0816 Digests

TORTS – TESORO 213-232

Articles: 2195-2206, 2214-2215

Title XVIII. - DAMAGES

reasonably attributed to the non-performance of the obligation. (1107a)

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

respectively

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

Cases: 40, 80, 285,

Damages may be: Actual or compensatory; Moral; Nominal; Temperate or moderate; Liquidated; or Exemplary or corrective.

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

Art. 2202. In crimes and quasi-delicts, the defendant shall be liable for all damages which are the natural and probable consequences of the act or omission complained of. It is not necessary that such damages have been foreseen or could have reasonably been foreseen by the defendant. Art. 2203. The party suffering loss or injury must exercise the diligence of a good father of a family to minimize the damages resulting from the act or omission in question. Art. 2204. In crimes, the damages to be adjudicated may be respectively increased or lessened according to the aggravating or mitigating circumstances. Art. 2205. Damages may be recovered: (1) For loss or impairment of earning capacity in cases of temporary or permanent personal injury; (2) For injury to the plaintiff's business standing or commercial credit. Art. 2206. The amount of damages for death caused by a crime or quasi-delict shall be at least three thousand pesos, even though there may have been mitigating circumstances. In addition: (1) The defendant shall be liable for the loss of the earning capacity of the deceased, and the indemnity shall be paid to the heirs of the latter; such indemnity shall in every case be assessed and awarded by the court, unless the deceased on account of permanent physical disability not caused by the defendant, had no earning capacity at the time of his death; (2) If the deceased was obliged to give support according to the provisions of Article 291, the recipient who is not an heir called to the decedent's inheritance by the law of testate or intestate succession, may demand support from the person causing the death, for a period not exceeding five years, the exact duration to be fixed by the court; (3) The spouse, legitimate and illegitimate descendants and ascendants of the deceased may demand moral damages for mental anguish by reason of the death of the deceased. Art. 2214. In quasi-delicts, the contributory negligence of the plaintiff shall reduce the damages that he may recover.

3C 2012 Digest Group 1

TORTS – TESORO 213-232

Articles: 2195-2206, 2214-2215

Art. 2215. In contracts, quasi-contracts, and quasi-delicts, the court may equitably mitigate the damages under circumstances other than the case referred to in the preceding article, as in the following instances: (1) That the plaintiff himself has contravened the terms of the contract; (2) That the plaintiff has derived some benefit as a result of the contract; (3) In cases where exemplary damages are to be awarded, that the defendant acted upon the advice of counsel; (4) That the loss would have resulted in any event; (5) That since the filing of the action, the defendant has done his best to lessen the plaintiff's loss or injury. 40. SANITARY STEAM LAUNDRY V. CA Facts: This case involves a collision between a Mercedes Bent panel truck of petitioner Sanitary Steam Laundry and a Cimarron which caused the death of three persons and the injuries of several others (Cimarron passengers are the respondents). All the victims were riding in the Cimarron. One of those who died was the driver. The passengers of the Cimarron were mostly employees of the Project Management Consultants, Inc. (PMCI). The other passengers were family members and friends whom they invited to an outing. The Cimarron was owned by Salvador Salenga, father of one of the employees of PMCI. Driving the vehicle was Rolando Hernandez. It appears that on its way back to Manila, the Cimarron was hit on its front portion by Sanitary's panel truck, which was traveling in the opposite direction. The truck’s driver, Herman Hernandez, claimed that a jeepney in front of him suddenly stopped. He said he stepped on the brakes to avoid hitting the jeepney and that this caused his vehicle to swerve to the left and encroach on a portion of the opposite lane. As a result, his panel truck collided with the Cimarron on the north-bound lane. The driver of the Cimarron, Rolando Hernandez, and two of his passengers, namely, Jason Bernabe and Dalmacio Salunoy, died. Several of the other passengers of the Cimarron were injured and taken to various hospitals. They filed an action against Sanitary for damages. The RTC sided with the victims and granted moral damages to 14 of them, in amounts ranging from 2k to 20k. The heirs of Salunoy were also awarded 100k for moral damages and unearned income. (The respondents also received actual damages, attorney’s fees and a 50k civil indemnity for the heirs of Bernabe )

