Torts and Damages Case Set 1

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G.R. No. 107518 October 8, 1998 interest at the legal rate plus 25% thereof as attorney's fees.

est at the legal rate plus 25% thereof as attorney's fees. Meanwhile, during the
pendency of the case, petitioner PNOC Shipping and Transport Corporation sought
PNOC SHIPPING AND TRANSPORT CORPORATION, petitioner, to be substituted in place of LSC as it had already acquired ownership of
vs. the Petroparcel. 9
HONORABLE COURT OF APPEALS and MARIA EFIGENIA FISHING
CORPORATION, respondents. For its part, private respondent later sought the amendment of its complaint on the
ground that the original complaint failed to plead for the recovery of the lost value
of the hull of M/V Maria Efigenia XV. 10Accordingly, in the amended complaint, private
respondent averred that M/V Maria Efigenia XV had an actual value of P800,000.00
ROMERO, J.: and that, after deducting the insurance payment of P200,000.00, the amount of
P600,000.00 should likewise be claimed. The amended complaint also alleged that
inflation resulting from the devaluation of the Philippine peso had affected the
A party is entitled to adequate compensation only for such pecuniary loss actually suffered
replacement value of the hull of the vessel, its equipment and its lost cargoes, such
and duly proved.1Indeed, basic is the rule that to recover actual damages, the amount
that there should be a reasonable determination thereof. Furthermore, on account
of loss must not only be capable of proof but must actually be proven with a
of the sinking of the vessel, private respondent supposedly incurred unrealized
reasonable degree of certainty, premised upon competent proof or best evidence
profits and lost business opportunities that would thereafter be proven. 11
obtainable of the actual amount thereof.2 The claimant is duty-bound to point out
specific facts that afford a basis for measuring whatever compensatory damages
are borne.3 A court cannot merely rely on speculations, conjectures, or guesswork Subsequently, the complaint was further amended to include petitioner as a
as to the fact and amount of damages4 as well as hearsay5or uncorroborated defendant 12 which the lower court granted in its order of September 16,
testimony whose truth is suspect.6 Such are the jurisprudential precepts that the 1985. 13 After petitioner had filed its answer to the second amended complaint, on
Court now applies in resolving the instant petition. February 5, 1987, the lower court issued a pre-trial order 14 containing, among other
things, a stipulations of facts, to wit:
The records disclose that in the early morning of September 21, 1977, the M/V Maria
Efigenia XV, owned by private respondent Maria Efigenia Fishing Corporation, was 1. On 21 September 1977, while the fishing boat "M/V MARIA
navigating the waters near Fortune Island in Nasugbu, Batangas on its way to EFIGENIA" owned by plaintiff was navigating in the vicinity of Fortune
Navotas, Metro Manila when it collided with the vessel Petroparcel which at the time Island in Nasugbu, Batangas, on its way to Navotas, Metro Manila,
was owned by the Luzon Stevedoring Corporation (LSC). said fishing boat was hit by the LSCO tanker "Petroparcel" causing
the former to sink.
After investigation was conducted by the Board of Marine Inquiry, Philippine Coast
Guard Commandant Simeon N. Alejandro rendered a decision finding 2. The Board of Marine Inquiry conducted an investigation of this
the Petroparcel at fault. Based on this finding by the Board and after unsuccessful marine accident and on 21 November 1978, the Commandant of the
demands on petitioner, 7 private respondent sued the LSC and Philippine Coast Guard, the Honorable Simeon N. Alejandro,
the Petroparcelcaptain, Edgardo Doruelo, before the then Court of First Instance of rendered a decision finding the cause of the accident to be the
Caloocan City, paying thereto the docket fee of one thousand two hundred fifty-two reckless and imprudent manner in which Edgardo Doruelo navigated
pesos (P1,252.00) and the legal research fee of two pesos (P2.00). 8 In particular, the LSCO "Petroparcel" and declared the latter vessel at fault.
private respondent prayed for an award of P692,680.00, allegedly representing the
value of the fishing nets, boat equipment and cargoes of M/V Maria Efigenia XV, with
3. On 2 April 1978, defendant Luzon Stevedoring Corporation After trial, the lower court 15 rendered on November 18, 1989 its decision disposing
(LUSTEVECO), executed in favor of PNOC Shipping and Transport of Civil Case No. C-9457 as follows:
Corporation a Deed of Transfer involving several tankers, tugboats,
barges and pumping stations, among which was the LSCO WHEREFORE, and in view of the foregoing, judgment is hereby
Petroparcel. rendered in favor of the plaintiff and against the defendant PNOC
Shipping & Transport Corporation, to pay the plaintiff:
4. On the same date on 2 April 1979 (sic), defendant PNOC STC again
entered into an Agreement of Transfer with co-defendant Lusteveco a. The sum of P6,438,048.00 representing the value of
whereby all the business properties and other assets appertaining to the fishing boat with interest from the date of the filing
the tanker and bulk oil departments including the motor tanker LSCO of the complaint at the rate of 6% per annum;
Petroparcel of defendant Lusteveco were sold to PNOC STC.
b. The sum of P50,000.00 as and for attorney's fees;
5. The aforesaid agreement stipulates, among others, that PNOC-STC and
assumes, without qualifications, all obligations arising from and by
virtue of all rights it obtained over the LSCO "Petroparcel". c. The costs of suit.

6. On 6 July 1979, another agreement between defendant The counterclaim is hereby DISMISSED for lack of merit. Likewise,
LUSTEVECO and PNOC-STC was executed wherein Board of Marine the case against defendant Edgardo Doruelo is hereby DISMISSED,
Inquiry Case No. 332 (involving the sea accident of 21 September for lack of jurisdiction.
1977) was specifically identified and assumed by the latter.
SO ORDERED.
7. On 23 June 1979, the decision of Board of Marine Inquiry was
affirmed by the Ministry of National Defense, in its decision
In arriving at the above disposition, the lower court cited the evidence presented by
dismissing the appeal of Capt. Edgardo Doruelo and Chief mate
private respondent consisting of the testimony of its general manager and sole
Anthony Estenzo of LSCO "Petroparcel".
witness, Edilberto del Rosario. Private respondent's witness testified that M/V Maria
Efigenia XV was owned by private respondent per Exhibit A, a certificate of
8. LSCO "Petroparcel" is presently owned and operated by PNOC- ownership issued by the Philippine Coast Guard showing that M/V Maria Efigenia
STC and likewise Capt. Edgardo Doruelo is still in their employ. XV was a wooden motor boat constructed in 1965 with 128.23 gross tonnage.
According to him, at the time the vessel sank, it was then carrying 1,060 tubs
9. As a result of the sinking of M/V Maria Efigenia caused by the (bañeras) of assorted fish the value of which was never recovered. Also lost with
reckless and imprudent manner in which LSCO Petroparcel was the vessel were two cummins engines (250 horsepower), radar, pathometer and
navigated by defendant Doruelo, plaintiff suffered actual damages by compass. He further added that with the loss of his flagship vessel in his fishing
the loss of its fishing nets, boat equipments (sic) and cargoes, which fleet of fourteen (14) vessels, he was constrained to hire the services of counsel
went down with the ship when it sank the replacement value of which whom he paid P10,000 to handle the case at the Board of Marine Inquiry and
should be left to the sound discretion of this Honorable Court. P50,000.00 for commencing suit for damages in the lower court.
As to the award of P6,438,048.00 in actual damages, the lower court took into cost P140,000.00; two (2) rolls of nylon rope (3" cir. X
account the following pieces of documentary evidence that private respondent 240fl.), P42,750.00; one (1) binocular (7 x 50), P1,400.00,
proffered during trial: one (1) compass (6"), P4,000.00 and 50 pcs. of floats,
P9,000.00 or a total of P197,150.00;
(a) Exhibit A — certified xerox copy of the certificate of
ownership of M/V Maria Efigenia XV; (g) Exhibit G — retainer agreement between Del
Rosario and F. Sumulong Associates Law Offices
(b) Exhibit B — a document titled "Marine Protest" stipulating an acceptance fee of P5,000.00, per
executed by Delfin Villarosa, Jr. on September 22, 1977 appearance fee of P400.00, monthly retainer of
stating that as a result of the collision, the M/V Maria P500.00, contingent fee of 20% of the total amount
Efigenia XV sustained a hole at its left side that caused recovered and that attorney's fee to be awarded by the
it to sink with its cargo of 1,050 bañeras valued at court should be given to Del Rosario; and
P170,000.00;
(h) Exhibit H — price quotation issued by Seafgear
(c) Exhibit C — a quotation for the construction of a 95- Sales, Inc. dated April 10, 1987 to Del Rosario showing
footer trawler issued by Isidoro A. Magalong of I. A. the cost of poly nettings as: 50 rolls of 400/18 3kts.
Magalong Engineering and Construction on January 100md x 100mtrs., P70,000.00; 50 rolls of 400/18 5kts.
26, 1987 to Del Rosario showing that construction of 100md x 100mtrs., P81,500.00; 50 rolls of 400/18 8kts.
such trawler would cost P2,250,000.00; 100md x 100mtrs., P116,000.00, and 50 rolls of 400/18
10kts. 100md x 100mtrs., P146,500 and bañera (tub) at
(d) Exhibit D — pro forma invoice No. PSPI-05/87-NAV P65.00 per piece or a total of P414,065.00.
issued by E.D. Daclan of Power Systems, Incorporated
on January 20, 1987 to Del Rosario showing that two The lower court held that the prevailing replacement value of P6,438,048.00 of the
(2) units of CUMMINS Marine Engine model N855-M, fishing boat and all its equipment would regularly increase at 30% every year from
195 bhp. at 1800 rpm. would cost P1,160,000.00; the date the quotations were given.

(e) Exhibit E — quotation of prices issued by Scan On the other hand, the lower court noted that petitioner only presented Lorenzo
Marine Inc. on January 20, 1987 to Del Rosario showing Lazaro, senior estimator at PNOC Dockyard & Engineering Corporation, as sole
that a unit of Furuno Compact Daylight Radar, Model witness and it did not bother at all to offer any documentary evidence to support its
FR-604D, would cost P100,000.00 while a unit of position. Lazaro testified that the price quotations submitted by private respondent
Furuno Color Video Sounder, Model FCV-501 would were "excessive" and that as an expert witness, he used the quotations of his
cost P45,000.00 so that the two units would cost suppliers in making his estimates. However, he failed to present such quotations of
P145,000.00; prices from his suppliers, saying that he could not produce a breakdown of the costs
of his estimates as it was "a sort of secret scheme." For this reason, the lower court
(f) Exhibit F — quotation of prices issued by Seafgear concluded:
Sales, Inc. on January 21, 1987 to Del Rosario showing
that two (2) rolls of nylon rope (5" cir. X 300fl.) would
Evidently, the quotation of prices submitted by the plaintiff relative to reports or quotations, trade journals, trade circulars and price lists, the Court of
the replacement value of the fishing boat and its equipments in the Appeals held, thus:
tune of P6,438,048.00 which were lost due to the recklessness and
imprudence of the herein defendants were not rebutted by the latter Consequently, until such time as the Supreme Court categorically
with sufficient evidence. The defendants through their sole witness rules on the admissibility or inadmissibility of this class of evidence,
Lorenzo Lazaro relied heavily on said witness' bare claim that the the reception of these documentary exhibits (price quotations) as
amount afore-said is excessive or bloated, but they did not bother at evidence rests on the sound discretion of the trial court. In fact, where
all to present any documentary evidence to substantiate such claim. the lower court is confronted with evidence which appears to be of
Evidence to be believed must not only proceed from the mouth of the doubtful admissibility, the judge should declare in favor of
credible witness, but it must be credible in itself. (Vda. de Bonifacio admissibility rather than of non-admissibility (The Collector of
vs. B. L. T. Bus Co., Inc. L-26810, August 31, 1970). Palakadhari, 124 [1899], p. 13, cited in Francisco, Revised Rules of
Court, Evidence, Volume VII, Part I, 1990 Edition, p. 18). Trial courts
Aggrieved, petitioner filed a motion for the reconsideration of the lower court's are enjoined to observe the strict enforcement of the rules of
decision contending that: (1) the lower court erred in holding it liable for damages; evidence which crystallized through constant use and practice and
that the lower court did not acquire jurisdiction over the case by paying only are very useful and effective aids in the search for truth and for the
P1,252.00 as docket fee; (2) assuming that plaintiff was entitled to damages, the effective administration of justice. But in connection with evidence
lower court erred in awarding an amount greater than that prayed for in the second which may appear to be of doubtful relevancy or incompetency or
amended complaint; and (3) the lower court erred when it failed to resolve the issues admissibility, it is the safest policy to be liberal, not rejecting them on
it had raised in its memorandum. 16Petitioner likewise filed a supplemental motion doubtful or technical grounds, but admitting them unless plainly
for reconsideration expounding on whether the lower court acquired jurisdiction irrelevant, immaterial or incompetent, for the reason that their
over the subject matter of the case despite therein plaintiff's failure to pay the rejection places them beyond the consideration of the court. If they
prescribed docket fee. 17 are thereafter found relevant or competent, can easily be remedied by
completely discarding or ignoring them. (Banaria vs. Banaria, et al.,
On January 25, 1990, the lower court declined reconsideration for lack of C.A. No. 4142, May 31, 1950; cited in Francisco, Supra). [Emphasis
merit. 18 Apparently not having received the order denying its motion for supplied].
reconsideration, petitioner still filed a motion for leave to file a reply to private
respondent's opposition to said motion. 19 Hence, on February 12, 1990, the lower Stressing that the alleged inadmissible documentary exhibits were never
court denied said motion for leave to file a reply on the ground that by the issuance satisfactorily rebutted by appellant's own sole witness in the person of Lorenzo
of the order of January 25, 1990, said motion had become moot and academic. 20 Lazaro, the appellate court found that petitioner ironically situated itself in an
"inconsistent posture by the fact that its own witness, admittedly an expert one,
Unsatisfied with the lower court's decision, petitioner elevated the matter to the heavily relies on the very same pieces of evidence (price quotations) appellant has
Court of Appeals which, however, affirmed the same in toto on October 14, so vigorously objected to as inadmissible evidence." Hence, it concluded:
1992. 21 On petitioner's assertion that the award of P6,438,048.00 was not
convincingly proved by competent and admissible evidence, the Court of Appeals . . . The amount of P6,438,048.00 was duly established at the trial on
ruled that it was not necessary to qualify Del Rosario as an expert witness because the basis of appellee's documentary exhibits (price quotations) which
as the owner of the lost vessel, "it was well within his knowledge and competency stood uncontroverted, and which already included the amount by way
to identify and determine the equipment installed and the cargoes loaded" on the of adjustment as prayed for in the amended complaint. There was
vessel. Considering the documentary evidence presented as in the nature of market therefore no need for appellee to amend the second amended
complaint in so far as to the claim for damages is concerned to damages for the loss of use during the period before replacement. In
conform with the evidence presented at the trial. The amount of other words, in the case of profit-earning chattels, what has to be
P6,438,048.00 awarded is clearly within the relief prayed for in assessed is the value of the chattel to its owner as a going concern at
appellee's second amended complaint. the time and place of the loss, and this means, at least in the case of
ships, that regard must be had to existing and pending engagements,
On the issue of lack of jurisdiction, the respondent court held that following the ...
ruling in Sun Insurance Ltd. v. Asuncion, 22 the additional docket fee that may later
on be declared as still owing the court may be enforced as a lien on the judgment. . . . . If the market value of the ship reflects the fact that it is in any
case virtually certain of profitable employment, then nothing can be
Hence, the instant recourse. added to that value in respect of charters actually lost, for to do so
would be pro tanto to compensate the plaintiff twice over. On the
In assailing the Court of Appeals' decision, petitioner posits the view that the award other hand, if the ship is valued without reference to its actual future
of P6,438,048 as actual damages should have been in light of these considerations, engagements and only in the light of its profit-earning potentiality,
namely: (1) the trial court did not base such award on the actual value of the vessel then it may be necessary to add to the value thus assessed the
and its equipment at the time of loss in 1977; (2) there was no evidence on anticipated profit on a charter or other engagement which it was
extraordinary inflation that would warrant an adjustment of the replacement cost of unable to fulfill. What the court has to ascertain in each case is the
the lost vessel, equipment and cargo; (3) the value of the lost cargo and the prices "capitalised value of the vessel as a profit-earning machine not in the
quoted in respondent's documentary evidence only amount to P4,336,215.00; (4) abstract but in view of the actual circumstances," without, of course,
private respondent's failure to adduce evidence to support its claim for unrealized taking into account considerations which were too remote at the time
profit and business opportunities; and (5) private respondent's failure to prove the of the loss. 27 [Emphasis supplied].
extent and actual value of damages sustained as a result of the 1977 collision of the
vessels. 23 As stated at the outset, to enable an injured party to recover actual or compensatory
damages, he is required to prove the actual amount of loss with reasonable degree
Under Article 2199 of the Civil Code, actual or compensatory damages are those of certainty premised upon competent proof and on the best evidence
awarded in satisfaction of, or in recompense for, loss or injury sustained. They available. 28 The burden of proof is on the party who would be defeated if no evidence
proceed from a sense of natural justice and are designed to repair the wrong that would be presented on either side. He must establish his case by a preponderance
has been done, to compensate for the injury inflicted and not to impose a of evidence which means that the evidence, as a whole, adduced by one side is
penalty. 24 In actions based on torts or quasi-delicts, actual damages include all the superior to that of the other. 29 In other words, damages cannot be presumed and
natural and probable consequences of the act or omission complained of. 25 There courts, in making an award must point out specific facts that could afford a basis
are two kinds of actual or compensatory damages: one is the loss of what a person for measuring whatever compensatory or actual damages are borne. 30
already possesses (daño emergente), and the other is the failure to receive as a
benefit that which would have pertained to him (lucro cesante). 26 Thus: In this case, actual damages were proven through the sole testimony of private
respondent's general manager and certain pieces of documentary evidence. Except
Where goods are destroyed by the wrongful act of the defendant the for Exhibit B where the value of the 1,050 bañeras of fish were pegged at their
plaintiff is entitled to their value at the time of destruction, that is, September 1977 value when the collision happened, the pieces of documentary
normally, the sum of money which he would have to pay in the market evidence proffered by private respondent with respect to items and equipment lost
for identical or essentially similar goods, plus in a proper case show similar items and equipment with corresponding prices in early 1987 or
approximately ten (10) years after the collision. Noticeably, petitioner did not object
to the exhibits in terms of the time index for valuation of the lost goods and evidence falls within the exceptions to the hearsay evidence rule. 36 On this point,
equipment. In objecting to the same pieces of evidence, petitioner commented that we believe that the exhibits do not fall under any of the exceptions provided under
these were not duly authenticated and that the witness (Del Rosario) did not have Sections 37 to 47 of Rule 130. 37
personal knowledge on the contents of the writings and neither was he an expert on
the subjects thereof. 31 Clearly ignoring petitioner's objections to the exhibits, the It is true that one of the exceptions to the hearsay rule pertains to "commercial lists
lower court admitted these pieces of evidence and gave them due weight to arrive and the like" under Section 45, Rule 130 of the Revised Rules on Evidence. In this
at the award of P6,438,048.00 as actual damages. respect, the Court of Appeals considered private respondent's exhibits as
"commercial lists." It added, however, that these exhibits should be admitted in
The exhibits were presented ostensibly in the course of Del Rosario's testimony. evidence "until such time as the Supreme Court categorically rules on the
Private respondent did not present any other witnesses especially those whose admissibility or inadmissibility of this class of evidence" because "the reception of
signatures appear in the price quotations that became the bases of the award. We these documentary exhibits (price quotations) as evidence rests on the sound
hold, however, that the price quotations are ordinary private writings which under discretion of the trial court." 38 Reference to Section 45, Rule 130, however, would
the Revised Rules of Court should have been proffered along with the testimony of show that the conclusion of the Court of Appeals on the matter was arbitrarily
the authors thereof. Del Rosario could not have testified on the veracity of the arrived at. This rule states:
contents of the writings even though he was the seasoned owner of a fishing fleet
because he was not the one who issued the price quotations. Section 36, Rule 130 Commercial lists and the like. — Evidence of statements of matters
of the Revised Rules of Court provides that a witness can testify only to those facts of interest to persons engaged in an occupation contained in a list,
that he knows of his personal knowledge. register, periodical, or other published compilation is admissible as
tending to prove the truth of any relevant matter so stated if that
For this reason, Del Rosario's claim that private respondent incurred losses in the compilation is published for use by persons engaged in that
total amount of P6,438,048.00 should be admitted with extreme caution considering occupation and is generally used and relied upon by them there.
that, because it was a bare assertion, it should be supported by independent
evidence. Moreover, because he was the owner of private respondent Under Section 45 of the aforesaid Rule, a document is a commercial list if: (1) it is a
corporation 32 whatever testimony he would give with regard to the value of the lost statement of matters of interest to persons engaged in an occupation; (2) such
vessel, its equipment and cargoes should be viewed in the light of his self-interest statement is contained in a list, register, periodical or other published compilation;
therein. We agree with the Court of Appeals that his testimony as to the equipment (3) said compilation is published for the use of persons engaged in that occupation,
installed and the cargoes loaded on the vessel should be given and (4) it is generally used and relied upon by persons in the same occupation.
credence 33 considering his familiarity thereto. However, we do not subscribe to the
conclusion that his valuation of such equipment, cargo and the vessel itself should Based on the above requisites, it is our considered view that Exhibits B, C, D, E, F
be accepted as gospel truth. 34 We must, therefore, examine the documentary and H 39 are not "commercial lists" for these do not belong to the category of "other
evidence presented to support Del Rosario's claim as regards the amount of losses. published compilations" under Section 45 aforequoted. Under the principle
of ejusdem generis, "(w)here general words follow an enumeration of persons or
The price quotations presented as exhibits partake of the nature of hearsay things, by words of a particular and specific meaning, such general words are not
evidence considering that the persons who issued them were not presented as to be construed in their widest extent, but are to be held as applying only to persons
witnesses. 35 Any evidence, whether oral or documentary, is hearsay if its probative or things of the same kind or class as those specifically mentioned." 40 The exhibits
value is not based on the personal knowledge of the witness but on the knowledge mentioned are mere price quotations issued personally to Del Rosario who
of another person who is not on the witness stand. Hearsay evidence, whether requested for them from dealers of equipment similar to the ones lost at the collision
objected to or not, has no probative value unless the proponent can show that the of the two vessels. These are not published in any list, register, periodical or other
compilation on the relevant subject matter. Neither are these "market reports or TERMS : CASH
quotations" within the purview of "commercial lists" as these are not "standard
handbooks or periodicals, containing data of everyday professional need and relied DELIVERY : 60-90 days from date of order.
upon in the work of the occupation." 41 These are simply letters responding to the
queries of Del Rosario. Thus, take for example Exhibit D which reads: VALIDITY : Subject to our final confirmation.

January 20, 1987 WARRANTY : One (1) full year against factory defect.

PROFORMA INVOICE NO. PSPI-05/87-NAV V


e
MARIA EFIGINIA FISHING CORPORATION r
y
Navotas, Metro Manila t
r
Attention: MR. EDDIE DEL ROSARIO u
l
Gentlemen: y
y
o
In accordance to your request, we are pleated to quote our Cummins
u
Marine Engine, to wit.
r
s
Two (2) units CUMMINS Marine Engine ,
model N855-M, 195 bhp. at 1800 rpm., 6-
cylinder in-line, 4-stroke cycle, natural
P
aspirated, 5 1/2 in. x 6 in. bore and
O
stroke, 855 cu. In. displacement, keel-
W
cooled, electric starting coupled with
E
Twin-Disc Marine gearbox model MG-
R
509, 4.5:1 reduction ratio, includes oil
S
cooler, companion flange, manual and
Y
standard accessories as per attached
S
sheet.
T
E
Price FOB Manila P580,000.00/unit M
S
Total FOB Manila P1,160,000.00 ,
Admissibility
I of evidence refers to the question of whether or not the circumstance
(or evidence)
N is to considered at all. 45 On the other hand, the probative value of
evidenceCrefers to the question of whether or not it proves an issue. 46 Thus, a letter
may be offered
. in evidence and admitted as such but its evidentiary weight depends
upon the observance of the rules on evidence. Accordingly, the author of the letter
should be( presented as witness to provide the other party to the litigation the
opportunity
S to question him on the contents of the letter. Being mere hearsay
evidence,g failure to present the author of the letter renders its contents suspect. As
earlier stated,
d hearsay evidence, whether objected to or not, has no probative value.
Thus: .
)
The courts differ as to the weight to be given to hearsay evidence
E admitted without objection. Some hold that when hearsay has been
. admitted without objection, the same may be considered as any other
D properly admitted testimony. Others maintain that it is entitled to no
. more consideration than if it had been excluded.
D
a The rule prevailing in this jurisdiction is the latter one. Our Supreme
c Court held that although the question of admissibility of evidence can
l not be raised for the first time on appeal, yet if the evidence is hearsay
a it has no probative value and should be disregarded whether objected
n to or not. "If no objection is made" — quoting Jones on Evidence —
"it (hearsay) becomes evidence by reason of the want of such
To be sure, letters and telegrams are admissible in evidence but these are, however, objection even though its admission does not confer upon it any new
subject to the general principles of evidence and to various rules relating to attribute in point of weight. Its nature and quality remain the same, so
documentary evidence. 42 Hence, in one case, it was held that a letter from an far as its intrinsic weakness and incompetency to satisfy the mind are
automobile dealer offering an allowance for an automobile upon purchase of a new concerned, and as opposed to direct primary evidence, the latter
automobile after repairs had been completed, was not a "price current" or always prevails.
"commercial list" within the statute which made such items presumptive evidence
of the value of the article specified therein. The letter was not admissible in evidence The failure of the defense counsel to object to the presentation of
as a "commercial list" even though the clerk of the dealer testified that he had incompetent evidence, like hearsay evidence or evidence that
written the letter in due course of business upon instructions of the dealer. 43 violates the rules of res inter alios acta, or his failure to ask for the
striking out of the same does not give such evidence any probative
But even on the theory that the Court of Appeals correctly ruled on the admissibility value. But admissibility of evidence should not be equated with
of those letters or communications when it held that unless "plainly irrelevant, weight of evidence. Hearsay evidence whether objected to or not has
immaterial or incompetent," evidence should better be admitted rather than rejected no probative value. 47
on "doubtful or technical grounds," 44 the same pieces of evidence, however, should
not have been given probative weight. This is a distinction we wish to point out.
Accordingly, as stated at the outset, damages may not be awarded on the basis of considering that such payment is causally related to the loss for which it claimed
hearsay evidence. 48 compensation. This Court believes that such allegations in the original and
amended complaints can be the basis for determination of a fair amount of nominal
Nonetheless, the non-admissibility of said exhibits does not mean that it totally damages inasmuch as a complaint alleges the ultimate facts constituting the
deprives private respondent of any redress for the loss of its vessel. This is because plaintiffs cause of
in Lufthansa German Airlines v. Court of Appeals, 49 the Court said: action. 54 Private respondent should be bound by its allegations on the amount of its
claims.
In the absence of competent proof on the actual damage suffered,
private respondent is "entitled to nominal damages which, as the law With respect to petitioner's contention that the lower court did not acquire
says, is adjudicated in order that a right of the plaintiff, which has jurisdiction over the amended complaint increasing the amount of damages claimed
been violated or invaded by defendant, may be vindicated and to P600,000.00, we agree with the Court of Appeals that the lower court acquired
recognized, and not for the purpose of indemnifying the plaintiff for jurisdiction over the case when private respondent paid the docket fee
any loss suffered." [Emphasis supplied]. corresponding to its claim in its original complaint. Its failure to pay the docket fee
corresponding to its increased claim for damages under the amended complaint
Nominal damages are awarded in every obligation arising from law, contracts, should not be considered as having curtailed the lower court's jurisdiction.
quasi-contracts, acts or omissions punished by law, and quasi-delicts, or in every Pursuant to the ruling in Sun Insurance Office, Ltd. (SIOL) v. Asuncion, 55 the unpaid
case where property right has been invaded. 50Under Article 2223 of the Civil Code, docket fee should be considered as a lien on the judgment even though private
"(t)he adjudication of nominal damages shall preclude further contest upon the right respondent specified the amount of P600,000.00 as its claim for damages in its
involved and all accessory questions, as between the parties to the suit, or their amended complaint.
respective heirs and assigns."
Moreover, we note that petitioner did not question at all the jurisdiction of the lower
Actually, nominal damages are damages in name only and not in fact. Where these court on the ground of insufficient docket fees in its answers to both the amended
are allowed, they are not treated as an equivalent of a wrong inflicted but simply in complaint and the second amended complaint. It did so only in its motion for
recognition of the existence of a technical injury. 51 However, the amount to be reconsideration of the decision of the lower court after it had received an adverse
awarded as nominal damages shall be equal or at least commensurate to the injury decision. As this Court held in Pantranco North Express, Inc. v. Court of
sustained by private respondent considering the concept and purpose of such Appeals, 56 participation in all stages of the case before the trial court, that included
damages. 52 The amount of nominal damages to be awarded may also depend on invoking its authority in asking for affirmative relief, effectively barred petitioner by
certain special reasons extant in the case. 53 estoppel from challenging the court's jurisdiction. Notably, from the time it filed its
answer to the second amended complaint on April 16, 1985, 57 petitioner did not
question the lower court's jurisdiction. It was only on December 29, 1989 58 when it
Applying now such principles to the instant case, we have on record the fact that
filed its motion for reconsideration of the lower court's decision that petitioner
petitioner's vesselPetroparcel was at fault as well as private respondent's complaint
raised the question of the lower court's lack of jurisdiction. Petitioner thus
claiming the amount of P692,680.00 representing the fishing nets, boat equipment
foreclosed its right to raise the issue of jurisdiction by its own inaction.
and cargoes that sunk with the M/V Maria Efigenia XV. In its amended complaint,
private respondent alleged that the vessel had an actual value of P800,000.00 but it
had been paid insurance in the amount of P200,000.00 and, therefore, it claimed only WHEREFORE, the challenged decision of the Court of Appeals dated October 14,
the amount of P600,000.00. Ordinarily, the receipt of insurance payments should 1992 in CA-G.R. CV No. 26680 affirming that of the Regional Trial Court of Caloocan
diminish the total value of the vessel quoted by private respondent in his complaint City, Branch 121, is hereby MODIFIED insofar as it awarded actual damages to
private respondent Maria Efigenia Fishing Corporation in the amount of
P6,438,048.00 for lack of evidentiary bases therefor. Considering the fact, however, Candano Shipping as Third Marine Engineer on board its cargo vessel, M/V David, Jr.,
that: (1) technically petitioner sustained injury but which, unfortunately, was not with the monthly salary of ₱7,800.00.4
adequately and properly proved, and (2) this case has dragged on for almost two
decades, we believe that an award of Two Million (P2,000,000.00) 59 in favor of private On 25 March 1996, M/V David, Jr. left the port of Davao City with its cargo and 20 crew
respondent as and for nominal damages is in order. members. The voyage was initially uneventful until around seven o’clock in the evening of
27 March 1996 when the vessel encountered rough seas and strong winds while traversing
No pronouncement as to costs. the waters of Lianga Bay, Surigao del Sur, causing her to tilt at three degrees on its
starboard side. Due to the violent waves which continuously hammered the tilting vessel,
SO ORDERED. the seawaters slowly swallowed up the main deck causing the tilting to worsen up to 30
degrees. In an effort to salvage the vessel, the ship captain changed its course from the
G.R. No. 163212 March 13, 2007 north to the south but the tilting continued to grow to a dangerously high level, rendering
the vessel beyond control. It was at this point when the ship captain ordered the crew
members to abandon the vessel. Despite the efforts exerted by the crew members to save
CANDANO SHIPPING LINES, INC., Petitioner,
the vessel, M/V David, Jr. sank together with her cargo at around eleven o’clock in the
vs.
evening at Bakulin Point, Lianga Bay, Surigao del Sur. Among the 20 crew members,
FLORENTINA J. SUGATA-ON, Respondent.
twelve survived, one died and seven were missing. One of those who were missing was
Melquiades Sugata-on (Melquiades), the husband of herein respondent, Florentina
DECISION Sugata-on, (Florentina) as shown in the List of Surviving Crew of the Ill-Fated David, Jr.,
prepared by Candano Shipping.5
CHICO-NAZARIO, J.:
Upon learning of Melquiades’ fate, Florentina immediately went to the office of Candano
This is a Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court, Shipping in Manila to claim the death benefits of her husband but it refused to pay.6
seeking to reverse and set aside the Court of Appeals Decision1 dated 23 May 2003 and
its Resolution dated 1 April 2004, affirming with modification the Decision of the Regional Such refusal prompted Florentina to institute on 31 January 1997, an action seeking
Trial Court (RTC) of Manila, Branch 20, finding Candano Shipping Lines, Inc. (Candano indemnity for the death of her husband against Candano Shipping before the RTC of
Shipping) liable for the death of Melquiades Sugata-on. The dispositive portion of the Manila, Branch 20. She grounded her case on the provision of Article 17117 of the New
assailed decision of the appellate court reads: Civil Code, which imposes upon 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,
IN VIEW OF ALL THE FOREGOING, the appealed decision is AFFIRMED, with Florentina prayed that actual, moral and exemplary damages including attorney’s fees, be
the MODIFICATION that: (1) the awarded compensation for the death of Melquiades awarded in her favor.8
Sugata-on is reduced to ₱608,400.00; and, (2) the award of moral and exemplary damages
as well as attorney’s fees is deleted. No pronouncement as to costs.2 In its Answer,9 Candano Shipping countered that Florentina had no cause of action against
it because the death of Melquiades was not yet an established fact since he was merely
The factual and procedural antecedents of this instant petition are as follows: reported missing upon the sinking of M/V David, Jr. The filing of the case before the RTC
therefore was premature for she should have waited until the body of Melquiades could be
Candano Shipping is a domestic corporation engaged in the business of coastwise trading recovered or until the lapse of time which would render the provision of Article 391 of the
within the Philippines.3On 7 March 1994, Melquiades Sugata-on was employed by New Civil Code10 on presumptive death operative.
The RTC resolved the controversy in favor of Florentina and ratiocinated that the provision further, That if he has no primary beneficiary, the System shall pay to his secondary
of Article 391 of the New Civil Code on presumptive death had become operative since the beneficiaries the monthly income benefit not to exceed sixty months; Provided, finally, That
period of four years had already elapsed since Melquiades was reported missing upon the the minimum monthly death benefit shall not be less that fifteen thousand pesos.
sinking incident which occurred on 27 March 1996. In a Decision11promulgated on 15
February 2001, the RTC ordered Candano Shipping to indemnify Florentina for the death In a Resolution16 issued on 1 April 2004, the Court of Appeals denied the Motion for
of her husband, in the following amounts: Reconsideration filed by Candano Shipping for failure to offer any justifiable ground to
modify, reverse or reconsider the questioned decision.
WHEREFORE, premises considered, judgment is hereby rendered ordering defendant
Candano Shipping Lines, Inc. to indemnify plaintiff Forentina J. Sugata-on the amount of Hence, this instant Petition for Review on Certiorari filed by Candano Shipping raising the
₱988,400.00 as actual damages, ₱100,000.00 as moral damages ₱50,000.00 as following issues:
exemplary damages and 10% of the amount due as and for attorney’s fees plus the cost
of suit. WHETHER OR NOT THE FORMULA FOR FIXING THE AMOUNT OF DEATH
COMPENSATION IN ARTICLE 194 OF THE LABOR CODE APPLIES IN
The award for actual damages amounting to ₱988,400.00 was computed by the lower DETERMINING THE COMPENSATION CLAIMED BY THE HEIR OF THE
court by adopting the formula in the computation of loss of earning capacity enunciated in DECEASED EMPLOYEE AGAINST THE EMPLOYER UNDER ARTICLE 1711?
the case of Villa Rey Transit, Inc. v. Court of Appeals,12wherein the annual expenses of
the deceased are deducted from his gross annual income and multiplied by life expectancy WHETHER OR NOT IT IS PERMITTED FOR THE COURT OF APPEALS, ON
(gross annual income – annual expense x life expectancy).13 ORDINARY APPEAL, TO APPLY ART. 194 OF THE LABOR CODE ON A CLAIM
FOR DEATH COMPENSATION OF AN EMPLOYEE AGAINST THE EMPLOYER
The Motion for Reconsideration interposed by Candano Shipping was denied by the RTC FILED AND TRIED BEFORE THE REGULAR COURTS ON THE BASIS OF
for lack of cogent reason to disturb or reconsider its decision.14 ARTICLE 1711 OF THE CIVIL CODE AND THE DOCTRINE ENUNCIATED IN
THE VILLA REY TRANSIT CASE?
Aggrieved, Candano Shipping elevated the adverse RTC decision to the Court of Appeals,
which in turn, affirmed with modification the judgment of the lower court. The award for WHETHER OR NOT APPLICATION OF ARTICLE 194 OF THE LABOR CODE
actual damages was reduced from ₱998,400.00 to ₱608,400.00, while the awards for ON THE CLAIM FOR DEATH COMPENSATION OF RESPONDENT OUSTS THE
moral and exemplary damages including attorney’s fees were deleted for lack of sufficient REGULAR COURTS, INCLUDING THE COURT OF APPEALS OF
basis for their allowance.15 JURISDICTION OVER THE CASE?

In arriving at the sum of ₱608,400.00, the appellate court applied the standard prescribed IN THE EVENT THAT THE SUPREME COURT RULES THAT THE COURT OF
by Article 194 of the Labor Code of the Philippines, as amended, to wit: APPEALS APPLICATION OF ARTICLE 194 OF THE LABOR CODE IN THIS
CASE SHOULD BE SET ASIDE, IS RESPONDENT ENTITLED TO RECOVER
ART. 194. DEATH. – (a) Under such regulations as the Commission may approve, the DEATH COMPENSATION FROM PETITIONER IN ACCORDANCE WITH HER
System shall pay to the primary beneficiaries upon the death of the covered employee THEORY OF THE CASE AS ALLEGED, ARGUED AND TRIED BEFORE THE
under this Title an amount equivalent to his monthly income benefit, plus ten percent TRIAL COURT.17
thereof for each dependent child, but not exceeding five, beginning with the youngest and
without substitution, except as provided for in paragraph (j) of Article 167 hereof; Provided, Since the factual findings of the RTC and the Court of Appeals that the non-recovery of
however, That the monthly income benefit shall be guaranteed for five years: Provided, Melquiades’ body for the period of four (4) years from 27 March 1996 creates a
presumption that he is already dead and that his death was caused by a fortuitous event, In other words, under compensation acts, the employer is liable to pay compensation
were already settled, and considering that these findings were not controverted by the benefits for loss of income, as long as the death, sickness or injury is work-connected or
parties in this instant petition, we find no compelling reason to disturb the same. work-aggravated, even if the death or injury is not due to the fault of the employer (Murillo
Henceforth, we will limit our discussion to the computation of the amount of indemnification. v. Mendoza, 66 Phil. 689). On the other hand, damages are awarded to one as a
vindication of the wrongful invasion of his rights. It is the indemnity recoverable by a person
In its Petition, Candano Shipping argues that the application of the measure stipulated who has sustained injury either in his person, property or relative rights, through the act or
under Article 194 of the Labor Code is erroneous since it applies only to death default of another (25 C.J.S. 452).
compensation to be paid by the Social Security System to the beneficiaries of a deceased
member, to which proposition Florentina concedes. We agree. The remedy availed by The principle underscored in the case of Floresca was further affirmed in the later case
Sugata-on in filing the claim under the New Civil Code has been validly recognized by the of Ysmael Maritime Corporation v. Avelino,20 wherein we emphasized that once the
prevailing jurisprudence on the matter. claimant had already exercised his choice to pursue his right under one remedy, he is
barred from proceeding with an alternative remedy. As eloquently laid down by Chief
In the case of Floresca v. Philex Mining Company,18 we declared that the employees may Justice Marcelo Fernan:
invoke either the Workmen’s Compensation Act or the provisions of the Civil Code, subject
to the consequence that the choice of one remedy will exclude the other and that the It is therefore clear that respondents had not only opted to recover under the Act but they
acceptance of the compensation under the remedy chosen will exclude the other remedy. had also been duly paid. At the very least, a sense of fair play would demand that if a
The exception is where the claimant who had already been paid under the Workmen’s person entitled to a choice of remedies made a first election and accepted the benefits
Compensation Act may still sue for damages under the Civil Code on the basis of thereof, he should no longer be allowed to exercise the second option. "Having staked
supervening facts or developments occurring after he opted for the first remedy.19 his fortunes on a particular remedy, (he) is precluded from pursuing the alternate
course, at least until the prior claim is rejected by the Compensation Commission."
Stated differently, save for the recognized exception, an employee cannot pursue both
remedies simultaneously but has the option to proceed by interposing one remedy and In the case at bar, Florentina was forced to institute a civil suit for indemnity under the New
waiving his right over the other. As we have explained in Floresca, this doctrinal rule is Civil Code, after Candano Shipping refused to compensate her husband’s death.
rooted on the theory that the basis of the compensation under the Workmen’s
Compensation Act is separate and distinct from the award of damages under the Civil The pertinent provision of the New Civil Code reads:
Code, thus:
Article 1711. Owners of enterprises and other employers are obliged to pay compensation
The rationale in awarding compensation under the Workmen’s Compensation Act differs for the death of or injuries to their laborers, workmen, mechanics or other employees, even
from that in giving damages under the Civil Code. The compensation acts are based on a though the event may have been purely accidental or entirely due to a fortuitous cause, if
theory of compensation distinct from the existing theories of damages, payments under the death or personal injury arose out of and in the course of employment. The employer
the acts being made as compensation and not as damages (99 C.J.S. 53). Compensation is also liable for compensation if the employee contracts any illness or diseases caused by
is given to mitigate harshness and insecurity of industrial life for the workman and his such employment or as the result of the nature of employment. If the mishap was due to
family. Hence, an employer is liable whether negligence exists or not since liability is the employee’s own notorious negligence, or voluntary act, or drunkenness, the employer
created by law. Recovery under the Act is not based on any theory of actionable wrong on shall not be liable for compensation. When the employee’s lack of due care contributed to
the part of the employer (99 D.J.S. 36). his death or injury, the compensation shall be equitably reduced.
In the case of Philippine Air Lines, Inc. v. Court of Appeals,21 this Court validated the Art. 2199. Except as provided by law or by stipulation, one is entitled to an adequate
strength of the aforementioned provision and made the employer liable for the injury compensation only for such pecuniary loss suffered by him as he has duly proved. Such
suffered by its employee in the course of employment. We thus ruled: compensation is referred to as actual or compensatory damages.

Having affirmed the gross negligence of PAL in allowing Capt. Delfin Bustamante to fly the Article 2200. Indemnification for damages shall comprehend not only the value of the loss
plane to Daet on January 8, 1951 whose slow reaction and poor judgment was the cause suffered, but also that of the profits which the obligee failed to obtain.
of the crash-landing of the plane which resulted in private respondent Samson hitting his
head against the windshield and causing him injuries for which reason PAL terminated his In order to give breath to the aforestated provisions on damages of the New Civil Code,
services and employment as pilot after refusing to provide him with the necessary medical they must be transformed into a more tangible and practical mathematical form, so that the
treatment of respondent’s periodic spells, headache and general debility produced from purpose of the law to indemnify the employee or his heirs for his death or injury occasioned
said injuries, We must necessarily affirm likewise the award of damages or by his employment, as envisioned by the Article 1711 of the same code may be realized.
compensation under the provisions of Art. 1711 and Art. 1712 of the New Civil Code. We deem it best to adopt the formula for loss of earning capacity enunciated in the case
x x x. of Villa Rey v. Court of Appeals,23 in computing the amount of actual damages to be
awarded to the claimant under Article 1711 of the New Civil Code.
As early as the case of Valencia v. Manila Yacht Club, Inc.,22 this Court, speaking
through the renowned civilist, Mr. Justice J.B.L. Reyes, made a pronouncement that In Villa Rey, the common carrier was made liable for the death of its passenger on board
Article 1711 of the Civil Code imposes upon the employer the obligation to a passenger bus owned and operated by Villa Rey Transit, Inc. going to Manila from
compensate the employee for injury or sickness occasioned by his employment, Lingayen, Pangasinan. While the bus was nearing Sadsaran Bridge in Barrio Sto.
and thus articulated: Domingo, Minalin, Pampanga, it frontally hit the rear side of bull cart filled with hay and
bamboo poles. The protruding end of one bamboo pole, about eight feet long, penetrated
>Appellant’s demand for compensation is predicated on employer’s liability for the sickness through the glass windshield of the bus and hit the face of Policarpio Quintos, Jr., who was
of, or injury to, his employee imposed by Article 1711 of the Civil Code, which reads: then sitting at the front row, causing his death.24

Article 1711. Owners of enterprises and other employers are obliged to pay compensation The obligation of the common carrier to indemnify its passenger or his heirs for injury or
for the death x x x. death arose from the contract of carriage entered into by the common carrier and the
passenger.25 By the very nature of the obligation which is imbued with public interest,26 in
We find the abovequoted provision to be applicable and controlling in this case. The matter contract of carriage the carrier assumes the express obligation to transport its passenger
of the amount of compensation and allowable medical expenses should be properly to his destination safely and to observe extraordinary diligence with due regard to all the
determined by the Municipal Court after the parties are heard accordingly. circumstances, and any injury that might be suffered by the passenger is right away
attributable to the fault or negligence of the carrier and thus gives rise to the right of the
Given that the right of the claimant arose from the contract of employment and the passenger or his heirs for indemnity.27
corresponding obligation imposed by the New Civil Code upon the employer to indemnify
the former for death and injury of the employee circumstanced by his employment, In the same breadth, the employer shall be liable for the death or personal injury of its
necessarily, the provisions of the same code on damages shall govern the extent of the employees in the course of employment as sanctioned by Article 1711 of the New Civil
employer’s liability. Code. The liability of the employer for death or personal injury of his employees arose from
the contract of employment entered into between the employer and his employee which is
The pertinent provision on damages under the New Civil Code provides: likewise imbued with public interest.28 Accordingly, when the employee died or was injured
in the occasion of employment, the obligation of the employer for indemnity, automatically of damages to one’s estate for his death by wrongful act is necessarily his net earning
attaches. The indemnity may partake of the form of actual, moral, nominal, temperate, capacity or his capacity to acquire money, ‘less necessary expense for his own living.’
liquidated or exemplary damages, as the case may be depending on the factual milieu of Stated otherwise, the amount recoverable is not the loss of entire earning, but rather the
the case and considering the criterion for the award of these damages as outlined by our loss of that portion of the earnings which the beneficiary would have received. In other
jurisprudence.29 In the case at bar, only the award of actual damages, specifically the words, only net earnings, and not gross earnings are to be considered that is, the total of
award for unearned income is warranted by the circumstances since it has been duly the earnings less expenses necessary in the creation of such earnings or income and less
proven that the cause of death of Melquiades is a fortuitous event for which Candano living and other incidental expenses.33
Shipping cannot be faulted.
In computing the third factor, the necessary living expense, a survey of more recent
The formula for the computation of unearned income is: jurisprudence shows that this Court consistently pegged the amount at 50% of the gross
annual income.34 We held in Smith Bell Dodwell Shipping Agency Corp. v. Borja,35 that
Net Earning Capacity = life expectancy x (gross annual income - reasonable and when there is no showing that the living expenses constituted the smaller percentage of
necessary living expenses). the gross income, we fix the living expenses at half of the gross income.

Life expectancy is determined in accordance with the formula: Applying the aforestated jurisprudential guidelines in the computation of the amount of
award for damages set out in Villa Rey, we now proceed to determining Melquiades’ life
2 / 3 x [80 – age of deceased at the time of death] expectancy, thus:

Jurisprudence provides that the first factor, i.e., life expectancy, shall be computed by Life expectancy = 2 / 3 x [80 – age of deceased at the time of death]
applying the formula (2/3 x [80 - age at death]) adopted in the American Expectancy Table
of Mortality or the Actuarial of Combined Experience Table of Mortality.30 2 /3 x [80 – 56]

In the computation of the second factor, it is computed by multiplying the life expectancy 2 / 3 x [24]
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 Life expectancy = 16
expenses.31 The loss is not equivalent to the entire earnings of the deceased, but only such
portion that he would have used to support his dependents or heirs. Hence, we deduct With 16 more years of life expectancy and a monthly income of ₱7,800.00, as evidenced
from his gross earnings the necessary expenses supposed to be used by the deceased by the pay slips duly presented before the RTC, Melquiades’ earning capacity is computed
for his own needs.32 The Court explained in Villa Rey: 1avv phi1
as follows:

[(The award of damages for loss of earning capacity is)] concerned with the determination Net Earning Capacity = life expectancy x (gross annual income - reasonable and
of losses or damages sustained by the private respondents, as dependents and intestate necessary living expenses).
heirs of the deceased, and that said damages consist, not of the full amount of his earnings,
but of the support they received or would have received from him had he not died in = 16 x ( ₱93,600.00 – ₱ 46,800.00)
consequence of negligence of petitioner’s agent. In fixing the amount of that support, we
must reckon with the ‘necessary expenses of his own living’, which should be deducted
= 16 x ( ₱ 46,800.00 )
from his earnings. Thus, it has been consistently held that earning capacity, as an element
Net Earning Capacity = ₱ 748,800.00 SPOUSES CESAR & SUTHIRA ZALAMEA and LIANA ZALAMEA, petitioners,
vs.
The argument raised by Candano Shipping that the formula for determining the life HONORABLE COURT OF APPEALS and TRANSWORLD AIRLINES,
expectancy under Villa Reycannot be automatically applied without proof of the basis for INC., respondents.
the expected length of life of a Filipino does not merit our consideration. The formula for
life expectancy has been repeatedly adopted in our jurisprudence in fixing the amount of Sycip, Salazar, Hernandez, Gatmaitan for petitioners.
indemnity for the death of a party. This was adopted from the American Expectancy Table
of Mortality or the Actuarial of Combined Experience Table of Mortality which was used by Quisumbing, Torres & Evangelista for private-respondent.
insurers in determining the capital sum to be charged for annuity.36

Admittedly, in several cases, this Court reduced the life expectancy multiplier considering
the medical history such as when the deceased previously underwent a major surgery37 or NOCON, J.:
when it was shown that he was treated for chest pains, backache or occasional feeling of
tiredness38 and the fact that the deceased has been consistently engaged in a dangerous Disgruntled over TransWorld Airlines, Inc.'s refusal to accommodate them in TWA Flight
and risky activity tending to shorten his life.39 Failing to prove, however, that any of these
007 departing from New York to Los Angeles on June 6, 1984 despite possession of
circumstances is attendant in the case at bar, Candano Shipping cannot validly assert that confirmed tickets, petitioners filed an action for damages before the Regional Trial Court
the standard life expectancy factor laid down in Villa Rey cannot be applied in this case. of Makati, Metro Manila, Branch 145. Advocating petitioner's position, the trial court
categorically ruled that respondent TransWorld Airlines (TWA) breached its contract of
Accordingly, Florentina is entitled to recover the amount of ₱748,800.00 as actual carriage with petitioners and that said breach was "characterized by bad faith." On appeal,
damages for the death of her husband. The awards of moral and exemplary damages are however, the appellate court found that while there was a breach of contract on respondent
deleted. However, the award of costs of litigation and attorney’s fees are proper.40 TWA's part, there was neither fraud nor bad faith because under the Code of Federal
Regulations by the Civil Aeronautics Board of the United States of America it is allowed to
WHEREFORE, in view of the foregoing, the instant petition is DENIED and the Decision overbook flights.
dated 23 May 2003 as well as the Resolution dated 1 April 2004, rendered by the Court of
Appeals in CA-G.R. CV No. 70410, are hereby PARTIALLY AFFIRMED in so far as it finds The factual backdrop of the case is as follows:
petitioner liable to respondent for damages.
Petitioners-spouses Cesar C. Zalamea and Suthira Zalamea, and their daughter, Liana
Pursuant to the appropriate provisions of the New Civil Code and the prevailing Zalamea, purchased three (3) airline tickets from the Manila agent of respondent
jurisprudence on the matter, petitioner Candano Shipping Lines, Inc., is ORDERED to pay TransWorld Airlines, Inc. for a flight to New York to Los Angeles on June 6, 1984. The
the amount of ₱748,800.00, as actual damages, plus 10% of the amount awarded as tickets of petitioners-spouses were purchased at a discount of 75% while that of their
attorney’s fee plus cost of the suit. daughter was a full fare ticket. All three tickets represented confirmed reservations.

SO ORDERED. While in New York, on June 4, 1984, petitioners received notice of the reconfirmation of
their reservations for said flight. On the appointed date, however, petitioners checked in at
G.R. No. 104235 November 18, 1993 10:00 a.m., an hour earlier than the scheduled flight at 11:00 a.m. but were placed on the
wait-list because the number of passengers who had checked in before them had already
taken all the seats available on the flight. Liana Zalamea appeared as the No. 13 on the
wait-list while the two other Zalameas were listed as "No. 34, showing a party of two." Out (5) One Hundred Thousand Pesos (P100,000.00), Philippine Currency, as
of the 42 names on the wait list, the first 22 names were eventually allowed to board the and for attorney's fees; and
flight to Los Angeles, including petitioner Cesar Zalamea. The two others, on the other
hand, at No. 34, being ranked lower than 22, were not able to fly. As it were, those holding (6) The costs of suit.
full-fare tickets were given first priority among the wait-listed passengers. Mr. Zalamea,
who was holding the full-fare ticket of his daughter, was allowed to board the plane; while SO ORDERED. 2
his wife and daughter, who presented the discounted tickets were denied boarding.
According to Mr. Zalamea, it was only later when he discovered the he was holding his
On appeal, the respondent Court of Appeals held that moral damages are recoverable in
daughter's full-fare ticket.
a damage suit predicated upon a breach of contract of carriage only where there is fraud
or bad faith. Since it is a matter of record that overbooking of flights is a common and
Even in the next TWA flight to Los Angeles Mrs. Zalamea and her daughter, could not be accepted practice of airlines in the United States and is specifically allowed under the Code
accommodated because it was also fully booked. Thus, they were constrained to book in of Federal Regulations by the Civil Aeronautics Board, no fraud nor bad faith could be
another flight and purchased two tickets from American Airlines at a cost of Nine Hundred imputed on respondent TransWorld Airlines.
Eighteen ($918.00) Dollars.
Moreover, while respondent TWA was remiss in not informing petitioners that the flight was
Upon their arrival in the Philippines, petitioners filed an action for damages based on overbooked and that even a person with a confirmed reservation may be denied
breach of contract of air carriage before the Regional Trial Court of Makati, Metro Manila, accommodation on an overbooked flight, nevertheless it ruled that such omission or
Branch 145. As aforesaid, the lower court ruled in favor of petitioners in its decision 1 dated negligence cannot under the circumstances be considered to be so gross as to amount to
January 9, 1989 the dispositive portion of which states as follows: bad faith.

