevented the Rough Rider from common carrier.[42]
not swerving to its left in order to avoid hitting and
The Doctrine ofLast Clear ChanceIs Inapplicable in theCase
bumping the parked cargo truck. But the evidence showed
at Bar
that the Rough Rider instead of swerving to the still
spacious left lane of the national highway plowed directly Contrary to the petitioners contention, the principle
into the parked cargo truck hitting the latter at its rear of last clear chance is inapplicable in the instant case, as it
portion; and thus, the (sic) causing damages not only to only applies in a suit between the owners and drivers of
herein plaintiff but to the cargo truck as well.[28] two colliding vehicles. It does not arise where a passenger
demands responsibility from the carrier to enforce its
Indeed, petitioner Laspias negligence in driving the contractual obligations, for it would be inequitable to
bus is apparent in the records. By his own admission, he exempt the negligent driver and its owner on the ground
had just passed a bridge and was traversing the highway of that the other driver was likewise guilty of
Compostela, Cebu at a speed of 40 to 50 kilometers per negligence.[43] The common law notion of last clear chance
hour before the collision occurred. The maximum speed permitted courts to grant recovery to a plaintiff who has
allowed by law on a bridge is only 30 kilometers per also been negligent provided that the defendant had the
hour.[29] And, as correctly pointed out by the trial court, last clear chance to avoid the casualty and failed to do so.
petitioner Laspias also violated Section 35 of the Land Accordingly, it is difficult to see what role, if any, the
common law of last clear chance doctrine has to play in a
jurisdiction where the common law concept of contributory have been averted had respondent Condor, the owner of
negligence as an absolute bar to recovery by the plaintiff, the truck, equipped the said vehicle with lights, flares, or,
has itself been rejected, as it has been in Article 2179 of at the very least, an early warning device.[49] Hence, we
the Civil Code.[44] cannot subscribe to respondents Condor and Pedranos
claim that they should be absolved from liability because,
Thus, petitioner Tiu cannot escape liability for the as found by the trial and appellate courts, the proximate
death of respondent Arriesgados wife due to the negligence cause of the collision was the fast speed at which petitioner
of petitioner Laspias, his employee, on this score. Laspias drove the bus. To accept this proposition would be
to come too close to wiping out the fundamental principle
Respondents Pedrano andCondor were likewiseNegligent
of law that a man must respond for the foreseeable
In Phoenix Construction, Inc. v. Intermediate Appellate consequences of his own negligent act or omission. Indeed,
Court,[45] where therein respondent Dionisio sustained our law on quasi-delicts seeks to reduce the risks and
injuries when his vehicle rammed against a dump truck burdens of living in society and to allocate them among its
parked askew, the Court ruled that the improper parking of members. To accept this proposition would be to weaken
a dump truck without any warning lights or reflector the very bonds of society.[50]
devices created an unreasonable risk for anyone driving
The Liability ofRespondent PPSIIas Insurer
within the vicinity, and for having created such risk, the
truck driver must be held responsible. In ruling against the The trial court in this case did not rule on the liability
petitioner therein, the Court elucidated, thus: of respondent PPSII, while the appellate court ruled that, as
no evidence was presented against it, the insurance
In our view, Dionisios negligence, although later in point of company is not liable.
time than the truck drivers negligence, and therefore closer
A perusal of the records will show that when the
to the accident, was not an efficient intervening or
petitioners filed the Third-Party Complaint against
independent cause. What the petitioners describe as an
respondent PPSII, they failed to attach a copy of the terms
intervening cause was no more than a foreseeable
of the insurance contract itself. Only Certificate of Cover
consequence of the risk created by the negligent manner in
No. 054940[51] issued in favor of Mr. William Tiu,
which the truck driver had parked the dump truck. In other
Lahug, Cebu City signed by Cosme H. Boniel was appended
words, the petitioner truck driver owed a duty to private
to the third-party complaint. The date of issuance, July 22,
respondent Dionisio and others similarly situated not to
1986, the period of insurance, from July 22, 1986 to July
impose upon them the very risk the truck driver had
22, 1987, as well as the following items, were also
created. Dionisios negligence was not that of an
indicated therein:
independent and overpowering nature as to cut, as it were,
the chain of causation in fact between the improper
parking of the dump truck and the accident, nor to sever SCHEDULED VEHICLE
the juris vinculum of liability.