Cases: 40, 80, 285,

On appeal, the CA affirmed the decision. Issue: Whether or not the moral damages were justly awarded. Held: To those injured – Yes! To the heirs of Salunoy – No! Doctrine: As to the moral damages awarded, we find them to be reasonable and necessary in view of the circumstances of this case. Moral damages are awarded to allow the victims to obtain means, diversion, or amusement to alleviate the moral suffering they had undergone due to the defendant's culpable action. In this case, private respondents doubtless suffered some ordeal because some of them lost their loved ones, while others lost their future. Within the meaning of Art. 2217 of the Civil Code, they suffered sleepless night, mental anguish, serious anxiety, and wounded feelings. An award of moral damages in their favor is thus justified. However, the award of P100,000 to the heirs of Dalmacio Salunoy, denominated in the decision of the trial court as "moral damages and unearned income" cannot be upheld. The heirs were already included among those awarded moral damages. Marilyn Salunoy was ordered to be paid P10,000, Jack Salunoy, P10,000, and their mother Nenita Salunoy, P20,000, as moral damages. The amount of P100,000 was presumably awarded primarily for loss of earning capacity but even then the amount must be modified. The SC awarded Salunoy’s heirs P50k as death indemnity and P124, 300 as compensatory damages based on the formula we studied in class. 80. CAPILI v. CARDENA FACTS: On Feb 1993, Jasmin Cardena, a 12 year old school girl, was walking along the fence of San Roque Elementary School when a branch of a caimito tree located within the school premises fell on her. It caused her death. Hence, her parents filed a case for damages against Capili, the principal of the school. The spouses allege that as early as Dec 1992, a certain Lerios reported on the possible danger of the tree to passersby but it was not acted upon by the principal whose office even stood near the office. The spouses averred principal’s gross negligence and lack of foresight as the cause of their daughter’s death. Capili denied knowledge of the tree’s rotting condition. The TC dismissed the complaint for failure to establish Capili’s negligence. The CA reversed the decision and found Capilli liable for Jasmin’s death. The CA ordered Capili to pay to the spouses the following amounts:  for the life of Jasmin D. Cardena - P50,000

3C 2012 Digest Group 2

TORTS – TESORO 213-232

Articles: 2195-2206, 2214-2215

 for burial expenses - 15,010  for moral damages - 50,000  for attorney's fees and litigation - 10,000. Capili now avers that she was not negligent and she in fact assigned the person next in rank to her to dispose of the tree. And that she did not observe any indication that the tree was already rotten. She also claims that oral damages should not be granted since there was no fraud or bad faith on her part. ISSUE: W/N Capili the principal was negligent and is liable for the death of Jasmin Cardena. HELD/RATIO: Yes, negligent. But NOT liable for moral damages. No bad faith or fraud. The fact that respondents' daughter, Jasmin, died as a result of the dead and rotting tree within the school's premises shows that the tree was indeed an obvious danger to anyone passing by and calls for application of the principle of res ipsa loquitur. As the school principal, petitioner was tasked to see to the maintenance of the school grounds and safety of the children within the school and its premises. That she was unaware of the rotten state of the tree calls for an explanation on her part as to why she failed to be vigilant. Moral damages are awarded if the following elements exist in the case:(1) an injury clearly sustained by the claimant; (2) a culpable act or omission factually established; (3) a wrongful act or omission by the defendant as the proximate cause of the injury sustained by the claimant; and (4) the award of damages predicated on any of the cases stated in Article 2219 of the Civil Code. However, the person claiming moral damages must prove the existence of bad faith by clear and convincing evidence for the law always presumes good faith. It is not enough that one merely suffered sleepless nights, mental anguish, and serious anxiety as the result of the actuations of the other party. Invariably, such action must be shown to have been willfully done in bad faith or with ill motive. Under the circumstances, we have to concede that petitioner was not motivated by bad faith or ill motive vis--vis respondents' daughter's death. The award of moral damages is therefore not proper. 285. MCC INDUSTRIAL vs. SSANGYONG CORPORATION FACTS: MCC Industrial Sales is engaged in the business of importing and wholesaling stainless steel produce. Ssyangyong was one of its suppliers, whose head office was in S. Korea and has a HQ in Makati. The 2 corporations conducted business through telephone calls and facsimile or telecopy transmissions. Ssangyong would send pro forma

Cases: 40, 80, 285,

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

3C 2012 Digest Group 3

TORTS – TESORO 213-232

Articles: 2195-2206, 2214-2215

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

Cases: 40, 80, 285,

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

3C 2012 Digest Group 4

TORTS – TESORO 213-232

Articles: 2195-2206, 2214-2215

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

Cases: 40, 80, 285,

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

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

3C 2012 Digest Group 5

TORTS – TESORO 213-232

Articles: 2195-2206, 2214-2215

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

Cases: 40, 80, 285,

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

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

3C 2012 Digest Group 6

TORTS – TESORO 213-232

Articles: 2195-2206, 2214-2215

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

Cases: 40, 80, 285,

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

3C 2012 Digest Group 7

TORTS – TESORO 213-232

Articles: 2195-2206, 2214-2215

Cases: 40, 80, 285,

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

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

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

Issue:

What is the proper penalty for the crime of murder?

Held:

Reclusion perpetua!

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

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

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

3C 2012 Digest Group 8

TORTS – TESORO 213-232 1. 2.

3. 4. 5. 6. 7.