WHEREFORE, judgment is hereby rendered ordering the defendant to pay Finally, it also held that there was no bad faith in placing petitioners in the wait-list along
plaintiffs the following amounts: with forty-eight (48) other passengers where full-fare first class tickets were given priority
over discounted tickets.
(1) US $918.00, or its peso equivalent at the time of payment representing
the price of the tickets bought by Suthira and Liana Zalamea from American The dispositive portion of the decision of respondent Court of Appeals3 dated October 25,
Airlines, to enable them to fly to Los Angeles from New York City; 1991 states as follows:

(2) US $159.49, or its peso equivalent at the time of payment, representing WHEREFORE, in view of all the foregoing, the decision under review is
the price of Suthira Zalamea's ticket for TWA Flight 007; hereby MODIFIED in that the award of moral and exemplary damages to
the plaintiffs is eliminated, and the defendant-appellant is hereby ordered
(3) Eight Thousand Nine Hundred Thirty-Four Pesos and Fifty Centavos to pay the plaintiff the following amounts:
(P8,934.50, Philippine Currency, representing the price of Liana Zalamea's
ticket for TWA Flight 007, (1) US$159.49, or its peso equivalent at the time of the payment,
representing the price of Suthira Zalamea's ticket for TWA Flight 007;
(4) Two Hundred Fifty Thousand Pesos (P250,000.00), Philippine
Currency, as moral damages for all the plaintiffs' (2) US$159.49, or its peso equivalent at the time of the payment,
representing the price of Cesar Zalamea's ticket for TWA Flight 007;
(3) P50,000.00 as and for attorney's fees. Respondent TWA relied solely on the statement of Ms. Gwendolyn Lather, its customer
service agent, in her deposition dated January 27, 1986 that the Code of Federal
(4) The costs of suit. Regulations of the Civil Aeronautics Board allows overbooking. Aside from said statement,
no official publication of said code was presented as evidence. Thus, respondent court's
SO ORDERED.4 finding that overbooking is specifically allowed by the US Code of Federal Regulations has
no basis in fact.
Not satisfied with the decision, petitioners raised the case on petition for review
on certiorari and alleged the following errors committed by the respondent Court of Even if the claimed U.S. Code of Federal Regulations does exist, the same is not
Appeals, to wit: applicable to the case at bar in accordance with the principle of lex loci contractus which
require that the law of the place where the airline ticket was issued should be applied by
the court where the passengers are residents and nationals of the forum and the ticket is
I.
issued in such State by the defendant airline.8 Since the tickets were sold and issued in
the Philippines, the applicable law in this case would be Philippine law.
. . . IN HOLDING THAT THERE WAS NO FRAUD OR BAD FAITH ON THE
PART OF RESPONDENT TWA BECAUSE IT HAS A RIGHT TO
Existing jurisprudence explicitly states that overbooking amounts to bad faith, entitling the
OVERBOOK FLIGHTS.
passengers concerned to an award of moral damages. In Alitalia Airways v. Court of
Appeals,9 where passengers with confirmed bookings were refused carriage on the last
II. minute, this Court held that when an airline issues a ticket to a passenger confirmed on a
particular flight, on a certain date, a contract of carriage arises, and the passenger has
. . . IN ELIMINATING THE AWARD OF EXEMPLARY DAMAGES. every right to expect that he would fly on that flight and on that date. If he does not, then
the carrier opens itself to a suit for breach of contract of carriage. Where an airline had
III. deliberately overbooked, it took the risk of having to deprive some passengers of their
seats in case all of them would show up for the check in. For the indignity and
. . . IN NOT ORDERING THE REFUND OF LIANA ZALAMEA'S TWA inconvenience of being refused a confirmed seat on the last minute, said passenger is
TICKET AND PAYMENT FOR THE AMERICAN AIRLINES entitled to an award of moral damages.
TICKETS.5
Similarly, in Korean Airlines Co., Ltd. v. Court of Appeals, 10 where private respondent was
That there was fraud or bad faith on the part of respondent airline when it did not allow not allowed to board the plane because her seat had already been given to another
petitioners to board their flight for Los Angeles in spite of confirmed tickets cannot be passenger even before the allowable period for passengers to check in had lapsed despite
disputed. The U.S. law or regulation allegedly authorizing overbooking has never been the fact that she had a confirmed ticket and she had arrived on time, this Court held that
proved. Foreign laws do not prove themselves nor can the courts take judicial notice of petitioner airline acted in bad faith in violating private respondent's rights under their
them. Like any other fact, they must be alleged and proved.6 Written law may be evidenced contract of carriage and is therefore liable for the injuries she has sustained as a result.
by an official publication thereof or by a copy attested by the officer having the legal custody
of the record, or by his deputy, and accompanied with a certificate that such officer has In fact, existing jurisprudence abounds with rulings where the breach of contract of carriage
custody. The certificate may be made by a secretary of an embassy or legation, consul amounts to bad faith. In Pan American World Airways, Inc. v. Intermediate Appellate
general, consul, vice-consul, or consular agent or by any officer in the foreign service of Court, 11 where a would-be passenger had the necessary ticket, baggage claim and
the Philippines stationed in the foreign country in which the record is kept, and clearance from immigration all clearly and unmistakably showing that she was, in fact,
authenticated by the seal of his office.7 included in the passenger manifest of said flight, and yet was denied accommodation in
said flight, this Court did not hesitate to affirm the lower court's finding awarding her faith. But the issue raised in this case is not the reasonableness of said policies but whether
damages. or not said policies were incorporated or deemed written on petitioners' contracts of
carriage. Respondent TWA failed to show that there are provisions to that effect. Neither
A contract to transport passengers is quite different in kind and degree from any other did it present any argument of substance to show that petitioners were duly apprised of the
contractual relation. So ruled this Court in Zulueta v. Pan American World Airways, overbooked condition of the flight or that there is a hierarchy of boarding priorities in
Inc. 12 This is so, for a contract of carriage generates a relation attended with public duty — booking passengers. It is evident that petitioners had the right to rely upon the assurance
a duty to provide public service and convenience to its passengers which must be of respondent TWA, thru its agent in Manila, then in New York, that their tickets
paramount to self-interest or enrichment. Thus, it was also held that the switch of planes represented confirmed seats without any qualification. The failure of respondent TWA to
from Lockheed 1011 to a smaller Boeing 707 because there were only 138 confirmed so inform them when it could easily have done so thereby enabling respondent to hold on
economy class passengers who could very well be accommodated in the smaller planes, to them as passengers up to the last minute amounts to bad faith. Evidently, respondent
thereby sacrificing the comfort of its first class passengers for the sake of economy, TWA placed its self-interest over the rights of petitioners under their contracts of carriage.
amounts to bad faith. Such inattention and lack of care for the interest of its passengers Such conscious disregard of petitioners' rights makes respondent TWA liable for moral
who are entitled to its utmost consideration entitles the passenger to an award of moral damages. To deter breach of contracts by respondent TWA in similar fashion in the future,
damages. 13 we adjudge respondent TWA liable for exemplary damages, as well.

Even on the assumption that overbooking is allowed, respondent TWA is still guilty of bad Petitioners also assail the respondent court's decision not to require the refund of Liana
faith in not informing its passengers beforehand that it could breach the contract of carriage Zalamea's ticket because the ticket was used by her father. On this score, we uphold the
even if they have confirmed tickets if there was overbooking. Respondent TWA should respondent court. Petitioners had not shown with certainty that the act of respondent TWA
have incorporated stipulations on overbooking on the tickets issued or to properly inform in allowing Mr. Zalamea to use the ticket of her daughter was due to inadvertence or
its passengers about these policies so that the latter would be prepared for such eventuality deliberate act. Petitioners had also failed to establish that they did not accede to said
or would have the choice to ride with another airline. agreement. The logical conclusion, therefore, is that both petitioners and respondent TWA
agreed, albeit impliedly, to the course of action taken.
Respondent TWA contends that Exhibit I, the detached flight coupon upon which were
written the name of the passenger and the points of origin and destination, contained such The respondent court erred, however, in not ordering the refund of the American Airlines
a notice. An examination of Exhibit I does not bear this out. At any rate, said exhibit was tickets purchased and used by petitioners Suthira and Liana. The evidence shows that
not offered for the purpose of showing the existence of a notice of overbooking but to show petitioners Suthira and Liana were constrained to take the American Airlines flight to Los
that Exhibit I was used for flight 007 in first class of June 11, 1984 from New York to Los Angeles not because they "opted not to use their TWA tickets on another TWA flight" but
Angeles. because respondent TWA could not accommodate them either on the next TWA flight
which was also fully booked. 14 The purchase of the American Airlines tickets by petitioners
Moreover, respondent TWA was also guilty of not informing its passengers of its alleged Suthira and Liana was the consequence of respondent TWA's unjustifiable breach of its
policy of giving less priority to discounted tickets. While the petitioners had checked in at contracts of carriage with petitioners. In accordance with Article 2201, New Civil Code,
the same time, and held confirmed tickets, yet, only one of them was allowed to board the respondent TWA should, therefore, be responsible for all damages which may be
plane ten minutes before departure time because the full-fare ticket he was holding was reasonably attributed to the non-performance of its obligation. In the previously cited case
given priority over discounted tickets. The other two petitioners were left behind. of Alitalia Airways v. Court of Appeals, 15 this Court explicitly held that a passenger is
entitled to be reimbursed for the cost of the tickets he had to buy for a flight to another
airline. Thus, instead of simply being refunded for the cost of the unused TWA tickets,
It is respondent TWA's position that the practice of overbooking and the airline system of
petitioners should be awarded the actual cost of their flight from New York to Los Angeles.
boarding priorities are reasonable policies, which when implemented do not amount to bad
On this score, we differ from the trial court's ruling which ordered not only the
reimbursement of the American Airlines tickets but also the refund of the unused TWA LEONARDO-DE CASTRO, J.:
tickets. To require both prestations would have enabled petitioners to fly from New York to
Los Angeles without any fare being paid. On automatic review is the decision1 dated July 14, 2005 of the Court of Appeals (CA) in
CA-G.R. CR-HC No. 00717 which affirmed, with modifications, an earlier decision2 of the
The award to petitioners of attorney's fees is also justified under Article 2208(2) of the Civil Regional Trial Court (RTC) of Ligao City, Branch 13, in Criminal Case No. 4134, finding
Code which allows recovery when the defendant's act or omission has compelled plaintiff herein accused-appellant Richard O. Sarcia alias "Nogi" guilty beyond reasonable doubt
to litigate or to incur expenses to protect his interest. However, the award for moral of the crime of rape3 committed against AAA,4 and sentenced him to suffer the penalty of
damages and exemplary damages by the trial court is excessive in the light of the fact that Reclusion Perpetua and to pay the amount of ₱50,000.00 as civil indemnity, ₱50,000.00
only Suthira and Liana Zalamea were actually "bumped off." An award of P50,000.00 moral as moral damages, and the cost of the suit. However, the CA modified the penalties
damages and another P50,000.00 exemplary damages would suffice under the imposed by the RTC by imposing the death penalty, increasing the award of civil indemnity
circumstances obtaining in the instant case. to ₱75,000.00, and awarding ₱25,000.00 as exemplary damages, aside from the
₱50,000.00 for moral damages.
WHEREFORE, the petition is hereby GRANTED and the decision of the respondent Court
of Appeals is hereby MODIFIED to the extent of adjudging respondent TransWorld Airlines The crime of rape was allegedly committed sometime in 1996 against AAA, a five (5) year
to pay damages to petitioners in the following amounts, to wit: old girl. After almost four (4) years, AAA’s father filed a complaint5 for acts of lasciviousness
against herein accused-appellant on July 7, 2000. Upon review of the evidence, the Office
(1) US$918.00 or its peso equivalent at the time of payment representing the price of the of the Provincial Prosecutor at Ligao, Albay upgraded the charge to rape.6 The
tickets bought by Suthira and Liana Zalamea from American Airlines, to enable them to fly Information7 dated September 5, 2000 reads:
to Los Angeles from New York City;
That sometime in 1996 at Barangay Doña Tomasa, Municipality of Guinobatan, Province
(2) P50,000.00 as moral damages; of Albay, Philippines, and within the jurisdiction of this Honorable Court, the above-named
accused, with lewd and unchaste design, and by means of force, threats and intimidation,
(3) P50,000.00 as exemplary damages; did then and there willfully, unlawfully and feloniously have sexual intercourse with [AAA],
who was then 6 years of age, against her will and consent, to her damage and prejudice.
(4) P50,000.00 as attorney's fees; and
ACTS CONTRARY TO LAW.
(5) Costs of suit.
At his arraignment on October 25, 2000, accused-appellant, with the assistance of his
counsel, entered a plea of not guilty.8 Thereafter, trial on the merits ensued.
SO ORDERED.
The prosecution presented the oral testimonies of the victim AAA; her minor cousin; her
G.R. No. 169641 September 10, 2009
father; and Dr. Joana Manatlao, the Municipal Health Officer of Guinobatan, Albay. The
defense presented the accused-appellant himself, who vehemently denied committing the
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, crimes imputed to him and Manuel Casimiro, Clerk of Court II of the Municipal Trial Court
vs. at Guinobatan, Albay.
RICHARD O. SARCIA, Accused-Appellant.

DECISION
On January 17, 2003, the trial court rendered its Decision9 finding the accused-appellant In his Brief filed before the CA, accused-appellant raised the following assignment of
guilty of the crime of rape and imposed the penalty mentioned above. errors:

The record of this case was forwarded to this Court in view of the Notice of Appeal filed by I
the accused- appellant.10
THE LOWER COURT GRAVELY ERRED IN GIVING CREDENCE TO THE TESTIMONY
Accused-appellant filed his Appellant’s Brief11 on July 15, 2004, while the People, through OF [AAA], [her cousin] and [her father].
the Office of the Solicitor General, filed its Appellee’s Brief12 on December 15, 2004.
II
Pursuant to our pronouncement in People v. Mateo,13 modifying the pertinent provisions of
the Revised Rules on Criminal Procedure insofar as they provide for direct appeals from THE LOWER COURT GLARINGLY ERRED IN REJECTING THE DEFENSE OF ALIBI
the RTC to this Court in cases in which the penalty imposed by the trial court is death, INTERPOSED BY THE ACCUSED WHICH IS MORE CREDIBLE.
reclusion perpetua or life imprisonment, and the Resolution dated September 19, 1995 in
"Internal Rules of the Supreme Court," the case was transferred, for appropriate action and III
disposition, to the CA where it was docketed as CA-G.R. CR-H.C. No. 00717.
THE LOWER COURT GRAVELY ERRED IN NOT ACQUITTING THE ACCUSED
As stated at the beginning hereof, the CA, in its decision of July 14, 2005, in CA-G.R. CR- RICHARD SARCIA.
H.C. No. 000717, affirmed with modification the judgment of conviction pronounced by the
trial court. We quote the fallo of the CA decision:
The evidence for the prosecution is summarized by the OSG in the Appellee's Brief, as
follows:
WHEREFORE, the judgment of conviction is AFFIRMED. The accused, Richard Sarcia y
Olivera, is ordered to suffer the penalty of DEATH, and to pay the victim, [AAA], the amount
On December 16, 1996, five-year-old [AAA], together with her [cousin and two other
of (1) ₱75,000.00 as civil indemnity; (2) ₱50,000.00 as moral damages, and (3) ₱25,000.00
playmates], was playing in the yard of Saling Crisologo near a mango tree.
as exemplary damages.
Suddenly, appellant appeared and invited [AAA] to go with him to the backyard of Saling
Let the entire records of this case be elevated to the Supreme Court for review, pursuant
Crisologo’s house. She agreed. Unknown to appellant, [AAA’s cousin] followed them.
to A.M. No. 00-5-03-SC (Amendments to the Revised Rules of Criminal Procedure to
Govern Death Penalty Cases), which took effect on October 15, 2004.
Upon reaching the place, appellant removed [AAA’s] shorts and underwear. He also
removed his trousers and brief. Thereafter, he ordered [AAA] to lie down on her back.
SO ORDERED.
Then, he lay on top of her and inserted his penis into [AAA’s] private organ. Appellant made
an up-and-down movement ("Nagdapadapa tabi"). [AAA] felt severe pain inside her private
On September 30, 2005, the case was elevated to this Court for further review.14 part and said "aray." She also felt an intense pain inside her stomach.

In our Resolution15 of November 15, 2005, we required the parties to simultaneously submit [AAA’s cousin], who positioned herself around five (5) meters away from them, witnessed
their respective supplemental briefs. Accused-appellant filed his Supplemental Brief16 on appellant’s dastardly act. Horrified, [AAA’s cousin] instinctively rushed to the house of
April 7, 2006. Having failed to submit one, the Office of the Solicitor General (OSG) was [AAA’s] mother, her aunt Emily, and told the latter what she had seen. [AAA’s] mother
deemed to have waived the filing of its supplemental brief.
answered that they (referring to {AAA and her cousin} were still very young to be talking agriculturist in the Municipality of Teresa, Antipolo, Rizal. As an agriculturist of the
about such matters. Department of Agriculture, his mother would bring seedlings and attend seminars in
Batangas and Baguio. They were residing in Cainta, Rizal when sometime in 1992 they
Meanwhile, after satisfying his lust, appellant stood up and ordered [AAA] to put on her transferred residence to Guinobatan, Albay. His father is from barangay Masarawag while
clothes. Appellant then left. his mother is from barangay Doña Tomasa both of Guinobatan, Albay. After their transfer
in Guinobatan, his mother continued to be an agriculturist while his father tended to his 1-
Perplexed, [AAA’s cousin] immediately returned to the backyard of Saling Crisologo where hectare coconut land. Richard testified he was between fourteen (14) and fifteen (15) years
she found [AAA] crying. Appellant, however, was gone. [AAA’s cousin] approached [AAA] old in 1992 when they transferred to Guinobatan. Between 1992 and 1994 he was out of
and asked her what appellant had done to her. When [AAA] did not answer, [her cousin] school. But from 1994 to 1998 he took his high school at Masarawag High School. His
did not ask her any further question and just accompanied her home. daily routine was at about 4:00 o’clock in the afternoon after school before proceeding
home he would usually play basketball at the basketball court near the church in Doña
Tomasa about 1 kilometer away from their house. When her mother suffered a stroke in
At home, [AAA] did not tell her mother what appellant had done to her because she feared
1999 he and his father took turns taking care of his mother. Richard denied molesting other
that her mother might slap her. Later, when her mother washed her body, she felt a grating
girls ... and was most surprised when he was accused of raping [AAA]. He knows Saling
sensation in her private part. Thereafter, [AAA] called for [her cousin]. [AAA’s cousin] came
Crisologo and the latter’s place which is more than half kilometer to their house. Richard
to their house and told [AAA’s] mother again that appellant had earlier made an up-and-
claimed Salvacion Bobier, grandmother of Mae Christine Camu, whose death on May 7,
down movement on top of [AAA]. [AAA’s mother], however did not say anything. At that
2000 was imputed to him and for which a case for Murder under Criminal Case No. 4087
time, [AAA’s] father was working in Manila.
was filed against him with the docile cooperation of [AAA’s] parents who are related to
Salvacion, concocted and instigated [AAA’s] rape charge against him to make the case for
Dr. Joana Manatloa is the Municipal Health Officer of Guinobatan, Albay. She testified that: Murder against him stronger and life for him miserable. He was incarcerated on May 10,
(1) it was the rural health officer, Dr. Reantaso, who conducted a physical examination on 2000 for the Murder charge and two (2) months later while he already in detention, the
[AAA]; (2) Dr. Reantaso prepared and signed a medico-legal certificate containing the rape case supposedly committed in 1996 was filed against him in the Municipal Trial Court
result of [AAA]’s examination; (3) Dr. Reantaso, however, had already resigned as rural (MTC) of Guinobatan, Albay. He was to learn about it from his sister, Marivic, on a Sunday
health officer of Guinobatan, Albay; (4) as a medical doctor, she can interpret, the findings afternoon sometime on July 20, 2000 when his sister visited him in jail. He naturally got
in said medico-legal certificate issued to [AAA]; (5) [AAA]’s medical findings are as follows: angry when he heard of this rape charge because he did not do such thing and recalled
"negative for introital vulvar laceration nor scars, perforated hymen, complete, pinkish telling his sister they can go to a doctor and have the child examine to prove he did not
vaginal mucosa, vaginal admits little finger with resistance; (6) the finding "negative for rape her. Subsequently, from his sister again he was to learn that the rape case was
introital bulvar laceration nor scars" means, in layman’s language, that there was no ordered dismissed.
showing of any scar or wound, and (7) there is a complete perforation of the hymen which
means that it could have been subjected to a certain trauma or pressure such as strenuous
On cross-examination, Richard admitted [AAA’s] mother, is also related to his father, [AAA
exercise or the entry of an object like a medical instrument or penis.17
mother’s] father, being a second cousin of his father. Richard is convinced it is not the
lending of money by his father to the AAA’s family as the motive for the latter to file the
On the other hand, the trial court summarized the version of the defense as follows: rape case against him but the instigation of Salvacion Bobier.

Richard Sarcia, 24 years old, single, student and a resident of Doña Tomasa, Guinobatan, Manuel A. Casimiro, Clerk of Court II of the Municipal Trial Court (MTC), Guinobatan,
Albay denied he raped [AAA]. While he knows [AAA’s] parents, because sometimes they Albay, testified on the records of Criminal Case No. 7078 filed in MTC Guinobatan, Albay
go to their house looking for his father to borrow money, he does not know [AAA] herself. against Richard Sarcia for Rape in relation to RA 7610 relative to the alleged withdrawal
His father retired as a fireman from Crispa in 1991 while his mother worked as an
of said rape case but the accused through counsel failed to formally offer the marked overturn the findings of the court a quo. It is important that the two prosecution witnesses
exhibits relative to said case.18 were one in saying that it was accused-appellant who sexually abused AAA. Their positive,
candid and straightforward narrations of how AAA was sexually abused by accused-
Accused-appellant alleges that the trial court erred in convicting him, as the prosecution appellant evidently deserve full faith and credence. When the rape incident happened, AAA
was not able to prove his guilt beyond reasonable doubt. He assailed the credibility of the was only five (5) years old; and when she and her cousin testified, they were barely 9 and
prosecution witnesses, AAA, her cousin and her father on the following grounds: (1) the 11 years old, respectively. This Court has had occasion to rule that the alleged
testimonies of AAA and her cousin were inconsistent with each other; (2) the victim was inconsistencies in the testimonies of the witnesses can be explained by their age and their
confused as to the date and time of the commission of the offense; (3) there was a four- inexperience with court proceedings, and that even the most candid of witnesses commit
year delay in filing the criminal case, and the only reason why they filed the said case was mistakes and make confused and inconsistent statements. This is especially true of young
"to help Salvacion Bobier get a conviction of this same accused in a murder case filed by witnesses, who could be overwhelmed by the atmosphere of the courtroom. Hence, there
said Salvacion Bobier for the death of her granddaughter Mae Christine Camu on May 7, is more reason to accord them ample space for inaccuracy.20
2000." Accused-appellant stressed that the same Salvacion Bobier helped AAA’s father in
filing the said case for rape. Accused-appellant also claimed that the prosecution failed to Accused-appellant capitalizes on AAA’s inability to recall the exact date when the incident
prove that he employed force, threats or intimidation to achieve his end. Finally, accused- in 1996 was committed. Failure to recall the exact date of the crime, however, is not an
appellant harped on the finding in the medical certificate issued by Dr. Reantaso and indication of false testimony, for even discrepancies regarding exact dates of rapes are
interpreted by Dr. Joana Manatlao, stating "negative for introital bulvar laceration nor scar inconsequential and immaterial and cannot discredit the credibility of the victim as a
which means that there was no showing of any scar or wound." witness.21 In People v. Purazo,22 We ruled:

In his Appellee's Brief accused-appellant pointed out the inconsistencies between AAA’s We have ruled, time and again that the date is not an essential element of the crime of
and her cousin’s testimonies as follows: (1) the cousin testified that she played with AAA rape, for the gravamen of the offense is carnal knowledge of a woman. As such, the time
at the time of the incident, while AAA testified that she was doing nothing before accused- or place of commission in rape cases need not be accurately stated. As early as 1908, we
appellant invited her to the back of the house of a certain Saling; (2) the cousin testified already held that where the time or place or any other fact alleged is not an essential
that when she saw accused-appellant doing the push-and-pull motion while on top of AAA, element of the crime charged, conviction may be had on proof of the commission of the
the latter shouted in a loud voice contrary to AAA’s testimony that when accused-appellant crime, even if it appears that the crime was not committed at the precise time or place
was inside her and started the up-and-down motion, she said "aray"; (3) when the cousin alleged, or if the proof fails to sustain the existence of some immaterial fact set out in the
returned to AAA after telling the latter’s mother what accused-appellant had done to AAA, complaint, provided it appears that the specific crime charged was in fact committed prior
she found AAA crying. AAA however testified that, after putting on her clothes, she invited to the date of the filing of the complaint or information within the period of the statute of
the cousin to their house; and (4) the cousin testified that other children were playing at limitations and at a place within the jurisdiction of the court.
the time of the incident, but AAA testified that there were only four of them who were playing
at that time. Also in People v. Salalima,23 the Court held:

As it is oft-repeated, inconsistencies in the testimonies of witnesses, which refer only to Failure to specify the exact dates or time when the rapes occurred does not ipso facto
minor details and collateral matters, do not affect the veracity and weight of their make the information defective on its face. The reason is obvious. The precise date or time
testimonies where there is consistency in relating the principal occurrence and the positive when the victim was raped is not an element of the offense. The gravamen of the crime is
identification of the accused. Slight contradictions in fact even serve to strengthen the the fact of carnal knowledge under any of the circumstances enumerated under Article 335
credibility of the witnesses and prove that their testimonies are not rehearsed. Nor are such of the Revised Penal Code. As long as it is alleged that the offense was committed at any
inconsistencies, and even improbabilities, unusual, for there is no person with perfect time as near to the actual date when the offense was committed an information is sufficient.
faculties or senses.19 The alleged inconsistencies in this case are too inconsequential to In previous cases, we ruled that allegations that rapes were committed "before and until
October 15, 1994," "sometime in the year 1991 and the days thereafter," "sometime in Q Yet, despite your anger you were telling us that you waited until June to file this
November 1995 and some occasions prior and/or subsequent thereto" and "on or about case?
and sometime in the year 1988" constitute sufficient compliance with Section 11, Rule 110
of the Revised Rules on Criminal Procedure. A After I heard about the incident, I and my wife had a talk for which reason that
during that time we had no money yet to use in filing the case, so we waited. When
In this case, AAA’s declaration that the rape incident took place on December 15, 1996 we were able to save enough amounts, we filed the case.26
was explained by the trial court, and we quote:
Accused-appellant also contends that he could not be liable for rape because there is no
The rape took place in 1996. As earlier noted by the Court the date December 15, 1996 proof that he employed force, threats or intimidation in having carnal knowledge of AAA.
mentioned by [AAA] may have been arbitrarily chosen by the latter due to the intense Where the girl is below 12 years old, as in this case, the only subject of inquiry is whether
cross-examination she was subjected but the Court believes it could have been in any "carnal knowledge" took place. Proof of force, intimidation or consent is unnecessary, since
month and date in the year 1996 as in fact neither the information nor [AAA’s] sworn none of these is an element of statutory rape. There is a conclusive presumption of
statement mention the month and date but only the year.24 absence of free consent when the rape victim is below the age of twelve.27

Likewise, witnesses’ credibility is not affected by the delay in the filing of the case against Accused-appellant harps on the medical report, particularly the conclusion quoted as
accused-appellant. Neither does the delay bolster accused-appellant’s claim that the only follows: "negative for introital bulvar laceration nor scars, which means, in layman
reason why this case was filed against him was "to help Salvacion Bobier get a conviction language, that there was no showing of any scar or wound." The Court has consistently
of this same accused-appellant in the case of murder filed by Salvacion Bobier for the ruled that the presence of lacerations in the victim’s sexual organ is not necessary to prove
death of her granddaughter Mae Christine Camu on May 7, 2000." the crime of rape and its absence does not negate the fact of rape. A medical report is not
indispensable in a prosecution for rape.28 What is important is that AAA’s testimony meets
The rape victim’s delay or hesitation in reporting the crime does not destroy the truth of the the test of credibility, and that is sufficient to convict the accused.
charge nor is it an indication of deceit. It is common for a rape victim to prefer silence for
fear of her aggressor and the lack of courage to face the public stigma of having been Accused-appellant’s defense of denial was properly rejected. Time and time again, we
sexually abused. In People v. Coloma25 we even considered an 8-year delay in reporting have ruled that denial like alibi is the weakest of all defenses, because it is easy to concoct
the long history of rape by the victim’s father as understandable and not enough to render and difficult to disprove. Furthermore, it cannot prevail over the positive and unequivocal
incredible the complaint of a 13-year-old daughter. Thus, in the absence of other identification of appellant by the offended party and other witnesses. Categorical and
circumstances that show that the charge was a mere concoction and impelled by some ill consistent positive identification, absent any showing of ill motive on the part of the
motive, delay in the filing of the complainant is not sufficient to defeat the charge. Here, eyewitness testifying on the matter, prevails over the appellants’ defense of denial and
the failure of AAA’s parents to immediately file this case was sufficiently justified by the alibi.29 The shallow hypothesis put forward by accused-appellant that he was accused of
complainant’s father in the latter’s testimony, thus: raping AAA due to the instigation of Salvacion Bobier hardly convinces this Court. On this
score, the trial court aptly reached the following conclusion:
Q But, did you not say, please correct me if I am wrong, you got angry when your
wife told you that something happened to Hazel way back in 1996? …True, Salvacion Bobier actively assisted AAA’s family file the instant case against the
accused, but the Court believes [AAA’s] parents finally decided to file the rape case
A Yes, sir. because after they have come to realize after what happened to Mae Christine Camu that
what previously [AAA and her cousin] told her mother and which the latter had continually
ignored is after all true.
AAA was barely 9 years of age when she testified. It has been stressed often enough that Under Article 68 of the Revised Penal Code, when the offender is a minor under 18 years,
the testimony of rape victims who are young and immature deserve full credence. It is the penalty next lower than that prescribed by law shall be imposed, but always in the
improbable for a girl of complainant’s age to fabricate a charge so humiliating to herself proper period. However, for purposes of determining the proper penalty because of the
and her family had she not been truly subjected to the painful experience of sexual abuse. privileged mitigating circumstance of minority, the penalty of death is still the penalty to be
At any rate, a girl of tender years, innocent and guileless, cannot be expected to brazenly reckoned with.35 Thus, the proper imposable penalty for the accused-appellant is reclusion
impute a crime so serious as rape to any man if it were not true.30 Parents would not perpetua.
sacrifice their own daughter, a child of tender years at that, and subject her to the rigors
and humiliation of public trial for rape, if they were not motivated by an honest desire to It is noted that the Court is granted discretion in awarding damages provided in the Civil
have their daughter’s transgressor punished accordingly.31 Hence, the logical conclusion Code, in case a crime is committed. Specifically, Article 2204 of the Civil Code provides
is that no such improper motive exists and that her testimony is worthy of full faith and that "in crimes, the damages to be adjudicated may be respectively increased or lessened
credence. according to the aggravating or mitigating circumstances." The issue now is whether the
award of damages should be reduced in view of the presence here of the privileged
The guilt of accused-appellant having been established beyond reasonable doubt, we mitigating circumstance of minority of the accused at the time of the commission of the
discuss now the proper penalty to be imposed on him. offense.

Article 335 of the Revised Penal Code, as amended by Republic Act No. 7659, 32 was the A review of the nature and purpose of the damages imposed on the convicted offender is
governing law at the time the accused-appellant committed the rape in question. Under the in order. Article 107 of the Revised Penal Code defines the term "indemnification," which
said law, the penalty of death shall be imposed when the victim of rape is a child below is included in the civil liability prescribed by Article 104 of the same Code, as follows:
seven years of age. In this case, as the age of AAA, who was five (5) years old at the time
the rape was committed, was alleged in the information and proven during trial by the Art. 107. Indemnification-What is included. – Indemnification for consequential damages
presentation of her birth certificate, which showed her date of birth as January 16, 1991, shall include not only those caused the injured party, but also those suffered by his family
the death penalty should be imposed. or by a third person by reason of the crime.

However, this Court finds ground for modifying the penalty imposed by the CA. We cannot Relative to civil indemnity, People v. Victor36 ratiocinated as follows:
agree with the CA’s conclusion that the accused-appellant cannot be deemed a minor at
the time of the commission of the offense to entitle him to the privileged mitigating The lower court, however, erred in categorizing the award of ₱50,000.00 to the offended
circumstance of minority pursuant to Article 68(2)33 of the Revised Penal Code. When party as being in the nature of moral damages. We have heretofore explained in People v.
accused appellant testified on March 14, 2002, he admitted that he was 24 years old, which Gementiza that the indemnity authorized by our criminal law as civil liability ex delicto for
means that in 1996, he was 18 years of age. As found by the trial court, the rape incident the offended party, in the amount authorized by the prevailing judicial policy and aside from
could have taken place "in any month and date in the year 1996." Since the prosecution other proven actual damages, is itself equivalent to actual or compensatory damages in
was not able to prove the exact date and time when the rape was committed, it is not civil law. It is not to be considered as moral damages thereunder, the latter being based
certain that the crime of rape was committed on or after he reached 18 years of age in on different jural foundations and assessed by the court in the exercise of sound discretion.
1996. In assessing the attendance of the mitigating circumstance of minority, all doubts
should be resolved in favor of the accused, it being more beneficial to the latter. In fact, in
One other point of concern has to be addressed. Indictments for rape continue unabated
several cases, this Court has appreciated this circumstance on the basis of a lone
and the legislative response has been in the form of higher penalties. The Court believes
declaration of the accused regarding his age.34
that, on like considerations, the jurisprudential path on the civil aspect should follow the
same direction. Hence, starting with the case at bar, if the crime of rape is committed or
effectively qualified by any of the circumstances under which the death penalty is damages, even if the public penalty imposed on the accused was lowered by one degree,
authorized by the present amended law, the indemnity for the victim shall be in the because of the presence of the privileged mitigating circumstance of minority.
increased amount of not less than ₱75,000.00. This is not only a reaction to the apathetic
societal perception of the penal law, and the financial fluctuations over time, but also an The principal consideration for the award of damages, under the ruling in People v.
expression of the displeasure of the Court over the incidence of heinous crimes against Salome40 and People v. Quiachon41 is the penalty provided by law or imposable for the
chastity. (Emphasis Supplied) offense because of its heinousness, not the public penalty actually imposed on the
offender.
The Court has had the occasion to rule that moral damages are likewise compensatory in
nature. In San Andres v. Court of Appeals,37 we held: Regarding the civil indemnity and moral damages, People v. Salome explained the basis
for increasing the amount of said civil damages as follows:
x x x Moral damages, though incapable of pecuniary estimation, are in the category of an
award designed to compensate the claimant for actual injury suffered and not to impose a The Court, likewise, affirms the civil indemnity awarded by the Court of Appeals to Sally in
penalty on the wrongdoer. (Emphasis Supplied) accordance with the ruling in People v. Sambrano which states:

In another case, this Court also explained: "As to damages, we have held that if the rape is perpetrated with any of the attending
qualifying circumstances that require the imposition of the death penalty, the civil indemnity
What we call moral damages are treated in American jurisprudence as compensatory for the victim shall ₱75,000.00 … Also, in rape cases, moral damages are awarded without
damages awarded for mental pain and suffering or mental anguish resulting from a wrong the need proof other than the fact of rape because it is assumed that the victim has suffered
(25 C.J.S. 815).38 (Emphasis Supplied) moral injuries entitling her to such an award. However, the trial court’s award of ₱50,000.00
as moral damages should also be increased to ₱75,000 pursuant to current jurisprudence
Thus, according to law and jurisprudence, civil indemnity is in the nature of actual and on qualified rape."
compensatory damages for the injury caused to the offended party and that suffered by
her family, and moral damages are likewise compensatory in nature. The fact of minority It should be noted that while the new law prohibits the imposition of the death penalty, the
of the offender at the time of the commission of the offense has no bearing on the gravity penalty provided for by law for a heinous offense is still death and the offense is still
and extent of injury caused to the victim and her family, particularly considering the heinous. Consequently, the civil indemnity for the victim is still ₱75,000.00.
circumstances attending this case. Here, the accused-appelant could have been eighteen
at the time of the commission of the rape. He was accorded the benefit of the privileged People v. Quiachon also ratiocinates as follows:
mitigating circumstance of minority because of a lack of proof regarding his actual age and
the date of the rape rather than a moral or evidentiary certainty of his minority. With respect to the award of damages, the appellate court, following prevailing
jurisprudence, correctly awarded the following amounts; ₱75,000.00 as civil indemnity
In any event, notwithstanding the presence of the privileged mitigating circumstance of which is awarded if the crime is qualified by circumstances warranting the imposition of the
minority, which warrants the lowering of the public penalty by one degree, there is no death penalty; ₱75,000.00.00 as moral damages because the victim is assumed to have
justifiable ground to depart from the jurisprudential trend in the award of damages in the suffered moral injuries, hence, entitling her to an award of moral damages even without
case of qualified rape, considering the compensatory nature of the award of civil indemnity proof thereof, x x x
and moral damages. This was the same stance this Court took in People v. Candelario,39 a
case decided on July 28, 1999, which did not reduce the award of damages. At that time, Even if the penalty of death is not to be imposed on the appellant because of the prohibition
the damages amounted to ₱75,000.00 for civil indemnity and ₱50,000.00 for moral in R.A. No. 9346, the civil indemnity of ₱75,000.00 is still proper because, following the
ratiocination in People v. Victor, the said award is not dependent on the actual imposition Presidential Decree (P.D.) No. 603, The Child and Youth Welfare Code 46 and Section 32
of the death penalty but on the fact that qualifying circumstances warranting the imposition of A.M. No. 02-1-18-SC, the Rule on Juveniles in Conflict with the Law.47 Accused-
of the death penalty attended the commission of the offense. The Court declared that the appellant is now approximately 31 years of age. He was previously detained at the Albay
award of ₱75,000.00 shows "not only a reaction to the apathetic societal perception of the Provincial Jail at Legaspi City and transferred to the New Bilibid Prison, Muntinlupa City
penal law and the financial fluctuations over time but also the expression of the displeasure on October 13, 2003.
of the court of the incidence of heinous crimes against chastity."
R.A. No. 9344 provides for its retroactive application as follows:
The litmus test therefore, in the determination of the civil indemnity is the heinous character
of the crime committed, which would have warranted the imposition of the death penalty, Sec. 68. Children Who Have Been Convicted and are Serving Sentence. – Persons who
regardless of whether the penalty actually imposed is reduced to reclusion perpetua. have been convicted and are serving sentence at the time of the effectivity of this Act, and
who were below the age of eighteen (18) years at the time of the commission of the offense
As to the award of exemplary damages, Article 2229 of the Civil Code provides that for which they were convicted and are serving sentence, shall likewise benefit from the
exemplary or corrective damages are imposed in addition to the moral, temperate, retroactive application of this Act. x x x
liquidated or compensatory damages. Exemplary damages are not recoverable as a matter
of right. The requirements of an award of exemplary damagees are: (1) they may be The aforequoted provision allows the retroactive application of the Act to those who have
imposed by way of example in addition to compensatory damages, and only after the been convicted and are serving sentence at the time of the effectivity of this said Act, and
claimant’s right to them has been established; (2) they cannot be recovered as a matter of who were below the age of 18 years at the time of the commission of the offense. With
right, their determination depending upon the amount of compensatory damages that may more reason, the Act should apply to this case wherein the conviction by the lower court is
be awarded to the claimant; (3) the act must be accompanied by bad faith or done in a still under review. Hence, it is necessary to examine which provisions of R.A. No. 9344
wanton, fraudulent, oppressive or malevolent manner.42 Since the compensatory shall apply to accused-appellant, who was below 18 years old at the time of the
damages, such as the civil indemnity and moral damages, are increased when qualified commission of the offense.
rape is committed, the exemplary damages should likewise be increased in accordance
with prevailing jurisprudence.43 Sec. 38 of R.A. No. 9344 provides for the automatic suspension of sentence of a child in
conflict with the law, even if he/she is already 18 years of age or more at the time he/she
In sum, the increased amount of ₱75,000.00 each as civil indemnity and moral damages is found guilty of the offense charged. It reads:
should be maintained. It is also proper and appropriate that the award of exemplary
damages be likewise increased to the amount of ₱30,000.00 based on the latest Sec. 38. Automatic Suspension of Sentence. – Once the child who is under eighteen (18)
jurisprudence on the award of damages on qualified rape. Thus, the CA correctly awarded years of age at the time of the commission of the offense is found guilty of the offense
₱75,000.00 as civil indemnity. However the award of ₱50,000.00 as moral damages is charged, the court shall determine and ascertain any civil liability which may have resulted
increased to ₱75,000.0044 and that of ₱25,000.00 as exemplary damages is likewise from the offense committed. However, instead of pronouncing the judgment of conviction,
increased to ₱30,000.00.45 the court shall place the child in conflict with the law under suspended sentence, without
need of application: Provided, however, That suspension of sentence shall still be applied
Meanwhile, when accused-appellant was detained at the New Bilibid Prison pending the even if the juvenile is already eighteen (18) of age or more at the time of the
outcome of his appeal before this Court, Republic Act (R.A.) No. 9344, the Juvenile Justice pronouncement of his/her guilt.
and Welfare Act of 2006 took effect on May 20, 2006. The RTC decision and CA decision
were promulgated on January 17, 2003 and July 14, 2005, respectively. The promulgation
of the sentence of conviction of accused-appellant handed down by the RTC was not
suspended as he was about 25 years of age at that time, in accordance with Article 192 of
Upon suspension of sentence and after considering the various circumstances of the child, not been fulfilled, or if the child in conflict with the law has willfully failed to comply with the
the court shall impose the appropriate disposition measures as provided in the Supreme condition of his/her disposition or rehabilitation program, the child in conflict with the law
Court on Juvenile in Conflict with the Law. shall be brought before the court for execution of judgment.

The above-quoted provision makes no distinction as to the nature of the offense committed If said child in conflict with the law has reached eighteen (18) years of age while under
by the child in conflict with the law, unlike P.D. No. 603 and A.M. No. 02-1-18-SC.48 The suspended sentence, the court shall determine whether to discharge the child in
said P.D. and Supreme Court (SC) Rule provide that the benefit of suspended sentence accordance with this Act, to order execution of sentence, or to extend the suspended
would not apply to a child in conflict with the law if, among others, he/she has been sentence for a certain specified period or until the child reaches the maximum age of
convicted of an offense punishable by death, reclusion perpetua or life imprisonment. In twenty-one (21) years. (emphasis ours)
construing Sec. 38 of R.A. No. 9344, the Court is guided by the basic principle of statutory
construction that when the law does not distinguish, we should not distinguish.49 Since R.A. To date, accused-appellant is about 31 years of age, and the judgment of the RTC had
No. 9344 does not distinguish between a minor who has been convicted of a capital offense been promulgated, even before the effectivity of R.A. No. 9344. Thus, the application of
and another who has been convicted of a lesser offense, the Court should also not Secs. 38 and 40 to the suspension of sentence is now moot and academic.51 However,
distinguish and should apply the automatic suspension of sentence to a child in conflict accused-appellant shall be entitled to appropriate disposition under Sec. 51 of R.A. No.
with the law who has been found guilty of a heinous crime. 9344, which provides for the confinement of convicted children as follows:

Moreover, the legislative intent, to apply to heinous crimes the automatic suspension of Sec. 51. Confinement of Convicted Children in Agricultural Camps and Other Training
sentence of a child in conflict with the law can be gleaned from the Senate Facilities. – A child in conflict with the law may, after conviction and upon order of the court,
deliberations50 on Senate Bill No. 1402 (Juvenile Justice and Delinquency Prevention Act be made to serve his/her sentence, in lieu of confinement in a regular penal institution, in
of 2005), the pertinent portion of which is quoted below: an agricultural camp and other training facilities that may be established, maintained,
supervised and controlled by the BUCOR, in coordination with the DSWD.
If a mature minor, maybe 16 years old to below 18 years old is charged, accused with, or
may have committed a serious offense, and may have acted with discernment, then the The civil liability resulting from the commission of the offense is not affected by the
child could be recommended by the Department of Social Welfare and Development appropriate disposition measures and shall be enforced in accordance with law.52
(DSWD), by the Local Council for the Protection of Children (LCPC), or by my proposed
Office of Juvenile Welfare and Restoration to go through a judicial proceeding; but the WHEREFORE, the decision of the CA dated July 14, 2005 in CA-G.R. CR-H.C. No. 00717
welfare, best interests, and restoration of the child should still be a primordial or primary is hereby AFFIRMED with the following MODIFICATIONS: (1) the penalty of death
consideration. Even in heinous crimes, the intention should still be the child’s restoration, imposed on accused-appellant is reduced to reclusion perpetua;53 and (2) accused-
rehabilitation and reintegration. xxx (Italics supplied)1avvphi 1

appellant is ordered to pay the victim the amount of ₱75,000.00 and ₱30,000.00 as moral
damages and exemplary damages, respectively. The award of civil indemnity in the
Nonetheless, while Sec. 38 of R.A. No. 9344 provides that suspension of sentence can amount of ₱75,000.00 is maintained. However, the case shall be REMANDED to the court
still be applied even if the child in conflict with the law is already eighteen (18) years of age a quo for appropriate disposition in accordance with Sec. 51 of R.A. 9344.
or more at the time of the pronouncement of his/her guilt, Sec. 40 of the same law limits
the said suspension of sentence until the said child reaches the maximum age of 21, thus: SO ORDERED.

Sec. 40. Return of the Child in Conflict with the Law to Court. – If the court finds that the G.R. No. 85464 October 3, 1991
objective of the disposition measures imposed upon the child in conflict with the law have
DAVID P. LLORENTE, petitioner, Notwithstanding Condition (a) just quoted, the clearances of Mrs Perez and Mr.
vs. Azucena both dated October 30, 1981, were favorably acted upon by the CPA
THE SANDIGANBAYAN (THIRD DIVISION), and PEOPLE OF THE officers concerned, including Mrs. Sotto, acting for the accounting division, even if
PHILIPPINES, respondents. the clearances showed they had pending accountabilities to the GSIS and the
UCPB, and subsequently approved by Attys. Llorente and Rodriguez (Exhs. M and
Padilla Law Office for petitioner. N). Thereafter, the vouchers for their gratuity benefits, also indicating their
outstanding obligations were approved, among others, by Atty Llorente, and their
gratuity benefits released to them after deducting those accountabilities. ...

The clearanceof Mrs. Javier of the same date of October 30, 1991 was also signed
by all PCA officers concerned, including Mrs. Sotto even though the former had
SAMIENTO, J.:
unsettled obligations noted thereon, viz 'SIS loan — P5,387.00 and UCPB car loan
P19,705.00, or a total of P25,092.00, and later on approveed by Col. Dueñas, Mrs
The petitioner questions the Decision of the Sandiganbayan * holding him civilly liable in Javier being an officer, and Atty. Rodriguez "Exh. (O)". Similariv the, voucher of
spite of an acquittal. The facts are not disputed: Mrs Javier for her gratuity benefits likewise recited her accountabilities of
P25,092.00 plus P92.000.00, which was handwritten. Both accounts were
Atty. Llorente was employed in the PCA, a public corporation (Sec. 1, PD 1468) deducted from her gratuity benefits, and the balance released to her on November
from 1975 to August 31, 1986, when he resigned. He occupied the positions of 16, 1981. The voucher passed post-audit by Atty. Rodriguez on December 1, 1981
Assistant Corporate Secretary for a year, then Corporate Legal Counsel until (Exhs. L,
November 2, 1981, and, finally, Deputy Administrator for Administrative Services, L-1, L-2, and L-3).
Finance Services, Legal Affairs Departments. ...
The said P92,000.00 was the disallowed portion of the cash advances received by
As a result of a massive reorganization in 1981, hundreds of PCA employees Mr. Curio in connection with his duties as "super cargo" in the distribution of seed
resigned effective October 31, 1981. Among them were Mr. Curio, Mrs. Perez, Mr. nuts throughout the country. He received them through and in the name of Mrs.
Azucena, and Mrs. Javier (TSN, Oct. 22/87, p. 2; Exhs. M-2, N-1, and O-1). They Javier from the UCPB. When the amount was disallowed, the UCPB withheld from
were all required to apply for PCA clearances in support of their gratuity benefits the PCA certain receivables; the latter, in turn, deducted the same amount from
(Exhs. C, M-2, N-1, and 0-1). Condition (a) of the clearance provided: the gratuity benefits of Mrs. Javier, she being primarily liable therefor (Exhs, L, L-
1, L-2, and L-3), At the time of the deduction, the additional liquidation papers had
The clearance shall be signed by the PCA officers concemed only when already been submitted and were in process. Just in case she would not be
there is no item appearing under "PENDING ACCOUNTABILITY" or after successful in having the entire amount wiped out, she requested Mr. Curio, who
every item previously entered thereunder is fully settled. Settlement thereof admittedly received it, to execute, as he did, an affidavit dated November 26, 1981,
shall be written in RED ink. (Exhs. D or D-1 and 1-B) in which he assumed whatever portion thereof might not be allowed ...

After the clearance was signed by the PCA officers concerned, it was to be The clearance of Mr. Curio dated November 4,1981, (Exh. D or D-1) likewise
approved, first, by Atty. Llorente, in the case of a rank-and-file employee, or by Col. favorably passed all officers concerned, including Mrs. Sotto, the latter signing
Duefias, the acting administrator, in the case of an officer, and then by Atty. despite the notation handwritten on December 8, 1981, that Mr. Curio had pending
Rodriguez, the corporate auditor ... accountabilities, namely: GSIS loan — 2,193.74, 201 accounts receivable —
P3,897.75, and UCPB loan — P3,623.49, or a total of P10,714.78. However, when
the clearance was submitted to Atty. Llorente for approval, he refused to approve mentioned anymore about the disallowed cash advances of P92,000.00, which had
it. For this reason, the clearance was held up in his office and did not reach Atty. been reduced to P55,000.00 ...
Rodriguez, ...
Between December 1981 and December 1986, Mr. Curio failed to get gainful
The reason given by Atty. Llorente was that when the clearance was presented to employment; as a result, his family literally went hungry, In 1981, he applied for
him on December 8, 1981, he was already aware of the affidavit dated November work with the Philippine Cotton Authority, but was refused, because he could not
26, 1981, in which Mr. Curio assumed to pay any residual liability for the disallowed present his PCA clearance. The same thing happened when he sought
cash advances, which at the time, December 8, 1981, stood at P92,000.00 (Exhs. employment with the Philippine Fish Marketing Administration in January 1982. In
2 and 2-A). Moreover, Mr. Curio had other pending obligations noted on his both prospective employers, the item applied for was P2,500.00 a month. At that
clearance totalling Pl0,714.98 (Exh. 1-a). To justify his stand, Atty. Llorente invoked time, he was only about 45 years old and still competitive in the job market. But in
Condition (a) of the clearance (Exhs. D and I-B), which, he said, was "very 1986, being already past 50 years, he could no longer be hired permanently, there
stringent" and could not be interpreted in any other way ... being a regulation to that effect. His present employment with the Philippine Ports
Authority, which started on March 16, 1987, was casual for that reason. Had his
On December 1, 1982, Mr. Curio brought the matter of his unapproved clearance gratuity benefits been paid in 1981, he would have received a bigger amount,
to Col. Dueñas (Exh. G), who referred it to the Legal Department, which was under considering that since then interest had accrued and the foreign exchange rate of
Atty. Llorente as Deputy Administrator for legal affairs. After follow-up in that the peso to the dollar had gone up ... 1
department, Mr. Curio received the answer of Col. Dueñas dated February 11,
1983, saying that the clearance was being withheld until the former settled his
alleged accountability for P92,000.00 reduced already to P56,000.00 (Exh. I). Mr.
On December 10, 1986, an Information for violation of Section 3(c) of the Anti-Graft and Corrupt Practices Act was filed against the
Curio elevated the matter to the Chairman of the PCA Board, who indorsed it to
petitioner:
Col. Dueñas, who, in turn, sent it to the Legal Department. This time the latter,
through its Manager, Manuel F. Pastor, Jr., first cousin of Atty. Llorente, submitted
a formal report under date of August 14, 1986, to the PCA Chairman, justifying the
action taken by Atty. Llorente and Col. Dueñas (Exh. 12). The PCA Chairman did
not respond in writing, but advised Mr. Curio to wait for the resolution of the
That on or about December 8, 1981 and/or subsequent thereto, in Quezon City, Philippines, and within the jurisdiction of
Tanodbayan with which he (Mr. Curio) had filed this case initially against Atty.
this Honorable Court, accused David Pastor Llorente, Deputy Administrator for the Philippine Coconut Authority (PCA), and
Llorente and, later on, against Col. Duerias also. On August 31, 1986, Atty.
as such was empowered among others to approve clearances of employees thereat, taking advantage of his position,
Llorente resigned from the PCA; the clearance, however, could not be issued
through evident bad faith, did then and there, wilfully and unlawfully refuse to issue a certificate of clearance to Herminigildo
because, according to the PCA Corporate Legal Counsel, Arthur J. Liquate, the
M. Curio, an employee thereat, who was forced to resign as a result of the abolition of his item pursuant to the 1981
PCA did not want to preempt the Tanodbayan. On November 12, 1986, the latter
reorganization of the PCA, resulting in his deprivation to receive his gratuity benefits amounting to P29,854.90, and to secure
decided to institlite this case in court ...
employment with other offices to his damage and prejudice, and that of the public service.