MODE MAKE TYPE OF COLOR BLT FILE


We hold that private respondent Dionisios negligence was L BODY NO.
only contributory, that the immediate and proximate cause
of the injury remained the truck drivers lack of due care.[46]
Isuzu Bus blue mixed
Forward
In this case, both the trial and the appellate courts
failed to consider that respondent Pedrano was also
negligent in leaving the truck parked askew without any PLAT SERIAL/CHAS MOTOR AUTHORIZE UNLADE
warning lights or reflector devices to alert oncoming E NO. SIS NO. NO. D N
vehicles, and that such failure created the presumption of PBP- SER450- 677836 CAPACITY WEIGHT
negligence on the part of his employer, respondent Condor, 724 1584124 50 6Cyls.
in supervising his employees properly and adequately. As Kgs.
we ruled in Poblete v. Fabros:[47]

SECTION 1/11 *LIMITS OF LIABILITY PREMIU


It is such a firmly established principle, as to have virtually P50,000.00 MS PAID
formed part of the law itself, that the negligence of the
employee gives rise to the presumption of negligence on A. THIRD PARTY
the part of the employer. This is the presumed negligence LIABILITY
in the selection and supervision of employee. The theory of
presumed negligence, in contrast with the American
B. PASSENGER Per Person Per P540.005
doctrine of respondeat superior, where the negligence of
LIABILITY P12,000.00 Accident 2
the employee is conclusively presumed to be the negligence
P50,000
of the employer, is clearly deducible from the last
paragraph of Article 2180 of the Civil Code which provides
that the responsibility therein mentioned shall cease if the In its Answer53 to the Third-Party Complaint, the
employers prove that they observed all the diligence of a respondent PPSII admitted the existence of the contract of
good father of a family to prevent damages. [48] insurance, in view of its failure to specifically deny the
same as required under then Section 8(a), Rule 8 of the
The petitioners were correct in invoking respondent Rules of Court,54 which reads:
Pedranos failure to observe Article IV, Section 34(g) of the
Rep. Act No. 4136, which provides: Sec. 8. How to contest genuineness of such documents. When
an action or defense is founded upon a written instrument
(g) Lights when parked or disabled. Appropriate parking copied in or attached to the corresponding pleading as
lights or flares visible one hundred meters away shall be provided in the preceding section, the genuineness and due
displayed at a corner of the vehicle whenever such vehicle execution of the instrument shall be deemed admitted
is parked on highways or in places that are not well-lighted unless the adverse party, under oath, specifically denies
or is placed in such manner as to endanger passing traffic. them, and sets forth what he claims to be the facts; but the
requirement of an oath does not apply when the adverse
party does not appear to be a party to the instrument or
The manner in which the truck was parked clearly when compliance with an order for inspection of the
endangered oncoming traffic on both sides, considering original instrument is refused.
that the tire blowout which stalled the truck in the first
place occurred in the wee hours of the morning. The Court
can only now surmise that the unfortunate incident could
In fact, respondent PPSII did not dispute the existence Associate Justice Leonardo A. Quisumbing, explained
of such contract, and admitted that it was liable thereon. It in Government Service Insurance System v. Court of
claimed, however, that it had attended to and settled the Appeals:62
claims of those injured during the incident, and set up the
following as special affirmative defenses:
However, although the victim may proceed directly against
the insurer for indemnity, the third party liability is only
Third party defendant Philippine Phoenix Surety and up to the extent of the insurance policy and those required
Insurance, Inc. hereby reiterates and incorporates by way by law. While it is true that where the insurance contract
of reference the preceding paragraphs and further states provides for indemnity against liability to third persons,
THAT:- and such persons can directly sue the insurer, the direct
liability of the insurer under indemnity contracts against
third party liability does not mean that the insurer can be
8. It has attended to the claims of Vincent Canales,
held liable in solidum with the insured and/or the other
Asuncion Batiancila and Neptali Palces who sustained
parties found at fault. For the liability of the insurer is
injuries during the incident in question. In fact, it settled
based on contract; that of the insured carrier or vehicle
financially their claims per vouchers duly signed by them
owner is based on tort.