Articles: 2195-2206, 2214-2215

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

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

Cases: 40, 80, 285,

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

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

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

3C 2012 Digest Group 9

TORTS – TESORO 213-232

Articles: 2195-2206, 2214-2215

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

222. GA MACHINERIES V YAPTINCHAY Facts:  Yaptinchay (Y) bought a Fordson engine from GA Machineries (GAMI) for P7,560. He relied on the representations of the latter’s representative that the engine was brand-new.  Y was engaged in the trucking business. The engine was installed in one of his trucks.  Within a week from delivery, the engine started to have malfunctions which necessitated successive trips to GAMI’s repair shop.  oil leak, clutch disc, release bearing hub and trunion bolt, propeller shaft…LEMON! LEMON! LEMON!  Upon investigation, the ff were discovered: 1) Worn-out screw courtesy of Y’s mechanic 2) Tampered original motor number courtesy of Capt. Garcia’s macro-etching test 3) Two-tone paint (unlike brand-new engine painted with single color) courtesy of Manila Trading Company  Y institutes action for indemnification for damages. Trial Court orders GAMI to pay Y P54k in actual damages, P7,590 as reimbursement for the purchase price of the engine, and P2k in attorney’s fees. CA affirms the decision. Hence, this petition. Issue: WON award of damages is justified Held: YES (reimbursement), NO (actual)

Cases: 40, 80, 285,

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

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

3C 2012 Digest Group 10

TORTS – TESORO 213-232

Articles: 2195-2206, 2214-2215

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

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

Cases: 40, 80, 285,

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

3C 2012 Digest Group 11

TORTS – TESORO 213-232

Articles: 2195-2206, 2214-2215

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

Cases: 40, 80, 285,

Trial Court and CA awarded damages in the following amounts: 1. actual damages - $5,417 2. moral damage – P50,000 3. Exemplary damages – P50,000 4. Attorney’s fees – P10,000

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

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

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

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

3C 2012 Digest Group 12

TORTS – TESORO 213-232

Articles: 2195-2206, 2214-2215

Cases: 40, 80, 285,

The underlying precept on contributory negligence is that a plaintiff who is partly responsible for his own injury should not be entitled to recover damages in full but must bear the consequences of his own negligence. The defendant must thus be held liable only for the damages actually caused by his negligence. The determination of the mitigation of the defendant’s liability varies depending on the circumstances of each case.

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

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

x GROSS ANNUAL INCOME (GAI)

- LIVING EXPENSES (50% of GAI)

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

X

= [2/3 (80-35)]

x [P31,876.00

-50% x P31,876.00]

X

= [2/3 (45)]

x [P31,876.00

- P15,938.00]

X

= 30

x 15,938.00

X

= P478,140.00

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

We sustain the awards of P33,215.00 as funeral and burial expenses being supported with receipts; P50,000.00 as death indemnity; and P50,000.00 as moral damages. However, the award of P20,000.00 as attorney’s fees must be deleted for lack of basis. The indemnity for death caused by a quasi-delict used to be pegged at P3,000.00, based on Article 2206 of the Civil Code. However, the amount has been gradually increased through the years. At present, prevailing jurisprudence fixes the amount at P50,000.00.

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

3C 2012 Digest Group 13

TORTS – TESORO 213-232

Articles: 2195-2206, 2214-2215

Cases: 40, 80, 285,

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

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

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

229. PERFECTO v. GONZALES

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

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

3C 2012 Digest Group 14

TORTS – TESORO 213-232

Articles: 2195-2206, 2214-2215

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

Cases: 40, 80, 285,

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

3C 2012 Digest Group 15

TORTS – TESORO 213-232

Articles: 2195-2206, 2214-2215

Cases: 40, 80, 285,

in Article 2219. However, moral damages are recoverable for breach of contract where the breach was wanton, reckless, malicious or in bad faith, oppressive or abusive. The wanton and reckless failure and neglect to timely check and remedy the video tape recorder by the PVE crew indicates a malicious breach of contract and gross negligence on the part of said respondent in the discharge of its contractual obligations. Consequently, the petitioners who suffered mental anguish and tortured feelings thereby, are entitled to an award of One Hundred Thousand Pesos (P100,000.00) as moral damages. In the case of Go v. Court of Appeals it was emphasized that “(i)n our society, the importance of a wedding ceremony cannot be underestimated as it is the matrix of the family and, therefore, an occasion worth reliving in the succeeding years.” Considering the sentimental value of the tapes and the fact that the event therein recorded—a wedding which in our culture is a significant milestone to be cherished and remembered—could no longer be reenacted and was lost forever. The award of exemplary damages which is hereby fixed to (P40,000.00) is justified, under the premises, to serve as a warning to all entities engaged in the same business to observe good faith and due diligence in the fulfillment of their contractual obligations. Additionally, the award of attorney’s fees in the amount of Ten Thousand Pesos (P10,000.00) is also proper in accordance with Article 2208 of the Civil Code.

3C 2012 Digest Group 16