Nine days thereafter, or on November 21, 1986, Mr. Curio accomplished another
CONTRARY TO LAW.
clearance, which no longer imposed Condition (a) of his earlier clearance (Exh. E).
The new clearance was approved, even if he still had pending accountabilities,
totalling P10,714.78 that had remained unsettled since December 1981. His
voucher was also approved, and his gratuity benefits paid to him in the middle of
December 1986, after deducting those obligations (Exh. F). Nothing was Manila, Philippines, December 10, 1986. 2
As indicated at the outset, the Sandiganbayan acquitted the petitioner in the absence of any evidence that he acted in bad faith. 3
The Sandiganbayan cited three Under the 1985 Rules of Criminal Procedure, amending Rules 110 through 127 of the
considerations that precluded bad faith: Rules of Court, the judgment of the court shall include, in case of acquittal, and
unless there is a clear showing that the act from which the civil liability might arise
First, when Atty. Llorente withheld favorable action on the clearance on and after did not exist, "a finding on the civil liability of the accused in favor of the offended
December 8, 1981, there was still the possibility, remote though it was when party." 5 The rule is based on the provisions of substantive law, 6 that if acquittal proceeds from reasonable doubt, a civil
viewed after the fact, that the accountability, which Mrs. Javier was primarily liable action, lies nonetheless.
therefor and which was fully settled by deduction from her gratuity benefits on
November 16, 1981 (Exhs. L, L-1, L-2, and The challenged judgment found that the petitioner, in refusing to issue a certificate of
L-3), would be reinstated and charged directly to Mr. Curio, for the latter executed clearance in favor of the private offended party, Herminigildo Curio, did not act with
on November 26, 1981, an affidavit assuming responsibility for the obligation to the "evident bad faith," one of the elements of Section 3(e) of Republic Act No. 3819. 7 We
extent of the amount finally disallowed, and the affidavit was on December 8, 1981, agree with tile judgment, insofar as it found lack of evident bad faith by the petitioner, for
already pending consideration by the PCA management (Exhs. 2 and 2-A). the reasons cited therein basicallv, because the petitioner was acting within the bounds of
law in refusing to clear Curio although "[t]he practice was that the clearance was
Second, Atty. Llorente was appointed Deputy Administrator for administrative nevertheless approved, and then the amount of the unsettled obligation was deducted from
services, finance services, and legal affairs departments only on November 2,1981 the gratuity benefits of the employee." 8
(TSN, March 9/87, p. 3). Being new in his job, it was but natural that he was zealous
in the performance of his functions — in fact, overzealous in the protection of the
PCA interests, even if that protection was not necessary, as the P92,000.00
We also agree with the Sandiganbaya (although the Sandiganbayan did not say it) that although the petitioner did not act with evident
accountability had already been paid (See Exh. 12, 4th paragraph).
bad faith, he acted with bad faith nevertheless, for which he should respond for damages.

Finally, Atty. Llorente was officiously, though incidentally, taking care also of the
interest of Mrs. Javier who, justice and equity demanded, should not be made to
shoulder the P92,000.00 unliquidated cash advances, for the reason that it was
The records show that the office practice indeed in the Philippine Coconut Authority was to clear the employee (retiree) and deduct his accountabilities from his gratuity benefits. There seems to be no debate
Mr. Curio who admittedly spent them or who, at the very least, should be able to
get reimbursement of what she paid, totally or partially, from his gratuity benefits
about the existence of this practice (the petitioner admitted it later on) and in fact, he cleared three employees on the condition that their obligations should be deducted from their benefits. 9
We
(See Exh. 5, pp. 2-3 ). 4 quote:

The Sandiganbayan, as we also indicated earlier, took the petitioner to task civilly, Confronted with these evidence (sic), Atty. Llorente conceded, albeit grudgingly,
and ordered him to pay "compensatory damages" in the sum of P90,000.00. the existence of the practice by the accounting division of not complying with
According to the Sandiganbayan, the petitioner was guilty nonetheless of abuse of Condition (a). He, however, claimed that he learned of the practice only during the
right under Article 19 of the Civil Code and as a public officer, he was liable for trial of the case and that he must have inadvertently approved the clearances of
damages suffered by the aggrieved party (under Article 27). Mrs. Perez, Mr. Azucena, and possibly others who were similarly situated (TSN,
March 9/88,pp. 4-5). This the evidence belies. First, he himself testified that when
the clearance of Mr. Curio was presented to him in December 1981, it already bore
The petitioner claims that the Sandiganbayan's Decision is erroneous even if the
the signature of Mrs. Sotto of the accounting division and the notation set opposite
Sandiganbayan acquitted him therein, because he was never in bad faith as indeed
her name about the outstanding accountabilities of Mr. Curio; but he (Atty. Llorente)
found by the Sandiganbayan.
significantly did not ask her why she signed the clearance (TSN, Nov. 24/87, pp.
24-25). Second, in that month, Atty. Llorente approved Mrs. Perez's and Mr.
Azucena's vouchers showing that hey has pending obligations to the GSIS and the terminating the agency — again, a legal act — when terminating the agency would deprive
UCPB, which were being deducted from their gratuity benefits. Attached to those the agent of his legitimate business.
vouchers were the clearances as supporting documents (Exhs. M-2 and N-1; TSN,
Dec. 7/87, pp. 13,23). And third, in the same month, Atty. Llorente was already We believe that the petitioner is liable under Article 19.
aware of the cae of Mrs. Javier whose clearance and voucher were, according to
him, preciselywithheld because of her unsettled accountability for the cash The Court finds the award of P90,000.00 to be justified bv Article 2202 of the Civil Code,
advances of P92,000.00, but here later on given due course; and her gratuity which holds the defendant liable for all "natural and probable" damages. Hennenegildo
benefits released on November 16, 1981, minus that amount (TSN, Nov. 24/87, Cunct presented evidence that as a consequence of the petitioner's refusal to clear him,
pp. 31-32; Exhs. L, L-1, L-2 and L-3). he failed to land a job at the Philippine Cotton Authority and Philippine First Marketing
Authority. He also testified that a job in either office would have earned him salary of
The cash advances of P92,000.00 were the primary obligation of Mrs. Javier, since P2,500.00 a month, or P150,000.00 in five years. Deducting his probable expenses of
they were secured through her and in her name from the UCPB. That was why reasonably about P1,000.00 a month or P60,000.00 in five years, the petitioner owes him
they were charged to and deducted from, her gratuity benefits. Consequently, as a total actual damages of P90,000.00
early as that date and in so far as the PCA and the UCPB were concerned, the
accountability was already fully paid. The assumption of residual liability by Mr. WHEREFORE, premises considered, the Petition is DENIED. No pronouncement as to
Curio for the cash advances on November 26, 1981, was a matter between him costs.
and Mrs. Javier (Exhs. 2 and 2-A). 10
The general rule is that this Court is bound by the findings of fact of the Sandiganbayan. 11
IT IS SO ORDERED.

As we said, the acts of the petitioner were legal (that is, pursuant to procedures), as he insists in this petition, yet it does not follow, as we said, that his acts were done in good faith. For emphasis, he had no G.R. No. L-56487 October 21, 1991
valid reason to "go legal" all of a sudden with respect to Mr. Curio, since he had cleared three employees who, as the Sandiganbayan found, "were all similarly circumstanced in that they all had pending
obligations when, their clearances were filed for consideration, warranting similar official action." 12

REYNALDA GATCHALIAN, petitioner,


vs.
ARSENIO DELIM and the HON. COURT OF APPEALS, respondents.
The Court is convinced that the petitioner had unjustly discriminated against Mr. Curio.

Pedro G. Peralta for petitioner.


It is no defense that the petitioner was motivated by no ill-will (a grudge, according to the Sandiganbayan), since the facts speak for
themselves. It is no defense either that he was, after all, complying merely with legal procedures since, as we indicated, he was not as Florentino G. Libatique for private respondent.
strict with respect to the three retiring other employees. There can be no other logical conclusion that he was acting unfairly, no more,
no less, to Mr. Curio.

It is the essence of Article 19 of the Civil Code, under which the petitioner was made to pay damages, together with Article 27, that the performance of duty be done with justice and good faith. In the case
FELICIANO, J.:
of Velayo vs. Shell Co. of the Philippines, 13 we held the defendant liable under Article 19 for disposing of its propertv — a perfectly legal act — in order to escape the reach of a creditor. In two fairly more recent

cases, Sevilla vs. Court of Appeals 14 and Valenzuela vs. Court of Appeals, 15
we held that a principal is liable under Article 19 in At noon time on 11 July 1973, petitioner Reynalda Gatchalian boarded, as a paying
passenger, respondent's "Thames" mini bus at a point in San Eugenio, Aringay, La Union,
(Emphasis supplied)
bound for Bauang, of the same province. On the way, while the bus was running along the
highway in Barrio Payocpoc, Bauang, Union, "a snapping sound" was suddenly heard at
one part of the bus and, shortly thereafter, the vehicle bumped a cement flower pot on the
side of the road, went off the road, turned turtle and fell into a ditch. Several passengers,
including petitioner Gatchalian, were injured. They were promptly taken to Bethany
Notwithstanding this document, petitioner Gathalian filed with the then Court of First Instance of La Union an action extra contractu to
Hospital at San Fernando, La Union, for medical treatment. Upon medical examination,
recover compensatory and moral damages. She alleged in the complaint that her injuries sustained from the vehicular mishap had left
petitioner was found to have sustained physical injuries on the leg, arm and forehead,
her with a conspicuous white scar measuring 1 by 1/2 inches on the forehead, generating mental suffering and an inferiority complex
specifically described as follows: lacerated wound, forehead; abrasion, elbow, left;
on her part; and that as a result, she had to retire in seclusion and stay away from her friends. She also alleged that the scar diminished
abrasion, knee, left; abrasion, lateral surface, leg, left. 1
her facial beauty and deprived her of opportunities for employment. She prayed for an award of: P10,000.00 for loss of employment
and other opportunities; P10,000.00 for the cost of plastic surgery for removal of the scar on her forehead; P30,000.00 for moral
damages; and P1,000.00 as attorney's fees.
On 14 July 1973, while injured. passengers were confined in the hospital, Mrs. Adela Delim, wife of respondent, visited them and later
paid for their hospitalization and medical expenses. She also gave petitioner P12.00 with which to pay her transportation expense in In defense, respondent averred that the vehicular mishap was due to force majeure, and that petitioner had already been paid and
going home from the hospital. However, before Mrs. Delim left, she had the injured passengers, including petitioner, sign an already moreover had waived any right to institute any action against him (private respondent) and his driver, when petitioner Gatchalian signed
prepared Joint Affidavit which stated, among other things: the Joint Affidavit on 14 July 1973.

After trial, the trial court dismissed the complaint upon the ground that when petitioner Gatchalian signed the Joint Affidavit, she
relinquished any right of action (whether criminal or civil) that she may have had against respondent and the driver of the mini-bus.

That we were passengers of Thames with Plate No. 52-222 PUJ Phil. 73 and victims after the said Thames met an accident
On appeal by petitioner, the Court of Appeals reversed the trial court's conclusion that there had been a valid waiver, but affirmed the
at Barrio Payocpoc Norte, Bauang, La Union while passing through the National Highway No. 3;
dismissal of the case by denying petitioner's claim for damages:

That after a thorough investigation the said Thames met the accident due to mechanical defect and went off the road and
turned turtle to the east canal of the road into a creek causing physical injuries to us;

xxx xxx xxx We are not in accord, therefore, of (sic) the ground of the trial court's dismissal of the complaint, although we conform to the
trial court's disposition of the case — its dismissal.
That we are no longer interested to file a complaint, criminal or civil against the said driver and owner of the said Thames,
because it was an accident and the said driver and owner of the said Thames have gone to the extent of helping us to be IN VIEW OF THE FOREGOING considerations, there being no error committed by the lower court in dismissing the plaintiff-
treated upon our injuries. appellant's complaint, the judgment of dismissal is hereby affirmed.

Without special pronouncement as to costs.

xxx xxx xxx 2

SO ORDERED. 3
Court of Spain of July 8, 1887) — which is not the case of the one relied upon in
this appeal. (Emphasis supplied)
In the present Petition for Review filed in forma pauperis, petitioner assails the decision of the Court of Appeals and ask this Court to
award her actual or compensatory damages as well as moral damages.
If we apply the standard used in Yepes and Susaya, we would have to conclude that the
terms of the Joint Affidavit in the instant case cannot be regarded as a waiver cast in "clear
We agree with the majority of the Court of Appeals who held that no valid waiver of her cause of action had been made by petitioner.
and unequivocal" terms. Moreover, the circumstances under which the Joint Affidavit was
The relevant language of the Joint Affidavit may be quoted again:
signed by petitioner Gatchalian need to be considered. Petitioner testified that she was still
reeling from the effects of the vehicular accident, having been in the hospital for only three
That we are no longer interested to file a complaint, criminal or civil against the said driver and owner of the said Thames,
days, when the purported waiver in the form of the Joint Affidavit was presented to her for
because it was an accident and the said driver and owner of the said Thames have gone to the extent of helping us to be
signing; that while reading the same, she experienced dizziness but that, seeing the other
treated upon our injuries. (Emphasis supplied)
passengers who had also suffered injuries sign the document, she too signed without
bothering to read the Joint Affidavit in its entirety. Considering these circumstances there
appears substantial doubt whether petitioner understood fully the import of the Joint
Affidavit (prepared by or at the instance of private respondent) she signed and whether
A waiver, to be valid and effective, must in the first place be couched in clear and unequivocal terms which leave no doubt as to the intention of a person to give up a right or benefit which legally pertains to she actually intended thereby to waive any right of action against private respondent.
A waiver may not casually be attributed to a person when the terms thereof do not
him. 4

explicitly and clearly evidence an intent to abandon a right vested in such person. Finally, because what is involved here is the liability of a common carrier for injuries
sustained by passengers in respect of whose safety a common carrier must
The degree of explicitness which this Court has required in purported waivers is illustrated exercise extraordinary diligence, we must construe any such purported waiver most strictly
in Yepes and Susaya v. Samar Express Transit (supra), where the Court in reading and against the common carrier. For a waiver to be valid and effective, it must not be contrary
rejecting a purported waiver said: to law, morals, public policy or good
customs. 5 To uphold a supposed waiver of any right to claim damages by an injured
. . . It appears that before their transfer to the Leyte Provincial Hospital, appellees passenger, under circumstances like those exhibited in this case, would be to dilute and
were asked to sign as, in fact, they signed the document Exhibit I wherein they weaken the standard of extraordinary diligence exacted by the law from common carriers
stated that "in consideration of the expenses which said operator has incurred in and hence to render that standard unenforceable. 6 We believe such a purported waiver is
properly giving us the proper medical treatment, we hereby manifest our desire to offensive to public policy.
waive any and all claims against the operator of the Samar Express Transit."
Petitioner Gatchalian also argues that the Court of Appeals, having by majority vote held
xxx xxx xxx that there was no enforceable waiver of her right of action, should have awarded her actual
or compensatory and moral damages as a matter of course.
Even a cursory examination of the document mentioned above will readily show
that appellees did not actually waive their right to claim damages from appellant We have already noted that a duty to exercise extraordinary diligence in protecting the
for the latter's failure to comply with their contract of carriage. All that said safety of its passengers is imposed upon a common carrier. 7 In case of death or injuries
document proves is that they expressed a "desire" to make the waiver — which to passengers, a statutory presumption arises that the common carrier was at fault or had
obviously is not the same as making an actual waiver of their right. A waiver of the acted negligently "unless it proves that it [had] observed extraordinary diligence as
kind invoked by appellant must be clear and unequivocal (Decision of the Supreme prescribed in Articles 1733 and 1755." 8 In fact, because of this statutory presumption, it
has been held that a court need not even make an express finding of fault or negligence
on the part of the common carrier in order to hold it liable. 9 To overcome this presumption,
the common carrier must slow to the court that it had exercised extraordinary diligence to cried out, "What happened?" ("Apay addan samet nadadaelen?"). The driver replied,
prevent the injuries. 10 The standard of extraordinary diligence imposed upon common nonchalantly, "That is only normal" ("Ugali ti makina dayta"). The driver did not stop to
carriers is considerably more demanding than the standard of ordinary diligence, i.e., the check if anything had gone wrong with the bus. Moreover, the driver's reply necessarily
diligence of a good paterfamilias established in respect of the ordinary relations between indicated that the same "snapping sound" had been heard in the bus on previous
members of society. A common carrier is bound to carry its passengers safely" as far as occasions. This could only mean that the bus had not been checked physically or
human care and foresight can provide, using the utmost diligence of a very cautious mechanically to determine what was causing the "snapping sound" which had occurred so
person, with due regard to all the circumstances". 11 frequently that the driver had gotten accustomed to it. Such a sound is obviously alien to
a motor vehicle in good operating condition, and even a modicum of concern for life and
Thus, the question which must be addressed is whether or not private respondent has successfully proved that he had exercised extraordinary diligence to prevent the mishap involving his mini-bus. The records
before the Court are bereft of any evidence showing that respondent had exercised the extraordinary diligence required by law. Curiously, respondent did not even attempt, during the trial before the court a quo,
limb of passengers dictated that the bus be checked and repaired. The obvious continued
to prove that he had indeed exercised the requisite extraordinary diligence. Respondent did try to exculpate himself from liability by alleging that the mishap was the result of force majeure. But allegation is not failure of respondent to look after the roadworthiness and safety of the bus, coupled with
proof and here again, respondent utterly failed to substantiate his defense offorce majeure. To exempt a common carrier from liability for death or physical injuries to passengers upon the ground of force
majeure, the carrier must clearly show not only that the efficient cause of the casualty was entirely independent of the human will, but also that it was impossible to avoid. Any participation by the common carrier
the driver's refusal or neglect to stop the mini-bus after he had heard once again the
"snapping sound" and the cry of alarm from one of the passengers, constituted wanton
the Court summed up the essential
in the occurrence of the injury will defeat the defense of force majeure. In Servando v. Philippine Steam Navigation Company, 12
disregard of the physical safety of the passengers, and hence gross negligence on the part
characteristics of force majeure by quoting with approval from the Enciclopedia Juridica
of respondent and his driver.
Española:
We turn to petitioner's claim for damages. The first item in that claim relates to revenue
Thus, where fortuitous event or force majeure is the immediate and proximate
which petitioner said she failed to realize because of the effects of the vehicular mishap.
cause of the loss, the obligor is exempt from liability non-performance. The
Petitioner maintains that on the day that the mini-bus went off the road, she was supposed
Partidas, the antecedent of Article 1174 of the Civil Code, defines "caso fortuito"
to confer with the district supervisor of public schools for a substitute teacher's job, a job
as 'an event that takes place by accident and could not have been foreseen.
which she had held off and on as a "casual employee." The Court of Appeals, however,
Examples of this are destruction of houses, unexpected fire, shipwreck, violence
found that at the time of the accident, she was no longer employed in a public school since,
of robber.
being a casual employee and not a Civil Service eligible, she had been laid off. Her
employment as a substitute teacher was occasional and episodic, contingent upon the
In its dissertation on the phrase "caso fortuito" the Enciclopedia Juridica Española availability of vacancies for substitute teachers. In view of her employment status as such,
says: 'In legal sense and, consequently, also in relation to contracts, a "caso the Court of Appeals held that she could not be said to have in fact lost any employment
fortuito" presents the following essential characteristics: (1) the cause of the after and by reason of the accident. 13 Such was the factual finding of the Court of Appeals,
unforeseen and unexpected occurence, or of the failure of the debtor to comply a finding entitled to due respect from this Court. Petitioner Gatchalian has not submitted
with his obligation, must be independent of the human will; (2) it must be impossible any basis for overturning this finding of fact, and she may not be awarded damages on the
to foresee the event which constitutes the "caso fortuito", or if it can be foreseen, it basis of speculation or conjecture. 14
must be impossible to avoid; (3) the occurrence must be such as to render it
impossible for the debtor to fulfill his obligation in a normal manner; and (4) the Petitioner's claim for the cost of plastic surgery for removal of the scar on her forehead, is another matter. A person is entitled to the physical integrity of his or her body; if that integrity is violated or diminished,

obligor must be free from any participation in the aggravation of the injury resulting actual injury is suffered for which actual or compensatory damages are due and assessable. Petitioner Gatchalian is entitled to be placed as nearly as possible in the condition that she was before the mishap.
A scar, especially one on the face of the woman, resulting from the infliction of injury upon her, is a violation of bodily integrity, giving raise to a legitimate claim for restoration to her conditio ante. If the scar is
to the creditor. relatively small and does not grievously disfigure the victim, the cost of surgery may be expected to be correspondingly modest. In Araneta, et al. vs. Areglado, et al., 15 this Court awarded actual or compensatory
damages for, among other things, the surgical removal of the scar on the face of a young boy who had been injured in a vehicular collision. The Court there held:

Upon the other hand, the record yields affirmative evidence of fault or negligence on the
part of respondent common carrier. In her direct examination, petitioner Gatchalian
narrated that shortly before the vehicle went off the road and into a ditch, a "snapping We agree with the appellants that the damages awarded by the lower court for the injuries suffered by Benjamin Araneta
sound" was suddenly heard at one part of the bus. One of the passengers, an old woman, are inadequate. In allowing not more than P1,000.00 as compensation for the "permanent deformity and — something like
an inferiority complex" as well as for the "pathological condition on the left side of the jaw" caused to said plaintiff, the court
hospitalized for their injuries, petitioner must be held entitled to such moral damages.
below overlooked the clear evidence on record that to arrest the degenerative process taking place in the mandible
Considering the extent of pain and anxiety which petitioner must have suffered as a result
and restore the injured boy to a nearly normal condition, surgical intervention was needed, for which the doctor's charges
of her physical injuries including the permanent scar on her forehead, we believe that the
would amount to P3,000.00, exclusive of hospitalization fees, expenses and medicines. Furthermore, the operation,
amount of P30,000.00 would be a reasonable award. Petitioner's claim for P1,000.00 as
according to Dr. Diño, would probably have to be repeated in order to effectuate a complete cure, while removal of the scar
atttorney's fees is in fact even more modest. 19
on the face obviously demanded plastic surgery.

xxx xxx xxx


WHEREFORE, the Decision of the Court of Appeals dated 24 October 1980, as well as the decision of the then Court of First Instance

The father's failure to submit his son to a plastic operation as soon as possible does not prove that such treatment is not of La Union dated 4 December 1975 are hereby REVERSED and SET ASIDE.Respondent is hereby ORDERED to pay petitioner

called for. The damage to the jaw and the existence of the scar in Benjamin Araneta's faceare physical facts that can not Reynalda Gatchalian the following sums: 1) P15,000.00 as actual or compensatory damages to cover the cost of plastic surgery for the
be reasoned out of existence. That the injury should be treated in order to restore him as far as possible to his original removal of the scar on petitioner's forehead; 2) P30,000.00 as moral damages; and 3) P1,000.00 as attorney's fees, the aggregate
condition is undeniable. The father's delay, or even his negligence, should not be allowed to prejudice the son who has no amount to bear interest at the legal rate of 6% per annum counting from the promulgation of this decision until full payment thereof.
control over the parent's action nor impair his right to a full indemnity. Costs against private respondent.

. . . Still, taking into account the necessity and cost of corrective measures to fully repair the damage; the pain suffered by SO ORDERED.
the injured party; his feelings of inferiority due to consciousness of his present deformity, as well as the voluntary character
of the injury inflicted; and further considering that a repair, however, skillfully conducted, is never equivalent to the original
state, we are of the opinion that the indemnity granted by the trial court should be increased to a total of P18,000.00.
G.R. No. 172122 June 22, 2007
(Emphasis supplied)
MERCURY DRUG CORPORATION and ROLANDO J. DEL ROSARIO, petitioners,
vs.
SPOUSES RICHARD HUANG and CARMEN HUANG, and STEPHEN
HUANG, respondents.
Upon the other hand, Dr. Fe Tayao
Petitioner estimated that the cost of having her scar surgically removed was somewhere between P10,000.00 to P15,000.00. 16

Lasam, a witness presented as an expert by petitioner, testified that the cost would DECISION
probably be between P5,000.00 to P10,000.00. 17 In view of this testimony, and the fact
that a considerable amount of time has lapsed since the mishap in 1973 which may be PUNO, C.J.:
expected to increase not only the cost but also very probably the difficulty of removing the
scar, we consider that the amount of P15,000.00 to cover the cost of such plastic surgery
is not unreasonable. On appeal are the Decision1 and Resolution2 of the Court of Appeals in CA-G.R. CV No.
83981, dated February 16, 2006 and March 30, 2006, respectively which affirmed with
modification the Decision3 of the Regional Trial Court (RTC) of Makati City, dated
Turning to petitioner's claim for moral damages, the long-established rule is that moral September 29, 2004. The trial court found petitioners jointly and severally liable to pay
damages may be awarded where gross negligence on the part of the common carrier is respondents damages for the injuries sustained by respondent Stephen Huang, son of
shown. 18 Since we have earlier concluded that respondent common carrier and his driver respondent spouses Richard and Carmen Huang.
had been grossly negligent in connection with the bus mishap which had injured petitioner
and other passengers, and recalling the aggressive manuevers of respondent, through his
wife, to get the victims to waive their right to recover damages even as they were still First, the facts:
Petitioner Mercury Drug Corporation (Mercury Drug) is the registered owner of a six- exercised due diligence of a good father of a family in the selection and supervision of all
wheeler 1990 Mitsubishi Truck with plate number PRE 641 (truck). It has in its employ its employees.
petitioner Rolando J. del Rosario as driver. Respondent spouses Richard and Carmen
Huang are the parents of respondent Stephen Huang and own the red 1991 Toyota Corolla The trial court, in its Decision dated September 29, 2004, found petitioners Mercury Drug
GLI Sedan with plate number PTT 775 (car). and Del Rosario jointly and severally liable to pay respondents actual, compensatory,
moral and exemplary damages, attorney’s fees, and litigation expenses. The dispositive
These two vehicles figured in a road accident on December 20, 1996 at around 10:30 p.m. portion reads:
within the municipality of Taguig, Metro Manila. Respondent Stephen Huang was driving
the car, weighing 1,450 kg., while petitioner Del Rosario was driving the truck, weighing WHEREFORE, judgment is rendered finding defendants Mercury Drug Corporation, Inc.
14,058 kg. Both were traversing the C-5 Highway, north bound, coming from the general and Rolando del Rosario, jointly and severally liable to pay plaintiffs Spouses Richard Y.
direction of Alabang going to Pasig City. The car was on the left innermost lane while the Huang and Carmen G. Huang, and Stephen Huang the following amounts:
truck was on the next lane to its right, when the truck suddenly swerved to its left and
slammed into the front right side of the car. The collision hurled the car over the island 1. Two Million Nine Hundred Seventy Three Thousand Pesos (₱2,973,000.00) actual
where it hit a lamppost, spun around and landed on the opposite lane. The truck also hit a damages;
lamppost, ran over the car and zigzagged towards, and finally stopped in front of Buellah
Land Church.
2. As compensatory damages:
At the time of the accident, petitioner Del Rosario only had a Traffic Violation Receipt
a. Twenty Three Million Four Hundred Sixty One Thousand, and Sixty-Two Pesos
(TVR). His driver’s license had been confiscated because he had been previously
(₱23,461,062.00) for life care cost of Stephen;
apprehended for reckless driving.
b. Ten Million Pesos (₱10,000,000.00) as and for lost or impaired earning capacity of
The car, valued at ₱300,000.00, was a total wreck. Respondent Stephen Huang sustained
Stephen;
massive injuries to his spinal cord, head, face, and lung. Despite a series of operations,
respondent Stephen Huang is paralyzed for life from his chest down and requires
continuous medical and rehabilitation treatment. 3. Four Million Pesos (₱4,000,000.00) as moral damages;

Respondents fault petitioner Del Rosario for committing gross negligence and reckless 4. Two Million Pesos (₱2,000,000.00) as exemplary damages; and
imprudence while driving, and petitioner Mercury Drug for failing to exercise the diligence
of a good father of a family in the selection and supervision of its driver. 5. One Million Pesos (₱1,000,000.00) as attorneys fees and litigation expense.4

In contrast, petitioners allege that the immediate and proximate cause of the accident was On February 16, 2006, the Court of Appeals affirmed the decision of the trial court but
respondent Stephen Huang’s recklessness. According to petitioner Del Rosario, he was reduced the award of moral damages to ₱1,000,000.00. The appellate court also denied
driving on the left innermost lane when the car bumped the truck’s front right tire. The truck the motion for reconsideration filed by petitioners.
then swerved to the left, smashed into an electric post, crossed the center island, and
stopped on the other side of the highway. The car likewise crossed over the center island Hence, this appeal.
and landed on the same portion of C-5. Further, petitioner Mercury Drug claims that it
Petitioners cite the following grounds for their appeal:
1. That the subject Decision which dismissed the appeal of petitioners herein but car, at its right, which bumped the right front side of the truck. Firstly, petitioner Del Rosario
AFFIRMED WITH MODIFICATION the decision of the Regional Trial Court, Branch 64, could not precisely tell which part of the truck was hit by the car,6 despite the fact that the
Makati City, in that the award of moral damages was reduced to ₱1,000,000.00 and its truck was snub-nosed and a lot higher than the car. Petitioner Del Rosario could not also
Resolution dated March 30, 2006, which dismissed outright the Motion for Reconsideration explain why the car landed on the opposite lane of C-5 which was on its left side. He said
must be set aside because the Honorable Court of Appeals committed reversible error: that "the car did not pass in front of him after it hit him or under him or over him or behind
him."7 If the truck were really at the left lane and the car were at its right, and the car hit the
A. IN DENYING OUTRIGHTLY THE MOTION FOR RECONSIDERATION ON truck at its front right side, the car would not have landed on the opposite side, but would
ALLEGEDLY BEING FILED OUT OF TIME FOR ONE DAY; have been thrown to the right side of the C-5 Highway. Noteworthy on this issue is the
testimony of Dr. Marlon Rosendo H. Daza, an expert in the field of physics. He conducted
B. IN ACCORDING GREATER WEIGHT TO THE EVIDENCE ADDUCED BY THE a study based on the following assumptions provided by respondents:
RESPONDENTS HEREIN AND COMPLETELY DISREGARDING THE DEFENSE
INTERPOSED BY THE PETITIONERS HEREIN; 1. Two vehicles collided;

C. IN DISREGARDING COMPLETELY ALL EVIDENCES PRESENTED BY THE 2. One vehicle is ten times heavier, more massive than the other;
PETITIONERS HEREIN AND PROCEEDED TO RENDER ITS DECISION BASED ON
PRESUMPTIONS AND PERSONAL OPINIONS OF PEOPLE WHO ARE NOT 3. Both vehicles were moving in the same direction and at the same speed of about 85 to
WITNESSES TO THE ACCIDENT; 90 kilometers per hour;

D. IN AWARDING DAMAGES IN FAVOR OF RESPONDENTS HEREIN; 4. The heavier vehicle was driving at the innermost left lane, while the lighter vehicle was
at its right.
E. IN FINDING THAT MERCURY DRUG CORPORATION FAILED TO EXERCISE THE
DILIGENCE REQUIRED IN SUPERVISING ITS EMPLOYEES DESPITE Dr. Daza testified that given the foregoing assumptions, if the lighter vehicle hits the right
OVERWHELMING EVIDENCE PRESENTED BY PETITIONER COMPANY; front portion of the heavier vehicle, the general direction of the light vehicle after the impact
would be to the right side of the heavy vehicle, not the other way around. The truck, he
F. IN FINDING THAT PETITIONER ROLANDO DEL ROSARIO WAS NEGLIGENT IN opined, is more difficult to move as it is heavier. It is the car, the lighter vehicle, which
DRIVING THE TRUCK AT THE TIME OF ACCIDENT AND TOTALLY DISREGARDING would move to the right of, and away from the truck. Thus, there is very little chance that
THE EVIDENCES PRESENTED DURING THE TRIAL OF THE CASE. the car will move towards the opposite side, i.e., to the left of the truck.

G. IN PRESENTING ONLY IN THE DECISION TESTIMONIES FAVORABLE TO THE Dr. Daza also gave a further study on the basis of the same assumptions except that the
RESPONDENTS HEREIN AND COMPLETELY DISREGARDING THE EVIDENCES car is on the left side of the truck, in accordance with the testimony of respondent Stephen
PRESENTED BY THE PETITIONERS HEREIN WHICH CONTRADICTED SUCH Huang. Dr. Daza concluded that the general direction of the car after impact would be to
TESTIMONIES NOT ONLY THROUGH ORAL TESTIMONIES BUT AS WELL AS the left of the truck. In this situation, the middle island against which the car was pinned
DOCUMENTARY EVIDENCES.5 would slow down the car, and enable the truck to catch up and hit the car again, before
running over it.8
We affirm the findings of the trial court and the appellate court that petitioner Del Rosario
was negligent. The evidence does not support petitioners’ claim that at the time of the To support their thesis, petitioners tried to show the damages that the truck sustained at
accident, the truck was at the left inner lane and that it was respondent Stephen Huang’s its front right side. The attempt does not impress. The photographs presented were taken
a month after the accident, and Rogelio Pantua, the automechanic who repaired the truck And this was despite the fact that you were only traveling at the speed of seventy five
and authenticated the photographs, admitted that there were damages also on the left side kilometers per hour, jumped over the island, hit the lamppost, and traveled the three lanes
of the truck.9 of the opposite lane of C-5 highway, is that what you want to impress upon this court?

Worse still, petitioner Del Rosario further admitted that after the impact, he lost control of WITNESS:
the truck and failed to apply his brakes. Considering that the car was smaller and lighter
than the six-wheeler truck, the impact allegedly caused by the car when it hit the truck Yes, sir.10
could not possibly be so great to cause petitioner to lose all control that he failed to even
step on the brakes. He testified, as follows: We therefore find no cogent reason to disturb the findings of the RTC and the Court of
Appeals. The evidence proves petitioner Del Rosario’s negligence as the direct and
ATTY. DIAZ: proximate cause of the injuries suffered by respondent Stephen Huang. Petitioner Del
Rosario failed to do what a reasonable and prudent man would have done under the
May I proceed, Your Honor. You were able to apply the brakes, were you sir? circumstances.

WITNESS: We now come to the liability of petitioner Mercury Drug as employer of Del Rosario. Articles
2176 and 2180 of the Civil Code provide:
No more, sir, because I went over the island.
Art. 2176. Whoever by act or omission causes damage to another, there being fault or
ATTY. DIAZ: negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no
pre-existing contractual relation between the parties, is called a quasi-delict and is
Because as you said you lost control, correct sir? governed by the provisions of this Chapter.

WITNESS: Art. 2180. The obligation imposed by article 2176 is demandable not only for one’s own
acts or omissions, but also for those of persons for whom one is responsible.
Yes, sir.
xxx
ATTY. DIAZ:
The owners and managers of an establishment or enterprise are likewise responsible for
damages caused by their employees in the service of the branches in which the latter are
In other words, sir from the time your truck was hit according to you up to the time you
employed or on the occasion of their functions.
rested on the shoulder, you traveled fifty meters?
xxx
WITNESS:
The liability of the employer under Art. 2180 of the Civil Code is direct or immediate. It is
Yes, sir, about that distance.
not conditioned on a prior recourse against the negligent employee, or a prior showing of
insolvency of such employee. It is also joint and solidary with the employee.11
ATTY. DIAZ:
To be relieved of liability, petitioner Mercury Drug should show that it exercised the The trial court awarded the following amounts:
diligence of a good father of a family, both in the selection of the employee and in the
supervision of the performance of his duties. Thus, in the selection of its prospective 1. Two Million Nine Hundred Seventy-Three Thousand Pesos (₱2,973,000.00) actual
employees, the employer is required to examine them as to their qualifications, experience, damages;
and service records.12 With respect to the supervision of its employees, the employer
should formulate standard operating procedures, monitor their implementation, and 2. As compensatory damages:
impose disciplinary measures for their breach. To establish compliance with these
requirements, employers must submit concrete proof, including documentary evidence.13
a. Twenty-Three Million Four Hundred Sixty One Thousand, and Sixty-Two Pesos
(₱23,461,062.00) for life care cost of Stephen;
In the instant case, petitioner Mercury Drug presented testimonial evidence on its hiring
procedure. According to Mrs. Merlie Caamic, the Recruitment and Training Manager of
b. Ten Million Pesos (₱10,000,000.00) as and for lost or impaired earning capacity of
petitioner Mercury Drug, applicants are required to take theoretical and actual driving tests,
Stephen;
and psychological examination. In the case of petitioner Del Rosario, however, Mrs.
Caamic admitted that he took the driving tests and psychological examination when he
applied for the position of Delivery Man, but not when he applied for the position of Truck 3. Four Million Pesos (₱4,000,000.00) as moral damages;
Man. Mrs. Caamic also admitted that petitioner Del Rosario used a Galant which is a light
vehicle, instead of a truck during the driving tests. Further, no tests were conducted on the 4. Two Million Pesos (₱2,000,000.00) as exemplary damages; and
motor skills development, perceptual speed, visual attention, depth visualization, eye and
hand coordination and steadiness of petitioner Del Rosario. No NBI and police clearances 5. One Million Pesos (₱1,000,000.00) as attorney’s fees and litigation expense.
were also presented. Lastly, petitioner Del Rosario attended only three driving seminars –
on June 30, 2001, February 5, 2000 and July 7, 1984. In effect, the only seminar he The Court of Appeals affirmed the decision of the trial court but reduced the award of moral
attended before the accident which occurred in 1996 was held twelve years ago in 1984. damages to ₱1,000,000.00.

It also appears that petitioner Mercury Drug does not provide for a back-up driver for long With regard to actual damages, Art. 2199 of the Civil Code provides that "[E]xcept as
trips. At the time of the accident, petitioner Del Rosario has been out on the road for more provided by law or by stipulation one is entitled to an adequate compensation only for such
than thirteen hours, without any alternate. Mrs. Caamic testified that she does not know of pecuniary loss suffered by him as he has duly proved x x x." In the instant case, we uphold
any company policy requiring back-up drivers for long trips.14 the finding that the actual damages claimed by respondents were supported by receipts.
The amount of ₱2,973,000.00 represented cost of hospital expenses, medicines, medical
Petitioner Mercury Drug likewise failed to show that it exercised due diligence on the services and supplies, and nursing care services provided respondent Stephen from
supervision and discipline over its employees. In fact, on the day of the accident, petitioner December 20, 1996, the day of the accident, until December 1998.
Del Rosario was driving without a license. He was holding a TVR for reckless driving. He
testified that he reported the incident to his superior, but nothing was done about it. He Petitioners are also liable for all damages which are the natural and probable
was not suspended or reprimanded.15 No disciplinary action whatsoever was taken against consequences of the act or omission complained of.16 The doctors who attended to
petitioner Del Rosario. We therefore affirm the finding that petitioner Mercury Drug has respondent Stephen are one in their prognosis that his chances of walking again and
failed to discharge its burden of proving that it exercised due diligence in the selection and performing basic body functions are nil. For the rest of his life, he will need continuous
supervision of its employee, petitioner Del Rosario. rehabilitation and therapy to prevent further complications such as pneumonia, bladder
and rectum
We now consider the damages which respondents should recover from the petitioners. infection, renal failure, sepsis and severe bed sores, osteoporosis and fractures, and other
spinal cord injury-related conditions. He will be completely dependent on the care and He feels frustration and embarrassment in needing to be helped with almost everything
support of his family. We thus affirm the award of ₱23,461,062.00 for the life care cost of and in his inability to do simple things he used to do. Similarly, respondent spouses and
respondent Stephen Huang, based on his average monthly expense and the actuarial the rest of the family undergo their own private suffering. They live with the day-to-day
computation of the remaining years that he is expected to live; and the conservative uncertainty of respondent Stephen Huang’s condition. They know that the chance of full
amount of ₱10,000,000.00, as reduced by the trial court, for the loss or impairment of his recovery is nil. Moreover, respondent Stephen Huang’s paralysis has made him prone to
earning capacity,17 considering his age, probable life expectancy, the state of his health, many other illnesses. His family, especially respondent spouses, have to make themselves
and his mental and physical condition before the accident. He was only seventeen years available for Stephen twenty-four hours a day. They have patterned their daily life around
old, nearly six feet tall and weighed 175 pounds. He was in fourth year high school, and a taking care of him, ministering to his daily needs, altering the lifestyle to which they had
member of the school varsity basketball team. He was also class president and editor-in- been accustomed.
chief of the school annual. He had shown very good leadership qualities. He was looking
forward to his college life, having just passed the entrance examinations of the University Respondent Carmen Huang’s brother testified on the insensitivity of petitioner Mercury
of the Philippines, De La Salle University, and the University of Asia and the Pacific. The Drug towards the plight of respondent. Stephen, viz.:
University of Sto. Tomas even offered him a chance to obtain an athletic scholarship, but
the accident prevented him from attending the basketball try-outs. Without doubt, he was Maybe words cannot describe the anger that we feel towards the defendants. All the time
an exceptional student. He excelled both in his academics and extracurricular that we were going through the crisis, there was none (sic) a single sign of nor offer of help,
undertakings. He is intelligent and motivated, a go-getter, as testified by Francisco Lopez, any consolation or anything whatsoever. It is funny because, you know, I have many
respondent Stephen Huang’s godfather and a bank executive.18 Had the accident not colleagues, business associates, people even as far as United States, Japan, that I
happened, he had a rosy future ahead of him. He wanted to embark on a banking career, probably met only once, when they found out, they make a call, they sent card, they write
get married and raise children. Taking into account his outstanding abilities, he would have small notes, but from the defendant, absolute silence. They didn’t care, and worst, you
enjoyed a successful professional career in banking. But, as Mr. Lopez stated, it is highly know, this is a company that have (sic) all the resources to help us. They were (sic) on our
unlikely for someone like respondent to ever secure a job in a bank. To his knowledge, no part, it was doubly painful because we have no choice but to go back to them and buy the
bank has ever hired a person suffering with medicines that we need for Stephen. So, I don’t know how someone will really have no
the kind of disability as Stephen Huang’s.19 sense of decency at all to at least find out what happened to my son, what is his condition,
or if there is anything that they can do to help us.22
We likewise uphold the award of moral and exemplary damages and attorney’s fees.
On the matter of exemplary damages, Art. 2231 of the Civil Code provides that in cases of
"The award of moral damages is aimed at a restoration, within the limits of the possible, of quasi-delicts, exemplary damages may be granted if the defendant acted with gross
the spiritual status quo ante."20 Moral damages are designed to compensate and alleviate negligence. The records show that at the time of the accident, petitioner Del Rosario was
in some way the physical suffering, mental anguish, fright, serious anxiety, besmirched driving without a license because he was previously ticketed for reckless driving. The
reputation, wounded feelings, moral shock, social humiliation, and similar injury unjustly evidence also shows that he failed to step on his brakes immediately after the impact. Had
caused a person. Although incapable of pecuniary computation, they must be petitioner Del Rosario done so, the injuries which respondent Stephen sustained could
proportionate to the suffering inflicted.21 The amount of the award bears no relation have been greatly reduced. Wanton acts such as that committed by petitioner Del Rosario
whatsoever with the wealth or means of the offender. need be suppressed; and employers like petitioner Mercury Drug should be more
circumspect in the observance of due diligence in the selection and supervision of their
In the instant case, respondent Stephen Huang and respondent spouses Richard and employees. The award of exemplary damages in favor of the respondents is therefore
Carmen Huang testified to the intense suffering they continue to experience as a result of justified.
the accident. Stephen recounted the nightmares and traumas he suffers almost every night
when he relives the accident. He also gets depression when he thinks of his bleak future.
With the award of exemplary damages, we also affirm the grant of attorney’s fees to During the trial, prosecution witness Leo Acibar (Acibar) testified that on 31 July 2006 at
respondents.23 In addition, attorney’s fees may be granted when a party is compelled to about 8:30 a.m., he saw Melendres buying cigarettes from a store when Lopez suddenly
litigate or incur expenses to protect his interest by reason of an unjustified act of the other appeared and shot Melendres from behind with a caliber .38 revolver, hitting him on the
party.24 right side of the head. Acibar added that Lopez again shot Melendres on the chest and on
the lower abdomen. Lopez then fled from the scene. Acibar immediately reported the
Cost against petitioners. incident to the barangay authorities.

IN VIEW THEREOF, the petition is DENIED. The Decision and Resolution of the Court of Ma. Liberty Francisco Melendres (Liberty), Melendres’ wife, testified as to the civil liability
Appeals dated February 16, 2006 and March 30, 2006, respectively, in CA-G.R. CV No. of Lopez. Liberty presented receipts to show that she spent ₱33,000 for the burial and the
83981, are AFFIRMED. interment and ₱7,500 for the wake.3 She also presented a certification from Tanod
Publishing, Inc. (Tanod Publishing), Melendres’ employer, as to his monthly salary
SO ORDERED. range,4 honoraria and transportation allowance.5 She also sought to recover moral
damages.
G.R. No. 188902 February 16, 2011
For the defense, Lopez maintained his innocence and claimed that he was working on
Jaime Domingo’s (Domingo) house on 31 July 2006.
PEOPLE OF THE PHILIPPINES, Appellee,
vs.
ROBERTO LOPEZ y CABAL, Appellant. Domingo testified that Lopez worked for him from 26 to 31 July 2006 to repair the pipelines
in his house. However, on cross-examination, Domingo said that Lopez worked for him
only until 30 July 2006.6
RESOLUTION
Maritess Padilla (Padilla) also testified that she saw two hooded men with guns tucked in
CARPIO, J.:
their waist draw their guns and shoot Melendres. Padilla said the first assailant was dark-
skinned and stood about five feet five inches, while the second assailant was only about
This is an appeal from the 12 May 2009 Decision1 of the Court of Appeals in CA-G.R. CR- four feet eleven inches. Padilla stated that Lopez was not one of the assailants and that
H.C. No. 03199. The 12 May 2009 Decision affirmed with modification the 15 February she would be able to identify the assailants if she saw them again.
2008 Decision2 of the Regional Trial Court, National Capital Judicial Region, Branch 73,
Malabon City (trial court), finding accused-appellant Roberto Lopez y Cabal (Lopez) guilty
On 15 February 2008, the trial court rendered its decision finding Lopez guilty of murder
beyond reasonable doubt of murder and sentencing him to suffer the penalty of reclusion
and sentenced him to suffer the penalty of reclusion perpetua. The trial court also ordered
perpetua. The Court of Appeals also ordered Lopez to pay the heirs of the victim Prudencio
Lopez to pay the heirs of Melendres as follows: ₱50,000 as death indemnity, ₱50,000 as
Melendres (Melendres) as follows: ₱50,000 as civil indemnity, ₱50,000 as moral damages,
moral damages, ₱40,000 as actual damages and ₱7,570 per month for six months as lost
₱33,000 as actual damages and ₱200,000 for loss of earning capacity.
income.
On 10 August 2006, Lopez was charged with the murder of Melendres.
Lopez appealed to the Court of Appeals. Lopez insisted that the prosecution failed to prove
his guilt beyond reasonable doubt. Lopez also questioned the monetary awards made by
Lopez pleaded not guilty upon arraignment. the trial court.
In its 12 May 2009 Decision, the Court of Appeals denied Lopez’s appeal and affirmed with 2006.12 The Court notes that the defense did not object when the prosecution presented
modification the trial court’s decision. The Court of Appeals said that Acibar’s failure to these documents before the trial court. The rule is that evidence not objected to is deemed
accurately describe Lopez as the perpetrator did not affect his credibility. Moreover, no ill admitted and may be validly considered by the court in arriving at its judgment.13 It was
motive can be attributed to Acibar to conclude that he would falsely testify against Lopez. also established that at the time of his death, Melendres was 41 years old.14
The Court of Appeals also agreed with the trial court that the testimonies of the defense
witnesses were vague. The Court of Appeals added that Lopez’s alibi is a weak defense Thus, Melendres’ net earning capacity can be derived from two sources: (1) his monthly
and can easily be fabricated. salary15 and (2) his honorarium and transportation allowance.16 Loss of earning capacity is
computed as follows:
On the award of damages, the Court of Appeals reduced the award of actual damages
from ₱40,000 to ₱33,000, the latter amount having been substantiated by receipts. As to Net Earning
the loss of income, the Court of Appeals Capacity = Life expectancy x Gross Annual Income – Living Expenses

noted that there was no accurate way to determine Melendres’ earnings since the = [2/3 (80 – age at death)] x GAI – [50% of GAI]
certification issued by Tanod Publishing did not reflect a fixed amount but only a salary
range. However, the Court of Appeals held that the heirs of Melendres are still entitled to = [2/3 (80 – 41)] x ₱74,94017 – ₱37,470
a reasonable amount as a result of Melendres’ loss of earning capacity and deemed it
proper to increase the award from ₱45,420 to ₱200,000.
= [2/3 (39)] x ₱37,470
1avv phi 1

Hence, this petition.


= 26 x ₱37,470
We find the petition without merit. When the trial court’s factual findings are affirmed by the
Net Earning
Court of Appeals, such findings are generally conclusive and binding upon the
Capacity = ₱974,220
Court.7 Moreover, where the credibility of the witness is in question, the findings of the trial
court are generally accorded great respect, if not finality, and generally will not be disturbed
on appeal, unless there is a clear showing that the trial court overlooked, misappreciated, WHEREFORE, we AFFIRM the 12 May 2009 Decision of the Court of Appeals finding
or misapplied some facts or circumstances of weight and substance that would have accused-appellant Roberto Lopez y Cabal guilty beyond reasonable doubt of murder with
affected the outcome of the case.8 The rationale for this rule is that the trial court has the the MODIFICATION that accused-appellant Roberto Lopez y Cabal is ordered to pay the
advantage of observing first-hand the demeanor, behavior, and manner of the witness on heirs of Prudencio Melendres the amount of ₱974,220 for loss of earning capacity.
the stand and, thus, is in a better position to determine the witness’ credibility.9
SO ORDERED.
However, we modify the award for loss of earning capacity. The rule is that documentary
evidence should be presented to substantiate a claim for loss of earning capacity.10 In this G.R. No. 166869 February 16, 2010
case, Liberty presented a certification from Tanod Publishing which showed that
Melendres was a photo correspondent for Tanod Newspaper and that "his monthly salary PHILIPPINE HAWK CORPORATION, Petitioner,
ranges from ₱1,780 to ₱3,570 on per story basis."11 Liberty presented another certification vs.
from Tanod Publishing which showed that Melendres received the total amount of ₱24,990 VIVIAN TAN LEE, Respondent.
representing payment of honoraria and transportation allowance from 1 January to 31 July
DECISION 1. On March 17, 1991, in Bgy. Buensoceso, Gumaca, Quezon, plaintiff Vivian Lee
Tan and her husband Silvino Tan, while on board a motorcycle with [P]late No. DA-
PERALTA, J.: 5480 driven by the latter, and a Metro Bus with [P]late No. NXR-262 driven by
Margarito Avila, were involved in an accident;
This is a Petition for Review on Certiorari1 of the Decision of the Court of Appeals in CA-
G.R. CV No. 70860, promulgated on August 17, 2004, affirming with modification the 2. As a result of the accident, Silvino Tan died on the spot while plaintiff Vivian Lee
Decision of the Regional Trial Court (RTC) of Quezon City, Branch 102, dated March 16, Tan suffered physical injuries which necessitated medical attention and
2001, in Civil Case No. Q-91-9191, ordering petitioner Philippine Hawk Corporation and hospitalization;
Margarito Avila to jointly and severally pay respondent Vivian Tan Lee damages as a result
of a vehicular accident. 3. The deceased Silvino Tan is survived by his wife, plaintiff Vivian Lee Tan and
four children, three of whom are now residents of the United States; and
The facts are as follows:
4. Defendant Margarito Avila is an employee of defendant Philippine Hawk.6
On March 15, 2005, respondent Vivian Tan Lee filed before the RTC of Quezon City a
Complaint2 against petitioner Philippine Hawk Corporation and defendant Margarito Avila The parties also agreed on the following issues:
for damages based on quasi-delict, arising from a vehicular accident that occurred on
March 17, 1991 in Barangay Buensoceso, Gumaca, Quezon. The accident resulted in the 1. Whether or not the proximate cause of the accident causing physical injuries
death of respondent’s husband, Silvino Tan, and caused respondent physical injuries. upon the plaintiff Vivian Lee Tan and resulting in the death of the latter’s husband
was the recklessness and negligence of Margarito Avila or the deceased Silvino
On June 18, 1992, respondent filed an Amended Complaint,3 in her own behalf and in Tan; and
behalf of her children, in the civil case for damages against petitioner. Respondent sought
the payment of indemnity for the death of Silvino Tan, moral and exemplary damages, 2. Whether or not defendant Philippine Hawk Transport Corporation exercised the
funeral and interment expenses, medical and hospitalization expenses, the cost of the diligence of a good father of the family in the selection and supervision of its driver
motorcycle’s repair, attorney’s fees, and other just and equitable reliefs. Margarito Avila.7

The accident involved a motorcycle, a passenger jeep, and a bus with Body No. 119. The Respondent testified that on March 17, 1991, she was riding on their motorcycle in tandem
bus was owned by petitioner Philippine Hawk Corporation, and was then being driven by with her husband, who was on the wheel, at a place after a Caltex gasoline station in
Margarito Avila. Barangay Buensoceso, Gumaca, Quezon on the way to Lopez, Quezon. They came from
the Pasumbal Machine Shop, where they inquired about the repair of their tanker. They
In its Answer,4 petitioner denied liability for the vehicular accident, alleging that the were on a stop position at the side of the highway; and when they were about to make a
immediate and proximate cause of the accident was the recklessness or lack of caution of turn, she saw a bus running at fast speed coming toward them, and then the bus hit a jeep
Silvino Tan. Petitioner asserted that it exercised the diligence of a good father of the family parked on the roadside, and their motorcycle as well. She lost consciousness and was
in the selection and supervision of its employees, including Margarito Avila. brought to the hospital in Gumaca, Quezon, where she was confined for a week. She was
later transferred to St. Luke’s Hospital in Quezon City, Manila. She suffered a fracture on
On March 25, 1993, the trial court issued a Pre-trial Order5 stating that the parties her left chest, her left arm became swollen, she felt pain in her bones, and had high blood
manifested that there was no possibility of amicable settlement between them. However, pressure.8
they agreed to stipulate on the following facts:
Respondent’s husband died due to the vehicular accident. The immediate cause of his (4) Test of his driving ability, particularly his defensive skill; and
death was massive cerebral hemorrhage.9
(5) Review of his driving skill every six months.16
Respondent further testified that her husband was leasing and operating a Caltex
10

gasoline station in Gumaca, Quezon that yielded one million pesos a year in revenue. They Efren Delantar, a Barangay Kagawad in Buensoceso, Gumaca, Quezon, testified that the
also had a copra business, which gave them an income of ₱3,000.00 a month or bus was running on the highway on a straight path when a motorcycle, with a woman
₱36,000.00 a year.11 behind its driver, suddenly emerged from the left side of the road from a machine shop.
The motorcycle crossed the highway in a zigzag manner and bumped the side of the bus.17
Ernest Ovial, the driver of the passenger jeep involved in the accident, testified that in the
afternoon of March 17, 1991, his jeep was parked on the left side of the highway near the In its Decision dated March 16, 2001, the trial court rendered judgment against petitioner
Pasumbal Machine Shop. He did not notice the motorcycle before the accident. But he and defendant Margarito Avila, the dispositive portion of which reads:
saw the bus dragging the motorcycle along the highway, and then the bus bumped his jeep
and sped away.12 ACCORDINGLY, MARGARITO AVILA is adjudged guilty of simple negligence, and
judgment is hereby rendered in favor of the plaintiff Vivian Lee Tan and h[er] husband’s
For the defense, Margarito Avila, the driver of petitioner’s bus, testified that on March 17, heirs ordering the defendants Philippine Hawk Corporation and Margarito Avila to pay them
1999, at about 4:30 p.m., he was driving his bus at 60 kilometers per hour on the Maharlika jointly and solidarily the sum of ₱745,575.00 representing loss of earnings and actual
Highway. When they were at Barangay Buensoceso, Gumaca, Quezon, a motorcycle ran damages plus ₱50,000.00 as moral damages.18
from his left side of the highway, and as the bus came near, the motorcycle crossed the
path of the bus, and so he turned the bus to the right. He heard a loud banging sound. The trial court found that before the collision, the motorcycle was on the left side of the
From his side mirror, he saw that the motorcycle turned turtle ("bumaliktad"). He did not road, just as the passenger jeep was. Prior to the accident, the motorcycle was in a running
stop to help out of fear for his life, but drove on and surrendered to the police. He denied position moving toward the right side of the highway. The trial court agreed with the bus
that he bumped the motorcycle.13 driver that the motorcycle was moving ahead of the bus from the left side of the road toward
the right side of the road, but disagreed that the motorcycle crossed the path of the bus
Avila further testified that he had previously been involved in sideswiping incidents, but he while the bus was running on the right side of the road.19
forgot how many times.14
The trial court held that if the bus were on the right side of the highway, and Margarito Avila
Rodolfo Ilagan, the bus conductor, testified that the motorcycle bumped the left side of the turned his bus to the right in an attempt to avoid hitting the motorcyle, then the bus would
bus that was running at 40 kilometers per hour.15 not have hit the passenger jeep, which was then parked on the left side of the road. The
fact that the bus also hit the passenger jeep showed that the bus must have been running
Domingo S. Sisperes, operations officer of petitioner, testified that, like their other drivers, from the right lane to the left lane of the highway, which caused the collision with the
Avila was subjected to and passed the following requirements: motorcycle and the passenger jeep parked on the left side of the road. The trial court stated
that since Avila saw the motorcycle before the collision, he should have stepped on the
(1) Submission of NBI clearance; brakes and slowed down, but he just maintained his speed and veered to the left.20 The
trial court found Margarito Avila guilty of simple negligence.
(2) Certification from his previous employer that he had no bad record;

(3) Physical examination to determine his fitness to drive;


The trial court held petitioner bus company liable for failing to exercise the diligence of a (2) whether or not petitioner is liable to respondent for damages; and (3) whether or not
good father of the family in the selection and supervision of Avila, having failed to the damages awarded by respondent Court of Appeals are proper.
sufficiently inculcate in him discipline and correct behavior on the road.21
Petitioner seeks a review of the factual findings of the trial court, which were sustained by
On appeal, the Court of Appeals affirmed the decision of the trial court with modification in the Court of Appeals, that petitioner’s driver was negligent in driving the bus, which caused
the award of damages. The dispositive portion of the decision reads: physical injuries to respondent and the death of respondent’s husband.