and they duly executed Affidavit[s] of Desistance to that
effect, xerox copies of which are hereto attached as
Annexes 1, 2, 3, 4, 5, and 6 respectively; Obviously, the insurer could be held liable only up to the
extent of what was provided for by the contract of
insurance, in accordance with the CMVLI law. At the time of
9. With respect to the claim of plaintiff, herein answering
the incident, the schedule of indemnities for death and
third party defendant through its authorized insurance
bodily injuries, professional fees and other charges payable
adjuster attended to said claim. In fact, there were
under a CMVLI coverage was provided for under the
negotiations to that effect. Only that it cannot accede to the
Insurance Memorandum Circular (IMC) No. 5-78 which was
demand of said claimant considering that the claim was
approved on November 10, 1978. As therein provided, the
way beyond the scheduled indemnity as per contract
maximum indemnity for death was twelve thousand
entered into with third party plaintiff William Tiu and third
(P12,000.00) pesos per victim. The schedules for medical
party defendant (Philippine Phoenix Surety and Insurance,
expenses were also provided by said IMC, specifically in
Inc.). Third party Plaintiff William Tiu knew all along the
paragraphs (C) to (G).63
limitation as earlier stated, he being an old hand in the
transportation business; 55
Damages to beAwarded
Considering the admissions made by respondent The trial court correctly awarded moral damages in
PPSII, the existence of the insurance contract and the the amount of P50,000 in favor of respondent
salient terms thereof cannot be dispatched. It must be Arriesgado. The award of exemplary damages by way of
noted that after filing its answer, respondent PPSII no example or correction of the public good,64 is likewise in
longer objected to the presentation of evidence by order. As the Court ratiocinated inKapalaran Bus Line v.
respondent Arriesgado and the insured petitioner Tiu. Even Coronado:65
in its Memorandum56 before the Court, respondent PPSII
admitted the existence of the contract, but averred as
follows: While the immediate beneficiaries of the standard of
extraordinary diligence are, of course, the passengers and
owners of cargo carried by a common carrier, they are not
Petitioner Tiu is insisting that PPSII is liable to him for the only persons that the law seeks to benefit. For if
contribution, indemnification and/or reimbursement. This common carriers carefully observed the statutory standard
has no basis under the contract. Under the contract, PPSII of extraordinary diligence in respect of their own
will pay all sums necessary to discharge liability of the passengers, they cannot help but simultaneously benefit
insured subject to the limits of liability but not to exceed pedestrians and the passengers of other vehicles who are
the limits of liability as so stated in the contract. Also, it is equally entitled to the safe and convenient use of our roads
stated in the contract that in the event of accident and highways. The law seeks to stop and prevent the
involving indemnity to more than one person, the limits of slaughter and maiming of people (whether passengers or
liability shall not exceed the aggregate amount so specified not) on our highways and buses, the very size and power of
by law to all persons to be indemnified.57 which seem to inflame the minds of their drivers. Article
2231 of the Civil Code explicitly authorizes the imposition
As can be gleaned from the Certificate of Cover, such of exemplary damages in cases of quasi-delicts if the
insurance contract was issued pursuant to the Compulsory defendant acted with gross negligence.66
Motor Vehicle Liability Insurance Law. It was expressly
provided therein that the limit of the insurers liability for The respondent Pedro A. Arriesgado, as the surviving
each person was P12,000, while the limit per accident was spouse and heir of Felisa Arriesgado, is entitled to
pegged at P50,000. An insurer in an indemnity contract for indemnity in the amount of P50,000.00.67
third party liability is directly liable to the injured party up
to the extent specified in the agreement but it cannot be The petitioners, as well as the respondents Benjamin
held solidarily liable beyond that amount.58 The respondent Condor and Sergio Pedrano are jointly and severally liable
PPSII could not then just deny petitioner Tius claim; it for said amount, conformably with the following
should have paid P12,000 for the death of Felisa pronouncement of the Court in Fabre, Jr. vs. Court of
Arriesgado,59 and respondent Arriesgados hospitalization Appeals:68
expenses of P1,113.80, which the trial court found to have
been duly supported by receipts. The total amount of the
The same rule of liability was applied in situations where
claims, even when added to that of the other injured
the negligence of the driver of the bus on which plaintiff
passengers which the respondent PPSII claimed to have
was riding concurred with the negligence of a third party
settled,60 would not exceed the P50,000 limit under the
who was the driver of another vehicle, thus causing an
insurance agreement.