WHEREFORE, foregoing premises considered, the appeal is DENIED. The assailed The rule is settled that the findings of the trial court, especially when affirmed by the Court
decision dated March 16, 2001 is hereby AFFIRMED with MODIFICATION. Appellants of Appeals, are conclusive on this Court when supported by the evidence on record.24 The
Philippine Hawk and Avila are hereby ordered to pay jointly and severally appellee the Court has carefully reviewed the records of this case, and found no cogent reason to
following amount: (a) ₱168,019.55 as actual damages; (b) ₱10,000.00 as temperate disturb the findings of the trial court, thus:
damages; (c) ₱100,000.00 as moral damages; (d) ₱590,000.00 as unearned income; and
(e) ₱50,000.00 as civil indemnity.22 The Court agree[s] with the bus driver Margarito that the motorcycle was moving ahead of
the bus towards the right side from the left side of the road, but disagrees with him that it
Petitioner filed this petition, raising the following issues: crossed the path of the bus while the bus was running on the right side of the highway.

1) The Court of Appeals committed grave abuse of discretion amounting to lack of If the bus were on the right side of the highway and Margarito turned his bus to the right in
jurisdiction in passing upon an issue, which had not been raised on appeal, and an attempt to avoid hitting it, then the bus would not have hit the passenger jeep vehicle
which had, therefore, attained finality, in total disregard of the doctrine laid down which was then parked on the left side of the road. The fact that the bus hit the jeep too,
by this Court in Abubakar v. Abubakar, G.R. No. 134622, October 22, 1999. shows that the bus must have been running to the left lane of the highway from right to the
left, that the collision between it and the parked jeep and the moving rightways cycle
2) The Court of Appeals committed reversible error in its finding that the petitioner’s became inevitable. Besides, Margarito said he saw the motorcycle before the collision
bus driver saw the motorcycle of private respondent executing a U-turn on the ahead of the bus; that being so, an extra-cautious public utility driver should have stepped
highway "about fifteen (15) meters away" and thereafter held that the Doctrine of on his brakes and slowed down. Here, the bus never slowed down, it simply maintained
Last Clear was applicable to the instant case. This was a palpable error for the its highway speed and veered to the left. This is negligence indeed.25
simple reason that the aforesaid distance was the distance of the witness to the
bus and not the distance of the bus to the respondent’s motorcycle, as clearly Petitioner contends that the Court of Appeals was mistaken in stating that the bus driver
borne out by the records. saw respondent’s motorcycle "about 15 meters away" before the collision, because the
said distance, as testified to by its witness Efren Delantar Ong, was Ong’s distance from
3) The Court of Appeals committed reversible error in awarding damages in total the bus, and not the distance of the bus from the motorcycle. Petitioner asserts that this
disregard of the established doctrine laid down in Danao v. Court of Appeals, 154 mistaken assumption of the Court of Appeals made it conclude that the bus driver,
SCRA 447 and Viron Transportation Co., Inc. v. Delos Santos, G.R. No. 138296, Margarito Avila, had the last clear chance to avoid the accident, which was the basis for
November 22, 2000.23 the conclusion that Avila was guilty of simple negligence.

In short, the issues raised by petitioner are: (1) whether or not negligence may be attributed A review of the records showed that it was petitioner’s witness, Efren Delantar Ong, who
to petitioner’s driver, and whether negligence on his part was the proximate cause of the was about 15 meters away from the bus when he saw the vehicular
accident, resulting in the death of Silvino Tan and causing physical injuries to respondent; accident.26 Nevertheless, this fact does not affect the finding of the trial court that
petitioner’s bus driver, Margarito Avila, was guilty of simple negligence as affirmed by the therein will be considered unless stated in the assignment of errors, or closely related to
appellate court. Foreseeability is the fundamental test of negligence.27 To be negligent, a or dependent on an assigned error and properly argued in the brief, save as the court pass
defendant must have acted or failed to act in such a way that an ordinary reasonable man upon plain errors and clerical errors.
would have realized that certain interests of certain persons were unreasonably subjected
to a general but definite class of risks.28 Philippine National Bank v. Rabat31 cited the book32 of Justice Florenz D. Regalado to
explain the section above, thus:
In this case, the bus driver, who was driving on the right side of the road, already saw the
motorcycle on the left side of the road before the collision. However, he did not take the In his book, Mr. Justice Florenz D. Regalado commented on this section, thus:
necessary precaution to slow down, but drove on and bumped the motorcycle, and also
the passenger jeep parked on the left side of the road, showing that the bus was negligent 1. Sec. 8, which is an amendment of the former Sec. 7 of this Rule, now includes
in veering to the left lane, causing it to hit the motorcycle and the passenger jeep. some substantial changes in the rules on assignment of errors. The basic
procedural rule is that only errors claimed and assigned by a party will be
Whenever an employee’s negligence causes damage or injury to another, there instantly considered by the court, except errors affecting its jurisdiction over the subject
arises a presumption that the employer failed to exercise the due diligence of a good father matter. To this exception has now been added errors affecting the validity of the
of the family in the selection or supervision of its employees.29 To avoid liability for a quasi- judgment appealed from or the proceedings therein.
delict committed by his employee, an employer must overcome the presumption by
presenting convincing proof that he exercised the care and diligence of a good father of a Also, even if the error complained of by a party is not expressly stated in his
family in the selection and supervision of his employee.30 assignment of errors but the same is closely related to or dependent on an
assigned error and properly argued in his brief, such error may now be considered
The Court upholds the finding of the trial court and the Court of Appeals that petitioner is by the court. These changes are of jurisprudential origin.
liable to respondent, since it failed to exercise the diligence of a good father of the family
in the selection and supervision of its bus driver, Margarito Avila, for having failed to 2. The procedure in the Supreme Court being generally the same as that in the
sufficiently inculcate in him discipline and correct behavior on the road. Indeed, petitioner’s Court of Appeals, unless otherwise indicated (see Secs. 2 and 4, Rule 56), it has
tests were concentrated on the ability to drive and physical fitness to do so. It also did not been held that the latter is clothed with ample authority to review matters, even if
know that Avila had been previously involved in sideswiping incidents. they are not assigned as errors on appeal, if it finds that their consideration is
necessary in arriving at a just decision of the case. Also, an unassigned error
As regards the issue on the damages awarded, petitioner contends that it was the only closely related to an error properly assigned (PCIB vs. CA, et al., L-34931, Mar.
one that appealed the decision of the trial court with respect to the award of actual and 18, 1988), or upon which the determination of the question raised by error properly
moral damages; hence, the Court of Appeals erred in awarding other kinds of damages in assigned is dependent, will be considered by the appellate court notwithstanding
favor of respondent, who did not appeal from the trial court’s decision. the failure to assign it as error (Ortigas, Jr. vs. Lufthansa German Airlines, L-28773,
June 30, 1975; Soco vs. Militante, et al., G.R. No. 58961, June 28, 1983).
Petitioner’s contention is unmeritorious.
It may also be observed that under Sec. 8 of this Rule, the appellate court is
Section 8, Rule 51 of the 1997 Rules of Civil Procedure provides: authorized to consider a plain error, although it was not specifically assigned by
the appellant (Dilag vs. Heirs of Resurreccion, 76 Phil. 649), otherwise it would be
SEC. 8. Questions that may be decided. -- No error which does not affect the jurisdiction sacrificing substance for technicalities.33
over the subject matter or the validity of the judgment appealed from or the proceedings
In this case for damages based on quasi-delict, the trial court awarded respondent the sum documentary evidence, it is reasonable to peg necessary expenses for the lease and
of ₱745,575.00, representing loss of earning capacity (₱590,000.00) and actual damages operation of the gasoline station at 80 percent of the gross income, and peg living
(₱155,575.00 for funeral expenses), plus ₱50,000.00 as moral damages. On appeal to the expenses at 50 percent of the net income (gross income less necessary expenses).
Court of Appeals, petitioner assigned as error the award of damages by the trial court on
the ground that it was based merely on suppositions and surmises, not the admissions In this case, the computation for loss of earning capacity is as follows:
made by respondent during the trial.

In its Decision, the Court of Appeals sustained the award by the trial court for loss of Life Expectancy Reasonable and
Net
[2/3 (80-age at Gross Annual Necessary
earning capacity of the deceased Silvino Tan, moral damages for his death, and actual Earning = x –
damages, although the amount of the latter award was modified. the time of Income (GAI) Expenses
Capacity
death)] (80% of GAI)
The indemnity for loss of earning capacity of the deceased is provided for by Article 2206 X = [2/3 (80-65)] x ₱1,000,000.00 - ₱800,000.00
of the Civil Code.34Compensation of this nature is awarded not for loss of earnings, but for
loss of capacity to earn money.35 X = 2/3 (15) x ₱200,000.00 - ₱100,000.00(Living
Expenses)
As a rule, documentary evidence should be presented to substantiate the claim for
X = 30/3 x ₱100,000.00
damages for loss of earning capacity.36 By way of exception, damages for loss of earning
capacity may be awarded despite the absence of documentary evidence when: (1) the X = 10 x ₱100,000.00
deceased is self-employed and earning less than the minimum wage under current labor
laws, in which case, judicial notice may be taken of the fact that in the deceased's line of X = ₱1,000,000.00
work no documentary evidence is available; or (2) the deceased is employed as a daily
wage worker earning less than the minimum wage under current labor laws.37
The Court of Appeals also awarded actual damages for the expenses incurred in
connection with the death, wake, and interment of respondent’s husband in the amount of
In this case, the records show that respondent’s husband was leasing and operating a ₱154,575.30, and the medical expenses of respondent in the amount of ₱168,019.55.
Caltex gasoline station in Gumaca, Quezon. Respondent testified that her husband earned
an annual income of one million pesos. Respondent presented in evidence a Certificate of
Creditable Income Tax Withheld at Source for the Year 1990,38which showed that Actual damages must be substantiated by documentary evidence, such as receipts, in
respondent’s husband earned a gross income of P950,988.43 in 1990. It is reasonable to order to prove expenses incurred as a result of the death of the victim40 or the physical
use the Certificate and respondent’s testimony as bases for fixing the gross annual income injuries sustained by the victim. A review of the valid receipts submitted in evidence
of the deceased at one million pesos before respondent’s husband died on March 17, showed that the funeral and related expenses amounted only to ₱114,948.60, while the
1999. However, no documentary evidence was presented regarding the income derived medical expenses of respondent amounted only to ₱12,244.25, yielding a total of
from their copra business; hence, the testimony of respondent as regards such income ₱127,192.85 in actual damages.
cannot be considered.
Moreover, the Court of Appeals correctly sustained the award of moral damages in the
In the computation of loss of earning capacity, only net earnings, not gross earnings, are amount of ₱50,000.00 for the death of respondent’s husband. Moral damages are not
to be considered; that is, the total of the earnings less expenses necessary for the creation intended to enrich a plaintiff at the expense of the defendant.41 They are awarded to allow
of such earnings or income, less living and other incidental expenses.39 In the absence of the plaintiff to obtain means, diversions or amusements that will serve to alleviate the moral
suffering he/she has undergone due to the defendant’s culpable action and must, perforce, severally respondent Vivian Lee Tan: (a) civil indemnity in the amount of Fifty Thousand
be proportional to the suffering inflicted.42 Pesos (₱50,000.00); (b) actual damages in the amount of One Hundred Twenty-Seven
Thousand One Hundred Ninety-Two Pesos and Eighty-Five Centavos ( ₱127,192.85); (c)
In addition, the Court of Appeals correctly awarded temperate damages in the amount of moral damages in the amount of Eighty Thousand Pesos (₱80,000.00); (d) indemnity for
₱10,000.00 for the damage caused on respondent’s motorcycle. Under Art. 2224 of the loss of earning capacity in the amount of One Million Pesos (₱1,000,000.00); and (e)
Civil Code, temperate damages "may be recovered when the court finds that some temperate damages in the amount of Ten Thousand Pesos (₱10,000.00).
pecuniary loss has been suffered but its amount cannot, from the nature of the case, be
proved with certainty." The cost of the repair of the motorcycle was prayed for by Costs against petitioner.
respondent in her Complaint. However, the evidence presented was merely a job
estimate43 of the cost of the motorcycle’s repair amounting to ₱17, 829.00. The Court of SO ORDERED.
Appeals aptly held that there was no doubt that the damage caused on the motorcycle was
due to the negligence of petitioner’s driver. In the absence of competent proof of the actual G.R. No. 148737 June 16, 2004
damage caused on the motorcycle or the actual cost of its repair, the award of temperate
damages by the appellate court in the amount of ₱10,000.00 was reasonable under the
ERNESTO PLEYTO and PHILIPPINE RABBIT BUS LINES, INC., petitioners,
circumstances.44
vs.
MARIA D. LOMBOY and CARMELA LOMBOY, respondents.
The Court of Appeals also correctly awarded respondent moral damages for the physical
injuries she sustained due to the vehicular accident. Under Art. 2219 of the Civil
DECISION
Code,45 moral damages may be recovered in quasi-delicts causing physical injuries.
However, the award of ₱50,000.00 should be reduced to ₱30,000.00 in accordance with
prevailing jurisprudence.46 QUISUMBING, J.:

Further, the Court of Appeals correctly awarded respondent civil indemnity for the death of For review on certiorari is the Decision1 dated October 31, 2000 of the Court of Appeals in
her husband, which has been fixed by current jurisprudence at ₱50,000.00.47 The award CA-G.R. CV No. 61300, which affirmed with modification the Decision2 dated June 26,
is proper under Art. 2206 of the Civil Code.48 1998 of the Regional Trial Court (RTC) of Dagupan City, Branch 42, in Civil Case No. 95-
00724-D. The RTC ordered herein petitioners to solidarily pay damages to respondents.
Petitioners likewise assail the Resolution3 dated June 21, 2001 of the appellate court,
In fine, the Court of Appeals correctly awarded civil indemnity for the death of respondent’s
which denied their Motion for Reconsideration.
husband, temperate damages, and moral damages for the physical injuries sustained by
respondent in addition to the damages granted by the trial court to respondent. The trial
court overlooked awarding the additional damages, which were prayed for by respondent Petitioner Philippine Rabbit Bus Lines, Inc. (PRBL), with principal office at Tarlac City,
in her Amended Complaint. The appellate court is clothed with ample authority to review Tarlac, is a public carrier, engaged in carrying passengers and goods for a fare. It serviced
matters, even if they are not assigned as errors in the appeal, if it finds that their various routes in Central and Northern Luzon. Petitioner Ernesto Pleyto was a bus driver
consideration is necessary in arriving at a just decision of the case.49 employed by PRBL at the time of the incident in question.

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals dated August Respondent Maria D. Lomboy of Calasiao, Pangasinan, is the surviving spouse of the late
17, 2004 in CA-G.R. CV No. 70860 is hereby AFFIRMED with MODIFICATION. Petitioner Ricardo Lomboy, who died in Pasolingan, Gerona, Tarlac, in a vehicular accident at around
Philippine Hawk Corporation and Margarito Avila are hereby ordered to pay jointly and 11:30 a.m. of May 16, 1995. The accident was a head-on collision between the PRBL bus
driven by petitioner Pleyto and the car where Ricardo was a passenger. Respondent
Carmela Lomboy is the eldest daughter of Ricardo and Maria Lomboy. Carmela suffered On June 26, 1998, the trial court decided Civil Case No. 95-00724-D as follows:
injuries requiring hospitalization in the same accident which resulted in her father’s death.
WHEREFORE, premises considered, judgment is hereby rendered in favor of the
On November 29, 1995, herein respondents, as pauper-litigants, filed an action for plaintiffs and against the defendants ordering the defendants to pay solidarily the
damages against PRBL and its driver, Pleyto, with the RTC of Dagupan City. In their plaintiffs the following amounts:
complaint, which was docketed as Civil Case No. 95-00724-D, the Lomboys prayed that
they be indemnified for the untimely death of Ricardo Lomboy, his lost earnings, the 1) ₱50,000.00 as indemnification for the death of Ricardo Lomboy;
medical and hospitalization expenses of Carmela, and moral damages.
2) ₱1,642,521.00 for lost earnings of Ricardo Lomboy;
The facts, established during trial and affirmed by the appellate court, are as follows:
3) ₱59,550.00 as actual damages for the funeral, wake, religious services
At approximately 11:30 a.m. of May 16, 1995, PRBL Bus No. 1539, with Plate No. and prayer for the soul of the departed;
CVD 556, driven by petitioner Pleyto, was traveling along MacArthur Highway in
Gerona, Tarlac bound for Vigan, Ilocos Sur. It was drizzling that morning and the 4) ₱52,000.00 for the medical treatment and medicine of Carmela Lomboy;
macadam road was wet. Right in front of the bus, headed north, was the tricycle
with Plate No. CX 7844, owned and driven by one Rodolfo Esguerra.
5) ₱500,000.00 as moral damages for the wife and children excluding
Carmela Lomboy;
According to Rolly Orpilla, a witness and one of the bus passengers, Pleyto tried to
overtake Esguerra’s tricycle but hit it instead. Pleyto then swerved into the left opposite
6) ₱50,000.00 as moral damages for Carmela Lomboy; and
lane. Coming down the lane, some fifty meters away, was a southbound Mitsubishi Lancer
car, with Plate No. PRS 941, driven by Arnulfo Asuncion. The car was headed for Manila
with some passengers. Seated beside Arnulfo was his brother-in-law, Ricardo Lomboy, 7) To pay costs.
while in the back seat were Ricardo’s 18-year old daughter Carmela and her friend, one
Rhino Daba. PRBL Bus No. 1539 smashed head-on the car, killing Arnulfo and Ricardo The filing fee the plaintiffs should have paid is hereby ordered to be paid by the
instantly. Carmela and Rhino suffered injuries, but only Carmela required hospitalization. plaintiffs to the Clerk of Court of this Court upon satisfaction of the foregoing
amounts to the plaintiffs by the defendants.
In their Answer, petitioners PRBL and Ernesto Pleyto both claimed that the bus was
running slowly at the time of the accident. They pointed out that Bus No. 1539 had been SO ORDERED.4
inspected by driver Pleyto and examined by a mechanic prior to the trip, in accordance
with the company’s standard operating procedure. It was found in good working condition. In ruling for respondents, the RTC found Pleyto negligent and lacking in precaution when
Pleyto claimed that while cruising along the highway at Gerona, Tarlac, he noticed he overtook the tricycle with complete disregard of the approaching car in the other lane.
Esguerra’s tricycle and followed it at a safe distance after he was unable to overtake it. It found the testimony of Rolly Orpilla credible and persuasive as against Pleyto’s self-
Suddenly and without warning, the tricycle stopped in the middle of the road. Pleyto serving and unbelievable testimony. The court found that Pleyto should have been more
stepped on the brakes and the bus lost speed. But, since it skidded towards the direction prudent in overtaking a tricycle, considering that it was drizzling, the road was slippery, and
of the tricycle, he swerved the bus to the other lane to avoid hitting it, only to collide with another vehicle was approaching from the opposite direction. The RTC found that Pleyto
the Manila-bound Mitsubishi car. had clearly violated traffic rules and regulations, and thus was negligent under Article
21855 of the Civil Code of the Philippines because petitioner Pleyto failed to present any
proof to rebut the presumption. The lower court likewise held co-petitioner PRBL equally
liable under Article 21806 of the Civil Code for its failure to show that it had maintained FEBRUARY 18, 1970, 31 SCRA 511, WHEN IT ARBITRARILY PEGGED THE
proper supervision of its employees notwithstanding strict standards in employee selection. MONTHLY LIVING EXPENSES AT 50% OF GROSS EARNINGS.8

Petitioners appealed the judgment of the trial court to the Court of Appeals in CA-G.R. CV At the outset, it appears that petitioners call for this Court to review the factual findings and
No. 61300. The appellate court, however, affirmed the decision of the trial court, with conclusions of the Court of Appeals. Petitioners assail the appellate court’s affirmance of
modification in the award of damages, thus: the finding by the trial court that Pleyto was negligent. The issue of negligence is factual
and, in quasi-delicts, crucial in the award of damages.9 But it is well established that under
Wherefore, with the MODIFICATION that the award for actual damages is reduced Rule 45 of the 1997 Rules of Civil Procedure, only questions of law, not of fact, may be
to ₱39,550.00 for funeral and religious services and ₱27,000.00 for medical raised before the Supreme Court. It must be stressed that this Court is not a trier of facts,
expenses of Carmela Lomboy; and the award for loss of earning capacity is and it is not its function to re-examine and weigh anew the respective evidence of the
accordingly corrected to ₱1,152,000.00, the appealed decision is AFFIRMED. parties.10 Factual findings of the trial court, especially those affirmed by the Court of
Appeals, are conclusive on this Court when supported by the evidence on record.11 In the
SO ORDERED.7 present petition, no compelling reason is shown by petitioners whatsoever for this Court to
reverse those findings. Our examination of the records shows that the evidence clearly
supports the following findings of the appellate court:
The Court of Appeals affirmed the findings of the RTC with respect to Pleyto’s fault and
negligence. The appellate court noted that this was evident in his overtaking Esguerra’s
tricycle despite the drizzle, the slippery road, and an oncoming car a mere fifty meters The negligence and fault of appellant driver is manifest. He overtook the tricycle despite
away. The court reasoned that the bus must have been speeding since despite braking, the oncoming car only fifty (50) meters away from him. Defendant-appellant’s claim that
the bus still hit the tricycle, and then rammed the car in the opposite lane with such force he was driving at a mere 30 to 35 kilometers per hour does not deserve credence as it
as to throw the car off the road. The appellate court also found petitioner PRBL liable as would have been easy to stop or properly maneuver the bus at this speed. The speed of
owner of the bus and as employer of Pleyto pursuant to Article 2180 of the Civil Code, for the bus, the drizzle that made the road slippery, and the proximity of the car coming from
its failure to observe the required diligence in its supervision of its employees and the safe the opposite direction were duly established by the evidence. The speed at which the bus
maintenance of its buses. In modifying the award of damages, the appellate court took traveled, inappropriate in the light of the aforementioned circumstances, is evident from
note of the amounts that were duly supported by receipts only. the fact despite the application of the brakes, the bus still bumped the tricycle, and then
proceeded to collide with the incoming car with such force that the car was pushed beyond
the edge of the road to the ricefield (Paragraph 8, Affidavit of Rolly Orpilla marked Exh. "D"
Petitioners then moved for reconsideration, but the appellate court denied it.
and Traffic Report marked Exh. "E", Folder of Exhibits)....12
Hence, the instant petition, premised on the following grounds:
Indeed, petitioner Pleyto violated traffic rules and regulations when he overtook the tricycle
despite the presence of an oncoming car in the other lane. Article 2185 of the Civil Code
A. THE SUPREME COURT MAY REVIEW THE CONCLUSION DRAWN BY THE lays down the presumption that a person driving a motor vehicle has been negligent if at
COURT OF APPEALS, NAMELY, THAT THE PRBL BUS OVERTOOK A the time of the mishap, he was violating any traffic regulation. As found by both the Court
TRICYCLE THUS CAUSING THE ACCIDENT, SINCE IT WAS MADE IN of Appeals and the trial court, petitioners failed to present any convincing proof rebutting
DISREGARD OF FACTS UNDISPUTED BY THE PARTIES. such presumption.

B. THE COURT OF APPEALS DISREGARDED THE DOCTRINE LAID DOWN IN A driver abandoning his proper lane for the purpose of overtaking another vehicle in an
VILLA REY TRANSIT, INC. v. COURT OF APPEALS, G.R. NO. L-25499, ordinary situation has the duty to see to it that the road is clear and not to proceed if he
cannot do so in safety. When a motor vehicle is approaching or rounding a curve, there is
special necessity for keeping to the right side of the road and the driver does not have the ...
right to drive on the left hand side relying upon having time to turn to the right if a car
approaching from the opposite direction comes into view.13 Indeed, the testimony of the said two witnesses of the PRBL would impress
one to believe that the PRBL has always exercised the strictest standard
The Court of Appeals found PRBL liable for Pleyto’s negligence pursuant to Article 2180 of selecting its employees and of maintaining its vehicles to avoid injury or
in relation to Article 217614of the Civil Code. Under Article 2180, when an injury is caused damage to the life and limb of people on the road whether of its own
by the negligence of a servant or an employee, the master or employer is presumed to be passengers or pedestrians or occupants or other vehicles. It has not
negligent either in the selection or in the supervision of that employee. This presumption however, shown to the satisfaction of the Court that it has maintained
may be overcome only by satisfactorily showing that the employer exercised the care and proper supervision of its employees, especially drivers while in the actual
the diligence of a good father of a family in the selection and the supervision of its operation of its buses. While it has a list of procedures and testing when it
employee.15 comes to recruitment and another list of what should be done with its buses
before they are allowed to run on the road, it has no list of procedures and
In fine, when the employee causes damage due to his own negligence while performing duties to be followed by a driver while he is operating a vehicle to prevent
his own duties, there arises the juris tantum presumption that the employer is negligent, injury to persons and damage to property. Neither has it proved to the Court
rebuttable only by proof of observance of the diligence of a good father of a family.16 Thus, that there are people employed by it to supervise its drivers so that it can
in the selection of prospective employees, employers are required to examine them as to be seen to it that all the safety procedures to prevent accident or damage
their qualifications, experience and service records. With respect to the supervision of to property or injury to people on the road have been in place. It is in this
employees, employers must formulate standard operating procedures, monitor their aspect of supervising its employees where this Court has found the
implementation and impose disciplinary measures for breaches thereof. These facts must defendant PRBL deficient." (Decision p. 29, Rollo)19
be shown by concrete proof, including documentary evidence.17
In our view, no reversible error was committed by the Court of Appeals when it sustained
In the present case, petitioners presented several documents in evidence to show the
18 what the trial court found after trial that PRBL had failed to rebut the presumption of
various tests and pre-qualification requirements imposed upon petitioner Pleyto before his negligence on its part. Said finding binds us now in this review on certiorari.
hiring as a driver by PRBL. However, no documentary evidence was presented to prove
that petitioner PRBL exercised due diligence in the supervision of its employees, including Hence, the only remaining issue relevant for our resolution concerns the award to herein
Pleyto. Citing precedents, the Court of Appeals opined, respondents for damages as well as the loss of earning capacity of the victim, Ricardo
Lomboy.
"in order that the defense of due diligence in the selection and supervision of
employees may be deemed sufficient and plausible, it is not enough for the Petitioners argue that the award of loss of earning capacity to respondents is devoid of
employer to emptily invoke the existence of company guidelines and policies on legal basis. They fault the appellate court for pegging the monthly living expenses at 50%
hiring and supervision. As the negligence of the employee gives rise to the of gross earnings since, they claim, this runs contrary to Villa Rey Transit, Inc. v. Court of
presumption of negligence on the part of the employer, the latter has the burden of Appeals,20 which held that "the amount recoverable is not loss of the entire earning, but
proving that it has been diligent not only in the selection of employees but also in rather the loss of that portion of the earnings which the beneficiary would have received."
the actual supervision of their work. The mere allegation of the existence of hiring Petitioners also point out that respondents failed to prove the gross income of the
procedures and supervisory policies without anything more is decidedly not deceased Ricardo Lomboy, thus, making the computations of the appellate court doubtful,
sufficient to overcome such presumption. (Metro Manila Transit Corp. vs. CA (223 to say the least.
SCRA 521). The trial court ratiocinated:
Respondents counter that the deduction of 50% of the gross income as reasonable and Expectancy Table of Mortality or the Actuarial Combined Experience Table of Mortality. As
necessary living expenses by the appellate court is in accord with established to the second factor, it is computed by multiplying the life expectancy by the net earnings
jurisprudence, pointing to our decision in Negros Navigation Co., Inc. v. Court of Appeals.21 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
Petitioners, in our view, misread the Villa Rey Transit case, where we emphasized that: ordinarily computed at fifty percent (50%) of the gross earnings.24 Thus, the formula used
by this Court in computing loss of earning capacity is: Net Earning Capacity = [2/3 x (80
"Thus, it has been consistently held that earning capacity, as an element of – age at time of death) x (gross annual income – reasonable and necessary living
damages to one’s estate for his death by wrongful act is necessarily his net earning expenses)].25
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 entireearning, It was established that Ricardo Lomboy was 44 years old at the time of his death and is
but rather the loss of that portion of the earnings which the beneficiary would have earning a monthly income of ₱8,000 or a gross annual income (GAI) of ₱96,000.26 Using
received. In other words, only net earnings, not gross earning, are to be considered the cited formula, the Court of Appeals correctly computed the Loss of Net Earning
that is, the total of the earnings lessexpenses necessary in the creation of such Capacity as ₱1,152,000, net of and after considering a reasonable and necessary living
earnings or income and less living and other incidental expenses."22 expenses of 50% of the gross annual income or ₱48,000. A detailed computation is as
follows:
In considering the earning capacity of the victim as an element of damages, the net
earnings, which is computed by deducting necessary expenses from the gross earnings, NET GROSS
and not the gross earnings, is to be utilized in the computation. Note that in the present LIFE EXPECTANCY LIVING
EARNING ANNUAL
case, both the Court of Appeals and the trial court used net earnings, not gross earnings = [2/3 (80-age at the x – EXPENSES
CAPACITY INCOME
in computing loss of earning capacity. The amount of net earnings was arrived at after time of death)] (50% of GAI)
(X) (GAI)
deducting the necessary expenses (pegged at 50% of gross income) from the gross annual
income. This computation is in accord with settled jurisprudence, including the Villa (50% x
X = [2/3 (80-44)] x [₱96,000 –
Rey case. ₱96,000)

Petitioners’ claim that no substantial proof was presented to prove Ricardo Lomboy’s gross X = [2/3 (36)] x [₱96,000 – 48,000]
income lacks merit. Failure to present documentary evidence to support a claim for loss of X = 24 x 48,000
earning capacity of the deceased need not be fatal to its cause. Testimonial evidence
suffices to establish a basis for which the court can make a fair and reasonable estimate X = ₱ 1,152,000.00
of the loss of earning capacity.23 Hence, the testimony of respondent Maria Lomboy,
Ricardo’s widow, that her husband was earning a monthly income of ₱8,000 is sufficient
to establish a basis for an estimate of damages for loss of earning capacity. Thus, no reversible error may be attributed to the court a quo in fixing the loss of earning
capacity at said amount.
It is well-settled in jurisprudence that the factors that should be taken into account in
determining the compensable amount of lost earnings are: (1) the number of years for We likewise sustain the reduction of the award of actual damages from ₱59,550 for funeral
which the victim would otherwise have lived; and (2) the rate of loss sustained by the heirs and burial expenses of Ricardo and ₱52,000 for medical expenses of Carmela Lomboy to
of the deceased. Jurisprudence provides that the first factor, i.e., life expectancy, is ₱39,55027 and ₱27,000, respectively, as only these latter amounts were duly supported by
computed by applying the formula (2/3 x [80 - age at death]) adopted in the American receipts.28 To justify an award of actual damages, there must be competent proof of the
actual amount of loss, credence can be given only to claims which are duly supported by PEREZ, J.:
receipts.29
Before us is an appeal via a Notice of Appeal from the Decision of the Court of Appeals in
However, while the award of ₱50,000 as moral damages to Carmela Lomboy is sustained, CA-G.R. CR-H.C. No. 04051.1 The appellate court affirmed in toto the Decision2 of the
the award for moral damages of ₱500,000 to the heirs of Ricardo Lomboy should be Regional Trial Court (RTC), Branch18, Malolos, Bulacan which convicted accused-
reduced for being excessive. appellants Edwin Ibañez y Albante (Edwin) and Alfredo Nulla y Ibañez (Alfredo) of Murder
in Criminal Case No. 3517-M-2004.
Under Article 2206 of the Civil Code, the spouse, legitimate children and illegitimate
descendants and ascendants of the deceased may demand moral damages for mental Appellants Edwin and Alfredo, with Jesus Monsillo y Taniares (Jesus), were all charged in
anguish by reason of the death of the deceased.30 However, we must stress that moral an Information for Murder under Article 248 of the Revised Penal Code, which reads:
damages, though incapable of pecuniary estimation, are in the category of an award
designed to compensate the claimant for actual injury and are not meant to enrich The undersigned Asst. Provincial Prosecutor accuses Jesus Montisillo y Taniares @
complainant at the expense of defendant.31 Moral damages are awarded to enable the Dodong, Edwin Ibañez y Albante and Alfredo(Freddie) Nulla y Ibañez of the crime of
injured party to obtain means, diversions or amusements that will serve to alleviate the murder, penalized under the provisions of Article 248 of the Revised Penal Code,
moral suffering he/she has undergone, by reason of the defendant’s culpable action. Its committed as follows:
award is aimed at restoration, as much as possible, of the spiritual status quo ante; thus it
must be proportionate to the suffering inflicted.32 Under the circumstances of this case, an That on or about the 29th day of August, 2004, in the municipality of Bocaue, province of
award of ₱100,000 to the heirs of Ricardo Lomboy would be justified and in keeping with Bulacan, Philippines, and within the jurisdiction of this Honorable Court, the above-named
the purpose of the law and jurisprudence in allowing moral damages.33 accused, armed with a soil digger (bareta) and with intent to kill one Wilfredo Atendido y
Dohenog, conspiring, confederating and helping one another did then and there willfully,
The indemnification award of ₱50,000 is also sustained. unlawfully and feloniously, with evident premeditation, abuse of superior strength and
treachery, attack, assault and hit with the said soildigger (bareta) the said Wilfredo
WHEREFORE, the assailed Decision of the Court of Appeals in CA-G.R. CV No. 61300 Atendido y Dohenog, hitting the latter on his head, thereby inflicting upon him serious
is AFFIRMED, with the sole MODIFICATION that the award of moral damages to the physical injuries which directly caused his death.3
heirs of Ricardo Lomboy is reduced from ₱500,000.00 to ₱100,000.00. No pronouncement
as to costs. During arraignment, Edwin and Alfredo pleaded not guilty. Jesus, on the other hand,
remained at large; the case against him was archived. Thereafter, trial ensued.
SO ORDERED.
The prosecution’s version was testified to by the victim’s wife and daughter, in succession.
G.R. No. 197813 September 25, 2013
On that fateful day, Wilfredo Atendido y Dohenog (Wilfredo) was invited by Alfredo to a
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, drinking session with Jesus and Edwin making them a party of four. Rachel, Wilfredo’s
vs. daughter, an adolescent at the time, was underneath the house (silong in the vernacular)
EDWIN IBANEZ y ALBANTE and ALFREDO (FREDDIE) NULLA y IBANEZ, Accused- of a neighbor, three (3)meters away from the place where Wilfredo and his companions
appellants. were ostensibly in merrymaking.

DECISION
Rachel saw her father step away from the group to urinate. While Wilfredo relieved himself, (2) On 29 August 2004, Rachel helped her in selling the doormats;
Edwin snatched a t-shirt from a nearby clothesline, and hooded the t-shirt over the head
and face of Wilfredo. Robbed of vision as his head was fully covered, Wilfredo was wrestled (3) On that day, they finished at around 6:00 p.m. and headed to their respective
and pinned down by Edwin, while Alfredo boxed the left side of Wilfredo’s chest. Jesus, residences along the railroad track;
armed with a long iron bar, swung at and hit Wilfredo in the head. Terrified, Rachel stood
immobilized as she watched the attack on father. Thereafter, she saw her mother running (4) Upon arriving at their vicinity, Aniceta witnessed the immediate aftermath of the
out of their house and crying for help. purported fight between Jesus and Wilfredo;

On that same auspicious date, 29 August 2004, Rowena, Wilfredo’s wife and Rachel’s (5) At that juncture, Jesus was being embraced by his sister, Marilou, and the two
mother, was inside their house taking care of their youngest daughter. She heard a were two meters away from the body of Wilfredo;
commotion coming from the neighboring house, about eight (8) steps away, so she rushed
in that direction. Once outside their house, she saw Wilfredo prostrate on the ground
(6) Marilou recounted to Aniceta that Jesus had hit Wilfredo with an iron bar, a
covered with blood on his face and forehead. Upon reaching Wilfredo, Rowena saw
preemptive move because Wilfredo was about to stab Jesus;
accused Jesus, standing one meter away from Wilfredo, holding an iron bar. Edwin and
Alfredo stood beside Jesus; Edwin held a white shirt. Forthwith, Jesus and Alfredo ran
away while Edwin went home. Rowena asked for help to bring Wilfredo to the hospital. (7) While Aniceta and Marilou discussed the incident, Rachel stood and listened to
However, Wilfredo did not reach the hospital alive and was pronounced dead on arrival. them;

Expectedly, the defense mainly of Edwin and Alfredo, proffered an altogether different (8) At that time, only the four of them, Jesus, Marilou, Aniceta and Rachel, were at
version of the events. the place of the incident;

The two accused-appellants pointed to Jesus as the sole culprit, proclaimed their (9) After learning the entirety of what had transpired, Aniceta, who was afraid to
innocence and professed to being at the scene of the crime only because of their curiosity get involved, and Rachel, ran to their respective houses;
for what had occurred.
(10) For the duration of the day, Aniceta did not step out of her house, neither did
Allegedly, on that day, the two buddies were having their regular drinking session at she volunteer information to the police when the case was investigated in the
Edwin’s house when they heard a commotion outside. Curious about the ruckus, they following days; and
approached and saw Wilfredo prostrate on the ground; Jesus, held an iron bar and was
being held back by his sister who was shouting, "Tama na! Tama na!." Edwin then called (11) Aniceta only came forward to testify at the request of Adela Ibañez, wife of
for a tricycle so Wilfredo could be brought to a hospital and given medical attention. Alfredo Edwin.
stood by and merely watched as events transpired.
As previously adverted to, the trial court convicted Edwin and Alfredo of Murder. It disposed
To corroborate their claim of innocence, the defense called Aniceta Dosil (Aniceta) to the of the case, to wit:
witness stand who testified as follows:
WHEREFORE, accused Edwin Ibañez y Albante and Alfredo (Freddie) Nulla y Ibañez are
(1) She sold doormats for a living which she peddled on the road; hereby found GUILTY beyond reasonable doubt of the crime of murder and are hereby
sentenced to suffer imprisonment of reclusion perpetua and to indemnify the heirs of
Wilfredo D. Atendido in the amount of:
a) Fifty Thousand Pesos (₱50,000.00) as civil indemnity; Edwin and Alfredo maintain their innocence and point to Jesus as the sole perpetrator of
the crime. They insist that they were at the scene of the crime only because they wanted
b) Twenty-Five Thousand Pesos (₱25,000.00) as temperate damages; to know what the commotion was all about. They claim that, in fact, Edwin called for a
tricycle so Wilfredo could be brought to a hospital. To discredit the eyewitness testimony
c) Fifty Thousand Pesos (₱50,000.00) as moral damages; of Rachel, they presented Aniceta who testified that she and Rachel were out on that day
selling doormats and only returned at 6:00 p.m. Thus, Rachel could not have witnessed
the murder of Wilfredo.
d) Twenty-Five Thousand Pesos (₱25,000.00) as exemplary damages; and
Both lower courts, however, found the testimony of Rachel credible:
e) One Million Nine Hundred Forty-Six Thousand and One Hundred Eighty Pesos
(₱1,946,180.00) for the unearned income of Wilfredo Atendido.4
This Court finds the testimony of Rachel clear and convincing. The testimony flows from a
person who was present in the place where the killing occurred. They are replete with
On appeal, Edwin and Alfredo found no reprieve. The Court of Appeals did not deviate
details sufficient to shift the burden of evidence to appellants. We have no reason to doubt
from the RTC’s ruling and affirmed in toto its finding of guilt.
Rachel’s credibility. Her candid account of the incident, standing alone, clearly established
the components of the crime of murder. Appellants’ defense of denial, not sufficiently
In this appeal, Edwin and Alfredo assign the following as errors: proven, cannot overcome the conclusions drawn from said evidence. We find no cogent
reason to deviate from the findings and conclusions of the trial court. Rachel’s testimony
I was delivered in a firm, candid, and straightforward manner. There is no showing that
Rachel wavered from the basic facts of her testimony, even when she was subjected to a
THE LOWER COURTS GRAVELY ERRED IN GIVING FULLWEIGHT AND rigorous examination.
CREDENCE TO THE TESTIMONY OF THEALLEGED PROSECUTION
EYEWITNESS. Rachel was only ten (10) years old when she witnessed the murder of the victim. She
testified in open court two (2) years later. Thus, she cannot be expected to give an error-
II free narration of the events that happened two years earlier. The alleged inconsistencies
between her sworn statement and testimony referred to by appellants do not affect her
THE LOWER COURTS GRAVELY ERRED IN NOT GIVINGWEIGHT AND credibility. What is important is that in all her narrations she consistently and clearly
CREDENCE TO THE DEFENSE‘S EVIDENCE. identified appellants as the perpetrators of the crime. Inconsistencies between the sworn
statement and the testimony in court do not militate against witness’ credibility since sworn
III statements are generally considered inferior to the testimony in open court.6

THE LOWER COURTS GRAVELY ERRED IN CONVICTING THEACCUSED- We find no error in the lower courts’ disposal of the issue.
APPELLANTS WHEN THEIR GUILT WAS NOT PROVENBEYOND
REASONABLE DOUBT.5 Well-entrenched in jurisprudence is that the trial court's evaluation of the testimony of a
witness is accorded the highest respect because of its direct opportunity to observe the
In sum, the issue is whether the accused are guilty of murder. witnesses on the stand and to determine if they are telling the truth or not.7 This opportunity
enables the trial judge to detect better that thin line between fact and prevarication that will
determine the guilt or innocence of the accused. That line may not be discernible from a
mere reading of the impersonal record by the reviewing court. Thus, the trial judge's Q: Was it already dark?
evaluation of the competence and credibility of a witness will not be disturbed on review,
unless it is clear from the records that his judgment is erroneous.8 A: Not yet, your Honor.

We have scrutinized the testimony of lone eyewitness, Rachel. Throughout her testimony, PROS. LAGROSA:
in her direct, cross and re-direct and re-cross examinations, she candidly recounted the
events surrounding the killing of her father as follows: Q: According to you, your father went to sleep, where were you when your father went to
sleep?
PROS. LAGROSA:
A: I was in the house, ma’am.
Your Honor please, may we invoke the right of the child the provisions (sic) under the child
witness wherein we can ask leading questions and in Tagalog. xxxx

COURT: Q: And when your father woke up, were you still in the house?

Anyway, the questions can be interpreted. A: Yes, ma’am.

PROS. LAGROSA: Q: Also inside the house?

Only the leading questions, your Honor. A: Yes, ma’am.

Q: You said that your father came from sleeping in your house, did you know what time of Q: When your father woke up, what did he do?
the day your father went to sleep?
A: All of us ate rice, ma’am. ("Kumain po kaming lahat ng kanin.")
A: I do not know because I do not know how to read time.
Q: Can you tell us if that is already dark or still daytime?
xxxx
A: It was still daytime, ma’am.
Q: But do you know whether or when your father went to sleep? It was morning, noon or
afternoon or nighttime or daytime?
xxxx
A: "Hapon po." (In the afternoon.)
Q: After eating rice, will you tell us what happened, if you still remember?
Q: Early afternoon, late afternoon or mid-afternoon?
A: My father was called by his compadre, ma’am.
A: Late in the afternoon, Your Honor. ("bandang hapon-hapon po.")
Q: And who was that compadre who called your father?
A: Freddie, ma’am. Q: At the time your father followed Freddie at the back of the house of your Kuya Edwin,
where were you?
Q: Do you know the full name of this Freddie?
A: I was under the house of Kuya Unyo, ma’am.
A: Freddie Nulla, ma’am.
Q: Now, you mentioned that your father followed Freddie at the back of the house of Kuya
Q: Why do you know Freddie Nulla? Edwin, who is this Kuya Edwin?

A: He is a compadre of my father, ma’am. INTERPRETER:

Q: Did you often see him in your place? Witness pointing to a detention prisoner who identified himself as EDWIN IBAÑEZ.PROS.
LAGROSA:
A: Yes, ma’am.
Q: You said that at that time you were under the house of Kuya Unyo, what is the full name
Q: Is Freddie Nulla now here in court? of this Kuya Unyo, if you know?

A: Yes, ma’am. A: I do not know, ma’am.

Q: Will you look around and point to him? Q: What were you doing under the house of Kuya Unyo?

INTERPRETER: A: I was throwing stones, ma’am.

Witness pointed to a detention prisoner (sic) when asked to identify himself answered Q: And this house of Kuya Unyo, is that near or far from your house?
FREDDIE NULLA.Q: Now, you said that Freddie Nulla, the compadre, called your father,
do you still remember how he was called? A: Just near our house, ma’am.

A: Yes, ma’am. Q: Can you point a place here where you are now sitted (sic) up to this courtroom to show
the distance between your house and the house of Kuya Unyo?
Q: How?
PROS. LAGROSA
A: "Pare. Pare."
The witness pointed up to the wall.
Q: And when your father was called, what did your father do?
ATTY. MALLILLIN:
A: My father followed Freddie at the back of the house of Kuya Edwin.
Can we estimate, your Honor.
A: Just near, ma’am, 3 to 4 meters.9 Q: And then what happened when Kuya Edwin put around that piece of cloth all over the
head and face of your papa?
xxxx
A: "Itinumba po siya."
Q: Rachel, last time you testified that your father followed Freddie Nulla at the back of the
house of Kuya Unyo and at that time you were under the house of Kuya Unyo, do you Q: You said "itinumba po siya," who caused your father to tumble down?
remember having stated that last time?
A: After Kuya Edwin had put around the piece of cloth on my father, he tumbled him down.
A: Yes, ma’am.
Q: And when your father tumbled down, what else happened?
Q: While you were at the house of Kuya Unyo, do you remember anything unusual that
happened at that time? A: Kuya Freddie boxed him, ma’am.

A: When my father was being killed, ma’am. Q: Did you see in what part of your father’s body was he boxed by Kuya Freddie?

Q: You said that your father was being killed or "pinapatay na po si papa ko," who killed A: Yes, ma’am.
your father?
Q: What part of his body was boxed?
A: Kuya Edwin, Kuya Freddie and Kuya Dodong, ma’am.
A: On the left portion of the shoulder blade, ma’am.
Q: You said that Kuya Freddie, Kuya Edwin and Kuya Dodong were killing your father, how
did Kuya Edwin, how was he killing your father as you said? Q: And how about Kuya Dodong when Kuya Edwin put around a piece of cloth and when
Kuya Freddie boxed your father, where was Kuya Dodong at that time?
A: "Pinuluputan po sa mukha ng damit ni Kuya Edwin." (Kuya Edwin put around a piece of
cloth). A: He was also there, ma’am.

Q: You said that Kuya Edwin put around a piece of cloth on your papa, in what part of your Q: And what was he doing, if he was doing anything at that time?
father’s body (sic) that cloth being put around by Kuya Edwin?
A: "Binareta na po ‘yong papa ko sa ulo."
A: He put it around all over the face and the head, ma’am.
COURT:
PROS. LAGROSA:
Q: What did he use noong" binareta"?
The witness was demonstrating by making a circling movement or motion of her hand all
over the head and the face.
A: It is a long iron bar used in digging soil?
PROS. LAGROSA: was astonished as the happening unfolded, her ability to perceive, remember, and make
known her perception was not diminished.
Q: Now, what happened after Kuya Dodong " binareta" (sic) your father on the head?
As regards Aniceta’s version of the events that Jesus was the sole perpetrator of the crime
A: "Nandoon pa po ako sa silong nila Kuya Unyo nakita ko nalang ponandoon na po ang who attacked Wilfredo only in self-defense, we easily see the fatal flaw: Aniceta arrived
nanay ko pati po mga kapatid ko tsaka na poako lumabas."10 after the supposed fight between Wilfredo and Jesus, and what transpired was merely
relayed to her by Jesus’ sister, Marilou.
As the lower courts have done, we accord full faith and credence to Rachel’s testimony.
She was young and unschooled, but her narration of the incident was categorical, without Quite apparent from Aniceta’s narration of events is that she has no personal knowledge
wavering. It has no markings of a concocted story, impressed upon her by other people. of Wilfredo’s killing. Aniceta’s testimony is mainly hearsay, specially on the purported fight
between Wilfredo and Jesus that ended in Wilfredo’s death. Aniceta’s testimony as such
The defense, accused-appellants herein, tried to further discredit Rachel’s testimony by carries no probative weight. At best, Aniceta’s testimony is an independent relevant
arguing that Rachel was a mere child who had studied only until the first grade of statement: offered only as to the fact of its declaration and the substance of what had been
elementary school and could barely read, and did not know how to tell time. relayed to Aniceta by Marilou, not as to the truth thereof.13

We cannot take Rachel’s testimony lightly simply because she was a mere child when she Section 36 of Rule 130 of the Rules of Court explicitly provides:
witnessed the incident and when she gave her testimony in court. There is no showing that
her mental maturity rendered her incapable of testifying and of relating the incident SEC. 36. Testimony generally confined to personal knowledge; hearsay excluded. – A
truthfully. witness can testify only to those facts which he knows of his personal knowledge; that is,
which are derived from his own perception, except as otherwise provided in these rules.
With exceptions provided in the Rules of Court,11 all persons who can perceive, and
perceiving, can make known their perception to others, may be witnesses. That is even We detect a clever, albeit transparent ploy, to pin Jesus who had already fled and is
buttressed by the Rule on Examination of a Child Witness which specifies that every child temporarily out of reach of the law. Thus, with Jesus temporarily shielded from punishment,
is presumed qualified to be a witness. To rebut this presumption, the burden of proof lies accused-appellants freely accuse and point to him as the sole perpetrator of the crime.
on the party challenging the child's competence. Only when substantial doubt exists This cannot trump the solid testimony of Rachel on accused-appellants’ direct participation
regarding the ability of the child to perceive, remember, communicate, distinguish truth in killing Wilfredo.
from falsehood, or appreciate the duty to tell the truth in court will the court, motu proprio
or on motion of a party, conduct a competency examination of a child.12 Thus, petitioners’ We likewise affirm the lower courts’ appreciation of the aggravating circumstance of
flimsy objections on Rachel’s lack of education and inability to read and tell time carry no treachery:
weight and cannot overcome the clear and convincing testimony of Rachel as to who killed
her father. The essence of treachery is the sudden and unexpected attack by an aggressor without
the slightest provocation on the part of the victim, depriving the latter of any real chance to
We likewise note that the line of questioning of the defense during cross-examination on defend himself, thereby ensuring its commission without risk to the aggressor. Treachery
the competency of Rachel to read and tell time did not distract her in recollecting how her attended the killing of the victim because he was unarmed and the attack on him was swift
father was attacked by accused-appellants. From her position underneath the house of her and sudden. He had not means and there was no time for him to defend himself. Indeed,
"Kuya Unyo," she saw her father, Wilfredo, attacked by accused-appellants. Although she nothing can be more sudden and unexpected than when petitioners Edwin and Alfredo
attacked the victim. The latter did not have the slightest idea that he was going to be
attacked because he was urinating and his back was turned from his assailants. The WHEREFORE, the appeal is DISMISSED. The Decisions of the Court of Appeals in CA-
prosecution was able to establish that petitioners’ attack on the victim was without any G.R. H.C. No. 04051 and the Regional Trial Court, Branch 18, Malolos, Bulacan in Criminal
slightest provocation on the latter’s part and that it was sudden and unexpected. This is a Case No. 3517-M-2004 are AFFIRMED with MODIFICATION. The award of exemplary
clear case of treachery.14 damages is increased from ₱25,000.00 to ₱30,000.00 and we delete the award for loss of
earning capacity in the amount of ₱1,946, 180.00.
Finally, we affirm the lower court’s award of damages consistent with jurisprudence:15 (1)
₱50,000.00 as civil indemnity; (2) ₱25,000.00 as temperate damages; and (3) ₱50,000.00 SO ORDERED.
as moral damages. Consistent with current jurisprudence, we increase the award of
exemplary damages from ₱25,000.00 to ₱30,000.00.16 However, we delete the award of G.R. No. 169873 June 8, 2007
₱1,946,180.00 representing the unearned income of Wilfredo.
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee,
To obviate confusion on the award of loss of earning capacity, we reiterate herein that vs.
compensation for lost income is in the nature of damages and as such requires due proof NORBERTO ASTROLOGO y DE DIOS, Accused-Appellant.
of the damages suffered; there must be unbiased proof of the deceased’s average
income.17 In this case, we only had he testimony of Wilfredo’s spouse, Rowena, who DECISION
claimed that Wilfredo earned ₱400.00 to ₱500.00 daily as a doormat vendor.
CHICO-NAZARIO, J.:
On more than one occasion, we have held that the bare testimony of a deceased’s mother
or spouse as to the income or earning capacity of the deceased must be supported by
For review is the Decision1 dated 29 April 2005 of the Court of Appeals in CA-G.R. CR No.
competent evidence like income tax returns or receipts.18
0013, which affirmed the Decision2 dated 10 March 2003 of the Regional Trial Court (RTC)
of Quezon City, Branch 102, in Criminal Case No. Q-00-89343 finding herein appellant
In People v. Caraig,19 we have drawn two exceptions to the rule that "documentary Norberto Astrologo y De Dios guilty beyond reasonable doubt of the crime of rape as
evidence should be presented to substantiate the claim for damages for loss of earning defined and penalized under Article 266 of the Revised Penal Code committed against his
capacity," and have thus awarded damages where there is testimony that the victim was own daughter and sentencing him to suffer the penalty of reclusion perpetua, with the
either (1) self-employed earning less than the minimum wage under current labor laws, modification which reduced the amount of civil indemnity to ₱50,000.00; moral damages
and judicial notice may be taken of the fact that in the victim's line of work no documentary to ₱50,000.00; and ordering the appellant to pay the victim exemplary damages in the
evidence is available; or (2) employed as a daily-wage worker earning less than the amount of ₱25,000.00.
minimum wage under current labor laws."
An Information3 dated 3 January 2000 was filed against appellant Astrologo charging him
Although Wilfredo’s occupation as a doormat vendor may fall under the first exception, the with the crime of rape committed against his own daughter, AAA.4 The Information reads
minimum wage for Region III, which includes the province of Bulacan, is below ₱400.00 as follows:
as per the National Wages and Productivity Commission Regional Daily Minimum Wage
Rates as of August 2013.20 Regrettably, except for the bare assertion of Rowena,
The undersigned upon prior sworn complaint filed by AAA, assisted by Aida
Wilfredo's spouse, we have nothing to anchor the award for loss of earning capacity. Thus,
Zipagan5 accuses [NORBERTO] ASTROLOGO Y DE DIOS of the crime of Rape,
we delete the award for loss of earning capacity in the amount of ₱1,946,180.00.
committed as follows:
That on or about the 28th day of December, 1999, in xxx City, Philippines, the said on 29 December 1999. Also on 29 December 1999, AAA, assisted by some barangay
accused, by means of force and intimidation, did then and there wilfully (sic), unlawfully officials, reported the incident to the police authorities where she executed an Affidavit8 on
and feloniously and at knife point have sexual intercourse with said AAA, his own daughter what had happened. AAA was also subjected to a physical examination at Camp Crame
inside their residence located at Phase xxx, Purok xxx, xxx, Bgy. xxx,6 this City, against conducted by Dr. Supe, Jr. on the basis of the complaint filed by her against her own father.
her will and without her consent.7
During Dr. Supe, Jr.’s testimony in court, he declared that AAA suffered a deep fresh
On 1 March 1999, the appellant was arraigned, in which he entered a plea of NOT GUILTY hymenal laceration at six and seven o’clock positions. Such declaration affirmed his
to the crime charged against him. Thereafter, trial ensued. findings as stated in Medico-Legal Report No. M-3479-A-999that AAA suffered a
"compatible loss of virginity," which loss could have occurred within 24 hours before the
The prosecution presented the following witnesses: AAA, the victim, Aida Zepadan (Aida), examination.
Mauricio Cabrera (Mauricio), and Dr. Francisco Supe, Jr. (Dr. Supe, Jr.).
On the other hand, the defense merely presented the lone testimony of the appellant. The
AAA testified that she is the daughter of the appellant. She stated that before the incident, appellant denied having committed the crime of rape against his own daughter, AAA. This
she used to live with her grandmother in Montalban. But, on 23 December 1999, she was Court will quote the defense’s own version of the facts of the case according to the
fetched by the appellant at her grandmother’s house to live with him and his family. On 28 testimony of the appellant as summarized by the RTC and the appellate court. Thus-
December 1999, at around 10:00 p.m., she went home after watching television from their
neighbor’s house. Shortly thereafter, she slept beside her two siblings, namely: BBB, nine On [23 December 1999], [herein appellant’s] mother instructed him to fetch [AAA] because
years old; and CCC, seven years old. At around 11:00 p.m., while she was sleeping inside his daughter was frequently meeting her boyfriend late in the evening at the back of her
a room in their house located in Phase XXX, Purok XXX, XXX, Barangay XXX, XXX City, grandmother’s house and that this would happen about twice or thrice in one evening. [The
she woke up when she felt someone kissing her lips. She opened her eyes and recognized appellant] then fetched his daughter and brought her to his house in [Barangay] XXX, XXX
that it was her father, herein appellant. She struggled in refusal. She noticed then that her City.
polo shirt was already open. The appellant started mashing her breasts, and when she
resisted, he pointed a knife at her. Then, the appellant touched her vagina, lifted her skirt On [26 December 1999], herein [appellant] celebrated his birthday. The next day, a friend
and succeeded in inserting his penis into her vagina despite her continuing refusal, thereby came to his house to continue the birthday celebration. The [appellant] and his friends
causing her so much pain. After satisfying his lust, the appellant fell asleep. AAA started the party at about 10:30 [a.m.], about four (4) blocks from his house. At around
immediately dressed up and proceeded to their neighbor’s (Aida) house. Aida brought AAA 10:30 [p.m.], the [appellant] went home from the party. On his way home, he passed by
to her stepmother, who was at another neighbor’s house that time. AAA narrated to her his daughter who was still out in the street. He ordered her to go home as it was getting
stepmother how the appellant sexually abused her. Subsequently, Aida brought AAA to late. At around 12:30 o’ clock past midnight, or early morning of [28 December 1999], he
the Barangay authorities, particularly to Mauricio who is a Barangay Security and went out of his house for some fresh air. Shortly thereafter, he was arrested [for allegedly
Development Officer (BSDO) of Barangay XXX, to report the incident. raping his daughter (AAA) and brought to Police Station 6 where he was detained.10

Mauricio affirmed that between 11:00 p.m. and 12:00 midnight of 28 December 1999 or After trial, the RTC rendered a Decision on 10 March 2003, finding the appellant guilty
almost 29 December 1999, while he was at a Christmas Party, AAA, together with a beyond reasonable doubt of the crime of simple rape.11 The RTC did not give credence to
neighbor, approached him to seek his assistance as she was raped by her father earlier the defense offered by the appellant which consisted merely of his bare denial. The
that night. Thereafter, he and the rest of the BSDO went to appellant’s house but the latter decretal portion of the aforesaid Decision reads, thus:
had already left the premises. The group spread out to search for the appellant and when
they saw him, they chased him for some distance until he was overran and caught by
SPO3 David Laciste. They brought the appellant to the police station at around 1:00 a.m.
WHEREFORE, in view of the foregoing, the Court finds the [appellant] Norberto Astrologo Let the records of this case be forwarded to the Supreme Court for automatic review.15
y De Dios GUILTY beyond reasonable doubt of the crime of Rape, as defined and
penalized under Article 266 of the Revised Penal Code, and is hereby sentenced to suffer Aggrieved by the aforesaid Decision of the appellate court, the appellant filed a Notice of
the penalty of imprisonment of reclusion perpetua. Appeal.16 In view of the said Notice of Appeal, the Court of Appeals forwarded to this Court
the records of this case.
The [appellant] is likewise ordered to pay [AAA] the following amounts:
On 4 September 2006, this Court resolved to accept the present case and to require the
(1) ₱75,000.00 as civil indemnity; and parties to simultaneously submit their respective supplemental briefs. The Office of the
Solicitor General filed a Manifestation in lieu of Supplemental Brief wherein it re-pleads
(2) ₱75,000.00 as moral damages.12 and re-submits all the arguments in the Appellee’s Brief dated 20 May 2004. The appellant
also filed a Manifestation in lieu of Supplemental Brief which merely adopts the defenses
The records of this case were originally transmitted to this Court on appeal. and arguments raised in the Appellant’s Brief.

In his brief, the appellant’s lone assignment of error was, the trial court gravely erred in After a careful review of the records of this case, this Court affirms appellant’s conviction.
convicting the appellant for the crime of rape.13
A rape charge is a serious matter with pernicious consequences both for the appellant and
Pursuant to People v. Mateo, the records of the present case were transferred to the
14 the complainant; hence, utmost care must be taken in the review of a decision involving
Court of Appeals for appropriate action and disposition. conviction of rape.17 Thus, in reviewing rape cases, the Court is guided by these principles:
First, the prosecution has to show the guilt of the accused by proof beyond reasonable
doubt or that degree of proof that, to an unprejudiced mind, produces conviction. Second,
Accordingly, the Court of Appeals, taking into consideration the assignment of error stated
unless there are special reasons, the findings of trial courts, especially regarding the
by the appellant in his Appellant’s Brief and after a thorough study of the records of the
credibility of witnesses, are entitled to great respect and will not be disturbed on appeal.
case, rendered a Decision on 29 April 2005 affirming the conviction of the appellant with
Third, the disposition of rape cases is governed by the following guidelines: (1) an
the modification which reduced the amount of civil indemnity and moral damages awarded
accusation of rape can be made with facility; it is difficult to prove but more difficult for the
and ordering the payment of exemplary damages to the victim, AAA. The dispositive
person accused, though innocent, to disprove; (2) in view of the intrinsic nature of the crime
portion of the said Decision reads as follows:
of rape where only two persons are usually involved, the testimony of the complainant must
be scrutinized with extreme caution; and (3) the evidence for the prosecution must stand
IN LIGHT OF ALL THE FOREGOING, the Decision of the Regional Trial Court of Quezon or fall on its own merits and cannot draw strength from the weakness of the evidence of
City, Branch 102 in Criminal Case No. Q-00-89343 is hereby AFFIRMED WITH the defense.18
MODIFICATIONS, to wit:
In the present case, appellant contends that the court a quo erred in disregarding the
1. Reducing the civil indemnity from ₱75,000.00 to ₱50,000.00; appellant’s defense of denial. According to appellant, he could not have raped the victim
as he was arrested during the early hours of 28 December 1999, while the rape incident
2. Reducing the award of moral damages from ₱75,000.00 to ₱50,000.00; and allegedly committed by him happened in the evening of the same day at around 10:00 p.m.
Therefore, he was arrested even before the commission of the crime. This Court finds this
3. Appellant Norberto Astrologo y De Dios is ordered to pay [the victim, AAA] ₱25,000.00 contention indefensible.
as exemplary damages.
This Court has consistently held that when the victim says that she has been raped, she established.22 Thus, such testimony of Dr. Supe, Jr. strengthens the charge of rape against
says in effect all that is necessary to show that rape has been committed, and if her appellant.
testimony meets the test of credibility, the accused may be convicted on the basis thereof.
This is all the more true where the complainant is the daughter of the accused19because a As compared to the aforesaid evidence of the prosecution, the defense of bare denial
daughter would not concoct a story of defloration against her father, accused him of so offered by the appellant cannot hold water.
grave a crime as rape, allow an examination of her private parts, submit herself to public
humiliation and scrutiny via an open trial, if she were not truly aggrieved or her sordid tale The defense of denial is an intrinsically weak defense, which must be buttressed by strong
was not true and her sole motivation was not to have the culprit apprehended and evidence of non-culpability to merit credibility.23 It is merely a negative and self-serving
punished.20 It is likewise against human nature for a girl to fabricate a story that would allegation that cannot be given any weight on the scale of justice.24 And although denial is
expose herself as well as her family to a lifetime of dishonor, especially when her charge a legitimate defense in rape cases, mere bare assertions to this effect cannot overcome
could mean the death or a lifetime in prison of her own father.21 the positive, straightforward, unequivocal and categorical testimony of the victim. It is an
established rule that an affirmative testimony is far stronger than a negative testimony,
In this case, when AAA testified before the trial court, she described in detail the horrible especially so when it comes from a credible witness.25 Likewise, it is hornbook doctrine
experience she suffered at the hands of her own father on that fateful night of 28 December that such positive and categorical testimony of a rape victim-daughter, identifying her own
1999. Her testimony can be characterized as categorical and unqualified. She gave a vivid father as the one who sexually attacked her, prevails over his bare denial because no
and clear account on how the appellant raped her. She also made a positive identification daughter will charge a father, especially a good father, with rape. The charge is not only
of the person who raped her and she declared in an unequivocal manner that it was her embarrassing to the victim and the family. It means death to the head of the family. A father
father, herein appellant, who raped her. It is worthy to note that after she was raped, she so charged cannot exculpate himself by a bare-bone denial.26
took effort to report that incident to their neighbor, but since she could not utter a word, her
neighbor brought her to her stepmother to whom she narrated how the appellant raped her In the case at bar, the appellant repeatedly denied having committed the crime of rape as
and subsequently, sought the help of the barangay officials to report what had happened charged against him because he was arrested even before its commission. Such defense
as affirmed by Mauricio, one of the prosecution’s witnesses. Mauricio averred that indeed, of denial offered by the appellant must be rejected. It is a well-settled doctrine that denial
between 11:00 p.m. and 12:00 midnight of 28 December 1999, or almost 29 December being a weak defense must be substantiated by a clear and convincing evidence to merit
1999, AAA, together with a neighbor, approached him asking for assistance as she was credibility.27 In this case, the defense merely relied on the lone testimony of the appellant.
raped by her father. He then informed the Barangay Chairman of XXX, Barangay XXX, The appellant did not bother to present other evidence to prove his contention that on the
and the latter ordered the barangay tanods to apprehend the appellant. Mauricio testified early hours of 28 December 1999, he was already arrested and brought to Police Station
that it was already 1:00 a.m. of 29 December 1999 and not 28 December 1999, as alleged 6 where he was detained thereby making it impossible for him to have committed the
by the appellant, when the latter was arrested and brought to Police Station 6. offense charged. The appellant could have presented the records or the logbook of the
Police Station where he was detained to establish the truthfulness of his assertion that he
The testimony of AAA as to the fact of rape was corroborated by the medical findings was already confined in prison when the alleged rape incident happened. In stark contrast,
conducted on 29 December 1999 by Dr. Supe, Jr. of the Philippine National Police (PNP) Mauricio, the BSDO of the Barangay, categorically stated that it was 1:00 a.m. of 29
Crime Laboratory at Camp Crame. In his testimony, he declared to have found a deep December 1999 when appellant was arrested.
fresh hymenal laceration at six and seven o’clock positions, which means AAA suffered a
"compatible loss of virginity." He avowed that such loss of virginity could have occurred Q: Where were you on [28 December 1999] at around 11:00 p.m., Mr. Witness?
within 24 hours before the examination, which coincides with the date the rape incident
happened, which was 28 December 1999. It has been said that when the testimony of a
A: I was attending a Christmas party, sir.
rape victim is consistent with the medical findings, sufficient basis exists to warrant a
conclusion that the essential requisite of carnal knowledge has thereby been
Q: Where was it held, Mr. Witness? failed to move for the quashing of the Information against him before the arraignment,
appellant is estopped from questioning the legality of his arrest.29
A: At the compound of our Barangay Captain.
Finally, this Court agrees in the amount of civil indemnity, moral damages and exemplary
Q: Where is that compound? damages which the appellate court awarded to the victim. Civil indemnity, which is actually
in the nature of actual or compensatory damages, is mandatory upon the finding of the fact
A: XXX. of rape.30 The case law also requires automatic award of moral damages to a rape victim
without need of proof because from the nature of the crime, it can be assumed that she
has suffered moral injuries entitling her to such award. Such award is separate and distinct
xxxx
from civil indemnity.31The reduction of civil indemnity to ₱50,000.00 and moral damages to
₱50,000.00 is proper because the crime committed by the appellant is only simple rape.
Q: What time when you arrived at the residence of the [appellant] in this case? The award of ₱25,000.00 as exemplary damages to AAA is likewise proper in order to
deter other fathers with perverse tendencies or aberrant sexual behaviors from sexually
A: It was nighttime but we could not determine the time when arrested the [appellant] (sic) abusing their own daughters.32
because when [the complainant] arrived to complain our Christmas party (sic) was already
between 11:00 and 12:00. WHEREFORE, premises considered, the Decision of the Court of Appeals in CA-G.R. CR
No. 0013 dated 29 April 2005 finding appellant Norberto Astrologo y De Dios guilty beyond
Q: What time was the [appellant] apprehended? reasonable doubt of the crime of rape, as defined and penalized under Article 266 of the
Revised Penal Code, committed against his own daughter, AAA, and sentencing him to
A: When we brought him to the police station, more or less it was 1:00 o’clock in the suffer the penalty of reclusion perpetua, is hereby AFFIRMED. Costs against appellant.
morning.28
SO ORDERED.
Therefore, the appellant’s bare denial, which was unsubstantiated by convincing evidence,
was not sufficient to create a reasonable doubt as to his commission of the crime. G.R. No. 193188 August 10, 2011

The contention of the appellant that the trial court failed to consider that his arrest was PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee,
legally objectionable because the barangay tanods and the arresting officer who arrested vs.
him had no personal knowledge of the facts indicating that he had committed the crime is JUANITO APATTAD,Accused-Appellant.
grossly weak. We quote here the findings of the appellate court, viz:
DECISION
Appellant cannot possibly claim that the arresting officers did not have personal knowledge
of the facts indicating that he committed the alleged rape. The victim herself reported to VELASCO, JR., J.:
the barangay authorities that it was appellant who raped her. The arresting officers
therefore, had probable cause to believe that appellant raped the victim.
The Case
Nevertheless, it is a well-entrenched rule that any objection, defect or irregularity attending
This is an appeal from the August 28, 2009 Decision1 of the Court of Appeals (CA) in CA-
an arrest must be made before the accused enters his plea on arraignment. And, having
G.R. CR-H.C. No. 03173, which affirmed, with modification, an earlier Decision2 in Criminal
Case Nos. 10172-10175 of the Regional Trial Court (RTC), Branch 4 in Tuguegarao City, APATTAD[,] father of the offended party, [AAA], a minor below 12 years of age, thus have
Cagayan. The RTC found accused Juanito Apattad guilty beyond reasonable doubt of moral ascendancy over the complainant, with lewd design and by the use of force, did,
three (3) counts of rape. then and there, willfully, unlawfully and feloniously have sexual intercourse with his own
daughter, the herein offended party, [AAA], a minor woman below 12 years of age against
The Facts her will.

Accused was charged in four (4) separate informations, the accusatory portions of which CONTRARY TO LAW.6 (Emphasis in the original.)
read:
CRIMINAL CASE NO. 10175
CRIMINAL CASE NO. 10172
That on or about June 11, 2003, in the Municipality of Peñablanca, Province of Cagayan,
That sometime in the year 2001, in the evening[,] in the Municipality of Peñablanca, and within the jurisdiction of this Honorable Court, the said accused, JUANITO
Province of Cagayan, and within the jurisdiction of this Honorable Court, the said accused, APATTAD[,] father of the offended party, [AAA], a minor below 12 years of age, thus have
JUANITO APATTAD[,] father of the offended party, [AAA],3 a minor below 12 years of age, moral ascendancy over the complainant, with lewd design and by the use of force, did,
thus have moral ascendancy over the complainant, with lewd design and by the use of then and there, willfully, unlawfully and feloniously have sexual intercourse with his own
force, did, then and there, willfully, unlawfully and feloniously have sexual intercourse with daughter, the herein offended party, [AAA], a minor woman below 12 years of age against
his own daughter, the herein offended party, [AAA], a minor woman below 12 years of age her will
against her will.
CONTRARY TO LAW.7 (Emphasis in the original.)
CONTRARY TO LAW.4 (Emphasis in the original.)
On June 1, 2004, the accused, with the assistance of his counsel, pleaded not guilty to all
CRIMINAL CASE NO. 10173 the charges against him.8Subsequently, on June 8, 2004, pre-trial conference was held
and was terminated on the same day, with the parties stipulating on the following:
That sometime in the year 2002, in the evening[,] in the Municipality of Peñablanca,
Province of Cagayan, and within the jurisdiction of this Honorable Court, the said accused, (a) The identities of the accused and AAA;
JUANITO APATTAD[,] father of the offended party, [AAA], a minor below 12 years of age,
thus have moral ascendancy over the complainant, with lewd design and by the use of (b) AAA is the daughter of the accused;
force, did, then and there, willfully, unlawfully and feloniously have sexual intercourse with
his own daughter, the herein offended party, [AAA], a minor woman below 12 years of age (c) AAA was a minor, being born on October 14, 1994, and was only ten (10) years
against her will. old during the commission of the crime;

CONTRARY TO LAW.5 (Emphasis in the original.) (d) The existence of the Certificate of Live Birth of AAA; and

CRIMINAL CASE NO. 10174 (e) The existence of the Medico Legal Report of AAA issued by Dr. Mila Lingan-
Simangan, Health Officer of Peñablanca, Cagayan.9
That on or about June 10, 2003, in the Municipality of Peñablanca, Province of Cagayan,
and within the jurisdiction of this Honorable Court, the said accused, JUANITO
Thereafter, trial on the merits ensued. During trial, the prosecution offered the oral on re-direct examination, AAA clarified that her mother did not teach her to claim that she
testimonies of AAA and Dr. Mila Lingan-Simangan. On the other hand, the defense was raped and that she was only telling the truth.26
presented as its witnesses the accused himself and Louie Calimag.10
Dr. Simangan, the prosecution’s other witness, testified that on June 16, 2003, she
Version of the Prosecution conducted a physical examination on AAA and discovered that the latter had a healed
hymen laceration at 4 and 7 o’clock positions, and that her vagina admitted the tip of the
AAA testified that sometime in 2001, while she was sleeping with her sisters, the accused fifth finger easily.27 She stated that the laceration could have been caused by a blunt
pulled and positioned her just below the feet of her siblings, and right then and there, object.28 She also testified that after conducting the physical examination, she interviewed
succeeded in molesting her.11 AAA was just seven (7) years old then.12 AAA and the latter gave her the name of the person who raped her.29 However, Dr.
Simangan admitted that she can no longer remember the name that was mentioned by
On June 10, 2003, the accused sexually abused AAA again. While she was sleeping AAA.30 Dr. Simangan also identified the Medico-Legal Report that she prepared.31
beside her younger sister in their room, accused carried her from the bed through the
window and placed her on the floor.13 Afterwards, accused removed his own shirt and used Version of the Defense
it to cover the mouth of AAA.14 Accused then removed his underwear and AAA’s
underwear, and inserted his penis inside AAA’s vagina, while telling her not to report the The accused denied the accusation of rape hurled against him and claimed that his wife
incident to her mother.15When the accused was finished in satisfying his lust, he put AAA’s was the one who initiated the criminal complaint against him because she thinks that he
clothes back on, carried her back to bed, and untied the shirt covering AAA’s mouth.16 has a mistress.32

The same incident happened on June 11, 2003, when accused carried AAA once again The other defense witness, Louie Calimag (Calimag), testified that from June 3, 2003 until
through the window, placed her on the floor, covered her mouth, undressed her, and July 8, 2003, he employed the services of the accused to help him in the operation of the
inserted his penis into her vagina.17 The accused also threatened to kill her if she reports chainsaw.33 As part of their routine, he and the accused would saw logs in the forest from
the incident to her mother.18 7:00 a.m. to 5:00 p.m., go back to his house, and sleep there at night.34 Calimag further
testified that when the accused was arrested by the police in the forest on July 8, 2003, he
When AAA finally told her mother on June 13, 2003 that she was being abused by her own was also with him.35 Thus, when he found out that the accused was arrested for rape
father, her mother whipped her for not telling her about it immediately.19 Thereafter, they allegedly committed on June 10 and 11, 2003, Calimag claimed that he did not believe this
went to the Department of Social Welfare and Development (DSWD) office in Peñablanca, because the accused stayed in his house on those days.36
Cagayan, where AAA was interviewed by a certain Ms. Abrena, a DSWD
personnel.20 Afterwards, they proceeded to the police station where AAA executed a sworn Calimag likewise added that after the accused was arrested, he saw AAA, who admitted
statement narrating what happened. Dr. Mila Lingan-Simangan (Dr. Simangan) also to him that she was not raped by the accused and that it was her mother who instructed
subsequently conducted a physical examination on AAA.21 her to give false information. AAA allegedly told him that her parents had a fight due to her
father’s illicit relationship with another woman.37
On cross-examination, AAA explained that the reason why it was only on June 13, 2003
that she reported the incidents to her mother was because she was afraid that her father On cross-examination, Calimag admitted that the house of the accused was only three (3)
would kill them.22 AAA also confirmed that her parents often quarrel and shout at each kilometers away from his house and that the accused’s house may be reached by jeepney
other.23 She even admitted that she had seen her father slap her mother and that because in an hour and by foot in four (4) hours.38
of this, she sympathized and took pity on her.24 When asked whether she would do
anything that her mother would tell her to do, AAA answered in the affirmative.25 However, Ruling of the Trial Court
Between the two versions of the incident, the trial court gave credence to the version of On September 22, 2009, accused-appellant filed his Notice of Appeal46 from the CA
the prosecution and rendered its Decision dated October 24, 2007, finding the accused Decision dated August 28, 2009.
guilty of three (3) counts of rape. The decretal portion reads:
In Our Resolution dated October 4, 2010, We notified the parties that they may file their
ACCORDINGLY, this Court finds accused JUANITO APATTAD GUILTY beyond respective supplemental briefs. Both parties manifested that they are no longer filing
reasonable doubt of the crime of rape for three (3) counts in Criminal Cases Nos. 10172, supplemental briefs and they are adopting their respective main briefs before the CA.
10174 and 10175 and hereby imposes upon him the penalty of RECLUSION PERPETUA
for each case. He is further ordered to pay [AAA] the amount of One Hundred Fifty The Issues
Thousand (P150,000.00) Pesos as civil indemnity.
Accused-appellant contends in his Brief47 that:
Accused is acquitted in Criminal Case No. 10173 for lack of sufficient evidence.
THE COURT A QUO GRAVELY ERRED IN FINDING ACCUSED-APPELLANT GUILTY
No pronouncement as to costs.39 DESPITE THE PROSECUTION’S FAILURE TO PROVE HIS GUILT BEYOND
REASONABLE DOUBT.
On December 19, 2007, accused-appellant filed his Notice of Appeal40 of the Decision
dated October 24, 2007 rendered by the trial court. On April 15, 2008, the CA, where the The Court’s Ruling
case was docketed as CA-G.R. C.R.-H.C. No. 03173, issued a notice to file brief to the
parties.41 We sustain accused-appellant’s conviction.

On September 5, 2008, accused-appellant filed his Brief for the Accused-Appellant,42 while Denial and alibi are inherently weak defenses
the People of the Philippines, through the Office of the Solicitor General, filed its Brief for
the Plaintiff-Appellee43 on March 27, 2009.
In his Brief, accused-appellant contends that while, generally, the defense of alibi is
frowned upon by the court, it assumes significance when it is corroborated by credible and
Ruling of the Appellate Court disinterested witnesses.48 Accused-appellant claims that Calimag’s testimony was
categorical, concise and persistent in affirming that he was innocent of the crimes
As stated above, the CA, in its Decision44 dated August 28, 2009, affirmed with modification charged.49 Accused-appellant also maintains that although he was not able to adduce any
the judgment of conviction by the trial court, the dispositive portion of which reads: evidence to corroborate his stand that it was his wife, motivated by revenge and anger,
who ultimately caused the filing of the criminal charges against him, this should not be
WHEREFORE, in view of the foregoing, the instant appeal is DISMISSED. The assailed entirely taken against him.50
Decision of Branch 4 of the Regional Trial Court of Tuguegarao City in Criminal Case Nos.
10172, 10174 and 10175 is hereby AFFIRMED with the MODIFICATION that the civil In People v. Estoya,51 this Court laid down the jurisprudential guidelines in assessing the
indemnity awarded should be P75,000.00 for each count of rape. In addition, moral proffered defense of alibi. Particularly:
damages and exemplary damages in the amounts of P75,000.00 and Php25,000.00
respectively, for each count of rape are hereby awarded. Jurisprudential rules and precepts guide this Court in assessing the proffered defense.
One, alibis and denials are generally disfavored by the courts for being weak. Two, they
SO ORDERED.45 cannot prevail over the positive identification of the accused as the perpetrators of the
crime. Three, for alibi to prosper, the accused must prove not only that they were
somewhere else when the crime was committed, but also that it was physically impossible Q: Why do you have light in the room?
for them to be at the scene of the crime at the time of its commission. Fourth, alibi assumes
significance or strength only when it is amply corroborated by credible and disinterested A: Yes, ma’am.
witnesses. Fifth, alibi is an issue of fact that hinges on the credibility of witnesses, and the
assessment made by the trial court — unless patently and clearly inconsistent — must be Q: What is that light?
accepted.52 (Emphasis supplied.)
A: Electric light, ma’am.
Measured against the foregoing yardstick, accused-appellant’s defenses of alibi and denial
cannot prosper. As mentioned above, alibis and denials are inherently weak defenses.
Q: After carrying you and brought [sic] you to the floor, what did he do to you?
This is understandably so because said defenses can be easily fabricated by an accused
in order to escape criminal liability.53
A: He removed his t-shirt and tied my mouth.
Likewise, it was stated in Estoya that alibi and denial cannot prevail over the positive
identification of the accused as the perpetrator of the crime. Notably, these defenses Q: You mean to say he used his t-shirt in tying your mouth?
crumble in light of positive identification by truthful witnesses.54 An alibi is evidence
negative in nature and self-serving, and, thus, cannot attain more credibility than the A: He tied his t-shirt covering my mouth.
testimonies of prosecution witnesses who testify on clear and positive evidence.55 In the
present case, AAA positively identified accused-appellant in her testimony as the very Q: After removing his t-shirt and tying your mouth, what did he do next?
perpetrator of the crime of rape committed against her, to wit:
A: He removed my t-shirt and short[s], ma’am.
Q: While you were sleeping, do you remember any untoward incident that
happened to you? Q: When he undressed you, what happened next?

A: Yes, ma’am. A: He also removed his short[s] and brief, ma’am, and he also removed my panty.

Q: What was that? Q: After undressing himself and undressed [sic] you, what happened next?

A: Somebody carried me, ma’am. A: He inserted his pennis [sic] into my vagina, ma’am.

Q: Who carried you? Q: While inserting his pennis [sic] into your vagina, did he utter something to you?

A: My father, ma’am. A: He ordered me not to report the incident to my mother because they just quarell
[sic].
Q: Where did he bring you?
Q: Did your two (2) sisters wake up?
A: From the bed, he brought me to the floor.
A: No ma’am.
Q: Can you estimate what time was that? A: No ma’am.

A: Its [sic] already late at that time, ma’am. Q: What did you feel when your papa inserted his pennis [sic] into your vagina?

Q: Aside from putting his pennis [sic] into your vagina, what are the things that he A: It is hard and I felt pain.56 (Emphasis supplied.)
do [sic] to you?
Moreover, for alibi to prosper, it is not enough for the accused to prove that he was in
Atty Doran: That is assuming the fact, your honor. another place when the crime was committed as he must likewise prove that it was
physically impossible for him to be present at the crime scene or its immediate vicinity at
Prosecutor Ugale: I will reform my question, your honor. the time of its commission.57 As correctly observed by the trial court, a distance of three (3)
kilometers does not make it physically impossible for accused-appellant to be at the scene
Prosecutor Ugale: of the crime at the time it was committed.58 Calimag himself admitted during cross-
examination that the house of accused-appellant may be reached by jeepney in an hour.
Significantly, even if accused-appellant indeed stayed in Calimag’s house on the dates that
Q: Is that all the things that he did to you?
he committed rape, it was still not physically impossible for accused-appellant to go home
and commit the said crime at the time it was said to have been committed.
A: Not only that, ma’am.
Also, alibi assumes significance or strength only when it is amply corroborated by credible
Q: What else did he do to you? and disinterested witnesses. In this regard, it should be noted that alibi becomes unworthy
of merit not only because accused-appellant was positively identified by AAA but also in
A: He out my shorts and panty and my t-shirt, he dressed himself [sic] and then he cases where it is established mainly by the accused himself, his relatives, friends and
put me back to be beside my sister then he untied me. comrades-in-arms,59 and not by credible persons.60

Q: What did you feel when your father inserted his pennis [sic] into your vagina? Finally, as mentioned in Estoya, alibi is an issue of fact that hinges on the credibility of
witnesses, and that the assessment made by the trial court must be accepted unless it is
A: I felt pain, ma’am. patently and clearly inconsistent.

Q: Did he also kiss you? Indeed, "it is a hornbook doctrine that the findings of fact of the trial court are entitled to
great weight on appeal and should not be disturbed except for strong and valid reasons,
A: He kissed my cheek, ma’am. because the trial court is in a better position to examine the demeanor of the witnesses
while testifying."61 In People v. Lusabio, Jr., this Court held:
Q: Did he kiss your lips?
All in all, we find the evidence of the prosecution to be more credible than that adduced by
A: No ma’am. accused-appellant. When it comes to credibility, the trial court's assessment deserves
great weight, and is even conclusive and binding, if not tainted with arbitrariness or
oversight of some fact or circumstance of weight and influence. The reason is obvious.
Q: How about your neck?
Having the full opportunity to observe directly the witnesses’ deportment and manner of
testifying, the trial court is in a better position than the appellate court to evaluate In the present case, it is undisputed that the victim, AAA, was below twelve (12) years old
testimonial evidence properly.62 (Emphasis supplied; citations omitted.) when the crime was committed. A copy of AAA’s birth certificate to prove her age was duly
presented in evidence by the prosecution, indicating that she was indeed born on October
Since accused-appellant failed to show any palpable error, arbitrariness, or capriciousness 14, 1994.69 Concomitantly, AAA was only seven (7) years old when the crime of rape was
on the findings of fact of the trial and appellate courts, these findings deserve great weight first committed against her in 2001, and was only nine (9) years old when the accused
and are deemed conclusive and binding. once again succeeded in committing the same crime in 2003.70 Also, it is undisputed that
accused-appellant is the father of AAA, as stipulated by the parties during the pre-trial
The guilt of accused-appellant has been conference and as also indicated in AAA’s birth certificate.71Thus, what only remains to be
established beyond reasonable doubt proved is the fact of carnal knowledge by the accused of the victim.

After a careful examination of the records of this case, this Court is satisfied that the Verily, the prosecution has sufficiently established the foregoing element, thus proving that
prosecution’s evidence established the guilt of accused-appellant beyond reasonable accused-appellant is guilty beyond reasonable doubt of three (3) counts of rape. 1avv phi1

doubt.
When AAA was called to the witness stand, she gave a detailed narration of how she was
In reviewing the evidence in rape cases, the following considerations should be made: (1) sexually molested by her father, which narration is difficult, if not improbable, for a 10-year-
an accusation for rape can be made with facility, it is difficult to prove but more difficult for old girl to concoct. As aptly observed by the CA, "[AAA] was able to describe in detail how
the person, though innocent, to disprove; (2) in view of the intrinsic nature of the crime of her father carried her through the window, laid her down the floor, tied her mouth, removed
rape where only two persons are usually involved, the testimony of the complainant must her clothes and inserted his penis inside her vagina. She even described that she felt pain
be scrutinized with extreme caution; and (3) the evidence for the prosecution must stand while her father was performing the carnal act against her."72
or fall on its own merits and cannot be allowed to draw strength from the weakness of the
evidence for the defense.63Nonetheless, it also bears stressing that rape is essentially Pertinently, "it is settled jurisprudence that the testimony of a child-victim is given full weight
committed in relative isolation or secrecy; thus, it is most often only the victim who can and credence, considering that when a woman, specially a minor, says that she has been
testify with regard to the fact of forced coitus.64 raped, she says in effect all that is necessary to show that rape was committed. Youth and
immaturity are generally badges of truth and sincerity."73
Under Article 266-A of the Revised Penal Code, as amended, the crime of rape is
committed by a man having carnal knowledge of a woman under any of the following Moreover, the fact that AAA’s testimony was able to withstand scrutiny during cross-
circumstances: (1) through force, threat or intimidation; (2) when the offended party is examination bolsters her credibility and makes her statements more credible.74
deprived of reason or otherwise unconscious; (3) by means of fraudulent machination or
grave abuse of authority; and (4) when the offended party is under twelve (12) years of Further, it should be noted that the findings in the medical examination of Dr. Simangan
age or is demented, even though none of the circumstances mentioned above be corroborate the testimony of AAA. In this regard, while a medical examination of the victim
present.65 is not indispensable in the prosecution of a rape case, and no law requires a medical
examination for its successful prosecution, the medical examination conducted and the
In People v. Orillosa,66 this Court held that in incestuous rape of a minor, actual force or medical certificate issued are veritable corroborative evidence, which strongly bolster
intimidation need not be employed where the overpowering moral influence of the father AAA’s testimony.75
would suffice.67 Thus, in order for the accused to be found guilty of the crime of statutory
rape in this jurisdiction, only two (2) elements must concur: (1) that the offender had carnal In addition, this Court is not convinced that a child of a tender age would concoct a story
knowledge of the victim; and (2) that the victim is below twelve (12) years old.68 as sordid as in the instant case due to her mother’s alleged ill motive. In People v. Padilla,
We held that accused-appellant’s imputation of ill motive on the victim’s mother for being Pertinently, as early as July 9, 1998, this Court has held that when the circumstances
jealous of another woman is clearly unmeritorious, for no mother in her right mind would surrounding the crime would justify the imposition of the penalty of death were it not for RA
possibly wish to stamp her child with the stigma that follows the crime of rape only because 9346, the award of civil indemnity for the crime of rape should be PhP 75,000,79 racionating
she is consumed with hatred and revenge. Specifically: that "[t]his is not only a reaction to the apathetic societal perception of the penal law and
the financial fluctuations over time, but also an expression of the displeasure of the Court
Appellant, nonetheless, imputes ill-motive on Laiza and her mother Elisa in charging him over the incidence of heinous crimes against chastity."80 1av vphi1

with rape contending that the latter was jealous when she found that he was courting a
woman in their place. Likewise, the award of moral damages in the amount of PhP 75,000 is warranted,81 without
need of pleading or proving them.82 In rape cases, it is recognized that the victim’s injury
Again, appellant’s excuse is simply too frail to cause resentment and ill will on the part of is concomitant with and necessarily results from the odious crime of rape to warrant per se
Laiza and her mother against him. Though one may be consumed with much hatred and the award of moral damages.83
revenge, it takes nothing less than psychological depravity for a mother to concoct a story
too damaging to the welfare and well-being of her own daughter. Certainly, no mother in Further, the Court also awards exemplary damages in the amount of PhP 30,000, despite
her right mind would possibly wish to stamp her child with the stigma that follows a the lack of any aggravating circumstances,84 to deter others from committing similar acts
despicable crime of rape. We are convinced that the victim and her mother boldly initiated or for correction for the public good.85
the present case to seek justice for the abominable act committed by appellant. (Emphasis
supplied; citations omitted.) WHEREFORE, the appeal is DENIED. The CA Decision dated August 28, 2009 in CA-
G.R. CR-H.C. No. 03173 finding accused-appellant Juanito Apattad guilty of rape
All told, We accordingly sustain accused-appellant’s conviction. is AFFIRMED with MODIFICATIONS. As thus modified, accused-appellant is ordered to
pay AAA for each count of rape, PhP 75,000 as civil indemnity, PhP 75,000 as moral
Award of Damages damages, and PhP 30,000 as exemplary damages.

The Decision of the CA as to the damages awarded must be modified. SO ORDERED.

In rape cases, when the victim is under 18 years of age and the offender is a parent, G.R. No. 128384 June 29, 1999
ascendant, step-parent, guardian, relative by consanguinity or affinity within the third civil
degree, or the common-law-spouse of the parent of the victim, the imposable penalty is PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
death.76 However, with the enactment of Republic Act No. (RA) 9346 or An Act Prohibiting vs.
the Imposition of Death Penalty in the Philippines, the imposition of death penalty is now REYNALDO SAHOR BAÑAGO, accused-appellant.
prohibited.77 In lieu of the penalty of death, the penalty of reclusion perpetua shall be
imposed when the law violated makes use of the nomenclature of the penalties of the
RPC.78
PUNO, J.:
Consequently, courts can no longer impose the penalty of death. Instead, they have to
impose reclusion perpetua. Nonetheless, the principal consideration for the award of Accused-appellant Reynaldo Sahor Bañago was charged before the Regional Trial Court
damages is "the penalty provided by law or imposable for the offense because of its of Malolos, Bulacan with the crime of rape committed as follows:
heinousness, not the public penalty actually imposed on the offender."
That on or about the 15th day of October, 1993, in the municipality of Antonina brought Dolores to the Philippine National Police Crime Laboratory for physical
Marilao, province of Bulacan, Philippines, and within the jurisdiction of this examination on March 29, 1994. The medico-legal report executed by Dr. Jesusa N.
Honorable Court, the above-named accused, armed with a gun, did then Vergara of the Philippine National Police Crime Laboratory revealed that Dolores was "in
and there wilfully, unlawfully and feloniously, by means of force and non-virgin state physically" and that "there (were) no signs of recent application of any form
intimidation and with lewd designs, have carnal knowledge to (sic) said of violence." 8
Dolores C. Jaurigue, against her will and without her consent. 1
On July 14, 1994, Dolores, assisted by her mother, filed a criminal complaint for rape
Accused-appellant pleaded "not guilty" to the charge. 2 Hence, trial proceeded in due against accused-appellant.
course.
For their part, the defense presented the testimonies of accused-appellant and Delfin
The prosecution presented the testimony of the thirteen-year-old victim, Dolores Jaurigue. Castillo.
She testified that on October 15, 1993, she visited her sister, Dorotea Jaurigue-Mejico,
who was staying with her husband at the bodega of Bauer Company in Marilao, Bulacan. Accused-appellant testified that he was a welder at Bauer Company. In the afternoon of
That evening, she was left alone in the bodega as her sister attended a party. She went to October 15, 1993, he, together with Delfin Castillo and Rolando Pambico, went to the office
bed at around seven o'clock. She was later roused from her sleep when she felt someone of their employer, Mr. Mariano Takbas, in Quezon City to get their salary. They left the
embracing her. It turned out to be accused-appellant. Accused-appellant poked a gun at office at about six o'clock in the evening and then they went home to Marilao, Bulacan.
her and started to remove her short pants and underwear. She tried to shout but accused- They reached Marilao at about eight o'clock in the evening. Accused-appellant proceeded
appellant slapped her twice. Then, he took off his pants and underwear and succeeded in to his residence in Constantino Street, Poblacion, Marilao, Bulacan. Accused-appellant
having carnal knowledge of Dolores. He admonished her not to tell anybody about the denied having raped Dolores Jaurigue on the evening of October 15, 1993. 9
incident. Thereafter, accused-appellant put on his pants and left the room. 3
Defense witness Delfin Castillo corroborated accused-appellant's testimony. Castillo
When Dorotea arrived from the party, she saw accused-appellant coming out of the bodega testified that he was with accused-appellant in the afternoon of October 15, 1993 when
zipping his pants. Dorotea asked Dolores what happened but she did not answer. 4 they went to Quezon City to get their salary. From Quezon City, they proceeded to Marilao,
Bulacan. He spent the night at the bodega of Bauer Company but he did not see private
The following day, Dorotea again asked Dolores what happened the previous night. complainant there. He also stated that accused-appellant did not go to the bodega that
Dolores told her sister that accused-appellant raped her. Afraid of what accused-appellant evening. 10
might do to them, Dolores and Dorotea kept the incident to themselves. 5
The trial court found accused-appellant guilty beyond reasonable doubt of the crime
It was only on March 18, 1994 that Dolores had the courage to tell her aunt, Lourdes charged. It sentenced him to reclusion perpetua and ordered him to indemnify the victim
Corcuera, about the assault on her womanhood. Lourdes tried to talk to accused-appellant the sum of P50,000.00 as moral damages. 11
but nothing happened. 6
Accused-appellant appealed the decision of the trial court. He raised the following errors:
During an altercation with Dolores' mother, Antonina Jaurigue, Lourdes divulged that
Dolores was no longer a virgin. Shocked about the revelation, Antonina sought for an 1. The court a quo erred in finding accused-appellant guilty
explanation. Dolores was compelled to tell her mother about the rape incident. 7 beyond reasonable doubt of the crime of rape; and
2. The court a quo erred in ordering accused-appellant to Third, a witness who testified in a categorical straightforward, spontaneous
indemnify (the) victim in the amount of P50,000.00 as moral and frank manner and remained consistent on cross-examination is a
damages. 12 credible witness. 13

Accused-appellant assailed the credibility of private complainant who alone testified for the We find no reason in the case at bar to disturb the findings of the trial court regarding
prosecution. In his brief, accused-appellant harped on the alleged flaws in the testimony private complainant's credibility. A reading of the transcript of the trial shows that private
of private complainant. He contended that it was unlikely for Dorotea Jaurigue-Mejico and complainant, young and innocent as she was, was able to recount clearly and candidly
her husband to use the bodega as their living quarters since the bodega had no division before the court how accused-appellant ravished her on the evening of October 15, 1993.
and was open to anyone who wished to enter; that although private complainant testified Her testimony must be given full weight, especially since it is supported by the medical
that her sister saw accused-appellant coming out of the bodega, the prosecution did not report submitted by the Philippine National Police Crime Laboratory. As a rule, testimonies
present her sister to testify on such fact; and that private complainant admitted that she of rape victims who are young and immature deserve full credence, considering that no
never saw accused-appellant again after the rape although she earlier testified that she young woman, especially of tender age, would concoct a story of defloration, allow an
told her aunt about the incident only on March 18, 1994 because she was afraid of what examination of her private parts, and thereafter pervert herself by being subject to a public
accused-appellant might do to her. Accused-appellant also cited the nine-month delay in trial, if she was not motivated solely by the desire to obtain justice for the wrong committed
the filing of the criminal complaint. against her. 14Hence, we affirm accused-appellant's conviction.

Accused-appellant's contentions deserve scant consideration as they pertain merely to We likewise affirm the award of moral damages to private complainant. In rape cases, the
minor details and do not negate private complainant's positive testimony that accused- court may, in its discretion, award moral damages to the victim without need for pleading
appellant violated her on the evening of October 15, 1993. Even the delay in the filing of or proof of the basis thereof. We held in People vs. Prades 15 that "the conventional
the complaint does not favor accused-appellant's cause. The records show that private requirement of allegata et probata in civil procedure and for essentially civil cases should
complainant did not report the incident to the authorities because accused-appellant be dispensed with in criminal prosecutions for rape with the civil aspect included therein,
threatened to harm her if she tells anybody about it. It is understandable for any woman, since no appropriate pleadings are filed wherein such allegations can be made." As the
especially a young girl, to hide such a traumatic and horrible experience even from the fact of rape has been sufficiently proved in this case, we find the award of moral damages
persons closest to her because of shame and fear. proper and correct.

The parameters for scrutinizing the credibility of witnesses have been set forth as follows: We note, however, that the trial court failed to award civil indemnity to private complainant.
Time and again, we have held that moral damages is separate and distinct from the civil
First, the appellate court will not disturb the factual findings of the lower indemnity awarded to rape victims. The moral damages cannot take the place of the civil
court unless there is a showing that it had overlooked, misunderstood, or indemnity. While the award of moral damages is discretionary on the part of the court, the
misapplied some fact or circumstances of weight and substance that would civil indemnity, which is actually in the nature of actual or compensatory damages, is
have affected the result of the case; mandatory upon the finding of the fact of rape. 16 Hence, in addition to the P50,000.00 moral
damages, accused appellant is ordered to pay private complainant the amount of
Second, the findings of the trial court pertaining to the credibility of P75,000.00 by way of civil indemnity.
witnesses are entitled to great respect since it had the opportunity to
examine their demeanor as they testified on the witness stand; and IN VIEW WHEREOF, the judgment appealed from is AFFIRMED with the MODIIFICATION
that in addition to the P50,000.00 moral damages, accused-appellant is also ordered to
pay private complainant P75,000.00 as civil indemnity. 1âwphi1.nêt
SO ORDERED. Criminal Case No. 99-1-2084-H:

G.R. No. 179498 August 3, 2010 That on or about March 2, 1998, at 8:00 o’clock in the morning, more or less, at Sitio [ABC],
Barangay [123], Municipality of Hinatuan, Province of Surigao del Sur, Philippines, and
PEOPLE OF THE PHILIPPINES, Appellee, within the jurisdiction of this Honorable Court, the above-named accused, with lewd and
vs. unchaste designs and by means of force and intimidation, did then and there wilfully,
RUSTICO BARTOLINI y AMPIS, Appellant. unlawfully and feloniously [have] carnal knowledge or rape his own daughter, [BBB],
against the latter’s will, to the damage and prejudice of said [BBB].
DECISION
CONTRARY TO LAW: In violation of Article 335 of the Revised Penal Code, as amended
VILLARAMA, JR., J.: by Section 11 of Republic Act No. 7659.

We review the May 31, 2007 Decision1 of the Court of Appeals (CA) which affirmed the Bislig, Surigao del Sur, November 27, 1998.5
guilty verdict rendered by Branch 29 of the Regional Trial Court (RTC) of Bislig City2 in
Criminal Case Nos. 99-1-2083-H, 99-1-2084-H and 99-1-2085-H, finding appellant Rustico Criminal Case No. 99-1-2085-H:
Bartolini y Ampis guilty of three (3) counts of incestuous rape against his two (2) daughters,
AAA and BBB.3 That on or about 3:00 o’clock in the afternoon sometime in the month of March 1994, at
Sitio [ABC], Barangay [123], Municipality of Hinatuan, Province of Surigao del Sur,
The facts are culled from the findings of both the trial and appellate courts. Philippines, and within the jurisdiction of this Honorable Court, the above-named accused
with lewd and unchaste designs and by means of force and intimidation, did then and there
Appellant Bartolini was charged with three (3) counts of rape before the RTC, Branch 29, wilfully, unlawfully and feloniously rape [his] daughter [BBB], 16 years old, against the
of Bislig City, Surigao del Sur. The informations filed against him read: latter’s will, to the damage and prejudice of the said [BBB].

Criminal Case No. 99-1-2083-H: CONTRARY TO LAW: In violation of Article 335 of the Revised Penal Code as amended
by Section 11 of Republic Act No. 7659.
That on or about 7:00 o’clock in the morning sometime in the month of March 1995, at Sitio
[ABC], Barangay [123], Municipality of Hinatuan, Province of Surigao del Sur, Philippines, Bislig, Surigao del Sur, November 27, 1998.6
and within the jurisdiction of this Honorable Court, the above-named accused with lewd
and unchaste designs, did then and there wilfully, unlawfully and feloniously rape [his] Upon arraignment on May 4, 1999, Bartolini pleaded not guilty to all the three (3) charges
daughter, [AAA], by means of force and intimidation, and against his daughter’s will, to the filed against him.7 The three (3) criminal cases were thereafter tried jointly.
damage and prejudice of the said [AAA], who was then 14 years old.
In the course of the trial, the prosecution presented four (4) witnesses: AAA; BBB; CCC,
CONTRARY TO LAW: In violation of Article 335 of the Revised Penal Code as amended appellant’s wife and mother of both victims; and Dr. Emelie S. Viola, the Municipal Health
by Section 11 of Republic Act No. 7659. Officer of Hinatuan District Hospital who conducted the physical examination of both
victims.
Bislig, Surigao del Sur, November 23, 1998.4
Below are the facts established by their testimonies.
Bartolini is married to CCC.8 They begot six (6) children, the eldest being BBB who was During the trial, CCC testified that sometime in March 1994, her daughter BBB confided to
born on January 14, 1978,9followed by AAA who was born on June 16, 1980.10 her that she was raped by appellant. She just kept silent about the incident for fear that her
husband will maul her when confronted. AAA also reported to her that she was raped by
Sometime in March 1994, at around 3:00 in the afternoon, while BBB was weeding the her father sometime in 1995. In one (1) instance, CCC even saw appellant touching AAA’s
grass on their vegetable garden with her father, the latter suddenly pulled her to the ground vagina while the two (2) were inside their kitchen. She got angry and told her parents-in-
and forced her to lie down. Bartolini then lifted BBB’s skirt, removed her panty and law about the incident, but the latter replied that she has no other evidence to prove her
proceeded to have sexual intercourse with her. As BBB struggled, appellant punched her accusation. CCC also testified that appellant, despite being an elected barangay kagawad,
and hit her at her back. Afterwards, appellant put back his clothes and left. When BBB was a drunkard, violent and an irresponsible individual. She added that she had received
went inside their house, appellant, who was waiting for her, warned her not to tell CCC a letter from appellant threatening to kill them.
about the incident. Despite the warning, BBB reported the incident to her mother, but the
latter told her to just keep quiet.11 Dr. Emelie S. Viola, Municipal Health Officer of Hinatuan District Hospital, testified that
sometime in October 1998, BBB and AAA were brought to her clinic for physical
After the said incident, appellant repeatedly had sexual intercourse with BBB, the last of examination. Although there were no visible signs of physical trauma, Dr. Viola found that
which happened on March 2, 1998 at about 8:00 in the morning inside their house while BBB had deep healed hymenal lacerations at the 6 and 7 o’clock positions, as well as
her mother was away selling fish and while all her siblings were attending school. That superficial healed hymenal laceration at the 10 o’clock position, which indicate that there
morning, appellant ordered BBB to get his clothes for him. Appellant then followed BBB to was a penetration of an object or a male reproductive organ at BBB’s female genitalia.15
the room, took off her clothes and raped her.12
Dr. Viola also examined AAA and found that the latter had deep healed lacerations at the
It also appears that sometime in March 1995, at about 6:30 in the morning, while having 12 o’clock position and superficial healed hymenal lacerations at the 3, 9 and 10 o’clock
breakfast, appellant instructed his second eldest daughter, AAA, to burn the dried leaves positions, also indicating penetration of an object or a male reproductive organ at AAA’s
in their garden. Dutifully, AAA went to the garden at around 7:00 that morning and met her vagina. AAA was also pregnant.16
father there. To her surprise, appellant immediately pulled her and brought her near a big
fallen tree while threatening to kill her and all the members of their family if she would not The defense, on the other hand, presented its lone witness, appellant Bartolini, who
acquiesce to his demands. Appellant told her to remove her panties, but since AAA was interposed the defense of denial and alibi. According to him, he could not have raped BBB
crying and pushing her father away, appellant himself took off AAA’s panties, laid her on in the morning of March 2, 1998 because he has been out of their house from 4:00 a.m.
the ground and placed one (1) of her feet on top of the fallen tree. Afterwards, appellant that day to deliver shrimps, prawns, and crabs to a certain Benjamin Castañas who resides
removed his pants and raped her. After having sexual intercourse with AAA, appellant put in Hinatuan, Surigao del Sur. Appellant claims that he arrived at Castañas’s house at
back his pants and went to the barangay hall to report for duty as appellant was a around 4:20 a.m. and stayed there for breakfast upon the latter’s invitation. After getting
barangay kagawadat that time. Like her sister, AAA also told the incident to their mother, paid, he left for home at around 10:00 a.m. and reached his house fifteen (15) minutes
but the latter told her to keep silent for fear that appellant would fulfill his threats. later.17
Consequently, AAA was repeatedly raped by appellant until sometime in October 1998, a
month before she gave birth to appellant’s child.13 On September 4, 2000, a subpoena was issued for Benjamin Castañas to appear as
witness for the defense.18Castañas, however, failed to appear before the trial court. A
When CCC discovered that AAA was pregnant, she confided the matter to her sister-in- warrant of arrest was thereafter issued against him,19but to no avail. Thus, on July 24,
law, DDD, who, in turn, reported the incident to the barangay captain and to a 2002, the trial court issued another subpoena to Castañas.20 When Castañas still failed to
representative of the Department of Social Welfare and Development (DSWD) in Butuan appear, the trial court issued an order declaring the case submitted for decision.21
City. On November 19, 1998, while under the custody of the DSWD, AAA gave birth to her
child.14
On September 18, 2002, the RTC promulgated its decision finding appellant guilty beyond modified the penalties by reducing the penalty of death to reclusion perpetua following the
reasonable doubt of three (3) counts of rape committed against AAA and BBB. The fallo abolition of the death penalty and by modifying the monetary award in favor of the victims.
reads: The dispositive portion of the appellate court’s decision reads,

WHEREFORE, finding the accused RUSTICO BARTOLINI Y AMPIS, forty-four (44) years WHEREFORE, the Decision dated September 18, 2002 of the Regional Trial Court, 11th
of age, a fisherman and a resident of [ABC, 123,] Hinatuan, Surigao del Sur, guilty beyond Judicial Region, Branch 29, Bislig City, in Criminal Case Nos. [99-1-]2083-H, [99-1-]2084-
reasonable doubt of the crime of RAPE pursuant to Article 335 of the Revised Penal Code, H and [99-1-]2085-H finding appellant Rustico Bartolini y Ampis guilty beyond reasonable
as amended by Section 11, Republic Act No. 7659, paragraph (1), this Court hereby doubt for three counts of rape is AFFIRMED with the following MODIFICATIONS:
sentences him:
(a) in Criminal Case Nos. [99-1-]2083-H and [99-1-]2085-H, the penalty of death is
1. In Criminal Case No. [99-1-]2083-H, to suffer the penalty of Death by Lethal reduced to reclusion perpetua; and to pay the amount of seventy-five thousand
Injection. To pay Seventy-Five Thousand (P75,000.00) pesos as civil indemnity pesos (P75,000.00) as civil indemnity, seventy-five thousand pesos (P75,000.00)
and Fifty Thousand (P50,000.00) pesos as moral damages and to pay the costs; as moral damages and twenty-five thousand pesos (P25,000.00) as exemplary
damages for each count; and
2. In Criminal Case No. [99-1-]2084-H, to suffer the penalty of Death by Lethal
Injection. To pay Seventy-Five Thousand (P75,000.00) pesos as civil indemnity (b) in Criminal Case No. [99-1-]2084-H, the accused is sentenced to suffer the
and Fifty Thousand (P50,000.00) pesos as moral damages and to pay the costs; penalty of reclusion perpetua; and to pay the amount of fifty thousand pesos
[and] (P50,000.00) as civil indemnity, the amount of fifty thousand pesos (P50,000.00)
as moral damages, and twenty-five thousand pesos (P25,000.00) as exemplary
3. In Criminal Case No. [99-1-]2085-H, to suffer the penalty of Death by Lethal damages;
Injection. To pay Seventy-Five Thousand (P75,000.00) pesos as civil indemnity
and Fifty Thousand (P50,000.00) pesos as moral damages and to pay the costs. (c) with costs.