accident. In Anuran v. Buo, Batangas Laguna Tayabas Bus
Indeed, the nature of Compulsory Motor Vehicle Co. v. Intermediate Appellate Court, and Metro Manila
Liability Insurance is such that it is primarily intended to Transit Corporation v. Court of Appeals, the bus company,
provide compensation for the death or bodily injuries its driver, the operator of the other vehicle and the driver
suffered by innocent third parties or passengers as a result of the vehicle were jointly and severally held liable to the
of the negligent operation and use of motor vehicles. The injured passenger or the latters heirs. The basis of this
victims and/or their dependents are assured of immediate allocation of liability was explained in Viluan v. Court of
financial assistance, regardless of the financial capacity of Appeals, thus:
motor vehicle owners.61 As the Court, speaking through
Nor should it make difference that the liability of petitioner IN LIGHT OF ALL THE FOREGOING, the petition is
[bus owner] springs from contract while that of PARTIALLY GRANTED. The Decision of the Court of Appeals
respondents [owner and driver of other vehicle] arises from is AFFIRMED with MODIFICATIONS:
quasi-delict. As early as 1913, we already ruled in Gutierrez
vs. Gutierrez, 56 Phil. 177, that in case of injury to a (1) Respondent Philippine Phoenix Surety and
passenger due to the negligence of the driver of the bus on Insurance, Inc. and petitioner William Tiu are ORDERED to
which he was riding and of the driver of another vehicle, pay, jointly and severally, respondent Pedro A. Arriesgado
the drivers as well as the owners of the two vehicles are the total amount of P13,113.80;
jointly and severally liable for damages. Some members of
(2) The petitioners and the respondents Benjamin
the Court, though, are of the view that under the
Condor and Sergio Pedrano are ORDERED to pay, jointly
circumstances they are liable on quasi-delict.69
and severally, respondent Pedro A. Arriesgado P50,000.00
as indemnity; P26,441.50 as actual damages; P50,000.00 as
moral damages; P50,000.00 as exemplary damages;
and P20,000.00 as attorneys fees.
for this rule are that since damages are penal in
character, the motive authorizing their infliction
will not be imputed by presumption to the
EN BANC
principal when the act is committed by an agent or
servant, and that since they are awarded not by
G.R. No. L-21151 June 26, 1968 way of compensation, but as a warning to others,
they can only be awarded against one who has
participated in the offense, and the principal
LOURDES MUNSAYAC, petitioner,
therefore cannot be held liable for them merely by
vs.
reason of wanton, oppressive or malicious intent
BENEDICTA DE LARA and THE COURT OF
on the part of the agent (15 Art. Jur. 730).
APPEALS, respondents.

We believe the point of the appellant is well-taken. It is


As a result of injuries suffered by the plaintiff-appellee
difficult to conceive how the defendant in a breach of
while riding as a passenger on a jeepney owned and
contract case could be held to have acted in a wanton,
operated by the defendant-appellant, this action for
fraudulent, reckless, oppressive or violent manner within
recovery of damages was filed in the Court of First Instance
the meaning of Article 2232 for something he did or did
of Rizal (Pasig Branch). The trial Judge found the driver
not do after the breach, which had no causal connection
recklessly negligent: he drove at an excessive speed,
therewith. The law does not contemplate a vicarious
unmindful of the fact that the road was under repair and
liability on his part: the breach is his as party to the
heedless of the passengers' pleas that he go more slowly.
contract, and so if he is to be held liable at all for
Besides the award of compensatory damages for actual
exemplary damages by reason of the wrongful act of his
expenses incurred and loss of income, the defendant was
agent, it must be shown that he had previously authorized
ordered to pay P1,000.00 as exemplary damages and
or knowingly ratified it thereafter, in effect making him a
P500.00 as attorney's fees. On these last two items the
co-participant. From the decision under review, however,
defendant appealed to the Court of Appeals, which
there is nothing to show previous authority or subsequent
rendered a judgment of affirmance, quoting the trial
ratification by appellant insofar as the recklessness of the
Court's justification for the award as follows:
driver was concerned. The mere statement that the
defendant failed, even refused, to placate the suffering of
The defendant's admission that the accident the plaintiff, necessitating the filing of the action, is too
happened and the plaintiff's extensive injuries as a tenuous a basis to warrant the conclusion that the
result thereof, despite which the defendant failed, defendant approved of the wrongful act of his servant with
or even refused, to placate the sufferings of full knowledge of the facts.
plaintiff, necessitating the filing of this action,
entitled plaintiff to exemplary damages — to set
It is not enough to say that an example should be made, or
an example to others — and attorney's fees.
corrective measures employed, for the public good,
especially in accident cases where public carriers are
The case is new before us on review by certiorari. involved. For the causative negligence in such cases is
personal to the employees actually in charge of the
vehicles, and it is they who should be made to pay this
The Civil Code provides that "exemplary or corrective
damages are imposed, by way of example or correction for kind of damages by way of example or correction, unless
by the demonstrated tolerance or approval of the owners
the public good" (Act 2229); and that in contracts "the
Court may award exemplary damages if the defendant they themselves can be held at fault and their fault is of the
character described in Article 2232 of the Civil Code.
acted in wanton, fraudulent, reckless, oppressive or
Otherwise there would be practically no difference between
malevolent manner" (Art. 2232).
their liability for exemplary damages and their liability for
compensatory damages, which needs no proof of their
Appellant points out that the act referred to in Article 2232 negligence since the suit is predicated on breach of
must be one which is coetaneous with and characterizes contract and due diligence on their part does not constitute
the breach of the contract on which the suit is based, and a defense.
not one which is subsequent to such breach and therefore
has no causal relation thereto, such as the herein
defendant's failure to placate the sufferings of the plaintiff. IN VIEW OF THE FOREGOING, the judgment appealed from
is modified by eliminating the award for exemplary
damages, and affirmed with respect to the attorney's fees.
Appellant relies on the case of Rotea vs. Halili, G.R. No. L- No pronouncement as to costs.
12030, September 30, 1960, where this Court held:

According to the rule adopted by many courts, a FIRST DIVISION


principal or master can be held liable for
exemplary or punitive damages based upon the [G.R. No. 139268. September 3, 2002]
wrongful act of his agent or servant only where he
participated in the doing of such wrongful act or
has previously authorized or subsequently ratified PHILIPPINE TELEGRAPH & TELEPHONE CORPORATION
it with full knowledge of the facts. Reasons given and LOUIE CABALIT, petitioners, vs. HON. COURT
OF APPEALS and LOLITA SIPE `WHEREFORE, this Court renders judgment in favor of the
ESCARA, respondents. plaintiff and against the defendants, ordering the
defendants, jointly and severally, to pay the plaintiff:
DECISION
`1. The sum of P100,000.00 in actual/compensatory
Assailed in the instant petition of the Philippine damages;
Telegraph & Telephone Corporation (PT&T) and Louie
Cabalit is the judgment of the Court of Appeals in CA G.R.