Let the entire records of this case be forwarded to the Supreme Court for automatic review SO ORDERED.24
pursuant to Section 22 of Republic Act No. 7659.
On August 30, 2007, the records of the case were forwarded to this Court for automatic
SO ORDERED.22 review.25 The Court accepted the appeal and directed the parties to file their respective
supplemental briefs if they so desire. However, both the Office of the Solicitor General, for
At the CA, Bartolini argued that he should not have been convicted of the crime of qualified the appellee, and the appellant submitted manifestations26 stating that they replead and
rape since the information in Criminal Case No. 99-1-2085-H was defective because it adopt the arguments raised in their respective briefs27 before the CA.
failed to allege that the act was committed by force or intimidation as required by law, while
there was no allegation of minority of the victim in the information for Criminal Case No. Appellant raises the following issues:
99-1-2084-H. Bartolini also argued that the prosecution failed to prove his guilt beyond
reasonable doubt.23 I. Whether the trial court erred in convicting the appellant;

After an extensive discussion on the issues raised by Bartolini, the appellate court found II. Whether the trial court erred in convicting the appellant in Criminal Case No. 99-
no compelling reason to deviate from the findings of the trial court. Nevertheless, the CA 1-2085-H despite the fact that the information therein was allegedly defective; and
III. Whether the trial court erred in imposing the death penalty upon the appellant Q: Do you recall of any unusual incident that happened on March 1994, while you
after finding him guilty in Criminal Case No. 99-1-2084-H considering the failure of were still residing at [Sitio ABC], [123], Lingig, Surigao del Sur, together with your
the information to allege minority.28 parents?

We shall first discuss the second and third issues raised by the appellant, i.e., whether the A: Yes, sir.
element of force and intimidation was correctly alleged in the information in Criminal Case
No. 99-1-2085-H and whether the penalty of death was properly imposed upon the Q: What was that unusual incident all about?
appellant in Criminal Case No. 99-1-2084-H.
A: We were weeding grasses, sir.
The appellant’s arguments are partially meritorious.
Q: Where were you [weeding] grasses?
Rape is committed by having carnal knowledge of a woman under any of the following
circumstances: (1) when force or intimidation is used; (2) when the woman is deprived of A: We were weeding grasses near to our house, sir.
reason or is otherwise unconscious; and (3) when she is under 12 years of age.29
Q: Were you alone while you were weeding grasses at [Sitio ABC], [123], Lingig,
A perusal of the information used as basis for Criminal Case No. 99-1-2085-H readily Surigao del Sur?
reveals the allegation that appellant employed force and intimidation in raping BBB. We
reproduce the contents of the information below:
A: We were two, me and my father, sir.
Criminal Case No. 99-1-2085-H:
Q: What time was that?
That on or about 3:00 o’clock in the afternoon sometime in the month of March 1994, at
A: Afternoon, sir.
Sitio [ABC], Barangay [123], Municipality of Hinatuan, Province of Surigao del Sur,
Philippines, and within the jurisdiction of this Honorable Court, the above-named accused
with lewd and unchaste designs and by means of force and intimidation, did then and there Q: Now, while you were weeding grasses near your house in the afternoon of
wilfully, unlawfully and feloniously rape [his] daughter [BBB], 16 years old, against the March 1994, with your father, what happened if any?
latter’s will, to the damage and prejudice of the said [BBB].
A: He pulled me, sir.
CONTRARY TO LAW: In violation of Article 335 of the Revised Penal Code as amended
by Section 11 of Republic Act No. 7659. Q: Where did he bring you?

Bislig, Surigao del Sur, November 27, 1998.30 A: At the place where we were weeding grasses, sir.

The same allegation was proven during the trial. We quote BBB’s testimony during her Q: What happened next after you[r] father brought you near the place where you
direct examination: were weeding grasses?

A: He made me lie down, sir.


Q: What did you do when your father made you lie down? Q: Were you hit by the blow?

A: He lift[ed] my skirt and took up my panty, sir. A: Yes, sir.

Q: What did you do when your father pulled you[r] panty? Q: Where?

A: I pushed aside his hands, sir. A: [O]n my back, sir.

Q: What did your father do next? xxxx

A: He made me lie down, sir. Q: When you reached to your house, what did [he] do?

Q: Afterward[s], what happened next? A: He scolded me, sir.

A: He also took [off] his brief and his pant[s], sir. Q: Who scolded you?

Q: You want to tell this Honorable Court that you were already [lying] down when A: My father, sir.
your father removed his brief and his pant[s]?
Q: Why did he scold you?
A: Yes, sir.
A: He was afraid I might tell my mother, sir.
Q: In relation to you[,] where was your father situated when he removed his brief
and pant[s]? Q: Did you tell your mother about the incident?

A: [Just by] my side[,] just near me, sir. A: Yes, sir.31

Q: What happened after your father removed his pant[s] and brief? We are adequately convinced that the prosecution proved that appellant employed force
and intimidation upon his victim. This being so, we find no cogent reason to disturb the
A: He inserted his penis in my vagina, sir. ruling of both the RTC and the appellate court on this matter.

xxxx However, we disagree with the trial court’s ruling convicting appellant Bartolini for qualified
rape under Criminal Case No. 99-1-2084-H. The appellate court was correct in sustaining
Q: While his penis was inside your vagina, what happened? appellant’s argument that the special qualifying circumstance cannot be appreciated in
Criminal Case No. 99-1-2084-H since the age of the victim was not specifically alleged in
A: He boxed me, sir. the information.32
Our disquisition in People v. Tagud, Sr.33 succinctly explains the matter. There, we said: Appellant also argues that both the trial court and the CA committed reversible errors when
he was found guilty for the three (3) counts of rape even if his guilt was not proven beyond
To justify the imposition of the death penalty in this case, the single special qualifying reasonable doubt. In particular, appellant attacks AAA’s credibility by arguing that it would
circumstance of the minority of the victim and her relationship to the offender must be have been physically impossible for him to rape said victim on top of a log as claimed by
specifically alleged in the Information and proven during the trial. x x x AAA in her testimony. Appellant also questions the motive of both victims saying that it is
unnatural for both to report the abuses made on them only after the lapse of several years.
xxxx
We cannot subscribe to appellant’s desperate attempt to save himself from the
Even under the old Rules of Criminal Procedure, jurisprudence already required that consequences of his dastardly acts.
qualifying circumstances must be specifically alleged in the Information to be appreciated
as such. Settled is the rule that when the issue is one (1) of credibility of witnesses, appellate courts
will generally not disturb the findings of the trial courts considering that the latter are in a
xxxx better position to decide the question as they have heard the witnesses and observed their
deportment and manner of testifying during the trial. It is for this reason that the findings of
the trial court are given the highest degree of respect. These findings will not ordinarily be
Notably, the amended Information merely stated that appellant had carnal knowledge of
disturbed by an appellate court absent any clear showing that the trial court has
his minor daughter without stating Arwin’s actual age. In a rape case where the very life of
overlooked, misunderstood, or misapplied some facts or circumstances of weight or
the accused is at stake, such an inexact allegation of the age of the victim is insufficient to
substance which could very well affect the outcome of the case.37
qualify the rape and raise the penalty to death. The sufficiency of the Information is held to
1avvphi1

a higher standard when the only imposable penalty is death. The constitutional right of the
accused to be properly informed of the nature and cause of the accusation against him Moreover, AAA’s testimony was vivid and precise. She said:
assumes the greatest importance when the only imposable penalty in case of conviction is
death.34 Q: What was your position at that time when you said your father spread your legs
apart?
Similar to Tagud, the qualifying circumstance of relationship of BBB to appellant was
specifically alleged and proven during the trial. Notably absent in the information, however, A: When I spread my legs, I was laying (sic), and he put my one leg on top of the
is a specific averment of the victim’s age at the time the offense against her was committed. fallen tree.38
Such an omission committed by the prosecutor is fatal in the imposition of the supreme
penalty of death against the offender. It must be borne in mind that the requirement for We note with approval the CA’s observation that such revelation is plausible and consistent
complete allegations on the particulars of the indictment is based on the right of the with human experience. Indeed, if there is any incongruity in the manner of intercourse as
accused to be fully informed of the nature of the charges against him so that he may portrayed by the appellant, the same would be trivial and will not smother AAA’s revelation
adequately prepare for his defense pursuant to the constitutional requirement on due of sexual abuse.39
process,35 specially so if the case involves the imposition of the death penalty in case the
accused is convicted. Thus, even if the victim is below eighteen (18) years of age and the How the victims managed to endure the bestial treatment of their father to them for four (4)
offender is her parent, but these facts are not alleged in the information, or if only one (1) long years, with one (1) even having to live with the shame of siring an offspring from her
is so alleged such as what happened in the instant case, their proof as such by evidence very own father, should not be taken against them. Children of tender age have natural
offered during trial cannot sanction the imposition of the death penalty.36 respect and reverence for their loved ones. More often than not, they would try to keep to
themselves if anything unnatural was committed against them, especially if the offender is
one (1) of their relatives. A father is known to have a strong natural, cultural and ₱75,000.00 as civil indemnity, ₱75,000.00 as moral damages, and ₱30,000.00 as
psychological hold upon his child. Hence, it would be too assuming for us to ask the victims exemplary damages.
why they have kept these facts of abuse to themselves, when their very own mother
decided to be mum on the matter as well. In Criminal Case No. 99-1-2084-H, appellant is found GUILTY beyond reasonable doubt
of the crime of RAPE and is hereby sentenced to suffer the penalty of reclusion perpetua.
Anent the award of damages, we find modifications to be in order. We increase the award He is ORDERED to pay the victim, BBB, ₱75,000.00 as civil indemnity, ₱75,000.00 as
of civil indemnity and moral damages in Criminal Case No. 99-1-2084-H from ₱50,000.00 moral damages, and ₱30,000.00 as exemplary damages.
to ₱75,000.00 each. In People v. Catubig,40 we explained that the commission of an
offense has a two (2)-pronged effect, one (1) on the public as it breaches the social order Costs against the appellant.
and the other upon the private victim as it causes personal sufferings. Each effect is
respectively addressed by the prescription of heavier punishment for the accused and by SO ORDERED.
an award of additional damages to the victim. The increase of the penalty or a shift to a
graver felony underscores the exacerbation of the offense by the attendance of
G.R. No. 158911 March 4, 2008
aggravating circumstances, whether ordinary or qualifying, in its commission. But unlike
the criminal liability which is basically the State’s concern, the award of damages is in
general intended for the offended party who suffers thereby. Hence, although it is essential MANILA ELECTRIC COMPANY, Petitioner,
to observe the requirements imposed by Sections 841 and 942 of Rule 110 of the Revised vs.
Rules of Criminal Procedure, as amended, the requirements should affect only the criminal MATILDE MACABAGDAL RAMOY, BIENVENIDO RAMOY, ROMANA RAMOY-
liability of the accused, which is the State’s concern, and should not affect the civil liability RAMOS, ROSEMARIE RAMOY, OFELIA DURIAN and CYRENE
of the accused, which is for the benefit of the injured party. Where the special qualifying PANADO, Respondents.
circumstances of age and relationship, although not alleged in the information, are
nonetheless established during the trial, the award of civil indemnity and moral damages DECISION
in a conviction for simple rape should equal the award of civil indemnity and moral
damages in convictions for qualified rape. Truly, BBB’s moral suffering is just as great as AUSTRIA-MARTINEZ, J.:
when her father who raped her is convicted for qualified rape as when he is convicted only
for simple rape due to a technicality. 1avvphi 1
This resolves the Petition for Review on Certiorari under Rule 45 of the Rules of Court,
praying that the Decision1 of the Court of Appeals (CA) dated December 16, 2002, ordering
Likewise, we modify the award for exemplary damages. Pursuant to prevailing petitioner Manila Electric Company (MERALCO) to pay Leoncio Ramoy2 moral and
jurisprudence, the award of exemplary damages for the two (2) counts of qualified rape exemplary damages and attorney's fees, and the CA Resolution3 dated July 1, 2003,
under Criminal Case Nos. 99-1-2083-H and 99-1-2085-H and for the crime of simple rape denying petitioner's motion for reconsideration, be reversed and set aside.
in Criminal Case No. 99-1-2084-H is increased to ₱30,000.00 for each count of rape.43
The Regional Trial Court (RTC) of Quezon City, Branch 81, accurately summarized the
WHEREFORE, the judgment on review is AFFIRMED with MODIFICATIONS. facts as culled from the records, thus:

In Criminal Case Nos. 99-1-2083-H and 99-1-2085-H, appellant Rustico Bartolini y Ampis The evidence on record has established that in the year 1987 the National Power
is found GUILTY beyond reasonable doubt of two (2) counts of QUALIFIED RAPE and is Corporation (NPC) filed with the MTC Quezon City a case for ejectment against several
hereby sentenced to suffer the penalty of reclusion perpetua, in lieu of death, without the persons allegedly illegally occupying its properties in Baesa, Quezon City. Among the
possibility of parole. He is ORDERED to pay each of his two (2) victims, AAA and BBB, defendants in the ejectment case was Leoncio Ramoy, one of the plaintiffs in the case at
bar. On April 28, 1989 after the defendants failed to file an answer in spite of summons During the ocular inspection ordered by the Court and attended by the parties, it was found
duly served, the MTC Branch 36, Quezon City rendered judgment for the plaintiff out that the residence of plaintiffs-spouses Leoncio and Matilde Ramoy was indeed outside
[MERALCO] and "ordering the defendants to demolish or remove the building and the NPC property. This was confirmed by defendant's witness R.P. Monsale III on cross-
structures they built on the land of the plaintiff and to vacate the premises." In the case of examination (TSN, October 13, 1993, pp. 10 and 11). Monsale also admitted that he did
Leoncio Ramoy, the Court found that he was occupying a portion of Lot No. 72-B-2-B with not inform his supervisor about this fact nor did he recommend re-connection of plaintiffs'
the exact location of his apartments indicated and encircled in the location map as No. 7. power supply (Ibid., p. 14).
A copy of the decision was furnished Leoncio Ramoy (Exhibits 2, 2-A, 2-B, 2-C, pp. 128-
131, Record; TSN, July 2, 1993, p. 5). The record also shows that at the request of NPC, defendant Meralco re-connected the
electric service of four customers previously disconnected none of whom was any of the
On June 20, 1990 NPC wrote Meralco requesting for the "immediate disconnection of plaintiffs (Exh. 14).4
electric power supply to all residential and commercial establishments beneath the NPC
transmission lines along Baesa, Quezon City (Exh. 7, p. 143, Record). Attached to the The RTC decided in favor of MERALCO by dismissing herein respondents' claim for moral
letter was a list of establishments affected which included plaintiffs Leoncio and Matilde damages, exemplary damages and attorney's fees. However, the RTC ordered MERALCO
Ramoy (Exh. 9), as well as a copy of the court decision (Exh. 2). After deliberating on to restore the electric power supply of respondents.
NPC's letter, Meralco decided to comply with NPC's request (Exhibits 6, 6-A, 6-A-1, 6-B)
and thereupon issued notices of disconnection to all establishments affected including Respondents then appealed to the CA. In its Decision dated December 16, 2002, the CA
plaintiffs Leoncio Ramoy (Exhs. 3, 3-A to 3-C), Matilde Ramoy/Matilde Macabagdal faulted MERALCO for not requiring from National Power Corporation (NPC) a writ of
(Exhibits 3-D to 3-E), Rosemarie Ramoy (Exh. 3-F), Ofelia Durian (Exh. 3-G), Jose Valiza execution or demolition and in not coordinating with the court sheriff or other proper officer
(Exh. 3-H) and Cyrene S. Panado (Exh. 3-I). before complying with the NPC's request. Thus, the CA held MERALCO liable for moral
and exemplary damages and attorney's fees. MERALCO's motion for reconsideration of
In a letter dated August 17, 1990 Meralco requested NPC for a joint survey to determine the Decision was denied per Resolution dated July 1, 2003.
all the establishments which are considered under NPC property in view of the fact that
"the houses in the area are very close to each other" (Exh. 12). Shortly thereafter, a joint Hence, herein petition for review on certiorari on the following grounds:
survey was conducted and the NPC personnel pointed out the electric meters to be
disconnected (Exh. 13; TSN, October 8, 1993, p. 7; TSN, July 1994, p. 8).
I
In due time, the electric service connection of the plaintiffs [herein respondents] was
THE COURT OF APPEALS GRAVELY ERRED WHEN IT FOUND MERALCO
disconnected (Exhibits D to G, with submarkings, pp. 86-87, Record).
NEGLIGENT WHEN IT DISCONNECTED THE SUBJECT ELECTRIC SERVICE OF
RESPONDENTS.
Plaintiff Leoncio Ramoy testified that he and his wife are the registered owners of a parcel
of land covered by TCT No. 326346, a portion of which was occupied by plaintiffs
II
Rosemarie Ramoy, Ofelia Durian, Jose Valiza and Cyrene S. Panado as lessees. When
the Meralco employees were disconnecting plaintiffs' power connection, plaintiff Leoncio
Ramoy objected by informing the Meralco foreman that his property was outside the NPC THE COURT OF APPEALS GRAVELY ERRED WHEN IT AWARDED MORAL AND
property and pointing out the monuments showing the boundaries of his property. EXEMPLARY DAMAGES AND ATTORNEY'S FEES AGAINST MERALCO UNDER THE
However, he was threatened and told not to interfere by the armed men who accompanied CIRCUMSTANCES THAT THE LATTER ACTED IN GOOD FAITH IN THE
the Meralco employees. After the electric power in Ramoy's apartment was cut off, the DISCONNECTION OF THE ELECTRIC SERVICES OF THE RESPONDENTS. 5
plaintiffs-lessees left the premises.
The petition is partly meritorious. infraction is to create a new duty, that is, to make recompense to the one who has been
injured by the failure of another to observe his contractual obligation unless he can show
MERALCO admits6 that respondents are its customers under a Service Contract whereby extenuating circumstances, like proof of his exercise of due diligence x x x or of
it is obliged to supply respondents with electricity. Nevertheless, upon request of the NPC, the attendance of fortuitous event, to excuse him from his ensuing liability.9 (Emphasis
MERALCO disconnected its power supply to respondents on the ground that they were supplied)
illegally occupying the NPC's right of way. Under the Service Contract, "[a] customer of
electric service must show his right or proper interest over the property in order that he will Article 1173 also provides that the fault or negligence of the obligor consists in the omission
be provided with and assured a continuous electric service."7 MERALCO argues that since of that diligence which is required by the nature of the obligation and corresponds with the
there is a Decision of the Metropolitan Trial Court (MTC) of Quezon City ruling that herein circumstances of the persons, of the time and of the place. The Court emphasized in Ridjo
respondents were among the illegal occupants of the NPC's right of way, MERALCO was Tape & Chemical Corporation v. Court of Appeals10 that "as a public utility, MERALCO has
justified in cutting off service to respondents. the obligation to discharge its functions with utmost care and diligence."11

Clearly, respondents' cause of action against MERALCO is anchored on culpa The Court agrees with the CA that under the factual milieu of the present case, MERALCO
contractual or breach of contract for the latter's discontinuance of its service to respondents failed to exercise the utmost degree of care and diligence required of it. To repeat, it was
under Article 1170 of the Civil Code which provides: not enough for MERALCO to merely rely on the Decision of the MTC without ascertaining
whether it had become final and executory. Verily, only upon finality of said Decision can
Article 1170. Those who in the performance of their obligations are guilty of fraud, it be said with conclusiveness that respondents have no right or proper interest over the
negligence, or delay, and those who in any manner contravene the tenor thereof, are liable subject property, thus, are not entitled to the services of MERALCO.
for damages.
Although MERALCO insists that the MTC Decision is final and executory, it never showed
In Radio Communications of the Philippines, Inc. v. Verchez,8 the Court expounded on the any documentary evidence to support this allegation. Moreover, if it were true that the
nature of culpa contractual, thus: decision was final and executory, the most prudent thing for MERALCO to have done was
to coordinate with the proper court officials in determining which structures are covered by
"In culpa contractual x x x the mere proof of the existence of the contract and the said court order. Likewise, there is no evidence on record to show that this was done by
failure of its compliance justify, prima facie, a corresponding right of relief. The law, MERALCO.
recognizing the obligatory force of contracts, will not permit a party to be set free from
liability for any kind of misperformance of the contractual undertaking or a contravention of The utmost care and diligence required of MERALCO necessitates such great degree of
the tenor thereof. A breach upon the contract confers upon the injured party a valid cause prudence on its part, and failure to exercise the diligence required means that MERALCO
for recovering that which may have been lost or suffered. The remedy serves to preserve was at fault and negligent in the performance of its obligation. In Ridjo Tape,12 the Court
the interests of the promissee that may include his "expectation interest," which is his explained:
interest in having the benefit of his bargain by being put in as good a position as he would
have been in had the contract been performed, or his "reliance interest," which is his [B]eing a public utility vested with vital public interest, MERALCO is impressed with certain
interest in being reimbursed for loss caused by reliance on the contract by being put in as obligations towards its customers and any omission on its part to perform such duties
good a position as he would have been in had the contract not been made; or his would be prejudicial to its interest. For in the final analysis, the bottom line is that those
"restitution interest," which is his interest in having restored to him any benefit that he has who do not exercise such prudence in the discharge of their duties shall be made to bear
conferred on the other party. Indeed, agreements can accomplish little, either for their the consequences of such oversight.13
makers or for society, unless they are made the basis for action. The effect of every
This being so, MERALCO is liable for damages under Article 1170 of the Civil Code. It is a hornbook principle that damages may be awarded only if proven. In Mahinay v.
Velasquez, Jr.,18 the Court held thus:
The next question is: Are respondents entitled to moral and exemplary damages and
attorney's fees? In order that moral damages may be awarded, there must be pleading and proof of
moral suffering, mental anguish, fright and the like. While respondent alleged in his
Article 2220 of the Civil Code provides: complaint that he suffered mental anguish, serious anxiety, wounded feelings and moral
shock, he failed to prove them during the trial. Indeed, respondent should have taken
Article 2220. Willful injury to property may be a legal ground for awarding moral damages the witness stand and should have testified on the mental anguish, serious anxiety,
if the court should find that, under the circumstances, such damages are justly due. The wounded feelings and other emotional and mental suffering he purportedly suffered to
same rule applies to breaches of contract where the defendant acted fraudulently or in bad sustain his claim for moral damages. Mere allegations do not suffice; they must be
faith. substantiated by clear and convincing proof. No other person could have proven such
damages except the respondent himself as they were extremely personal to him.
In the present case, MERALCO wilfully caused injury to Leoncio Ramoy by withholding
from him and his tenants the supply of electricity to which they were entitled under the In Keirulf vs. Court of Appeals, we held:
Service Contract. This is contrary to public policy because, as discussed above,
MERALCO, being a vital public utility, is expected to exercise utmost care and diligence in "While no proof of pecuniary loss is necessary in order that moral damages may be
the performance of its obligation. It was incumbent upon MERALCO to do everything within awarded, the amount of indemnity being left to the discretion of the court, it is nevertheless
its power to ensure that the improvements built by respondents are within the NPC’s right essential that the claimant should satisfactorily show the existence of the factual basis of
of way before disconnecting their power supply. The Court emphasized in Samar II Electric damages and its causal connection to defendant’s acts. This is so because moral
Cooperative, Inc. v. Quijano14 that: damages, though incapable of pecuniary estimation, are in the category of an award
designed to compensate the claimant for actual injury suffered and not to impose a penalty
Electricity is a basic necessity the generation and distribution of which is imbued with public on the wrongdoer. In Francisco vs. GSIS, the Court held that there must be clear
interest, and its provider is a public utility subject to strict regulation by the State in testimony on the anguish and other forms of mental suffering. Thus, if the plaintiff
the exercise of police power. Failure to comply with these regulations will give rise to fails to take the witness stand and testify as to his/her social humiliation, wounded feelings
the presumption of bad faith or abuse of right.15 (Emphasis supplied) and anxiety, moral damages cannot be awarded. In Cocoland Development Corporation
vs. National Labor Relations Commission, the Court held that "additional facts must be
pleaded and proven to warrant the grant of moral damages under the Civil Code, these
Thus, by analogy, MERALCO's failure to exercise utmost care and diligence in the
being, x x x social humiliation, wounded feelings, grave anxiety, etc. that resulted
performance of its obligation to Leoncio Ramoy, its customer, is tantamount to bad faith.
therefrom."
Leoncio Ramoy testified that he suffered wounded feelings because of MERALCO's
actions.16 Furthermore, due to the lack of power supply, the lessees of his four apartments
on subject lot left the premises.17 Clearly, therefore, Leoncio Ramoy is entitled to moral x x x The award of moral damages must be anchored to a clear showing that respondent
damages in the amount awarded by the CA. actually experienced mental anguish, besmirched reputation, sleepless nights, wounded
feelings or similar injury. There was no better witness to this experience than respondent
himself. Since respondent failed to testify on the witness stand, the trial court did
Leoncio Ramoy, the lone witness for respondents, was the only one who testified regarding
not have any factual basis to award moral damages to him.19 (Emphasis supplied)
the effects on him of MERALCO's electric service disconnection. His co-respondents
Matilde Ramoy, Rosemarie Ramoy, Ofelia Durian and Cyrene Panado did not present any
evidence of damages they suffered.
Thus, only respondent Leoncio Ramoy, who testified as to his wounded feelings, may be (6) In actions for legal support;
awarded moral damages.20
(7) In actions for the recovery of wages of household helpers, laborers and skilled
With regard to exemplary damages, Article 2232 of the Civil Code provides that in contracts workers;
and quasi-contracts, the court may award exemplary damages if the defendant, in this
case MERALCO, acted in a wanton, fraudulent, reckless, oppressive, or malevolent (8) In actions for indemnity under workmen’s compensation and employer’s liability
manner, while Article 2233 of the same Code provides that such damages cannot be laws;
recovered as a matter of right and the adjudication of the same is within the discretion
of the court.
1avvphi1

(9) In a separate civil action to recover civil liability arising from a crime;

The Court finds that MERALCO fell short of exercising the due diligence required, but its (10) When at least double judicial costs are awarded;
actions cannot be considered wanton, fraudulent, reckless, oppressive or malevolent.
Records show that MERALCO did take some measures, i.e., coordinating with NPC
(11) In any other case where the court deems it just and equitable that attorney’s
officials and conducting a joint survey of the subject area, to verify which electric meters
fees and expenses of litigation should be recovered.
should be disconnected although these measures are not sufficient, considering the
degree of diligence required of it. Thus, in this case, exemplary damages should not be
awarded. In all cases, the attorney’s fees and expenses of litigation must be reasonable.

Since the Court does not deem it proper to award exemplary damages in this case, then None of the grounds for recovery of attorney's fees are present.
the CA's award for attorney's fees should likewise be deleted, as Article 2208 of the Civil
Code states that in the absence of stipulation, attorney's fees cannot be recovered WHEREFORE, the petition is PARTLY GRANTED. The Decision of the Court of Appeals
except in cases provided for in said Article, to wit: is AFFIRMED with MODIFICATION. The award for exemplary damages and attorney's
fees is DELETED.
Article 2208. In the absence of stipulation, attorney’s fees and expenses of litigation, other
than judicial costs, cannot be recovered, except: No costs.

(1) When exemplary damages are awarded; SO ORDERED.

(2) When the defendant’s act or omission has compelled the plaintiff to litigate with G.R. No. 150666 August 3, 2010
third persons or to incur expenses to protect his interest;
LUCIANO BRIONES and NELLY BRIONES, Petitioners,
(3) In criminal cases of malicious prosecution against the plaintiff; vs.
JOSE MACABAGDAL, FE D. MACABAGDAL and VERGON REALTY INVESTMENTS
(4) In case of a clearly unfounded civil action or proceeding against the plaintiff; CORPORATION,Respondents.

(5) Where the defendant acted in gross and evident bad faith in refusing to satisfy DECISION
the plaintiff’s plainly valid, just and demandable claim;
VILLARAMA, JR., J.: 1. That plaintiffs are the owners of Lot No. 2-R of subdivision plan (LRC) Psd-
147392 at Vergonville Subdivision, No. 10, Las Piñas, Metro Manila covered by
On appeal under Rule 45 of the 1997 Rules of Civil Procedure, as amended, is the TCT No. 62181 of the Registry of Deeds of Pasay City on which defendants have
Decision1 dated December 11, 2000 of the Court of Appeals (CA) in CA-G.R. CV No. constructed their house;
48109 which affirmed the September 29, 1993 Decision2 of the Regional Trial Court (RTC)
of Makati City, Branch 135, ordering petitioners Luciano and Nelly Briones to remove the 2. Defendants, jointly and severally, are ordered to demolish their house and
improvements they have made on the disputed property or to pay respondent-spouses vacate the premises and return the possession of the portion of Lot No. 2-R as
Jose and Fe Macabagdal the prevailing price of the land as compensation. above-described to plaintiffs within thirty (30) days from receipt of this decision, or
in the alternative, plaintiffs should be compensated by defendants, jointly and
The undisputed factual antecedents of the case are as follows: severally, by the payment of the prevailing price of the lot involved as Lot No. 2-R
with an area of 325 square meters which should not be less than ₱1,500.00 per
Respondent-spouses purchased from Vergon Realty Investments Corporation (Vergon) square meter, in consideration of the fact that prices of real estate properties in the
Lot No. 2-R, a 325-square-meter land located in Vergonville Subdivision No. 10 at Las area concerned have increased rapidly;
Piñas City, Metro Manila and covered by Transfer Certificate of Title No. 62181 of the
Registry of Deeds of Pasay City. On the other hand, petitioners are the owners of Lot No. 3. Defendants, jointly and severally, pay to plaintiffs for moral damages with
2-S, which is adjacent to Lot No. 2-R. plaintiffs’ plans and dreams of building their own house on their own lot being
severely shattered and frustrated due to defendants’ incursion as interlopers of Lot
Sometime in 1984, after obtaining the necessary building permit and the approval of No. 2-R in the sum of ₱50,000.00;
Vergon, petitioners constructed a house on Lot No. 2-R which they thought was Lot No. 2-
S. After being informed of the mix up by Vergon’s manager, respondent-spouses 4. Defendants, jointly and severally, to pay plaintiffs in the amount of ₱30,000.00
immediately demanded petitioners to demolish the house and vacate the property. as attorney’s fees; and,
Petitioners, however, refused to heed their demand. Thus, respondent-spouses filed an
action to recover ownership and possession of the said parcel of land with the RTC of 5. to pay the costs of the proceedings.
Makati City.3
Defendants’ counterclaim against plaintiffs is dismissed for lack of merit and with no cause
Petitioners insisted that the lot on which they constructed their house was the lot which of action.
was consistently pointed to them as theirs by Vergon’s agents over the seven (7)-year
period they were paying for the lot. They interposed the defense of being buyers in good Defendants’ third-party complaint against third-party defendant Vergonville Realty and
faith and impleaded Vergon as third-party defendant claiming that because of the warranty Investments Corporation is likewise ordered dismissed for lack of cause of action and
against eviction, they were entitled to indemnity from Vergon in case the suit is decided evidently without merit.
against them.4
On the other hand, defendants, jointly and severally, are liable for the litigation expenses
The RTC ruled in favor of respondent-spouses and found that petitioners’ house was incurred by Vergonville Realty by way of counterclaim, which is also proven by the latter
undoubtedly built on Lot No. 2-R. The dispositive portion of the trial court’s decision reads with a mere preponderance of evidence, and are hereby ordered to pay the sum of
as follows: ₱20,000.00 as compensatory damage; and attorney’s fees in the sum of ₱10,000.00

PREMISES CONSIDERED, let judgment be rendered declaring, to wit: SO ORDERED.5


On appeal, the CA affirmed the RTC’s finding that the lot upon which petitioners built their The petition is partly meritorious.
house was not the one (1) which Vergon sold to them. Based on the documentary
evidence, such as the titles of the two (2) lots, the contracts to sell, and the survey report At the outset, we note that petitioners raise factual issues, which are beyond the scope of
made by the geodetic engineer, petitioners’ house was built on the lot of the respondent- a petition for review on certiorari under Rule 45 of the Rules. Well settled is the rule that
spouses.6 There was no basis to presume that the error was Vergon’s fault. Also the the jurisdiction of this Court in cases brought to it from the CA via a petition for review on
warranty against eviction under Article 1548 of the Civil Code was not applicable as there certiorari under Rule 45 is limited to the review of errors of law. The Court is not bound to
was no deprivation of property: the lot on which petitioners built their house was not the lot weigh all over again the evidence adduced by the parties, particularly where the findings
sold to them by Vergon, which remained vacant and ready for occupation.7 The CA further of both the trial court and the appellate court coincide. The resolution of factual issues is a
ruled that petitioners cannot use the defense of allegedly being a purchaser in good faith function of the trial court whose findings on these matters are, as a general rule, binding
for wrongful occupation of land.8 on this Court, more so where these have been affirmed by the CA.13 We note that the CA
and RTC did not overlook or fail to appreciate any material circumstance which, when
Aggrieved, petitioners filed a motion for reconsideration, but it was denied by the appellate properly considered, would have altered the result of the case. Indeed, it is beyond cavil
court.9 Hence, this petition for review on certiorari. that petitioners mistakenly constructed their house on Lot No. 2-R which they thought was
Lot No. 2-S.
Petitioners raise the following assignment of errors:
However, the conclusiveness of the factual findings notwithstanding, we find that the trial
I. court nonetheless erred in outrightly ordering petitioners to vacate the subject property or
to pay respondent spouses the prevailing price of the land as compensation. Article
THE COURT OF APPEALS DECIDED A QUESTION OF SUBSTANCE CONTRARY TO 52714 of the Civil Code presumes good faith, and since no proof exists to show that the
LAW AND APPLICABLE DECISIONS OF THE SUPREME COURT IN AFFIRMING THE mistake was done by petitioners in bad faith, the latter should be presumed to have built
DECISION OF THE TRIAL COURT ORDERING PETITIONERS TO DEMOLISH THEIR the house in good faith.
ONLY HOUSE AND VACATE THE LOT AND TO PAY MORAL AND COMPENSATORY
DAMAGES AS WELL AS ATTORNEY’S FEE IN THE TOTAL AMOUNT OF PS[₱] When a person builds in good faith on the land of another, Article 448 of the Civil
110,000; AND Code governs. Said article provides,

II. ART. 448. The owner of the land on which anything has been built, sown or planted in
good faith, shall have the right to appropriate as his own the works, sowing or planting,
THE COURT OF APPEALS SANCTIONED THE DEPARTURE OF THE LOWER COURT after payment of the indemnity provided for in Articles 546 and 548, or to oblige the one
FROM THE ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDINGS AS TO who built or planted to pay the price of the land, and the one who sowed, the proper rent.
CALL FOR AN EXERCISE OF THE POWER OF SUPERVISION.10 However, the builder or planter cannot be obliged to buy the land if its value is considerably
more than that of the building or trees. In such case, he shall pay reasonable rent, if the
owner of the land does not choose to appropriate the building or trees after proper
In the main, it is petitioners’ position that they must not bear the damage alone. Petitioners
indemnity. The parties shall agree upon the terms of the lease and in case of disagreement,
insist that they relied with full faith and confidence in the reputation of Vergon’s agents
the court shall fix the terms thereof. (Emphasis ours.)
when they pointed the wrong property to them. Even the President of Vergon, Felix
Gonzales, consented to the construction of the house when he signed the building
permit.11 Also, petitioners are builders in good faith.12 The above-cited article covers cases in which the builders, sowers or planters believe
themselves to be owners of the land or, at least, to have a claim of title thereto.15 The
builder in good faith can compel the landowner to make a choice between appropriating of the lease if the parties so agree, and to determine other matters necessary for the proper
the building by paying the proper indemnity or obliging the builder to pay the price of the application of Article 448, in relation to Articles 546 and 548, of the Civil Code.
land. The choice belongs to the owner of the land, a rule that accords with the principle of
accession, i.e., that the accessory follows the principal and not the other way around. As to the liability of Vergon, petitioners failed to present sufficient evidence to show
However, even as the option lies with the landowner, the grant to him, nevertheless, is negligence on Vergon’s part. Petitioners’ claim is obviously one (1) for tort, governed by
preclusive. He must choose one.16 He cannot, for instance, compel the owner of the Article 2176 of the Civil Code, which provides:
building to remove the building from the land without first exercising either option. It is only
if the owner chooses to sell his land, and the builder or planter fails to purchase it where ART. 2176. Whoever by act or omission causes damage to another, there being fault or
its value is not more than the value of the improvements, that the owner may remove the negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no
improvements from the land. The owner is entitled to such remotion only when, after having preexisting contractual relation between the parties, is called a quasi-delict and is governed
chosen to sell his land, the other party fails to pay for the same.17 by the provisions of this Chapter. (Emphasis ours.)

Moreover, petitioners have the right to be indemnified for the necessary and useful Under this provision, it is the plaintiff who has to prove by a preponderance of evidence:
expenses they may have made on the subject property. Articles 546 and 548 of the Civil (1) the damages suffered by the plaintiff; (2) the fault or negligence of the defendant or
Code provide, some other person for whose act he must respond; and (3) the connection of cause and
effect between the fault or negligence and the damages incurred.19 This the petitioners
ART. 546. Necessary expenses shall be refunded to every possessor; but only the failed to do. The President of Vergon signed the building permit as a precondition for its
possessor in good faith may retain the thing until he has been reimbursed therefor. approval by the local government, but it did not guarantee that petitioners were
constructing the structure within the metes and bounds of petitioners’ lot. The signature of
Useful expenses shall be refunded only to the possessor in good faith with the same right the President of Vergon on the building permit merely proved that petitioners were
of retention, the person who has defeated him in the possession having the option of authorized to make constructions within the subdivision project of Vergon. And while
refunding the amount of the expenses or of paying the increase in value which the thing petitioners acted in good faith in building their house on Lot No. 2-R, petitioners did not
may have acquired by reason thereof. show by what authority the agents or employees of Vergon were acting when they pointed
to the lot where the construction was made nor was petitioners’ claim on this matter
ART. 548. Expenses for pure luxury or mere pleasure shall not be refunded to the corroborated by sufficient evidence.
possessor in good faith; but he may remove the ornaments with which he has embellished
the principal thing if it suffers no injury thereby, and if his successor in the possession does One (1) last note on the award of damages. Considering that petitioners acted in good faith
not prefer to refund the amount expended. in building their house on the subject property of the respondent-spouses, there is no basis
for the award of moral damages to respondent-spouses. Likewise, the Court deletes the
Consequently, the respondent-spouses have the option to appropriate the house on the award to Vergon of compensatory damages and attorney’s fees for the litigation expenses
subject land after payment to petitioners of the appropriate indemnity or to oblige Vergon had incurred as such amounts were not specifically prayed for in its Answer to
petitioners to pay the price of the land, unless its value is considerably more than the value petitioners’ third-party complaint. Under Article 220820 of the Civil Code, attorney’s fees
of the structures, in which case petitioners shall pay reasonable rent. and expenses of litigation are recoverable only in the concept of actual damages, not as
moral damages nor judicial costs. Hence, such must be specifically prayed for—as was
In accordance with Depra v. Dumlao,18 this case must be remanded to the RTC which shall not done in this case—and may not be deemed incorporated within a general prayer for
conduct the appropriate proceedings to assess the respective values of the improvement "such other relief and remedy as this court may deem just and equitable."21 It must also be
and of the land, as well as the amounts of reasonable rentals and indemnity, fix the terms noted that aside from the following, the body of the trial court’s decision was devoid of any
statement regarding attorney’s fees. In Scott Consultants & Resource Development
Corporation, Inc. v. Court of Appeals,22 we reiterated that attorney’s fees are not to be price of said land. The amounts to be respectively paid by the respondent-
awarded every time a party wins a suit. The power of the court to award attorney’s fees spouses and petitioners, in accordance with the option thus exercised by
under Article 2208 of the Civil Code demands factual, legal, and equitable justification; its written notice of the other party and to the Court, shall be paid by the obligor
basis cannot be left to speculation or conjecture. Where granted, the court must explicitly within fifteen (15) days from such notice of the option by tendering the
state in the body of the decision, and not only in the dispositive portion thereof, the legal amount to the Court in favor of the party entitled to receive it;
reason for the award of attorney’s fees. 1avvphi1

b. The trial court shall further order that if the respondent-spouses


WHEREFORE, the Decision dated December 11, 2000 of the Court of Appeals in CA-G.R. exercises the option to oblige petitioners to pay the price of the land but
CV No. 48109 is AFFIRMED WITH MODIFICATION. The award of moral damages in favor the latter rejects such purchase because, as found by the trial court, the
of respondent-spouses Jose and Fe Macabagdal and the award of compensatory value of the land is considerably more than that of the house, petitioners
damages and attorney’s fees to respondent Vergon Realty Investments Corporation shall give written notice of such rejection to the respondent-spouses and
are DELETED. The case is REMANDED to the Regional Trial Court of Makati City, Branch to the Court within fifteen (15) days from notice of the respondent-spouses’
135, for further proceedings consistent with the proper application of Articles 448, 546 and option to sell the land. In that event, the parties shall be given a period of
548 of the Civil Code, as follows: fifteen (15) days from such notice of rejection within which to agree upon
the terms of the lease, and give the Court formal written notice of such
1. The trial court shall determine: agreement and its provisos. If no agreement is reached by the parties, the
trial court, within fifteen (15) days from and after the termination of the said
a. the present fair price of the respondent-spouses’ lot; period fixed for negotiation, shall then fix the terms of the lease, payable
within the first five (5) days of each calendar month. The period for the
forced lease shall not be more than two (2) years, counted from the finality
b. the amount of the expenses spent by petitioners for the building of their
of the judgment, considering the long period of time since petitioners have
house;
occupied the subject area. The rental thus fixed shall be increased by ten
percent (10%) for the second year of the forced lease. Petitioners shall not
c. the increase in value ("plus value") which the said lot may have acquired make any further constructions or improvements on the house. Upon
by reason thereof; and expiration of the two (2)-year period, or upon default by petitioners in the
payment of rentals for two (2) consecutive months, the respondent-
d. whether the value of said land is considerably more than that of the spouses shall be entitled to terminate the forced lease, to recover their
house built thereon. land, and to have the house removed by petitioners or at the latter’s
expense. The rentals herein provided shall be tendered by petitioners to
2. After said amounts shall have been determined by competent evidence, the the Court for payment to the respondent-spouses, and such tender shall
Regional Trial Court shall render judgment, as follows: constitute evidence of whether or not compliance was made within the
period fixed by the Court.
a. The trial court shall grant the respondent-spouses a period of fifteen (15)
days within which to exercise their option under Article 448 of the Civil c. In any event, petitioners shall pay the respondent-spouses reasonable
Code, whether to appropriate the house as their own by paying to compensation for the occupancy of the respondent-spouses’ land for the
petitioners either the amount of the expenses spent by petitioners for the period counted from the year petitioners occupied the subject area, up to
building of the house, or the increase in value ("plus value") which the said the commencement date of the forced lease referred to in the preceding
lot may have acquired by reason thereof, or to oblige petitioners to pay the paragraph;
d. The periods to be fixed by the trial court in its Decision shall be On or about the 2nd week of December 1988, the President and Vice President of plaintiff-
inextendible, and upon failure of the party obliged to tender to the trial court appellee corporation were scheduled to go out of the country in connection with the
the amount due to the obligee, the party entitled to such payment shall be corporation’s business. In order not to disrupt operations in their absence, they pre-signed
entitled to an order of execution for the enforcement of payment of the several checks relating to Current Account No. 58891-012. The intention was to insure
amount due and for compliance with such other acts as may be required continuity of plaintiff-appellee’s operations by making available cash/money especially to
by the prestation due the obligee. settle obligations that might become due. These checks were entrusted to the accountant
with instruction to make use of the same as the need arose. The internal arrangement was,
No costs. in the event there was need to make use of the checks, the accountant would prepare the
corresponding voucher and thereafter complete the entries on the pre-signed checks.
SO ORDERED.
It turned out that on December 16, 1988, a John Doe presented to defendant-appellant
G.R. No. 150228 July 30, 2009 bank for encashment a couple of plaintiff-appellee corporation’s checks (Nos. 401116 and
401117) with the indicated value of P110,000.00 each. It is admitted that these 2 checks
were among those presigned by plaintiff-appellee corporation’s authorized signatories.
BANK OF AMERICA NT & SA, Petitioner,
vs.
PHILIPPINE RACING CLUB, Respondent. The two (2) checks had similar entries with similar infirmities and irregularities. On the
space where the name of the payee should be indicated (Pay To The Order Of) the
following 2-line entries were instead typewritten: on the upper line was the word "CASH"
DECISION
while the lower line had the following typewritten words, viz: "ONE HUNDRED TEN
THOUSAND PESOS ONLY." Despite the highly irregular entries on the face of the checks,
LEONARDO-DE CASTRO, J.: defendant-appellant bank, without as much as verifying and/or confirming the legitimacy
of the checks considering the substantial amount involved and the obvious infirmity/defect
This is a petition for review on certiorari under Rule 45 of the Rules of Court from the of the checks on their faces, encashed said checks. A verification process, even by was of
Decision1 promulgated on July 16, 2001 by the former Second Division of the Court of a telephone call to PRCI office, would have taken less than ten (10) minutes. But this was
Appeals (CA), in CA-G.R. CV No. 45371 entitled "Philippine Racing Club, Inc. v. Bank of not done by BA. Investigation conducted by plaintiff-appellee corporation yielded the fact
America NT & SA," affirming the Decision2 dated March 17, 1994 of the Regional Trial that there was no transaction involving PRCI that call for the payment of P220,000.00 to
Court (RTC) of Makati, Branch 135 in Civil Case No. 89-5650, in favor of the respondent. anyone. The checks appeared to have come into the hands of an employee of PRCI (one
Likewise, the present petition assails the Resolution3 promulgated on September 28, 2001, Clarita Mesina who was subsequently criminally charged for qualified theft) who eventually
denying the Motion for Reconsideration of the CA Decision. completed without authority the entries on the pre-signed checks. PRCI’s demand for
defendant-appellant to pay fell on deaf ears. Hence, the complaint.4
The facts of this case as narrated in the assailed CA Decision are as follows:
After due proceedings, the trial court rendered a Decision in favor of respondent, the
Plaintiff-appellee PRCI is a domestic corporation which maintains several accounts with dispositive portion of which reads:
different banks in the Metro Manila area. Among the accounts maintained was Current
Account No. 58891-012 with defendant-appellant BA (Paseo de Roxas Branch). The PREMISES CONSIDERED, judgment is hereby rendered in favor of plaintiff and against
authorized joint signatories with respect to said Current Account were plaintiff-appellee’s the defendant, and the latter is ordered to pay plaintiff:
President (Antonia Reyes) and Vice President for Finance (Gregorio Reyes).
(1) The sum of Two Hundred Twenty Thousand (₱220,000.00) Pesos, with legal III. The Court of Appeals gravely erred in affirming the trial court’s award of attorney’s fees
interest to be computed from date of the filing of the herein complaint; despite the absence of any applicable ground under Article 2208 of the Civil Code.

(2) The sum of Twenty Thousand (₱20,000.00) Pesos by way of attorney’s fees; IV. The Court of Appeals gravely erred in not awarding attorney’s fees, moral and
exemplary damages, and costs of suit in favor of petitioner, who clearly deserves them.6
(3) The sum of Ten Thousand (₱10,000.00) Pesos for litigation expenses, and
From the discussions of both parties in their pleadings, the key issue to be resolved in the
(4) To pay the costs of suit. present case is whether the proximate cause of the wrongful encashment of the checks in
question was due to (a) petitioner’s failure to make a verification regarding the said checks
SO ORDERED.5 with the respondent in view of the misplacement of entries on the face of the checks or (b)
the practice of the respondent of pre-signing blank checks and leaving the same with its
employees.
Petitioner appealed the aforesaid trial court Decision to the CA which, however, affirmed
said decision in toto in its July 16, 2001 Decision. Petitioner’s Motion for Reconsideration
of the CA Decision was subsequently denied on September 28, 2001. Petitioner insists that it merely fulfilled its obligation under law and contract when it
encashed the aforesaid checks. Invoking Sections 1267 and 1858 of the Negotiable
Instruments Law (NIL), petitioner claims that its duty as a drawee bank to a drawer-client
Petitioner now comes before this Court arguing that:
maintaining a checking account with it is to pay orders for checks bearing the drawer-
client’s genuine signatures. The genuine signatures of the client’s duly authorized
I. The Court of Appeals gravely erred in holding that the proximate cause of respondent’s signatories affixed on the checks signify the order for payment. Thus, pursuant to the said
loss was petitioner’s encashment of the checks. obligation, the drawee bank has the duty to determine whether the signatures appearing
on the check are the drawer-client’s or its duly authorized signatories. If the signatures are
A. The Court of Appeals gravely erred in holding that petitioner was liable for the genuine, the bank has the unavoidable legal and contractual duty to pay. If the signatures
amount of the checks despite the fact that petitioner was merely fulfilling its are forged and falsified, the drawee bank has the corollary, but equally unavoidable legal
obligation under law and contract. and contractual, duty not to pay.9

B. The Court of Appeals gravely erred in holding that petitioner had a duty to verify Furthermore, petitioner maintains that there exists a duty on the drawee bank to inquire
the encashment, despite the absence of any obligation to do so. from the drawer before encashing a check only when the check bears a material alteration.
A material alteration is defined in Section 125 of the NIL to be one which changes the date,
C. The Court of Appeals gravely erred in not applying Section 14 of the Negotiable the sum payable, the time or place of payment, the number or relations of the parties, the
Instruments Law, despite its clear applicability to this case; currency in which payment is to be made or one which adds a place of payment where no
place of payment is specified, or any other change or addition which alters the effect of the
II. The Court of Appeals gravely erred in not holding that the proximate cause of instrument in any respect. With respect to the checks at issue, petitioner points out that
respondent’s loss was its own grossly negligent practice of pre-signing checks without they do not contain any material alteration.10 This is a fact which was affirmed by the trial
payees and amounts and delivering these pre-signed checks to its employees (other than court itself.11
their signatories).
There is no dispute that the signatures appearing on the subject checks were genuine
signatures of the respondent’s authorized joint signatories; namely, Antonia Reyes and
Gregorio Reyes who were respondent’s President and Vice-President for Finance, and encash the same. As noted by the CA, petitioner could have made a simple phone
respectively. Both pre-signed the said checks since they were both scheduled to go abroad call to its client to clarify the irregularities and the loss to respondent due to the encashment
and it was apparently their practice to leave with the company accountant checks signed of the stolen checks would have been prevented.
in black to answer for company obligations that might fall due during the signatories’
absence. It is likewise admitted that neither of the subject checks contains any material In the case at bar, extraordinary diligence demands that petitioner should have ascertained
alteration or erasure. from respondent the authenticity of the subject checks or the accuracy of the entries therein
not only because of the presence of highly irregular entries on the face of the checks but
However, on the blank space of each check reserved for the payee, the following also of the decidedly unusual circumstances surrounding their encashment. Respondent’s
typewritten words appear: "ONE HUNDRED TEN THOUSAND PESOS ONLY." Above the witness testified that for checks in amounts greater than Twenty Thousand Pesos
same is the typewritten word, "CASH." On the blank reserved for the amount, the same (₱20,000.00) it is the company’s practice to ensure that the payee is indicated by name in
amount of One Hundred Ten Thousand Pesos was indicated with the use of a check writer. the check.14 This was not rebutted by petitioner. Indeed, it is highly uncommon for a
The presence of these irregularities in each check should have alerted the petitioner to be corporation to make out checks payable to "CASH" for substantial amounts such as in this
cautious before proceeding to encash them which it did not do. case. If each irregular circumstance in this case were taken singly or isolated, the bank’s
employees might have been justified in ignoring them. However, the confluence of the
It is well-settled that banks are engaged in a business impressed with public interest, and irregularities on the face of the checks and circumstances that depart from the usual
it is their duty to protect in return their many clients and depositors who transact business banking practice of respondent should have put petitioner’s employees on guard that the
with them. They have the obligation to treat their client’s account meticulously and with the checks were possibly not issued by the respondent in due course of its business.
highest degree of care, considering the fiduciary nature of their relationship. The diligence Petitioner’s subtle sophistry cannot exculpate it from behavior that fell extremely short of
required of banks, therefore, is more than that of a good father of a family.12 the highest degree of care and diligence required of it as a banking institution.