CV No. 48313, promulgated on 15 March 1999, which has `2. The sum of P50,000 in moral damages;
affirmed with modification the decision of the Regional
Trial Court of Makati awarding damages to respondent `3. The sum of P10,000.00 in exemplary damages;
Lolita Sipe Escara.

The facts were synthesized by the appellate court in `4. No attorneys fees awarded being a pro bono publica
its decision under review. case; and

On July 13, 1990, Felicitas B. Sipe, a resident of Surralah, `5. To pay costs of suits.[1]
South Cotabato, remitted to her sister-in-law, Lolita Sipe
Escara, two telegraphic money orders through the facilities Petitioners appealed the decision of the trial court to
of Philippine Telegraph and Telephone Company (PT&T, for the Court of Appeals. The appellate court affirmed the
brevity). The money orders, one for P2,000.00 and the decision with modification. Finding to be inadequate the
other for P1,000.00, originated from Marbel, South evidence submitted by respondent Lolita Sipe Escara to
Cotabato, and were transmitted to the Cubao branch of prove pecuniary loss suffered by her, the Court of Appeals
PT&T.Plaintiff was then studying for a doctoral degree in deleted the award of actual damages. The appellate court,
Education at the University of the Philippines (U.P., for however, sustained the award of moral and exemplary
brevity), Diliman, Quezon City and was residing in one of damages in favor of private respondent, ratiocinating
its dormitories, the Ipil Residence Hall. According to the thusly:
plaintiff, the money was sent for the purpose of paying for
her tuition fee for one semester at the U.P.; paying for her
fare to go back to Cotabato to enable her to complete the Article 1170 of the Civil Code provides that `those who in
requirements for a job promotion; and paying for the cost the performance of their obligations are guilty of fraud,
of the medical consultation of her son who is sick of negligence, or delay and those who in any manner
diabetes. contravene the tenor thereof, are liable for damages. In the
case at bar, appellant PT&T, for a fee, undertook to send
plaintiff two telegraphic money orders in the sum of
On July 22, 1990, plaintiffs husband sent her a telegram P3,000.00. Appellant, however, failed to deliver the money
advising her to inform him if she has received a remittance to plaintiff immediately after the money order was
of P3,000.00. She made several phone calls to PT&T to transmitted to its Cubao branch. It was only on September
inquire about the money but was told that no money was 14, 1990, or almost two months from transmittal that
transmitted in her favor. On August 10, 1990, plaintiff sent plaintiff was finally able to have her money.
her husband a telegram to inform him of her non-receipt of
the money. On August 18, 1990, plaintiffs husband again
sent her a telegram instructing her to claim at the PT&T We find PT&T negligent when it did not take steps to
Cubao branch the money transmitted on July 13, 1990. ensure the prompt delivery of the money to plaintiff from
the time the checks were issued in her favor. It is quite
clear that PT&T did not act with any sense of urgency but
On August 20, 1990, plaintiff went to the PT&T office to with indifference and nonchalance with respect to
inquire about the remittance in her favor. Since Louie plaintiffs case. First of all, after Louie Cabalit endorsed the
Cabalit, the branch cashier, was not around, plaintiff was two checks to the dispatch section of PT&T and
constrained to return the next day. It was only in the subsequently took an emergency leave, the personnel at
afternoon of August 21, 1990, that she was able to talk to the Cubao branch did not exert enough effort to effect the
Louie Cabalit about the remittance. Cabalit looked into his delivery of the money. In fact, the Cubao branch wired its
records, after which, the branch security guard informed Marbel branch only on August 3, 1990 to request for the
plaintiff that no money was transmitted to her. Upon complete address of the recipient from the
plaintiffs request, Cabalit issued a certification that no sender. Apparently, it took them eighteen days to realize
telegraphic money order in favor of plaintiff was received that the address of the recipient was insufficient.
from Surralah by PT&T. Nevertheless, Cabalit told her that
he would re-examine his records to determine whether a
remittance was made in her name. Furthermore, the claim of PT&T that it made several
attempts to deliver the money between July 17, 1990 and
August 3, 1990 is open to doubt because there is no proof
Subsequently, Cabalit informed plaintiff that the money showing to what extent PT&T endeavored to locate the
being claimed by her did not come from Surralah but from plaintiff. Francisco Dumlao, administrative officer of the
Marbel, South Cotabato.On August 22, 1990, an attempt Registrars Office of U.P., testified that the addressee of
was made by PT&T to deliver the telegraphic money order letters or telegrams labeled only as `U.P. Diliman, is
at plaintiffs dormitory but she was not around.On located by referring to the records of currently enrolled
September 10, 1990, plaintiff received from PT&T two students under the active file or to the records of its
checks representing the amount remitted to her. However, alumni under the inactive file. It appears that PT&T did not
plaintiff was not able to encash the checks at once because attempt to inquire from the Registrars Office regarding
the bank did not have a clearance from PT&T. Finally, on plaintiffs whereabouts since it obviously failed to draw the
September 14, 1990, plaintiff was able to encash the inference that the University of the Philippines is a school
checks. with facilities that can be of assistance in locating its own
students.[2]
Aggrieved by the delay in the delivery of the remittance,
plaintiff filed a complaint for damages against PT&T and In the instant appeal, petitioners would strongly urge
Louie Cabalit. In her complaint, she alleged that the delay that the appellate court be reversed in awarding moral and
was the cause of her failure to enroll for one semester at exemplary damages to respondent Lolita Escara with the
the U.P.; to complete her requirements for a job promotion; latters failure to present evidence that she had suffered
and to bring her son to the doctor for medical wounded feelings, serious anxiety, and mental anguish or
consultation. On November 29, 1994, the lower court that the act she had ascribed to petitioners was done in bad
rendered the questioned decision, the dispositive portion faith, or in wanton, fraudulent, oppressive or malevolent
of which reads:
manner. Private respondent, however, would insist that the might have been remiss in the prompt delivery of the sums
clearly established culpable conduct of petitioners sent through it to respondent; however, the Court would be
warranted the award of both moral and exemplary hardput to say that such delay under the facts obtaining
damages. can be described as being wanton, fraudulent, reckless, or
oppressive in character.
There is merit in the petition.
Still, of course, petitioner corporation is not totally
The breach of an obligation because of fraud, free from liability. It may have had good reasons, but it has
negligence or delay or of a contravention by any means of not been able to overcome thereby its burden to prove a
the tenor of that obligation does open the defaulting valid excuse, for the breach of agreement such as by
obligor to possible liability for damages. The right to those proving, among other possible legal grounds, fortuitous
damages and the extent of their recovery would depend on event to account for its failure. The breach would have
the kind and nature of the damages and the manner in justified a recovery of actual damages but, there being no
which the injury causing it is brought about. adequate proof of pecuniary loss found by the appellate
court, such damages cannot be awarded. Neither moral nor
The Court of Appeals was correct in deleting the
exemplary damages have been justified, as hereinbefore
award made by the trial court of actual damages where
explained, as to warrant any recovery thereof. The Court
proof of pecuniary loss, in an action based on culpa
thus is left with two alternative possibilities an award of
contractual, is essential. Finding the evidence to be wanting
temperate or moderate damages or an award of nominal
in this respect, the appellate court did not err in its
damages.
judgment.