Petitioner asserts that it was not duty-bound to verify with the respondent since the amount Indeed, taking this with the testimony of petitioner’s operations manager that in case of an
below the typewritten word "CASH," expressed in words, is the very same amount irregularity on the face of the check (such as when blanks were not properly filled out) the
indicated in figures by means of a check writer on the amount portion of the check. The bank may or may not call the client depending on how busy the bank is on a particular
amount stated in words is, therefore, a mere reiteration of the amount stated in figures. day,15 we are even more convinced that petitioner’s safeguards to protect clients from
Petitioner emphasizes that a reiteration of the amount in words is merely a repetition and check fraud are arbitrary and subjective. Every client should be treated equally by a
that a repetition is not an alteration which if present and material would have enjoined it to banking institution regardless of the amount of his deposits and each client has the right
commence verification with respondent.13 to expect that every centavo he entrusts to a bank would be handled with the same degree
of care as the accounts of other clients. Perforce, we find that petitioner plainly failed to
We do not agree with petitioner’s myopic view and carefully crafted defense. Although not adhere to the high standard of diligence expected of it as a banking institution.
in the strict sense "material alterations," the misplacement of the typewritten entries for the
payee and the amount on the same blank and the repetition of the amount using a check In defense of its cashier/teller’s questionable action, petitioner insists that pursuant to
writer were glaringly obvious irregularities on the face of the check. Clearly, someone made Sections 1416 and 1617 of the NIL, it could validly presume, upon presentation of the checks,
a mistake in filling up the checks and the repetition of the entries was possibly an attempt that the party who filled up the blanks had authority and that a valid and intentional delivery
to rectify the mistake. Also, if the check had been filled up by the person who customarily to the party presenting the checks had taken place. Thus, in petitioner’s view, the sole
accomplishes the checks of respondent, it should have occurred to petitioner’s employees blame for this debacle should be shifted to respondent for having its signatories pre-sign
that it would be unlikely such mistakes would be made. All these circumstances should and deliver the subject checks.18 Petitioner argues that there was indeed delivery in this
have alerted the bank to the possibility that the holder or the person who is attempting to case because, following American jurisprudence, the gross negligence of respondent’s
encash the checks did not have proper title to the checks or did not have authority to fill up accountant in safekeeping the subject checks which resulted in their theft should be treated
as a voluntary delivery by the maker who is estopped from claiming non-delivery of the loss. To reiterate, petitioner’s own operations manager admitted that they could have
instrument.19 called up the client for verification or confirmation before honoring the dubious checks.
Verily, petitioner had the final opportunity to avert the injury that befell the respondent.
Petitioner’s contention would have been correct if the subject checks were correctly and Failing to make the necessary verification due to the volume of banking transactions on
properly filled out by the thief and presented to the bank in good order. In that instance, that particular day is a flimsy and unacceptable excuse, considering that the "banking
there would be nothing to give notice to the bank of any infirmity in the title of the holder of business is so impressed with public interest where the trust and confidence of the public
the checks and it could validly presume that there was proper delivery to the holder. The in general is of paramount importance such that the appropriate standard of diligence must
bank could not be faulted if it encashed the checks under those circumstances. However, be a high degree of diligence, if not the utmost diligence."23 Petitioner’s negligence has
the undisputed facts plainly show that there were circumstances that should have alerted been undoubtedly established and, thus, pursuant to Art. 1170 of the NCC,24 it must suffer
the bank to the likelihood that the checks were not properly delivered to the person who the consequence of said negligence.
encashed the same. In all, we see no reason to depart from the finding in the assailed CA
Decision that the subject checks are properly characterized as incomplete and undelivered In the interest of fairness, however, we believe it is proper to consider respondent’s own
instruments thus making Section 1520 of the NIL applicable in this case. negligence to mitigate petitioner’s liability. Article 2179 of the Civil Code provides:

However, we do agree with petitioner that respondent’s officers’ practice of pre-signing of Art. 2179. When the plaintiff’s own negligence was the immediate and proximate cause of
blank checks should be deemed seriously negligent behavior and a highly risky means of his injury, he cannot recover damages. But if his negligence was only contributory, the
purportedly ensuring the efficient operation of businesses. It should have occurred to immediate and proximate cause of the injury being the defendant’s lack of due care, the
respondent’s officers and managers that the pre-signed blank checks could fall into the plaintiff may recover damages, but the courts shall mitigate the damages to be awarded. 1avvph!1

wrong hands as they did in this case where the said checks were stolen from the company
accountant to whom the checks were entrusted. Explaining this provision in Lambert v. Heirs of Ray Castillon,25 the Court held:

Nevertheless, even if we assume that both parties were guilty of negligent acts that led to The underlying precept on contributory negligence is that a plaintiff who is partly
the loss, petitioner will still emerge as the party foremost liable in this case. In instances responsible for his own injury should not be entitled to recover damages in full but must
where both parties are at fault, this Court has consistently applied the doctrine of last clear bear the consequences of his own negligence. The defendant must thus be held liable only
chance in order to assign liability. for the damages actually caused by his negligence. xxx xxx xxx

In Westmont Bank v. Ong,21 we ruled: As we previously stated, respondent’s practice of signing checks in blank whenever its
authorized bank signatories would travel abroad was a dangerous policy, especially
…[I]t is petitioner [bank] which had the last clear chance to stop the fraudulent encashment considering the lack of evidence on record that respondent had appropriate safeguards or
of the subject checks had it exercised due diligence and followed the proper and regular internal controls to prevent the pre-signed blank checks from falling into the hands of
banking procedures in clearing checks. As we had earlier ruled, the one who had a last unscrupulous individuals and being used to commit a fraud against the company. We
clear opportunity to avoid the impending harm but failed to do so is chargeable with the cannot believe that there was no other secure and reasonable way to guarantee the non-
consequences thereof.22 (emphasis ours) disruption of respondent’s business. As testified to by petitioner’s expert witness, other
corporations would ordinarily have another set of authorized bank signatories who would
In the case at bar, petitioner cannot evade responsibility for the loss by attributing be able to sign checks in the absence of the preferred signatories.26 Indeed, if not for the
negligence on the part of respondent because, even if we concur that the latter was indeed fortunate happenstance that the thief failed to properly fill up the subject checks,
negligent in pre-signing blank checks, the former had the last clear chance to avoid the respondent would expectedly take the blame for the entire loss since the defense of forgery
of a drawer’s signature(s) would be unavailable to it. Considering that respondent G.R. No. 156448 February 23, 2011
knowingly took the risk that the pre-signed blank checks might fall into the hands of
wrongdoers, it is but just that respondent shares in the responsibility for the loss. SPS. MOISES and CLEMENCIA ANDRADA, Petitioners,
vs.
We also cannot ignore the fact that the person who stole the pre-signed checks subject of PILHINO SALES CORPORATION, represented by its Branch Manager, JOJO S.
this case from respondent’s accountant turned out to be another employee, purportedly a SAET, Respondent.
clerk in respondent’s accounting department. As the employer of the "thief," respondent
supposedly had control and supervision over its own employee. This gives the Court more DECISION
reason to allocate part of the loss to respondent.
BERSAMIN, J.:
Following established jurisprudential precedents,27 we believe the allocation of sixty
percent (60%) of the actual damages involved in this case (represented by the amount of An appeal by petition for review on certiorari under Rule 45 shall raise only questions of
the checks with legal interest) to petitioner is proper under the premises. Respondent law. Thus, the herein petition for review must fail for raising a question essentially of fact.
should, in light of its contributory negligence, bear forty percent (40%) of its own loss.
Antecedents
Finally, we find that the awards of attorney’s fees and litigation expenses in favor of
respondent are not justified under the circumstances and, thus, must be deleted. The
On December 28, 1990, respondent Pilhino Sales Corporation (Pilhino) sued Jose
power of the court to award attorney’s fees and litigation expenses under Article 2208 of
Andrada, Jr. and his wife, Maxima, in the Regional Trial Court in Davao City (RTC) to
the NCC28 demands factual, legal, and equitable justification.
recover the principal sum of ₱240,863.00, plus interest and incidental charges (Civil Case
No. 20,489-90). Upon Pilhino’s application, the RTC issued a writ of preliminary
An adverse decision does not ipso facto justify an award of attorney’s fees to the winning attachment, which came to be implemented against a Hino truck and a Fuso truck both
party.29 Even when a claimant is compelled to litigate with third persons or to incur owned by Jose Andrada, Jr. However, the levies on attachment were lifted after Jose filed
expenses to protect his rights, still attorney’s fees may not be awarded where no sufficient a counter-attachment bond.
showing of bad faith could be reflected in a party’s persistence in a case other than an
erroneous conviction of the righteousness of his cause.30
In due course, the RTC rendered a decision against Jose Andrada, Jr. and his wife. Pilhino
opted to enforce the writ of execution against the properties of the Andradas instead of
WHEREFORE, the Decision of the Court of Appeals dated July 16, 2001 and its Resolution claiming against the counter-attachment bond considering that the premium on the bond
dated September 28, 2001 are AFFIRMED with the following MODIFICATIONS: (a) had not been paid. As a result, the sheriff seized the Hino truck and sold it at the ensuing
petitioner Bank of America NT & SA shall pay to respondent Philippine Racing Club sixty public auction, with Pilhino as the highest bidder. However, the Hino truck could not be
percent (60%) of the sum of Two Hundred Twenty Thousand Pesos (₱220,000.00) with transferred to Pilhino’s name due to its having been already registered in the name of
legal interest as awarded by the trial court and (b) the awards of attorney’s fees and petitioner Moises Andrada. It appears that the Hino truck had been meanwhile sold by
litigation expenses in favor of respondent are deleted. Jose Andrada, Jr. to Moises Andrada, which sale was unknown to Pilhino, and that Moises
had mortgaged the truck to BA Finance Corporation (BA Finance) to secure his own
Proportionate costs. obligation.

SO ORDERED. BA Finance sued Moises Andrada for his failure to pay the loan (Civil Case No. 5117).
After a decision was rendered in the action in favor of BA Finance, a writ of execution
issued, by which the sheriff levied upon and seized the Hino truck while it was in the good faith of Pilhino and BA Finance in filing their respective actions, rendered its decision
possession of Pilhino and sold it at public auction, with BA Finance as the highest bidder. in Civil Case No. 21,898-93,1 disposing:

Consequently, Pilhino instituted this action in the RTC in Davao City against Spouses Jose WHEREFORE, judgment is rendered dismissing this case insofar as the spouses Moises
Andrada, Jr. and Maxima Andrada, Spouses Moises Andrada and Clemencia Andrada, Andrada and Clemencia Andrada, Jose Andrada, Sr. and BA Finance Corporation, now
Jose Andrada, Sr., BA Finance, Land Transportation Office (in Surallah, South Cotabato), accordingly BA Savings Bank, including the counterclaims.
and the Registrar of Deeds of General Santos City to annul the following: (a) the deed of
sale between Jose Andrada, Jr. and Moises Andrada; (b) the chattel mortgage involving SO ORDERED.
the Hino truck between Moises Andrada and BA Finance; (c) the deed of conveyance
executed by Jose Andrada, Jr. in favor of his father, Jose Andrada, Sr., involving a hard- Spouses Moises and Clemencia Andrada appealed the decision rendered on March 25,
top jeep; and (d) the certificate of registration of the Hino truck in the name of Moises 1998 to the extent that the RTC thereby: (a) dismissed their counterclaim; (b) declared that
Andrada as well as the registration of the chattel mortgage with the Registry of Deeds of the deed of sale of the Hino truck between Jose Andrada, Jr. and Moises Andrada had
General Santos City. The action was docketed as Civil Case No. 21,898-93. been simulated; and (c) approved the compromise agreement between Pilhino and
Spouses Jose Andrada, Jr. and Maxima Andrada.
Of the Andradas who were defendants in Civil Case No. 21,898-93, only Moises Andrada
and his wife filed their responsive pleading. Later on, Jose Andrada, Jr. and his wife and On December 13, 2001, the Court of Appeals (CA) promulgated its decision, as follows:2
Pilhino submitted a compromise agreement dated August 20, 1993. They submitted a
second compromise agreement dated March 4, 1994 because the first was found to be
WHEREFORE, the judgment appealed from is AFFIRMED with the modification that the
defective and incomplete. The RTC thereafter rendered a partial judgment on March 21,
sale of the Hino truck by defendant Jose Andrada, Jr. in favor of defendant-appellant
1994 based on the second compromise agreement. After that, further proceedings were
Moises Andrada is declared valid, subject to the rights of BA Finance as mortgagee and
taken in Civil Case No. 21,898-93 only with respect to Moises Andrada and his wife, and
highest bidder.
BA Finance.
SO ORDERED.
Moises Andrada and his wife averred as defenses that they had already acquired the Hino
truck from Jose Andrada, Jr. free from any lien or encumbrance prior to its seizure by the
sheriff pursuant to the writ of execution issued in Civil Case No. 20,489-90; that their Spouses Moises and Clemencia Andrada are now before the Court via petition for review
acquisition had been made in good faith, considering that at the time of the sale the on certiorari to pose the following issues: 3
preliminary attachment had already been lifted; and that Pilhino’s recourse was to proceed
against the counter-attachment bond. 1. Whether or not Pilhino should be held liable for the damages the petitioners
sustained from Pilhino’s levy on execution upon the Hino truck under Civil Case
For its part, BA Finance claimed lack of knowledge of the truth of the material allegations No. 20,489-90; and
of the complaint of Pilhino; and insisted that the Hino truck had been validly mortgaged to
it by Moises Andrada, the lawful owner, to secure his own valid obligation. 2. Whether or not Pilhino was guilty of bad faith when it proceeded with the levy on
execution upon the Hino truck owned by Moises Andrada.
On March 25, 1998, the RTC, citing the compromise agreement between Pilhino and Jose
Andrada, Jr. that had settled all the claims of Pilhino against Jose Andrada, Jr., and the Ruling

We find no merit in the petition for review.


The petitioners assail the decision promulgated by the CA to the extent that it denied their Section 1. Filing of petition with Supreme Court. — A party desiring to appeal by certiorari
claim for the damages they had sought by way of counterclaim. They anchored their claim from a judgment or final order or resolution of the Court of Appeals, the Sandiganbayan,
on Article 21 of the Civil Code, which provides that "any person who willfully causes loss the Regional Trial Court or other courts whenever authorized by law, may file with the
or injury to another in a manner that is contrary to morals, good customs or public policy Supreme Court a verified petition for review on certiorari. The petition shall raise only
shall compensate the latter for damage." questions of law which must be distinctly set forth. (1a, 2a)8

Article 21 of the Civil Code, in conjunction with Article 19 of the Civil Code, is part of the It is true that the Court has, at times, allowed exceptions from the restriction. Among the
cause of action known in this jurisdiction as "abuse of rights." The elements of abuse of recognized exceptions are the following, to wit:9
rights are: (a) there is a legal right or duty; (b) exercised in bad faith; and (c) for the sole
intent of prejudicing or injuring another.4 (a) When the findings are grounded entirely on speculation, surmises, or
conjectures;
In its assailed decision, the CA found that Pilhino had acted in good faith in bringing Civil
Case No. 21,898-93 to annul the deed of sale involving the Hino truck executed by Jose (b) When the inference made is manifestly mistaken, absurd, or impossible;
Andrada, Jr. in favor of Moises Andrada, considering that Pilhino had "believed that the
sale in favor of defendants-appellants [had been] resorted to so that Jose Andrada [might] (c) When there is grave abuse of discretion;
evade his obligations."5 The CA concluded that no remedy was available for any damages
that the petitioners sustained from the filing of Civil Case No. 21,898-93 against them
(d) When the judgment is based on a misapprehension of facts;
because "the law affords no remedy for such damages resulting from an act which does
not amount to a legal injury or wrong."6
(e) When the findings of facts are conflicting;
Worthy to note is that the CA’s finding and conclusion rested on the RTC’s own persuasion
that the sale of the Hino truck to Moises Andrada had been simulated.7 (f) When in making its findings the CA went beyond the issues of the case, or its
findings are contrary to the admissions of both the appellant and the appellee;
Yet, the petitioners still insist in this appeal that both lower courts erred in their conclusion
on the absence of bad faith on the part of Pilhino. (g) When the CA’s findings are contrary to those by the trial court;

We cannot side with the petitioners. Their insistence, which represents their disagreement (h) When the findings are conclusions without citation of specific evidence on which
with the CA’s declaration that the second and third elements of abuse of rights, supra, were they are based;
not established, requires the consideration and review of factual issues. Hence, this appeal
cannot succeed, for an appeal by petition for review on certiorari cannot determine factual (i) When the facts set forth in the petition as well as in the petitioner’s main and
issues. In the exercise of its power of review, the Court is not a trier of facts and does not reply briefs are not disputed by the respondent;
normally undertake the re-examination of the evidence presented by the contending
parties during the trial. Perforce, the findings of fact by the CA are conclusive and binding (j) When the findings of fact are premised on the supposed absence of evidence
on the Court. This restriction of the review to questions of law has been institutionalized in and contradicted by the evidence on record; or
Section 1, Rule 45 of the Rules of Court, viz:
(k) When the CA manifestly overlooked certain relevant facts not disputed by the
parties, which, if properly considered, would justify a different conclusion.
However, the circumstances of this case do not warrant reversing or modifying the findings WHEREFORE, we deny the petition for review on certiorari for its lack of merit, and affirm
of the CA, which are consistent with the established facts. Verily, the petitioners did not the decision of the Court of Appeals.
prove the concurrence of the elements of abuse of rights.
SO ORDERED.
The petitioners further seek attorney’s fees based on Article 2208 (4) of the Civil Code,
which provides that "in the absence of stipulation, attorney’s fees and expenses of G.R. No. 183804 September 11, 2013
litigation, other than judicial costs, cannot be recovered, except xxx (4) in cases of clearly
unfounded civil action or proceeding against the plaintiff xxx." S.C. MEGAWORLD CONSTRUCTION and DEVELOPMENT
CORPORATION, Petitioner,
The petitioners are not entitled to attorney’s fees. vs.
ENGR. LUIS U. PARADA, represented by ENGR. LEONARDO A. PARADA of
It is well accepted in this jurisdiction that no premium should be placed on the right to GENLITE INDUSTRIES,Respondent.
litigate and that not every winning party is entitled to an automatic grant of attorney’s
fees.10 Indeed, before the effectivity of the new Civil Code, such fees could not be DECISION
recovered in the absence of a stipulation.11 It was only with the advent of the new Civil
Code that the right to collect attorney’s fees in the instances mentioned in Article 2208 was REYES, J.:
recognized,12 and such fees are now included in the concept of actual damages.13 One
such instance is where the defendant is guilty of gross and evident bad faith in refusing to
Before us on appeal by certiorari1 is the Decision2 dated April 30, 2008 of the Court of
satisfy the plaintiff’s plainly valid, just and demandable claim.14 This is a corollary of the
Appeals (CA) in CA-G.R. CV No. 83811 which upheld the Decision3 dated May 8, 2004 of
general principle expressed in Article 19 of the Civil Code that everyone must, in the
the Regional Trial Court (RTC) of Quezon City, Branch 100, in Civil Case No. Q-01-45212.
performance of his duties, observe honesty and good faith and the rule embodied in Article
1170 that anyone guilty of fraud (bad faith) in the performance of his obligation shall be
liable for damages. Factual Antecedents

But, as noted by the Court in Morales v. Court of Appeals,15 the award of attorney’s fees is S.C. Megaworld Construction and Development Corporation (petitioner) bought electrical
the exception rather than the rule. The power of a court to award attorney’s fees under lighting materials from Gentile Industries, a sole proprietorship owned by Engineer Luis U.
Article 2208 of the Civil Code demands factual, legal, and equitable justification; its basis Parada (respondent), for its Read-Rite project in Canlubang, Laguna. The petitioner was
cannot be left to speculation and conjecture.16 The general rule is that attorney’s fees unable to pay for the above purchase on due date, but blamed it on its failure to collect
cannot be recovered as part of damages because of the policy that no premium should be under its sub-contract with the Enviro KleenTechnologies, Inc. (Enviro Kleen). It was
placed on the right to litigate.17 however able to persuade Enviro Kleen to agree to settle its above purchase, but after
paying the respondent ₱250,000.00 on June 2, 1999,4 Enviro Kleen stopped making
1av vphi1

further payments, leaving an outstanding balance of ₱816,627.00. It also ignored the


Herein, the element of bad faith on the part of Pilhino in commencing and prosecuting Civil
various demands of the respondent, who then filed a suit in the RTC, docketed as Civil
Case No. 21,898-93, which was necessary to predicate the lawful grant of attorney’s fees
Case No.Q-01-45212, to collect from the petitioner the said balance, plus damages, costs
based on Article 2208 (4) of the Civil Code, was not established. Accordingly, the
and expenses, as summarized in the RTC’s decision, as follows:
petitioners’ demand for attorney’s fees must fail.
The petitioner in its answer denied liability, claiming that it was released from its
indebtedness to the respondent by reason of the novation of their contract, which, it
reasoned, took place when the latter accepted the partial payment of Enviro Kleen in its In dismissing the appeal, the CA noted that the petitioner in its answer below raised only
behalf, and thereby acquiesced to the substitution of Enviro Kleen as the new debtor in the the defense of novation, and that at no stage in the proceedings did it raise the question
petitioner’s place. After trial, the RTC rendered judgment6 on May 28, 2004 in favor of the of whether the suit was brought in the name of the real party in interest. Moreover, the
respondent, the fallo of which reads, as follows: appellate court found from the sales invoices and receipts that the respondent is the sole
proprietor of Genlite Industries, and therefore the real party-plaintiff. Said the CA:
WHEREFORE, judgment is hereby rendered for the respondent. The petitioner is hereby
ordered to pay the respondent the following: Settled is the rule that litigants cannot raise an issue for the first time on appeal as this
would contravene the basic rules of fair play and justice.
A. the sum of ₱816,627.00 representing the principal obligation due;
In any event, there is no question that respondent Engr.Luis U. Parada is the proprietor of
B. the sum equivalent to twenty percent (20%)per month of the principal obligation Genlite Industries, as shown on the sales invoice and delivery receipts. There is also no
due from date of judicial demand until fully paid as and for interest; and question that a special power of attorney was executed by respondent Engr.Luis U. Parada
in favor of Engr. Leonardo A. Parada authorizingthe latter to file a complaint against the
C. the sum equivalent to twenty-five percent (25%) of the principal sum due as and petitioner.8 (Citations omitted)
for attorney’s fees and other costs of suits. The compulsory counterclaim
interposed by the petitioner is hereby ordered dismissed for lack of merit. The petitioner also contended that a binding novation of the purchase contract between
the parties took place when the respondent accepted the partial payment of Enviro Kleen
SO ORDERED.7 (Emphasis supplied) of ₱250,000.00 in its behalf, and thus acquiesced to the substitution by Enviro Kleen of the
petitioner as the new debtor. But the CA noted that there is nothing in the two (2) letters of
the respondent to Enviro Kleen, dated April 14, 1999 and June 16, 1999, which would imply
On appeal to the CA, the petitioner maintained that the trial court erred in ruling that no
that he consented to the alleged novation, and, particularly, that he intended to release the
novation of the contract took place through the substitution of Enviro Kleen as the new
petitioner from its primary obligation to pay him for its purchase of lighting materials. The
debtor. But for the first time, it further argued that the trial court should have dismissed the
appellate court cited the RTC’s finding9 that the respondent informed Enviro Kleen in his
complaint for failure of the respondent to implead Genlite Industries as "a proper party in
first letter that he had served notice to the petitioner that he would take legal action against
interest", as provided in Section 2 of Rule 3 of the 1997 Rules of Civil Procedure. The said
it for its overdue account, and that he retained his option to pull out the lighting materials
section provides:
and charge the petitioner for any damage they might sustain during the pull-out:
SEC. 2. Parties in interest. — A real party in interest is the party who stands to be benefited
Respondent x x x has served notice to the petitioner that unless the overdue account is
or injured by the judgment in the suit, or the party entitled to the avails of the suit. Unless
paid, the matter will be referred to its lawyers and there may be a pull-out of the delivered
otherwise authorized by law or these Rules, every action must be prosecuted or defended
lighting fixtures. It was likewise stated therein that incidental damages that may result to
in the name of the real party in interest.
the structure in the course of the pull-out will be to the account of the petitioner.10
In Section 1(g) of Rule 16 of the Rules of Court, it is also provided that the defendant may
The CA concurred with the RTC that by retaining his option to seek satisfaction from the
move to dismiss the suit on the ground that it was not brought in the name of or against
petitioner, any acquiescence which the respondent had made was limited to merely
the real party in interest, with the effect that the complaint is then deemed to state no cause
accepting Enviro Kleen as an additional debtor from whom he could demand payment, but
of action.
without releasing the petitioner as the principal debtor from its debt to him.
On motion for reconsideration,11 the petitioner raised for the first time the issue of the died of cardio-pulmonary arrest on January 21,2009,16 survived by his legitimate children,
validity of the verification and certification of non-forum shopping attached to the complaint. namely, Leonardo, Luis, Jr., and Lalaine, all surnamed Parada. They have since
On July 18, 2008, the CA denied the said motion for lack of merit.12 substituted him in this petition, per the Resolution of the Supreme Court dated September
2, 2009.17 Also, on July 23, 2009, Luis, Jr. and Lalaine Parada executed an SPA
Petition for Review in the Supreme Court authorizing their brother Leonardo to represent them in the instant petition.18

In this petition, the petitioner insists, firstly, that the complaint should have been dismissed In the verification and certification of non-forum shopping attached to the complaint in Civil
outright by the trial court for an invalid non-forum shopping certification; and, secondly, that Case No. Q01-45212, Leonardo as attorney-in-fact of his father acknowledged as follows:
the appellate court erred in not declaring that there was a novation of the contract between
the parties through substitution of the debtor, which resulted in the release of the petitioner xxxx
from its obligation to pay the respondent the amount of its purchase.13
That I/we am/are the Plaintiff in the above-captioned case;
Our Ruling
That I/we have caused the preparation of this Complaint;
The petition is devoid of merit.
That I/we have read the same and that all the allegations therein are true and correct to
The verification and certification of the best of my/our knowledge;
non-forum shopping in the
complaint is not a jurisdictional but x x x x.19
a formal requirement, and any
objection as to non-compliance In this petition, the petitioner reiterates its argument before the CA that the above
therewith should be raised in the verification is invalid, since the SPA executed by the respondent did not specifically include
proceedings below and not for the an authority for Leonardo to sign the verification and certification of non-forum shopping,
first time on appeal. thus rendering the complaint defective for violation of Sections 4 and 5 of Rule 7. The said
sections provide, as follows:
"It is well-settled that no question will be entertained on appeal unless it has been raised
in the proceedings below. Points of law, theories, issues and arguments not brought to the Sec. 4. Verification. — A pleading is verified by an affidavit that the affiant has read the
attention of the lower court, administrative agency or quasi-judicial body, need not be pleading and that the allegations therein are true and correct of his personal knowledge or
considered by are viewing court, as they cannot be raised for the first time at that late based on authentic records.
stage. Basic considerations of fairness and due process impel this rule. Any issue raised
for the first time on appeal is barred by estoppel."14
Sec. 5. Certification against forum shopping. –– The plaintiff or principal party shall certify
under oath in the complaint or other initiatory pleading asserting a claim for relief, or in a
Through a Special Power of Attorney (SPA), the respondent authorized Engr. Leonardo A. sworn certification annexed thereto and simultaneously filed therewith: (a) that he has not
Parada (Leonardo), the eldest of his three children, to perform the following acts in his thereto fore commenced any action or filed any claim involving the same issues in any
behalf: a) to file a complaint against the petitioner for sum of money with damages; and b) court, or tribunal x x x and, to the best of his knowledge, no such other action or claim is
to testify in the trial thereof and sign all papers and documents related thereto, with full pending therein; (b) if there is such other pending action or claim, a complete statement of
powers to enter into stipulation and compromise.15 Incidentally, the respondent, a widower, the present status thereof; and (c) if he should thereafter learn that the same or similar
action or claim has been filed or is pending, he shall report that fact x x x to the court Lastly, it is well-settled that a strict compliance with the rules may be dispensed with in
wherein his aforesaid complaint or initiatory pleading has been filed. order that the ends of substantial justice may be served.25 It is clear that the present
controversy must be resolved on its merits, lest for a technical oversight the respondent
Failure to comply with the foregoing requirements shall not be curable by mere amendment should be deprived of what is justly due him.
of the complaint or other initiatory pleading but shall be cause for the dismissal of the case
without prejudice, unless otherwise provided, upon motion and after hearing. A sole proprietorship has no
juridical personality separate and
The petitioner’s argument is untenable. The petitioner failed to reckon that any objection distinct from that of its owner, and
as to compliance with the requirement of verification in the complaint should have been need not be impleaded as a party-
raised in the proceedings below, and not in the appellate court for the first time.20 In plaintiff in a civil case.
KILUSAN-OLALIA v. CA,21 it was held that verification is a formal, not a jurisdictional
requisite: On the question of whether Genlite Industries should have been impleaded as a party-
plaintiff, Section 1 of Rule 3 of the Rules of Court provides that only natural or juridical
We have emphasized, time and again, that verification is a formal, not a jurisdictional persons or entities authorized by law may be parties in a civil case. Article 44 of the New
requisite, as it is mainly intended to secure an assurance that the allegations therein made Civil Code enumerates who are juridical persons:
are done in good faith or are true and correct and not mere speculation. The Court may
order the correction of the pleading, if not verified, or act on the unverified pleading if the Art. 44. The following are juridical persons:
attending circumstances are such that a strict compliance with the rule may be dispensed
with in order that the ends of justice may be served. (1) The State and its political subdivisions;

Further, in rendering justice, courts have always been, as they ought to be, conscientiously (2) Other corporations, institutions and entities for public interest or purpose,
guided by the norm that on the balance, technicalities take a backseat vis-à-vis substantive created by law; their personality begins as soon as they have been constituted
rights, and not the other way around. x x x.22(Citations omitted) according to law;

In Young v. John Keng Seng,23 it was also held that the question of forum shopping cannot (3) Corporations, partnerships and associations for private interest or purpose to
be raised in the CA and in the Supreme Court, since such an issue must be raised at the which the law grants a juridical personality, separate and distinct from that of each
earliest opportunity in a motion to dismiss or a similar pleading. The high court even warned shareholder, partner or member.
that "invoking it in the later stages of the proceedings or on appeal may result in the
dismissal of the action x x x."24 Genlite Industries is merely the DTI-registered trade name or style of the respondent by
which he conducted his business. As such, it does not exist as a separate entity apart from
Moreover, granting that Leonardo has no personal knowledge of the transaction subject of its owner, and therefore it has no separate juridical personality to sue or be sued.26 As the
the complaint below, Section 4 of Rule 7 provides that the verification need not be based sole proprietor of Genlite Industries, there is no question that the respondent is the real
on the verifier’s personal knowledge but even only on authentic records. Sales invoices, party in interest who stood to be directly benefited or injured by the judgment in the
statements of accounts, receipts and collection letters for the balance of the amount still complaint below. There is then no necessity for Genlite Industries to be impleaded as a
due to the respondent from the petitioner are such records. There is clearly substantial party-plaintiff, since the complaint was already filed in the name of its proprietor, Engr. Luis
compliance by the respondent’s attorney-in-fact with the requirement of verification. U. Parada. To heed the petitioner’s sophistic reasoning is to permit a dubious technicality
to frustrate the ends of substantial justice.
Novation is never presumed but The fact that Enviro Kleen Technologies, Inc. made payments to the respondent and the
must be clearly and unequivocally latter accepted it does not ipso facto result innovation. Novation to be given its legal effect
shown. requires that the creditor should consent to the substitution of a new debtor and the old
debtor be released from its obligation (Art. 1293, New Civil Code). A reading of the letters
Novation is a mode of extinguishing an obligation by changing its objects or principal dated 14 April 1999 (Exh. 1) and dated 16 June 1999 (Exhs. 4 &4-a) sent by the respondent
obligations, by substituting a new debtor in place of the old one, or by subrogating a third to Enviro Kleen Technologies, Inc. clearly shows that there was nothing therein that would
person to the rights of the creditor.27 It is "the substitution of a new contract, debt, or evince that the[respondent] has consented to the exchange of the person of the debtor
obligation for an existing one between the same or different parties."28 Article 1293 of the from the petitioner to Enviro Kleen Technologies, Inc.
Civil Code defines novation as follows:
xxxx
Art. 1293. Novation which consists in substituting a new debtor in the place of the original
one, may be made even without the knowledge or against the will of the latter, but not Notably in Exh. 1, albeit addressed to Enviro Kleen Technologies, Inc., the respondent
without the consent of the creditor. Payment by the new debtor gives him rights mentioned expressly stated that it has served notice to the petitioner that unless the overdue account
in Articles 1236and 1237. is paid, the matter will be referred to its lawyers and there may be a pull-out of the delivered
lighting fixtures. It was likewise stated therein that incident damages that may result to the
Thus, in order to change the person of the debtor, the former debtor must be expressly structure in the course of the pull-out will be to the account of the petitioner.
released from the obligation, and the third person or new debtor must assume the former’s
place in the contractual relation.29 Article 1293 speaks of substitution of the debtor, which It is evident from the two (2) aforesaid letters that there is no indication of the respondent’s
may either be in the form of expromision or delegacion, as seems to be the case here. In intention to release the petitioner from its obligation to pay and to transfer it to Enviro Kleen
both cases, the old debtor must be released from the obligation, otherwise, there is no Technologies, Inc. The acquiescence of Enviro Kleen Technologies, Inc. to assume the
valid novation. As explained in Garcia30: obligation of the petitioner to pay the unpaid balance of [P]816,627.00 to the respondent
when there is clearly no agreement to release the petitioner will result merely to the addition
In general, there are two modes of substituting the person of the debtor: (1) expromision of debtors and not novation. Hence, the creditor can still enforce the obligation against the
and (2) delegacion. In expromision, the initiative for the change does not come from—and original debtor x x x. A fact which points strongly to the conclusion that the respondent did
may even be made without the knowledge of—the debtor, since it consists of a third not assent to the substitution of Enviro Kleen Technologies, Inc. as the new debtor is the
person’s assumption of the obligation. As such, it logically requires the consent of the third present action instituted by the respondent against the petitioner for the fulfillment of its
person and the creditor. In delegacion, the debtor offers, and the creditor accepts, a third obligation. A mere recital that the respondent has agreed or consented to the substitution
person who consents to the substitution and assumes the obligation; thus, the consent of of the debtor is not sufficient to establish the fact that there was a novation. x x x.32
these three persons are necessary. Both modes of substitution by the debtor require the
consent of the creditor.31 (Citations omitted) The settled rule is that novation is never presumed,33 but must be clearly and unequivocally
shown.34 In order for a new agreement to supersede the old one, the parties to a contract
From the circumstances obtaining below, we can infer no clear and unequivocal consent must expressly agree that they are abrogating their old contract in favor of a new
by the respondent to the release of the petitioner from the obligation to pay the cost of the one.35 Thus, the mere substitution of debtors will not result innovation,36 and the fact that
lighting materials. In fact, from the letters of the respondent to Enviro Kleen, it can be said the creditor accepts payments from a third person, who has assumed the obligation, will
that he retained his option to go after the petitioner if Enviro Kleen failed to settle the result merely in the addition of debtors and not novation, and the creditor may enforce the
petitioner’s debt. As the trial court held: obligation against both debtors.37 If there is no agreement as to solidarity, the first and new
debtors are considered obligated jointly.38 As explained in Reyes v. CA39:
The consent of the creditor to a novation by change of debtor is as indispensable as the Sentral ng Pilipinas Circular
creditor’s consent in conventional subrogation in order that a novation shall legally take No. 799, which took effect on
place. The mere circumstance of AFP-MBAI receiving payments from respondent Eleazar July 1, 2013, the respondent may
who acquiesced to assume the obligation of petitioner under the contract of sale of be awarded interest of six percent
securities, when there is clearly no agreement to release petitioner from her responsibility, (6%) of the judgment amount by
does not constitute novation. At most, it only creates a juridical relation of co-debtorship or way of actual and compensatory
surety ship on the part of respondent Eleazar to the contractual obligation of petitioner to damages.
AFP-MBAI and the latter can still enforce the obligation against the petitioner. In Ajax
Marketing and Development Corporation vs. Court of Appeals which is relevant in the It appears from the recital of facts in the trial court’s decision that the respondent demanded
instant case, we stated that — interest of two percent (2%) per month upon the balance of the purchase price of
₱816,627.00, from judicial demand until full payment. There is then an obvious clerical
"In the same vein, to effect a subjective novation by a change in the person of the debtor, error committed in the fallo of the trial court’s decision, for it incorrectly ordered the
it is necessary that the old debtor be released expressly from the obligation, and the third defendant there into pay "the sum equivalent to twenty percent (20%) per month of the
person or new debtor assumes his place in the relation. There is no novation without such principal obligation due from date of judicial demand until fully paid as and for interest."42
release as the third person who has assumed the debtor’s obligation becomes merely a
co-debtor or surety. xxx. Novation arising from a purported change in the person of the A clerical mistake is one which is visible to the eyes or obvious to the understanding; an
debtor must be clear and express xxx." error made by a clerk or a transcriber; a mistake in copying or writing.43 The Latin maxims
Error placitandi aequitatem non tollit ("A clerical error does not take away equity"), and
In the civil law setting, novatio is literally construed as to make new. So it is deeply rooted Error scribentis nocere non debit ("An error made by a clerk ought not to injure; a clerical
in the Roman Law jurisprudence, the principle – novatio non praesumitur — that novation error may be corrected") are apt in this case.44 Viewed against the landmark case of Medel
is never presumed. At bottom, for novation to be a jural reality, its animus must be ever v. CA45, an award of interest of 20% per month on the amount due is clearly excessive and
present, debitum pro debito — basically extinguishing the old obligation for the new iniquitous. It could not have been the intention of the trial court, not to mention that it is way
one.40 (Citation omitted) beyond what the plaintiff had prayed for below.

The trial court found that the respondent never agreed to release the petitioner from its It is settled that other than in the case of judgments which are void ab initio for lack of
obligation, and this conclusion was upheld by the CA. We generally accord utmost respect jurisdiction, or which are null and void per se, and thus may be questioned at any time,
and great weight to factual findings of the trial court and the CA, unless there appears in when a decision is final, even the court which issued it can no longer alter or modify it,
the record some fact or circumstance of weight and influence which has been overlooked, except to correct clerical errors or mistakes.46
or the significance of which has been misinterpreted, that if considered would have affected
the result of the case.41 We find no such oversight in the appreciation of the facts below, The foregoing notwithstanding, of more important consideration in the case before us is
nor such a misinterpretation thereof, as would otherwise provide a clear and unequivocal the fact that it is nowhere stated in the trial court’s decision that the parties had in fact
showing that a novation has occurred in the contract between the parties resulting in the stipulated an interest on the amount due to the respondent. Even granting that there was
release of the petitioner. such an agreement, there is no finding by the trial court that the parties stipulated that the
outstanding debt of the petitioner would be subject to two percent (2%) monthly interest.
Pursuant to Article 2209 of the The most that the decision discloses is that the respondent demanded a monthly interest
Civil Code, except as provided of 2% on the amount outstanding.
under Central Bank Circular
No. 905, and now under Bangko
Article 2209 of the Civil Code provides that "if the obligation consists in the payment of a this interim period being deemed to be by then an equivalent to a forbearance of
sum of money, and the debtor incurs in delay, the indemnity for damages, there being no credit.49 (Citations omitted)
stipulation to the contrary, shall be the payment of the interest agreed upon, and in the
absence of stipulation, the legal interest, which is six percent per annum." Pursuant to the As further clarified in the case of Sunga-Chan v. CA,50 a loan or forbearance of money,
said provision, then, since there is no finding of a stipulation by the parties as to the goods or credit describes a contractual obligation whereby a lender or creditor has
imposition of interest, only the amount of 12% per annum47 may be awarded by the court refrained during a given period from requiring the borrower or debtor to repay the loan or
by way of damages in its discretion, not two percent(2%) per month, following the debt then due and payable.51 Thus:
guidelines laid down in the landmark case of Eastern Shipping Lines v. Court of
Appeals,48 to wit: In Reformina v. Tomol, Jr., the Court held that the legal interest at 12% per annum under
Central Bank (CB) Circular No. 416 shall be adjudged only in cases involving the loan or
II. With regard particularly to an award of interest in the concept of actual and forbearance of money. And for transactions involving payment of indemnities in the
compensatory damages, the rate of interest, as well as the accrual thereof, is imposed, as concept of damages arising from default in the performance of obligations in general and/or
follows: for money judgment not involving a loan or forbearance of money, goods, or credit, the
governing provision is Art. 2209 of the Civil Code prescribing a yearly 6% interest. Art.
1. When the obligation is breached, and it consists in the payment of a sum of 2209 pertinently provides:
money, i.e., a loan or forbearance of money, the interest due should be that which
may have been stipulated in writing. Furthermore, the interest due shall itself earn "Art. 2209. If the obligation consists in the payment of a sum of money, and the debtor
legal interest from the time it is judicially demanded. In the absence of stipulation, incurs in delay, the indemnity for damages, there being no stipulation to the contrary, shall
the rate of interest shall be 12% per annum to be computed from default, i.e., from be the payment of the interest agreed upon, and in the absence of stipulation, the legal
judicial or extrajudicial demand under and subject to the provisions of Article 1169 interest, which is six per cent per annum."
of the Civil Code.
The term "forbearance," within the context of usury law, has been described as a
2. When an obligation, not constituting a loan or forbearance of money, is contractual obligation of a lender or creditor to refrain, during a given period of time, from
breached, an interest on the amount of damages awarded may be imposed at the requiring the borrower or debtor to repay the loan or debt then due and payable.
discretion of the court at the rate of 6% per annum. No interest, however, shall be
adjudged on unliquidated claims or damages except when or until the demand can Eastern Shipping Lines, Inc. synthesized the rules on the imposition of interest, if proper,
be established with reasonable certainty. Accordingly, where the demand is and the applicable rate, as follows: The12% per annum rate under CB Circular No. 416
established with reasonable certainty, the interest shall begin to run from the time shall apply only to loans or forbearance of money, goods, or credits, as well as to
the claim is made judicially or extrajudicially (Art. 1169, Civil Code) but when such judgments involving such loan or forbearance of money, goods, or credit, while the 6% per
certainty cannot be so reasonably established at the time the demand is made, the annum under Art. 2209 of the Civil Code applies "when the transaction involves the
interest shall begin to run only from the date the judgment of the court is made (at payment of indemnities in the concept of damage arising from the breach or a delay in the
which time the quantification of damages may be deemed to have been reasonably performance of obligations in general," with the application of both rates reckoned "from
ascertained).The actual base for the computation of legal interest shall, in any the time the complaint was filed until the adjudged amount is fully paid." In either instance,
case, be on the amount finally adjudged. the reckoning period for the commencement of the running of the legal interest shall be
subject to the condition "that the courts are vested with discretion, depending on the
3. When the judgment of the court awarding a sum of money becomes final and equities of each case, on the award of interest."52 (Citations omitted and emphasis ours)
executory, the rate of legal interest, whether the case falls under paragraph 1 or
paragraph 2, above, shall be 12% per annum from such finality until its satisfaction,
Pursuant, then, to Central Bank Circular No. 416, issued on July 29,1974,53 in the absence Section 2. In view of the above, Subsection X305.1 of the Manual of Regulations
of a written stipulation, the interest rate to be imposed in judgments involving a forbearance for Banks and Sections 4305Q.1, 4305S.3 and 4303P.1 of the Manual of
of credit shall be 12% per annum, up from 6% under Article 2209 of the Civil Code. This Regulations for Non-Bank Financial Institutions are hereby amended accordingly.
was reiterated in Central Bank Circular No. 905, which suspended the effectivity of the
Usury Law from January 1, 1983.54 But if the judgment refers to payment of interest as This Circular shall take effect on 1 July 2013.
damages arising from a breach or delay in general, the applicable interest rate is 6% per
annum, following Article 2209 of the Civil Code.55 Both interest rates apply from judicial or FOR THE MONETARY BOARD:
extrajudicial demand until finality of the judgment. But from the finality of the judgment
awarding a sum of money until it is satisfied, the award shall be considered a forbearance
DIWA C. GUINIGUNDO
of credit, regardless of whether the award in fact pertained to one, and therefore during
Officer-In-Charge
this period, the interest rate of 12% per annum for forbearance of money shall apply.56
The award of attorney’s fees is not proper.
But notice must be taken that in Resolution No. 796 dated May 16,2013, the Monetary
Board of the Bangko Sentral ng Pilipinas approved the revision of the interest rate to be
imposed for the loan or forbearance of any money, goods or credits and the rate allowed Other than to say that the petitioner "unjustifiably failed and refused to pay the respondent,"
in judgments, in the absence of an express contract as to such rate of interest. Thus, under the trial court did not state in the body of its decision the factual or legal basis for its award
BSP Circular No.799, issued on June 21, 2013 and effective on July 1, 2013, the said rate of attorney’s fees to the respondent, as required under Article 2208 of the New Civil Code,
of interest is now back at six percent (6%), viz: for which reason we have resolved to delete the same. The rule is settled that the trial court
must state the factual, legal or equitable justification for its award of attorney’s
fees.57Indeed, the matter of attorney’s fees cannot be stated only in the dispositive portion,
BANGKO SENTRAL NG PILIPINAS
but the reasons must be stated in the body of the court’s decision.58 This failure or oversight
OFFICE OF THE GOVERNOR
of the trial court cannot even be supplied by the CA. As concisely explained in Frias v. San
Diego-Sison59:
CIRCULAR NO. 799
Series of 2013
Article 2208 of the New Civil Code enumerates the instances where such may be awarded
and, in all cases, it must be reasonable, just and equitable if the same were to be granted.
Subject: Rate of interest in the absence of stipulation Attorney’s fees as part of damages are not meant to enrich the winning party at the
expense of the losing litigant. They are not awarded every time a party prevails in a suit
The monetary Board, in its Resolution No. 796 dated 16 May 2013,approved the following because of the policy that no premium should be placed on the right to litigate. The award
revisions governing the rate of interest in the absence of stipulation in loan contracts, of attorney’s fees is the exception rather than the general rule. As such, it is necessary for
thereby amending Section 2 of Circular No. 905, Series of 1982: the trial court to make findings of facts and law that would bring the case within the
exception and justify the grant of such award. The matter of attorney’s fees cannot be
Section 1. The rate of interest for the loan or forbearance of any money, goods or mentioned only in the dispositive portion of the decision. They must be clearly explained
credits and the rate allowed in judgments, in the absence of an express contract and justified by the trial court in the body of its decision. On appeal, the CA is precluded
as to such rate of interest, shall be six percent (6%) per annum. from supplementing the bases for awarding attorney’s fees when the trial court failed to
discuss in its Decision the reasons for awarding the same. Consequently, the award of
1âwphi1

attorney’s fees should be deleted.60 (Citations omitted)


WHEREFORE, premises considered, the Decision dated April 30, 2008 of the Court of DAR and the Land Bank of the Philippines (Land Bank) initially valued Atty. Domingo's
Appeals in CA-G.R. CV No. 83811 is AFFIRMED with MODIFICATION. Petitioner S.C. property at ₱484,236.27 or ₱7,999.30 per hectare, which the latter, through petitioner-
Megaworld Construction and Development Corporation is ordered to pay respondent Engr. counsel, opposed in courts. Eventually, the RTC, acting as Special Agrarian Court
Luis A. Parada, represented by Engr. Leonardo A. Parada, the principal amount due of (RTC/SAC) issued a Decision dated April 12, 2004 fixing the just compensation for Atty.
₱816,627.00, plus interest at twelve percent (12%) per annum, reckoned from judicial Domingo's property at ₱2,459,319.70 or ₱40,626.54 per hectare, or an increase of
demand until June 30, 2013, and six percent (6%) per an own from July 1, 2013 until finality ₱1,975,083.43 over the initial DAR and the Land Bank valuation. Land Bank moved for
hereof, by way of actual and compensatory damages. Thereafter, the principal amount due reconsideration, but was denied, thus, it filed a petition for review docketed as CA-G.R.
as adjusted by interest shall likewise earn interest at six percent (6%) per annum until fully SPNo. 85394. However, in a Decision dated June 12, 2007, the appellate court affirmed in
paid. The award of attorney's fees is DELETED. totothe SAC Decision dated April 12, 2004. Land Bank moved for reconsideration anew,
but was denied.
SO ORDERED.
Meanwhile, on September 30, 2007, Atty. Domingo died. Petitioner filed a Manifestation
G.R. No. 191470 January 26, 2015 dated December 11, 2007 of the fact of Atty. Domingo's death and the substitution of the
latter by his legal heirs, Ma. Ala F. Domingo and Margarita Irene F. Domingo (private
AUGUSTO M. AQUINO, Petitioner, respondents).
vs.
HON. ISMAEL P. CASABAR, as Presiding Judge Regional Trial Court-Guimba, Land Bank assailed the appellate court's decision and resolution before the Supreme Court
Nueva Ecija, Branch 33 and MA. ALA F. DOMINGO and MARGARITA IRENE F. via a petition for review on certiorari dated December 4, 2007 docketed as G.R. No. 180108
DOMINGO, substituting Heirs of the deceased ANGEL T. DOMINGO, Respondents. entitled "Land Bank of the Philippines vs. Angel T. Domingo". However, in a Resolution
dated September 17, 2008, the Court denied the same for failure to sufficiently show any
DECISION reversible error in the appellate court's decision. On December 15, 2008, the Court denied
with finality Land Bank's motion for reconsideration.
PERALTA, J.:
On February 11, 2009,3 petitioner wrote private respondent Ma. Ala Domingo and informed
her of the finality of the RTC/SAC decision as affirmed by the Court of Appeals and the
Before us is a special civil action for certiorari1 under Rule 65 of the Rules of Court, dated
Supreme Court. He then requested her to inform the Land Bank of the segregation of
March 17, 2010, filed by Atty. Augusto M. Aquino (petitioner) assailing the Order dated
petitioner's thirty percent (30%) contingent attorney's fees out of the increase of the just
January 11, 2010 issued by respondent Presiding Judge Ismael P. Casabar (public
compensation for the subject property, or thirty percent (30%) of the total increase
respondent), in relation to Agrarian Case No. 1217-G,2 for allegedly having been issued
amounting to Php1,975,983.43. Petitioner claimed never to have received a reply from
with grave abuse of discretion amounting to lack or excess of jurisdiction.
private respondent.
The facts of the case, as culled from the records, are as follows:
On March 30, 2009, petitioner received a copy of the entry of judgment from this Court
certifying that its Resolution dated September 17, 2008 in G.R. No. 180108 has already
On June 27, 2002, Atty. Angel T. Domingo (now deceased) verbally contracted petitioner become final and executory on March 3, 2009.
to represent him in Agrarian Case No. 1217-G on a contingency fee basis. The case was
for the determination of the just compensation for the expropriation and taking of Atty.
Domingo's ricelands consisting of 60.5348 hectares, situated in Guimba, Nueva Ecija, by
the Department of Agrarian Reform (DAR), pursuant to Presidential Decree (P.D.)27. The
On July 28, 2009, petitioner received a Notice of Appearance dated July 16, 2009 filed by Thus, the instant petition for certiorari via Rule 65, raising the following issues:
Atty. Antonio G. Conde, entering his appearance as counsel of herein private respondents
and replacing him as counsel in Agrarian Case No. 1217-G. I

On August 14, 2009, private respondents, through their new counsel, Atty. Conde, filed a WHETHER OR NOT A CHARGING (ATTORNEY'S) LIEN CAN EFFECTIVELY BE FILED
Motion for Execution dated August 6, 2009 of the RTC/SAC Decision dated April 12, 2004. ONLY BEFORE JUDGMENT IS RENDERED.

On August 12, 2009, petitioner filed a Motion for Approval of Charging Attorney's Lien and II
for the Order of Payment.4 Petitioner further executed an Affidavit5 dated August 10, 2009,
attesting to the circumstances surrounding the legal services he has rendered for the WHETHER OR NOT RESPONDENT PRESIDING JUDGE HAS THE JURISDICTION TO
deceased Atty. Domingo and the successful prosecution of the Agrarian case from the TAKE COGNIZANCE OVER PETITIONER'S MOTION FOR APPROVAL OF CHARGING
RTC/SAC through the appellate court and the Supreme Court. (ATTORNEY'S) LIEN FILED AFTER THE JUDGMENT HAS BECOME FINAL AND
EXECUTORY.
On August 18, 2009, private respondents filed a Motion to Dismiss/Expunge Petitioner's
Motion.6 Public respondent Presiding Judge Casabar denied the same.7 Private III
respondents moved for reconsideration.
WHETHER OR NOT THE RESPONDENT PRESIDING JUDGE ACTED WITH GRAVE
On January 11, 2010, public respondent Judge Casabar issued the disputed Order ABUSE OF DISCRETION IN ISSUING THE CHALLENGED ORDER.8
denying petitioner's motion for approval of attorney's lien, the dispositive portion of which
reads:
Petitioner maintains that he filed the motion for charging attorney's lien and order of
payment in the very same case, Agrarian Case No. 1217-G, as an incident thereof, wherein
xxxx he was the counsel during the proceedings of the latter, and that he is allowed to wait until
the finality of the case to file the said motion.
Examining the basis of the instant motion for reconsideration, this court agrees with
respondents – movants that this court has no jurisdiction over Atty. Aquino's motion for Private respondents, on the other hand, counter that the motion was belatedly filed and
approval of charging (Attorney's) lien having been filed after the judgment has become that it was filed without the payment of docket fees, thus, the court a quodid not acquire
final and executory. Accordingly, the motion for reconsideration is granted and the motion jurisdiction over the case.
for approval of (Attorney's) lien is denied and or expunged from the records of the case.
RULING
SO ORDERED.
In a nutshell, the issue is whether the trial court committed a reversible error in denying the
On the same day, January 11, 2010, public respondent issued an Order directing the motion toapprove attorney's lien and order of payment on the ground that it lost jurisdiction
issuance of a Writ of Execution of the RTC/SAC Decision dated April 12, 2004. over the case since judgment in the case has already become final and executory.