Temperate or moderate damages may only be given if
In the case of moral damages, recovery is more an
the court finds that some pecuniary loss has been suffered
exception rather than the rule. Moral damages are not
but that its amount cannot, from the nature of the case, be
punitive in nature but are designed to compensate and
proved with certainty.[10] The factual findings of the
alleviate the physical suffering, mental anguish, fright,
appellate court that respondent has failed to establish such
serious anxiety, besmirched reputation, wounded feelings,
pecuniary loss or, if proved, cannot from their nature be
moral shock, social humiliation, and similar harm unjustly
precisely quantified precludes the application of the rule
caused to a person. In order that an award of moral
on temperate or moderate damages. The result comes down
damages can be aptly justified, the claimant must be able
to only a possible award of nominal damages. Nominal
to satisfactorily prove that he has suffered such damages
damages are adjudicated in order that a right of the
and that the injury causing it has sprung from any of the
plaintiff, which has been violated or invaded by the
cases listed in Articles 2219[3] and 2220[4] of the Civil
defendant, may be vindicated or recognized and not for the
Code.[5]Then, too, the damages must be shown to be the
purpose of indemnifying the plaintiff for any loss suffered
proximate result of a wrongful act or omission. The
by him.[11]The court may award nominal damages in every
claimant must establish the factual basis of the damages
obligation arising from any source enumerated in article
and its causal tie with the acts of the defendant. In fine, an
1157 of the Civil Code or, generally, in every case where
award of moral damages would require, firstly, evidence of
property right is invaded.
besmirched reputation or physical, mental or psychological
suffering sustained by the claimant; secondly, a culpable In the instant case, for the violation of the right of
act or omission factually established; thirdly, proof that private respondent to receive timely delivery of the money
the wrongful act or omission of the defendant is the transmitted through petitioner corporation an award of
proximate cause of the damages sustained by the claimant; nominal damages is appropriate. An amount of P20,000.00
and fourthly, that the case is predicated on any of the by way of nominal damages, considering all that private
instances expressed or envisioned by Article 2219 and respondent has had to go through, is in the Courts view
Article 2220 of the Civil Code. In culpa contractual or reasonable and fair.
breach of contract, particularly, moral damages may be
recovered when the defendant has acted in bad faith or is There is, however, neither enough factual nor
found to be guilty of gross negligence (amounting to bad adequate legal basis to hold petitioner Louie Cabalit, PT&Ts
faith) or in wanton disregard of his contractual obligation.[6] branch cashier, solidarily liable with petitioner corporation.

In the case at bar, the appellate court itself did not WHEREFORE, the instant petition is GRANTED. The
see any clear indication of bad faith or gross negligence appealed decision is reversed and set aside and, in its
amounting to bad faith on the part of petitioners. It would stead, petitioner Philippine Telegraph & Telephone
be error to make an award of moral damages to private Corporation is ordered to pay respondent Lolita Sipe Escara
respondent merely because petitioner corporation was the sum of P20,000.00 by way of nominal damages. Costs
unable to effect immediate delivery of the money sent against petitioner corporation.
through it in two money orders, one for P2,000.00 and the
other for P1,000.00. Indeed, it would appear that the
address given by the sender was merely and vaguely stated
to be U.P. Diliman Quezon City. So, also, when private
respondent went to the office of petitioner PT&T to inquire
about the money order she erroneously mentioned it to
have been sent from Surralah, South Cotabato. It was only
upon verification made by petitioners that the latter were
able to discover that the money transfers did originate, not,
however, from Surralah, but from Marbel, South
Cotabato. Given all the circumstances found by the
appellate court, the delay of less than two months in the
remittance to private respondent of the amounts due her
could hardly be said as being constitutive of bad faith or
gross negligence amounting to bad faith.

Neither can the award of exemplary damages be


sustained. Exemplary damages are not recoverable as a
matter of right.[7]Although such damages need not be
proved, plaintiff must first show that he is entitled to
moral, temperate, or compensatory damages before a court
can favorably consider an award of exemplary
damages.[8] In contracts and quasi-contracts, specifically,
exemplary damages may be justified if the defendant is
shown to have acted in a wanton, fraudulent, reckless,
oppressive, or malevolent manner.[9] Petitioner corporation