On January 12, 2010, the Clerk of Court of Branch 33, RTC of Guimba, Nueva Ecija, issued We rule in favor of the petitioner.
a Writ of Execution of the April 12, 2004. On January 15, 2010, the Sheriff of the RTC of
Guimba, Nueva Ecija issued a Notice of Garnishment.
In the case of Rosario, Jr. v. De Guzman,9 the Court clarified a similar issue and discussed Similarly, in the instant case, the attorney’s fees being claimed by the petitioner is the
the two concepts of attorney’s fees – that is, ordinary and extraordinary. In its ordinary compensation for professional services rendered, and not an indemnity for damages.
sense, it is the reasonable compensation paid to a lawyer by his client for legal services Petitioner is claiming payment from private respondents for the successful outcome of the
rendered. In its extraordinary concept, it is awarded by the court to the successful litigant agrarian case which he represented. We see no valid reason why public respondent
to be paid by the losing party as indemnity for damages.10 Although both concepts are cannot pass upon a proper petition to determine attorney's fees considering that it is
similar in some respects, they differ from eachother, as further explained below: already familiar with the nature and the extent of petitioner's legal services. If we are to
follow the rule against multiplicity of suits, then with more reason that petitioner's motion
The attorney’s fees which a court may, in proper cases, award to a winning litigant is, should not be dismissed as the same is in effect incidental to the main case.
strictly speaking, anitem of damages. It differs from that which a client pays his counsel for
the latter’s professional services. However, the two concepts have many things in common We are, likewise, unconvinced that the courta quodid not acquire jurisdiction over the
that a treatment of the subject is necessary. The award that the court may grant to a motion solely due to non-payment of docket fees. Petitioner's failure to pay the docket fees
successful party by way of attorney’sfee is an indemnity for damages sustained by him in pertinent to his motion should not be considered as having divested the court a quo's
prosecuting or defending, through counsel, his cause in court. It may be decreed in favor jurisdiction. We note that, in this case, there was no showing that petitioner intended to
of the party, not his lawyer, in any of the instances authorized by law. Onthe other hand, evade the payment of docket fees as in fact he manifested willingness to pay the same
the attorney’s fee which a client pays his counsel refersto the compensation for the latter’s should it be necessary.12
services. The losing party against whom damages by way of attorney’s fees may be
assessed is not bound by, nor is his liability dependent upon, the fee arrangement of the Likewise, pursuant to the ruling in Sun Insurance Office, Ltd. (SIOL) v. Asuncion, should
prevailing party with his lawyer. The amount stipulated in such fee arrangement may, there be unpaid docket fees, the same should be considered as a lien on the judgment.
however, be taken into account by the court in fixing the amount of counsel fees as an Thus, even on the assumption that additional docket fees are required as a consequence
element of damages. of petitioner's motion, its non-payment will not result in the court’s loss of jurisdiction over
the case.13
The fee as an item of damages belongs to the party litigant and not to his lawyer. It forms
part of his judgment recoveries against the losing party. The client and his lawyer may, With regards tohow attorney’s fees for professional services can be recovered, and when
however, agree that whatever attorney’s fee as an element of damages the court may an action for attorney’s fees for professional services can be filed, the case of Traders
award shall pertain to the lawyer as his compensation or as part thereof. In such a case, Royal Bank Employees Union-Independent v. NLRC14 is instructive:
the court upon proper motion may require the losing party to pay such fee directly to the
lawyer of the prevailing party. x x x It is well settled that a claim for attorney’s fees may be asserted either in the very
action in which the services of a lawyer had been rendered or in a separate action.
The two concepts of attorney’s fees are similar in other respects. They both require, as a
prerequisite totheir grant, the intervention of or the rendition of professional services by a With respect to the first situation, the remedy for recovering attorney’s fees as an incident
lawyer. As a client may not be held liable for counsel fees in favor of his lawyer who never of the main action may be availed of only when something is due to the client. Attorney’s
rendered services, so too may a party be not held liable for attorney’s fees as damages in fees cannot be determined until after the main litigation has been decided and the subject
favor of the winning party who enforced his rights without the assistance of counsel. of the recovery is at the disposition of the court. The issue over attorney’s fees only arises
Moreover, both fees are subject to judicial control and modification. And the rules when something has been recovered from which the fee is to be paid.
governing the determination of their reasonable amount are applicablein one as in the
other.11
While a claim for attorney’s fees may be filed before the judgment is rendered, the
determination as to the propriety of the fees or as to the amount thereof will have to be
held in abeyance until the main case from which the lawyer’s claim for attorney’s fees may petitioner, the only way to determine his right to appropriate attorney’s fees is to apply the
arise has become final. Otherwise, the determination to be made by the courts will be principle of quantum meruit, to wit:
premature. Of course, a petition for attorney’s fees may be filed before the judgment in
favor of the client issatisfied or the proceeds thereof delivered to the client. Quantum meruit– literally meaning as much as he deserves – is used as basis for
determining an attorney’s professional fees in the absence of an express agreement. The
It is apparent from the foregoing discussion that a lawyer has two options as to when to recovery of attorney’s fees on the basis of quantum meruitis a device that prevents an
file his claim for professional fees. Hence, private respondent was well within his rights unscrupulous client from running away with the fruits of the legal services of counsel
when he made his claim and waited for the finality of the judgment for holiday pay without paying for it and also avoids unjust enrichment on the part of the attorney himself.
differential, instead of filing it ahead of the award’s complete resolution. To declare that a An attorney must show that he is entitled to reasonable compensation for the effort in
lawyer may file a claim for feesin the same action only before the judgment is reviewed by pursuing the client’s cause, taking into account certain factors in fixing the amount of legal
a higher tribunal would deprive him of his aforestated options and render ineffective the fees.
foregoing pronouncements of this Court.15 Here, apparently petitioner filed his claim as an
incident of the main action, as in fact, his motion was for the court's approval of charging Further, Rule 20.01 of the Code of Professional Responsibility lists the guidelines for
attorney's lien and the prayer thereto was to direct the entry into the case records the determining the proper amount of attorney fees, to wit:
attorney's fees he is claiming. Needless to say, petitioner's motion for approval of charging
attorney's lien and order of payment was not intended to be filed as a separate action. Rule 20.1 – A lawyer shall be guided by the following factors in determining his fees:
Nevertheless, it is within petitioner's right to wait for the finality of the judgment, instead of
filing it ahead of the court's resolution, since precisely the basis of the determination of the
a) The time spent and the extent of the services rendered or required;
attorney's fees is the final disposition of the case, that is, the just compensation to be
awarded tothe private respondents.
b) The novelty and difficult of the questions involved;
Moreover, the RTC/SAC decision became final and executory on March 3, 2009, and
petitioner filed his Motion to Determine Attorney’s Fees on August 10, 2009, or only about c) The important of the subject matter;
four (4) months from the finality of the RTC/SAC decision. Considering that petitioner and
Atty. Domingo’s agreement was contracted verbally, Article 114516 of the Civil Code allows d) The skill demanded;
petitioner a period of six (6) years within which to file an action to recover professional fees
for services rendered.17 Thus, the disputed motion to approve the charging of attorney's e) The probability of losing other employment as a result of acceptance of the
lien and the order of payment was seasonably filed. proffered case;

Petitioner claims that he and Atty. Domingo agreed to a contract for contingent fees f) The customary charges for similar services and the schedule of fees of the IBP
equivalent to thirty percent (30%) of the increase of the just compensation awarded, albeit chapter to which he belongs;
verbally. However, a contract for contingent fees is an agreement in writing by which the
fees, usually a fixed percentage of what may be recovered in the action, are made to g) The amount involved in the controversy and the benefits resulting to the client
depend upon the success in the effort to enforce or defend a supposed right. Contingent from the service;
fees depend upon an express contract, without which the attorney can only recover on the
basis of quantum meruit.18 Here, considering that the contract was made verbally and that h) The contingency or certainty of compensation;
there was no evidence presented to justify the 30% contingent fees being claimed by
i) The character of the employment, whether occasional or established; and WHEREFORE, the petition is GRANTED. Accordingly, the Court grants the Motion for
Approval of Charging Attorney's Lien filed by petitioner Atty. Augusto M. Aquino. Based on
j) The professional standing of the lawyer. quantum meruit, the amount of attorney's fees is at the rate of fifteen percent (15%) of the
amount of the increase in valuation of just compensation awarded to the private
Private respondents never rebutted the fact that petitioner rendered legal services in the respondents.
subject case. It is likewise undisputed that it was petitioner who successfully represented
1âwphi 1

Atty. Domingo in Agrarian Case No. 12-17-G before the Special Agrarian Court, in the SO ORDERED.
Court of Appeals in CAG.R. SP No. 85394, and before this Court in G.R. No. 180108 where
the case eventually attained finality. It is, therefore, through petitioner's effort for a lengthy G.R. No. 155223 April 4, 2007
period of seven (7) years that the just compensation for the property owned by deceased
Atty. Domingo increased. It cannot be denied then that private respondents benefited from BOBIE ROSE V. FRIAS, represented by her Attorney-in-fact, MARIE F.
the said increase in the just compensation. Thus, considering petitioner's effort and the FUJITA, Petitioner,
amount of time spent in ensuring the successful disposition of the case, petitioner rightfully vs.
deserves to be awarded reasonable attorney's fees for services rendered. FLORA SAN DIEGO-SISON, Respondent.

Ordinarily, We would have left it to the trial court the determination of attorney's fees based DECISION
on quantum meruit, however, following the several pronouncements of the Court that it will
be just and equitable to now assess and fix the attorney's fees in order that the resolution AUSTRIA-MARTINEZ, J.:
thereof would not be needlessly prolonged,19 this Court, which holds and exercises the
power to fix attorney's fees on quantum meruit basis in the absence of an express written
Before us is a Petition for Review on Certiorari filed by Bobie Rose V. Frias represented
agreement between the attorney and the client, deems it fair to fix petitioner's attorney's
by her Attorney-in-fact, Marie Regine F. Fujita (petitioner) seeking to annul the
fees at fifteen percent (15%) of the increase in the just compensation awarded to private
Decision1 dated June 18, 2002 and the Resolution2 dated September 11, 2002 of the Court
respondents.
of Appeals (CA) in CA-G.R. CV No. 52839.
The fact that the practice of law is not a business and the attorney plays a vital role in the
Petitioner is the owner of a house and lot located at No. 589 Batangas East, Ayala Alabang,
administration of justice underscores the need to secure him his honorarium lawfully
Muntinlupa, Metro Manila, which she acquired from Island Masters Realty and
earned as a means to preserve the decorum and respectability of the legal profession. A
Development Corporation (IMRDC) by virtue of a Deed of Sale dated Nov. 16, 1990.3 The
lawyer is as much entitled to judicial protection against injustice, imposition or fraud on the
property is covered by TCT No. 168173 of the Register of Deeds of Makati in the name of
part of his client as the client against abuse on the part of his counsel. The duty of the court
IMRDC.4
is not alone to see that a lawyer acts in a proper and lawful manner; it is also its duty to
see that a lawyer is paid his just fees. With his capital consisting of his brains and with his
skill acquired at tremendous cost not only in money but in expenditure of time and energy, On December 7, 1990, petitioner, as the FIRST PARTY, and Dra. Flora San Diego-Sison
he is entitled to the protection of any judicial tribunal against any attempt on the part of his (respondent), as the SECOND PARTY, entered into a Memorandum of Agreement5 over
client to escape payment of his just compensation. It would be ironic if after putting forth the property with the following terms:
the best in him to secure justice for his client he himself would not get his due.20
NOW, THEREFORE, for and in consideration of the sum of THREE MILLION PESOS
(₱3,000,000.00) receipt of which is hereby acknowledged by the FIRST PARTY from the
SECOND PARTY, the parties have agreed as follows:
1. That the SECOND PARTY has a period of Six (6) months from the date of the petitioner of their agreement that the amount of two million pesos which petitioner received
execution of this contract within which to notify the FIRST PARTY of her intention from respondent should be considered as a loan payable within six months. Petitioner
to purchase the aforementioned parcel of land together within (sic) the subsequently failed to pay respondent the amount of two million pesos.
improvements thereon at the price of SIX MILLION FOUR HUNDRED THOUSAND
PESOS (₱6,400,000.00). Upon notice to the FIRST PARTY of the SECOND On April 1, 1993, respondent filed with the Regional Trial Court (RTC) of Manila, a
PARTY’s intention to purchase the same, the latter has a period of another six complaint10 for sum of money with preliminary attachment against petitioner. The case was
months within which to pay the remaining balance of ₱3.4 million. docketed as Civil Case No. 93-65367 and raffled to Branch 30. Respondent alleged the
foregoing facts and in addition thereto averred that petitioner tried to deprive her of the
2. That prior to the six months period given to the SECOND PARTY within which security for the loan by making a false report11 of the loss of her owner’s copy of TCT No.
to decide whether or not to purchase the above-mentioned property, the FIRST 168173 to the Tagig Police Station on June 3, 1991, executing an affidavit of loss and by
PARTY may still offer the said property to other persons who may be interested to filing a petition12 for the issuance of a new owner’s duplicate copy of said title with the RTC
buy the same provided that the amount of ₱3,000,000.00 given to the FIRST of Makati, Branch 142; that the petition was granted in an Order13dated August 31, 1991;
PARTY BY THE SECOND PARTY shall be paid to the latter including interest that said Order was subsequently set aside in an Order dated April 10, 199214 where the
based on prevailing compounded bank interest plus the amount of the sale in RTC Makati granted respondent’s petition for relief from judgment due to the fact that
excess of ₱7,000,000.00 should the property be sold at a price more than ₱7 respondent is in possession of the owner’s duplicate copy of TCT No. 168173, and ordered
million. the provincial public prosecutor to conduct an investigation of petitioner for perjury and
false testimony. Respondent prayed for the ex-parte issuance of a writ of preliminary
3. That in case the FIRST PARTY has no other buyer within the first six months attachment and payment of two million pesos with interest at 36% per annum from
from the execution of this contract, no interest shall be charged by the SECOND December 7, 1991, ₱100,000.00 moral, corrective and exemplary damages and
PARTY on the P3 million however, in the event that on the sixth month the ₱200,000.00 for attorney’s fees.
SECOND PARTY would decide not to purchase the aforementioned property, the
FIRST PARTY has a period of another six months within which to pay the sum of In an Order dated April 6, 1993, the Executive Judge of the RTC of Manila issued a writ of
₱3 million pesos provided that the said amount shall earn compounded bank preliminary attachment upon the filing of a bond in the amount of two million pesos.15
interest for the last six months only. Under this circumstance, the amount of P3
million given by the SECOND PARTY shall be treated as [a] loan and the property Petitioner filed an Amended Answer16 alleging that the Memorandum of Agreement was
shall be considered as the security for the mortgage which can be enforced in conceived and arranged by her lawyer, Atty. Carmelita Lozada, who is also respondent’s
accordance with law. lawyer; that she was asked to sign the agreement without being given the chance to read
the same; that the title to the property and the Deed of Sale between her and the IMRDC
x x x x.6 were entrusted to Atty. Lozada for safekeeping and were never turned over to respondent
as there was no consummated sale yet; that out of the two million pesos cash paid, Atty.
Petitioner received from respondent two million pesos in cash and one million pesos in a Lozada took the one million pesos which has not been returned, thus petitioner had filed a
post-dated check dated February 28, 1990, instead of 1991, which rendered said check civil case against her; that she was never informed of respondent’s decision not to
stale.7 Petitioner then gave respondent TCT No. 168173 in the name of IMRDC and the purchase the property within the six month period fixed in the agreement; that when she
Deed of Absolute Sale over the property between petitioner and IMRDC. demanded the return of TCT No. 168173 and the Deed of Sale between her and the
IMRDC from Atty. Lozada, the latter gave her these documents in a brown envelope on
Respondent decided not to purchase the property and notified petitioner through a May 5, 1991 which her secretary placed in her attache case; that the envelope together
letter8 dated March 20, 1991, which petitioner received only on June 11, 1991,9 reminding with her other personal things were lost when her car was forcibly opened the following
day; that she sought the help of Atty. Lozada who advised her to secure a police report, to
execute an affidavit of loss and to get the services of another lawyer to file a petition for The RTC further found that petitioner admitted that she received from respondent the two
the issuance of an owner’s duplicate copy; that the petition for the issuance of a new million pesos in cash but the fact that petitioner gave the one million pesos to Atty. Lozada
owner’s duplicate copy was filed on her behalf without her knowledge and neither did she was without respondent’s knowledge thus it is not binding on respondent; that respondent
sign the petition nor testify in court as falsely claimed for she was abroad; that she was a had also proven that in 1993, she initially paid the sum of ₱30,000.00 as premium for the
victim of the manipulations of Atty. Lozada and respondent as shown by the filing of issuance of the attachment bond, ₱20,000.00 for its renewal in 1994, and ₱20,000.00 for
criminal charges for perjury and false testimony against her; that no interest could be due the renewal in 1995, thus plaintiff should be reimbursed considering that she was
as there was no valid mortgage over the property as the principal obligation is vitiated with compelled to go to court and ask for a writ of preliminary attachment to protect her rights
fraud and deception. She prayed for the dismissal of the complaint, counter-claim for under the agreement.
damages and attorney’s fees.
Petitioner filed her appeal with the CA. In a Decision dated June 18, 2002, the CA affirmed
Trial on the merits ensued. On January 31, 1996, the RTC issued a decision,17 the the RTC decision with modification, the dispositive portion of which reads:
dispositive portion of which reads:
WHEREFORE, premises considered, the decision appealed from is MODIFIED in the
WHEREFORE, judgment is hereby RENDERED: sense that the rate of interest is reduced from 32% to 25% per annum, effective June 7,
1991 until fully paid.19
1) Ordering defendant to pay plaintiff the sum of P2 Million plus interest thereon at
the rate of thirty two (32%) per cent per annum beginning December 7, 1991 until The CA found that: petitioner gave the one million pesos to Atty. Lozada partly as her
fully paid. commission and partly as a loan; respondent did not replace the mistakenly dated check
of one million pesos because she had decided not to buy the property and petitioner knew
2) Ordering defendant to pay plaintiff the sum of ₱70,000.00 representing of her decision as early as April 1991; the award of moral damages was warranted since
premiums paid by plaintiff on the attachment bond with legal interest thereon even granting petitioner had no hand in the filing of the petition for the issuance of an
counted from the date of this decision until fully paid. owner’s copy, she executed an affidavit of loss of TCT No. 168173 when she knew all
along that said title was in respondent’s possession; petitioner’s claim that she thought the
3) Ordering defendant to pay plaintiff the sum of ₱100,000.00 by way of moral, title was lost when the brown envelope given to her by Atty. Lozada was stolen from her
corrective and exemplary damages. car was hollow; that such deceitful conduct caused respondent serious anxiety and
emotional distress.
4) Ordering defendant to pay plaintiff attorney’s fees of ₱100,000.00 plus cost of
litigation.18 The CA concluded that there was no basis for petitioner to say that the interest should be
charged for six months only and no more; that a loan always bears interest otherwise it is
not a loan; that interest should commence on June 7, 199120 with compounded bank
The RTC found that petitioner was under obligation to pay respondent the amount of two
interest prevailing at the time the two million was considered as a loan which was in June
million pesos with compounded interest pursuant to their Memorandum of Agreement; that
1991; that the bank interest rate for loans secured by a real estate mortgage in 1991
the fraudulent scheme employed by petitioner to deprive respondent of her only security
ranged from 25% to 32% per annum as certified to by Prudential Bank,21 that in fairness to
to her loaned money when petitioner executed an affidavit of loss and instituted a petition
petitioner, the rate to be charged should be 25% only.
for the issuance of an owner’s duplicate title knowing the same was in respondent’s
possession, entitled respondent to moral damages; and that petitioner’s bare denial cannot
be accorded credence because her testimony and that of her witness did not appear to be Petitioner’s motion for reconsideration was denied by the CA in a Resolution dated
credible. September 11, 2002.
Hence the instant Petition for Review on Certiorari filed by petitioner raising the following contract shall be interpreted together, attributing to the doubtful ones that sense which may
issues: result from all of them taken jointly.26

(A) WHETHER OR NOT THE COMPOUNDED BANK INTEREST SHOULD BE In this case, the phrase "for the last six months only" should be taken in the context of the
LIMITED TO SIX (6) MONTHS AS CONTAINED IN THE MEMORANDUM OF entire agreement. We agree with and adopt the CA’s interpretation of the phrase in this
AGREEMENT. wise:

(B) WHETHER OR NOT THE RESPONDENT IS ENTITLED TO MORAL Their agreement speaks of two (2) periods of six months each. The first six-month period
DAMAGES. was given to plaintiff-appellee (respondent) to make up her mind whether or not to
purchase defendant-appellant’s (petitioner's) property. The second six-month period was
(C) WHETHER OR NOT THE GRANT OF CORRECTIVE AND EXEMPLARY given to defendant-appellant to pay the P2 million loan in the event that plaintiff-appellee
DAMAGES AND ATTORNEY’S FEES IS PROPER EVEN IF NOT MENTIONED decided not to buy the subject property in which case interest will be charged "for the last
IN THE TEXT OF THE DECISION.22 six months only", referring to the second six-month period. This means that no interest will
be charged for the first six-month period while appellee was making up her mind whether
Petitioner contends that the interest, whether at 32% per annum awarded by the trial court to buy the property, but only for the second period of six months after appellee had decided
or at 25% per annum as modified by the CA which should run from June 7, 1991 until fully not to buy the property. This is the meaning of the phrase "for the last six months only".
paid, is contrary to the parties’ Memorandum of Agreement; that the agreement provides Certainly, there is nothing in their agreement that suggests that interest will be charged for
that if respondent would decide not to purchase the property, petitioner has the period of six months only even if it takes defendant-appellant an eternity to pay the loan.27
another six months to pay the loan with compounded bank interest for the last six months
only; that the CA’s ruling that a loan always bears interest otherwise it is not a loan is The agreement that the amount given shall bear compounded bank interest for the last six
contrary to Art. 1956 of the New Civil Code which provides that no interest shall be due months only, i.e., referring to the second six-month period, does not mean that interest will
unless it has been expressly stipulated in writing. no longer be charged after the second six-month period since such stipulation was made
on the logical and reasonable expectation that such amount would be paid within the date
We are not persuaded. stipulated. Considering that petitioner failed to pay the amount given which under the
Memorandum of Agreement shall be considered as a loan, the monetary interest for the
last six months continued to accrue until actual payment of the loaned amount.
While the CA’s conclusion, that a loan always bears interest otherwise it is not a loan, is
flawed since a simple loan may be gratuitous or with a stipulation to pay interest,23 we find
no error committed by the CA in awarding a 25% interest per annum on the two-million The payment of regular interest constitutes the price or cost of the use of money and thus,
peso loan even beyond the second six months stipulated period. until the principal sum due is returned to the creditor, regular interest continues to accrue
since the debtor continues to use such principal amount.28 It has been held that for a debtor
to continue in possession of the principal of the loan and to continue to use the same after
The Memorandum of Agreement executed between the petitioner and respondent on
maturity of the loan without payment of the monetary interest, would constitute unjust
December 7, 1990 is the law between the parties. In resolving an issue based upon a
enrichment on the part of the debtor at the expense of the creditor.29
contract, we must first examine the contract itself, especially the provisions thereof which
are relevant to the controversy.24 The general rule is that if the terms of an agreement are
clear and leave no doubt as to the intention of the contracting parties, the literal meaning Petitioner and respondent stipulated that the loaned amount shall earn compounded bank
of its stipulations shall prevail.25 It is further required that the various stipulations of a interests, and per the certification issued by Prudential Bank, the interest rate for loans in
1991 ranged from 25% to 32% per annum. The CA reduced the interest rate to 25% instead her the owner’s copy of the title to the property, the Deed of Sale between petitioner and
of the 32% awarded by the trial court which petitioner no longer assailed. 1aw phi 1.nét IMRDC, the certificate of occupancy, and the certificate of the Secretary of the IMRDC who
signed the Deed of Sale.34 However, notwithstanding that all those documents were in
In Bautista v. Pilar Development Corp.,30 we upheld the validity of a 21% per annum respondent’s possession, petitioner executed an affidavit of loss that the owner’s copy of
interest on a ₱142,326.43 loan. In Garcia v. Court of Appeals,31 we sustained the the title and the Deed of Sale were lost.
agreement of the parties to a 24% per annum interest on an ₱8,649,250.00 loan. Thus,
the interest rate of 25% per annum awarded by the CA to a ₱2 million loan is fair and Although petitioner testified that her execution of the affidavit of loss was due to the fact
reasonable. that she was of the belief that since she had demanded from Atty. Lozada the return of the
title, she thought that the brown envelope with markings which Atty. Lozada gave her on
Petitioner next claims that moral damages were awarded on the erroneous finding that she May 5, 1991 already contained the title and the Deed of Sale as those documents were in
used a fraudulent scheme to deprive respondent of her security for the loan; that such the same brown envelope which she gave to Atty. Lozada prior to the transaction with
finding is baseless since petitioner was acquitted in the case for perjury and false testimony respondent.35 Such statement remained a bare statement. It was not proven at all since
filed by respondent against her. Atty. Lozada had not taken the stand to corroborate her claim. In fact, even petitioner’s
own witness, Benilda Ynfante (Ynfante), was not able to establish petitioner's claim that
We are not persuaded. the title was returned by Atty. Lozada in view of Ynfante's testimony that after the brown
envelope was given to petitioner, the latter passed it on to her and she placed it in
petitioner’s attaché case36and did not bother to look at the envelope.37
Article 31 of the Civil Code provides that when the civil action is based on an obligation not
arising from the act or omission complained of as a felony, such civil action may proceed
independently of the criminal proceedings and regardless of the result of the latter.32 It is clear therefrom that petitioner’s execution of the affidavit of loss became the basis of
the filing of the petition with the RTC for the issuance of new owner’s duplicate copy of
TCT No. 168173. Petitioner’s actuation would have deprived respondent of the security for
While petitioner was acquitted in the false testimony and perjury cases filed by respondent
her loan were it not for respondent’s timely filing of a petition for relief whereby the RTC
against her, those actions are entirely distinct from the collection of sum of money with
set aside its previous order granting the issuance of new title. Thus, the award of moral
damages filed by respondent against petitioner.
damages is in order.
We agree with the findings of the trial court and the CA that petitioner’s act of trying to
The entitlement to moral damages having been established, the award of exemplary
deprive respondent of the security of her loan by executing an affidavit of loss of the title
damages is proper.38Exemplary damages may be imposed upon petitioner by way of
and instituting a petition for the issuance of a new owner’s duplicate copy of TCT No.
example or correction for the public good.39 The RTC awarded the amount of ₱100,000.00
168173 entitles respondent to moral damages. Moral damages may be awarded
as moral and exemplary damages. While the award of moral and exemplary damages in
1a\^ /phi1.net

in culpa contractual or breach of contract cases when the defendant acted fraudulently or
an aggregate amount may not be the usual way of awarding said damages,40 no error has
in bad faith. Bad faith does not simply connote bad judgment or negligence; it imports a
been committed by CA. There is no question that respondent is entitled to moral and
dishonest purpose or some moral obliquity and conscious doing of wrong. It partakes of
exemplary damages.
the nature of fraud.33
Petitioner argues that the CA erred in awarding attorney’s fees because the trial court’s
The Memorandum of Agreement provides that in the event that respondent opts not to buy
decision did not explain the findings of facts and law to justify the award of attorney’s fees
the property, the money given by respondent to petitioner shall be treated as a loan and
as the same was mentioned only in the dispositive portion of the RTC decision.
the property shall be considered as the security for the mortgage. It was testified to by
respondent that after they executed the agreement on December 7, 1990, petitioner gave
We agree. The factual antecedents are undisputed.

Article 220841 of the New Civil Code enumerates the instances where such may be Petitioner Dario Nacar filed a complaint for constructive dismissal before the Arbitration
awarded and, in all cases, it must be reasonable, just and equitable if the same were to be Branch of the National Labor Relations Commission (NLRC) against respondents Gallery
granted.42 Attorney's fees as part of damages are not meant to enrich the winning party at Frames (GF) and/or Felipe Bordey, Jr., docketed as NLRC NCR Case No. 01-00519-97.
the expense of the losing litigant. They are not awarded every time a party prevails in a
suit because of the policy that no premium should be placed on the right to litigate.43 The On October 15, 1998, the Labor Arbiter rendered a Decision3 in favor of petitioner and
award of attorney's fees is the exception rather than the general rule. As such, it is found that he was dismissed from employment without a valid or just cause. Thus,
necessary for the trial court to make findings of facts and law that would bring the case petitioner was awarded backwages and separation pay in lieu of reinstatement in the
within the exception and justify the grant of such award. The matter of attorney's fees amount of ₱158,919.92. The dispositive portion of the decision, reads:
cannot be mentioned only in the dispositive portion of the decision.44 They must be clearly
explained and justified by the trial court in the body of its decision. On appeal, the CA is With the foregoing, we find and so rule that respondents failed to discharge the burden of
precluded from supplementing the bases for awarding attorney’s fees when the trial court showing that complainant was dismissed from employment for a just or valid cause. All the
failed to discuss in its Decision the reasons for awarding the same. Consequently, the more, it is clear from the records that complainant was never afforded due process before
award of attorney's fees should be deleted. he was terminated. As such, we are perforce constrained to grant complainant’s prayer for
the payments of separation pay in lieu of reinstatement to his former position, considering
WHEREFORE, in view of all the foregoing, the Decision dated June 18, 2002 and the the strained relationship between the parties, and his apparent reluctance to be reinstated,
Resolution dated September 11, 2002 of the Court of Appeals in CA-G.R. CV No. 52839 computed only up to promulgation of this decision as follows:
are AFFIRMED with MODIFICATION that the award of attorney’s fees is DELETED.

No pronouncement as to costs. SEPARATION PAY

Date Hired = August 1990


SO ORDERED.
Rate = ₱198/day
G.R. No. 189871 August 13, 2013
Date of Decision = Aug. 18, 1998
DARIO NACAR, PETITIONER, Length of Service = 8 yrs. & 1 month
vs.
GALLERY FRAMES AND/OR FELIPE BORDEY, JR., RESPONDENTS. ₱198.00 x 26 days x 8 months = ₱41,184.00

BACKWAGES
DECISION
Date Dismissed = January 24, 1997
PERALTA, J.:
Rate per day = ₱196.00
This is a petition for review on certiorari assailing the Decision dated September 23, 2008
1
Date of Decisions = Aug. 18, 1998
of the Court of Appeals (CA) in CA-G.R. SP No. 98591, and the Resolution2 dated October
9, 2009 denying petitioner’s motion for reconsideration.
a) 1/24/97 to 2/5/98 = 12.36 mos. Respondents then sought relief before the Supreme Court, docketed as G.R. No. 151332.
Finding no reversible error on the part of the CA, this Court denied the petition in the
₱196.00/day x 12.36 mos. = ₱62,986.56 Resolution dated April 17, 2002.8

b) 2/6/98 to 8/18/98 = 6.4 months An Entry of Judgment was later issued certifying that the resolution became final and
executory on May 27, 2002.9The case was, thereafter, referred back to the Labor Arbiter.
Prevailing Rate per day = ₱62,986.00
A pre-execution conference was consequently scheduled, but respondents failed to
₱198.00 x 26 days x 6.4 mos. = ₱32,947.20 appear.10

TOTAL = ₱95.933.76 On November 5, 2002, petitioner filed a Motion for Correct Computation, praying that his
backwages be computed from the date of his dismissal on January 24, 1997 up to the
xxxx finality of the Resolution of the Supreme Court on May 27, 2002.11 Upon recomputation,
the Computation and Examination Unit of the NLRC arrived at an updated amount in the
sum of ₱471,320.31.12
WHEREFORE, premises considered, judgment is hereby rendered finding respondents
guilty of constructive dismissal and are therefore, ordered:
On December 2, 2002, a Writ of Execution13 was issued by the Labor Arbiter ordering the
Sheriff to collect from respondents the total amount of ₱471,320.31. Respondents filed a
To pay jointly and severally the complainant the amount of sixty-two thousand nine
Motion to Quash Writ of Execution, arguing, among other things, that since the Labor
hundred eighty-six pesos and 56/100 (₱62,986.56) Pesos representing his separation pay;
Arbiter awarded 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
To pay jointly and severally the complainant the amount of nine (sic) five thousand nine decision becomes final and executory, the same cannot be altered or amended
hundred thirty-three and 36/100 (₱95,933.36) representing his backwages; and anymore.14 On January 13, 2003, the Labor Arbiter issued an Order15 denying the motion.
Thus, an Alias Writ of Execution16 was issued on January 14, 2003.
All other claims are hereby dismissed for lack of merit.
Respondents again appealed before the NLRC, which on June 30, 2003 issued a
SO ORDERED.4 Resolution17 granting the appeal in favor of the respondents and ordered the recomputation
of the judgment award.
Respondents appealed to the NLRC, but it was dismissed for lack of merit in the
Resolution5 dated February 29, 2000. Accordingly, the NLRC sustained the decision of the On August 20, 2003, an Entry of Judgment was issued declaring the Resolution of the
Labor Arbiter. Respondents filed a motion for reconsideration, but it was denied.6 NLRC to be final and executory. Consequently, another pre-execution conference was
held, but respondents failed to appear on time. Meanwhile, petitioner moved that an Alias
Dissatisfied, respondents filed a Petition for Review on Certiorari before the CA. On August Writ of Execution be issued to enforce the earlier recomputed judgment award in the sum
24, 2000, the CA issued a Resolution dismissing the petition. Respondents filed a Motion of ₱471,320.31.18
for Reconsideration, but it was likewise denied in a Resolution dated May 8, 2001.7
The records of the case were again forwarded to the Computation and Examination Unit
for recomputation, where the judgment award of petitioner was reassessed to be in the
total amount of only ₱147,560.19.
Petitioner then moved that a writ of execution be issued ordering respondents to pay him I
the original amount as determined by the Labor Arbiter in his Decision dated October 15,
1998, pending the final computation of his backwages and separation pay. WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED,
COMMITTED GRAVE ABUSE OF DISCRETION AND DECIDED CONTRARY TO LAW
On January 14, 2003, the Labor Arbiter issued an Alias Writ of Execution to satisfy the IN UPHOLDING THE QUESTIONED RESOLUTIONS OF THE NLRC WHICH, IN TURN,
judgment award that was due to petitioner in the amount of ₱147,560.19, which petitioner SUSTAINED THE MAY 10, 2005 ORDER OF LABOR ARBITER MAGAT MAKING THE
eventually received. DISPOSITIVE PORTION OF THE OCTOBER 15, 1998 DECISION OF LABOR ARBITER
LUSTRIA SUBSERVIENT TO AN OPINION EXPRESSED IN THE BODY OF THE SAME
Petitioner then filed a Manifestation and Motion praying for the re-computation of the DECISION.26
monetary award to include the appropriate interests.19
Petitioner argues that notwithstanding the fact that there was a computation of backwages
On May 10, 2005, the Labor Arbiter issued an Order granting the motion, but only up to
20 in the Labor Arbiter’s decision, the same is not final until reinstatement is made or until
the amount of ₱11,459.73. The Labor Arbiter reasoned that it is the October 15, 1998 finality of the decision, in case of an award of separation pay. Petitioner maintains that
Decision that should be enforced considering that it was the one that became final and considering that the October 15, 1998 decision of the Labor Arbiter did not become final
executory. However, the Labor Arbiter reasoned that since the decision states that the and executory until the April 17, 2002 Resolution of the Supreme Court in G.R. No. 151332
separation pay and backwages are computed only up to the promulgation of the said was entered in the Book of Entries on May 27, 2002, the reckoning point for the
decision, it is the amount of ₱158,919.92 that should be executed. Thus, since petitioner computation of the backwages and separation pay should be on May 27, 2002 and not
already received ₱147,560.19, he is only entitled to the balance of ₱11,459.73. when the decision of the Labor Arbiter was rendered on October 15, 1998. Further,
petitioner posits that he is also entitled to the payment of interest from the finality of the
Petitioner then appealed before the NLRC,21 which appeal was denied by the NLRC in its decision until full payment by the respondents.
Resolution22 dated September 27, 2006. Petitioner filed a Motion for Reconsideration, but
it was likewise denied in the Resolution23dated January 31, 2007. On their part, respondents assert that since only separation pay and limited backwages
were awarded to petitioner by the October 15, 1998 decision of the Labor Arbiter, no more
Aggrieved, petitioner then sought recourse before the CA, docketed as CA-G.R. SP No. recomputation is required to be made of said awards. Respondents insist that since the
98591. decision clearly stated that the separation pay and backwages are "computed only 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 Arbiter in the
On September 23, 2008, the CA rendered a Decision24 denying the petition. The CA opined
total amount of ₱158,919.92. Respondents added that it was only during the execution
that since petitioner no longer appealed the October 15, 1998 Decision of the Labor Arbiter,
proceedings that the petitioner questioned the award, long after the decision had become
which already became final and executory, a belated correction thereof is no longer
final and executory. Respondents contend that to allow the further recomputation of the
allowed. The CA stated that there is nothing left to be done except to enforce the said
backwages to be awarded to petitioner at this point of the proceedings would substantially
judgment. Consequently, it can no longer be modified in any respect, except to correct
vary the decision of the Labor Arbiter as it violates the rule on immutability of judgments.
clerical errors or mistakes.
The petition is meritorious.
Petitioner filed a Motion for Reconsideration, but it was denied in the Resolution 25 dated
October 9, 2009.
The instant case is similar to the case of Session Delights Ice Cream and Fast Foods v.
Court of Appeals (Sixth Division),27 wherein the issue submitted to the Court for resolution
Hence, the petition assigning the lone error:
was the propriety of the computation of the awards made, and whether this violated the [T]he Labor Arbiter of origin, in cases involving monetary awards and at all events, as far
principle of immutability of judgment. Like in the present case, it was a distinct feature of as practicable, shall embody in any such decision or order the detailed and full amount
the judgment of the Labor Arbiter in the above-cited case that the decision already provided awarded.
for the computation of the payable separation pay and backwages due and did not further
order the computation of the monetary awards up to the time of the finality of the judgment. Clearly implied from this original computation is its currency up to the finality of the labor
Also in Session Delights, the dismissed employee failed to appeal the decision of the labor arbiter's decision. As we noted above, this implication is apparent from the terms of the
arbiter. The Court clarified, thus: computation itself, and no question would have arisen had the parties terminated the case
and implemented the decision at that point.
In concrete terms, the question is whether a re-computation in the course of execution of
the labor arbiter's original computation of the awards made, pegged as of the time the However, the petitioner disagreed with the labor arbiter's findings on all counts - i.e., on
decision was rendered and confirmed with modification by a final CA decision, is legally the finding of illegality as well as on all the consequent awards made. Hence, the petitioner
proper. The question is posed, given that the petitioner did not immediately pay the awards appealed the case to the NLRC which, in turn, affirmed the labor arbiter's decision. By law,
stated in the original labor arbiter's decision; it delayed payment because it continued with the NLRC decision is final, reviewable only by the CA on jurisdictional grounds.
the litigation until final judgment at the CA level.
The petitioner appropriately sought to nullify the NLRC decision on jurisdictional grounds
A source of misunderstanding in implementing the final decision in this case proceeds from through a timely filed Rule 65 petition for certiorari. The CA decision, finding that NLRC
the way the original labor arbiter framed his decision. The decision consists essentially of exceeded its authority in affirming the payment of 13th month pay and indemnity, lapsed
two parts. to finality and was subsequently returned to the labor arbiter of origin for execution.

The first is that part of the decision that cannot now be disputed because it has been It was at this point that the present case arose. Focusing on the core illegal dismissal
confirmed with finality. This is the finding of the illegality of the dismissal and the awards portion of the original labor arbiter's decision, the implementing labor arbiter ordered the
of separation pay in lieu of reinstatement, backwages, attorney's fees, and legal interests. 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 arbiter's
The second part is the computation of the awards made. On its face, the computation the level. Thus, the labor arbiter re-computed the award to include the separation pay and the
labor arbiter made shows that it was time-bound as can be seen from the figures used in backwages due up to the finality of the CA decision that fully terminated the case on the
the computation. This part, being merely a computation of what the first part of the decision merits. Unfortunately, the labor arbiter's approved computation went beyond the finality of
established and declared, can, by its nature, be re-computed. This is the part, too, that the the CA decision (July 29, 2003) and included as well the payment for awards the final CA
petitioner now posits should no longer be re-computed because the computation is already decision had deleted - specifically, the proportionate 13th month pay and the indemnity
in the labor arbiter's decision that the CA had affirmed. The public and private respondents, awards. Hence, the CA issued the decision now questioned in the present petition.
on the other hand, posit that a re-computation is necessary because the relief in an illegal
dismissal decision goes all the way up to reinstatement if reinstatement is to be made, or We see no error in the CA decision confirming that a re-computation is necessary as it
up to the finality of the decision, if separation pay is to be given in lieu reinstatement. essentially considered the labor arbiter's original decision in accordance with its basic
component parts as we discussed above. To reiterate, the first part contains the finding of
That the labor arbiter's decision, at the same time that it found that an illegal dismissal had illegality and its monetary consequences; the second part is the computation of the awards
taken place, also made a computation of the award, is understandable in light of Section or monetary consequences of the illegal dismissal, computed as of the time of the labor
3, Rule VIII of the then NLRC Rules of Procedure which requires that a computation be arbiter's original decision.28
made. This Section in part states:
Consequently, from the above disquisitions, under the terms of the decision which is judicial or extrajudicial demand under and subject to the provisions of Article 1169
sought to be executed by the petitioner, no essential change is made by a recomputation of the Civil Code.
as this step is a necessary consequence that flows from the nature of the illegality of
dismissal declared by the Labor Arbiter in that decision.29 A recomputation (or an original 2. When an obligation, not constituting a loan or forbearance of money, is
computation, if no previous computation has been made) is a part of the law – specifically, breached, an interest on the amount of damages awarded may be imposed at the
Article 279 of the Labor Code and the established jurisprudence on this provision – that is discretion of the court at the rate of 6% per annum. No interest, however, shall be
read into the decision. By the nature of an illegal dismissal case, the reliefs continue to add adjudged on unliquidated claims or damages except when or until the demand can
up until full satisfaction, as expressed under Article 279 of the Labor Code. The be established with reasonable certainty. Accordingly, where the demand is
recomputation of the consequences of illegal dismissal upon execution of the decision established with reasonable certainty, the interest shall begin to run from the time
does not constitute an alteration or amendment of the final decision being implemented. the claim is made judicially or extrajudicially (Art. 1169, Civil Code) but when such
The illegal dismissal ruling stands; only the computation of monetary consequences of this certainty cannot be so reasonably established at the time the demand is made, the
dismissal is affected, and this is not a violation of the principle of immutability of final interest shall begin to run only from the date the judgment of the court is made (at
judgments.30 which time the quantification of damages may be deemed to have been reasonably
ascertained). The actual base for the computation of legal interest shall, in any
That the amount respondents shall now pay has greatly increased is a consequence that case, be on the amount finally adjudged.
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 consequences of illegal dismissal in 3. When the judgment of the court awarding a sum of money becomes final and
no uncertain terms, qualified only by jurisprudence in its interpretation of when separation executory, the rate of legal interest, whether the case falls under paragraph 1 or
pay in lieu of reinstatement is allowed. When that happens, the finality of the illegal paragraph 2, above, shall be 12% per annum from such finality until its satisfaction,
dismissal decision becomes the reckoning point instead of the reinstatement that the law this interim period being deemed to be by then an equivalent to a forbearance of
decrees. In allowing separation pay, the final decision effectively declares that the credit.33
employment relationship ended so that separation pay and backwages are to be computed
up to that point.31 Recently, however, the Bangko Sentral ng Pilipinas Monetary Board (BSP-MB), in its
Resolution No. 796 dated May 16, 2013, approved the amendment of Section 234 of
Finally, anent the payment of legal interest. In the landmark case of Eastern Shipping Circular No. 905, Series of 1982 and, accordingly, issued Circular No. 799,35 Series of
Lines, Inc. v. Court of Appeals,32 the Court laid down the guidelines regarding the manner 2013, effective July 1, 2013, the pertinent portion of which reads:
of computing legal interest, to wit:
The Monetary Board, in its Resolution No. 796 dated 16 May 2013, approved the following
II. With regard particularly to an award of interest in the concept of actual and revisions governing the rate of interest in the absence of stipulation in loan contracts,
compensatory damages, the rate of interest, as well as the accrual thereof, is imposed, as thereby amending Section 2 of Circular No. 905, Series of 1982:
follows:
Section 1. The rate of interest for the loan or forbearance of any money, goods or credits
1. When the obligation is breached, and it consists in the payment of a sum of and the rate allowed in judgments, in the absence of an express contract as to such rate
money, i.e., a loan or forbearance of money, the interest due should be that which of interest, shall be six percent (6%) per annum.
may have been stipulated in writing. Furthermore, the interest due shall itself earn
legal interest from the time it is judicially demanded. In the absence of stipulation,
the rate of interest shall be 12% per annum to be computed from default, i.e., from
Section 2. In view of the above, Subsection X305.136 of the Manual of Regulations for damages. The provisions under Title XVIII on "Damages" of the Civil Code govern
Banks and Sections 4305Q.1,37 4305S.338 and 4303P.139 of the Manual of Regulations for in determining the measure of recoverable damages. 1âwphi1

Non-Bank Financial Institutions are hereby amended accordingly.


II. With regard particularly to an award of interest in the concept of actual and
This Circular shall take effect on 1 July 2013. compensatory damages, the rate of interest, as well as the accrual thereof, is
imposed, as follows:
Thus, from the foregoing, in the absence of an express stipulation as to the rate of interest
that would govern the parties, the rate of legal interest for loans or forbearance of any When the obligation is breached, and it consists in the payment of a sum of money, i.e., a
money, goods or credits and the rate allowed in judgments shall no longer be twelve loan or forbearance of money, the interest due should be that which may have been
percent (12%) per annum - as reflected in the case of Eastern Shipping Lines40and stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the
Subsection X305.1 of the Manual of Regulations for Banks and Sections 4305Q.1, time it is judicially demanded. In the absence of stipulation, the rate of interest shall be 6%
4305S.3 and 4303P.1 of the Manual of Regulations for Non-Bank Financial Institutions, per annum to be computed from default, i.e., from judicial or extrajudicial demand under
before its amendment by BSP-MB Circular No. 799 - but will now be six percent (6%) per and subject to the provisions of Article 1169 of the Civil Code.
annum effective July 1, 2013. It should be noted, nonetheless, that the new rate could only
be applied prospectively and not retroactively. Consequently, the twelve percent (12%) per When an obligation, not constituting a loan or forbearance of money, is breached, an
annum legal interest shall apply only until June 30, 2013. Come July 1, 2013 the new rate interest on the amount of damages awarded may be imposed at the discretion of the court
of six percent (6%) per annum shall be the prevailing rate of interest when applicable. at the rate of 6% per annum. No interest, however, shall be adjudged on unliquidated
claims or damages, except when or until the demand can be established with reasonable
Corollarily, in the recent case of Advocates for Truth in Lending, Inc. and Eduardo B. certainty. Accordingly, where the demand is established with reasonable certainty, the
Olaguer v. Bangko Sentral Monetary Board,41 this Court affirmed the authority of the BSP- interest shall begin to run from the time the claim is made judicially or extrajudicially (Art.
MB to set interest rates and to issue and enforce Circulars when it ruled that "the BSP-MB 1169, Civil Code), but when such certainty cannot be so reasonably established at the time
may prescribe the maximum rate or rates of interest for all loans or renewals thereof or the the demand is made, the interest shall begin to run only from the date the judgment of the
forbearance of any money, goods or credits, including those for loans of low priority such court is made (at which time the quantification of damages may be deemed to have been
as consumer loans, as well as such loans made by pawnshops, finance companies and reasonably ascertained). The actual base for the computation of legal interest shall, in any
similar credit institutions. It even authorizes the BSP-MB to prescribe different maximum case, be on the amount finally adjudged.
rate or rates for different types of borrowings, including deposits and deposit substitutes,
or loans of financial intermediaries." When the judgment of the court awarding a sum of money becomes final and executory,
the rate of legal interest, whether the case falls under paragraph 1 or paragraph 2, above,
Nonetheless, with regard to those judgments that have become final and executory prior shall be 6% per annum from such finality until its satisfaction, this interim period being
to July 1, 2013, said judgments shall not be disturbed and shall continue to be implemented deemed to be by then an equivalent to a forbearance of credit.
applying the rate of interest fixed therein.
1awp++i 1

And, in addition to the above, judgments that have become final and executory prior to July
To recapitulate and for future guidance, the guidelines laid down in the case of Eastern 1, 2013, shall not be disturbed and shall continue to be implemented applying the rate of
Shipping Lines42 are accordingly modified to embody BSP-MB Circular No. 799, as follows: interest fixed therein.

I. When an obligation, regardless of its source, i.e., law, contracts, quasi-contracts,


delicts or quasi-delicts is breached, the contravenor can be held liable for
WHEREFORE, premises considered, the Decision dated September 23, 2008 of the Court Sometime in 1982 private respondent Donato Gonzales purchased an Isuzu passenger
of Appeals in CA-G.R. SP No. 98591, and the Resolution dated October 9, 2009 are jeepney from Gomercino Vallarta, holder of a certificate of public convenience for the
REVERSED and SET ASIDE. Respondents are Ordered to Pay petitioner: operation of public utility vehicles plying the Monumento-Bulacan route. While private
respondent Gonzales continued offering the jeepney for public transport services he did
(1) backwages computed from the time petitioner was illegally dismissed on not have the registration of the vehicle transferred in his name nor did he secure for himself
January 24, 1997 up to May 27, 2002, when the Resolution of this Court in G.R. a certificate of public convenience for its operation. Thus Vallarta remained on record as
No. 151332 became final and executory; its registered owner and operator. 1âwphi 1.nêt

(2) separation pay computed from August 1990 up to May 27, 2002 at the rate of On 22 July 1990, while the jeepney was running northbound along the North Diversion
one month pay per year of service; and Road somewhere in Meycauayan, Bulacan, it collided with a ten-wheeler-truck owned by
petitioner Abelardo Lim and driven by his co-petitioner Esmadito Gunnaban. Gunnaban
(3) interest of twelve percent (12%) per annum of the total monetary awards, owned responsibility for the accident, explaining that while he was traveling towards Manila
computed from May 27, 2002 to June 30, 2013 and six percent (6%) per annum the truck suddenly lost its brakes. To avoid colliding with another vehicle, he swerved to
from July 1, 2013 until their full satisfaction. the left until he reached the center island. However, as the center island eventually came
to an end, he veered farther to the left until he smashed into a Ferroza automobile, and
later, into private respondent's passenger jeepney driven by one Virgilio Gonzales. The
The Labor Arbiter is hereby ORDERED to make another recomputation of the total
impact caused severe damage to both the Ferroza and the passenger jeepney and left
monetary benefits awarded and due to petitioner in accordance with this Decision.
one (1) passenger dead and many others wounded.
SO ORDERED
Petitioner Lim shouldered the costs for hospitalization of the wounded, compensated the
heirs of the deceased passenger, and had the Ferroza restored to good condition. He also
G.R. No. 125817 January 16, 2002 negotiated with private respondent and offered to have the passenger jeepney repaired at
his shop. Private respondent however did not accept the offer so Lim offered him
ABELARDO LIM and ESMADITO GUNNABAN, petitioners, ₱20,000.00, the assessment of the damage as estimated by his chief mechanic. Again,
vs. petitioner Lim's proposition was rejected; instead, private respondent demanded a brand-
COURT OF APPEALS and DONATO H. GONZALES, respondents. new jeep or the amount of ₱236,000.00. Lim increased his bid to ₱40,000.00 but private
respondent was unyielding. Under the circumstances, negotiations had to be abandoned;
BELLOSILLO, J.: hence, the filing of the complaint for damages by private respondent against petitioners.

When a passenger jeepney covered by a certificate of public convenience is sold to In his answer Lim denied liability by contending that he exercised due diligence in the
another who continues to operate it under the same certificate of public convenience under selection and supervision of his employees. He further asserted that as the jeepney was
the so-called kabit system, and in the course thereof the vehicle meets an accident through registered in Vallarta’s name, it was Vallarta and not private respondent who was the real
the fault of another vehicle, may the new owner sue for damages against the erring party in interest.1 For his part, petitioner Gunnaban averred that the accident was a
vehicle? Otherwise stated, does the new owner have any legal personality to bring the fortuitous event which was beyond his control.2
action, or is he the real party in interest in the suit, despite the fact that he is not the
registered owner under the certificate of public convenience? Meanwhile, the damaged passenger jeepney was left by the roadside to corrode and
decay. Private respondent explained that although he wanted to take his jeepney home he
had no capability, financial or otherwise, to tow the damaged vehicle.3
The main point of contention between the parties related to the amount of damages due Petitioners' attempt to illustrate that an affirmance of the appealed decision could be
private respondent. Private respondent Gonzales averred that per estimate made by an supportive of the pernicious kabit system does not persuade. Their labored efforts to
automobile repair shop he would have to spend ₱236,000.00 to restore his jeepney to its demonstrate how the questioned rulings of the courts a quoare diametrically opposed to
original condition.4 On the other hand, petitioners insisted that they could have the vehicle the policy of the law requiring operators of public utility vehicles to secure a certificate of
repaired for ₱20,000.00.5 public convenience for their operation is quite unavailing.

On 1 October 1993 the trial court upheld private respondent's claim and awarded him The kabit system is an arrangement whereby a person who has been granted a certificate
₱236,000.00 with legal interest from 22 July 1990 as compensatory damages and of public convenience allows other persons who own motor vehicles to operate them under
₱30,000.00 as attorney's fees. In support of its decision, the trial court ratiocinated that as his license, sometimes for a fee or percentage of the earnings.9 Although the parties to
vendee and current owner of the passenger jeepney private respondent stood for all intents such an agreement are not outrightly penalized by law, the kabit system is invariably
and purposes as the real party in interest. Even Vallarta himself supported private recognized as being contrary to public policy and therefore void and inexistent under Art.
respondent's assertion of interest over the jeepney for, when he was called to testify, he 1409 of the Civil Code.
dispossessed himself of any claim or pretension on the property. Gunnaban was found by
the trial court to have caused the accident since he panicked in the face of an emergency In the early case of Dizon v. Octavio10 the Court explained that one of the primary factors
which was rather palpable from his act of directing his vehicle to a perilous streak down considered in the granting of a certificate of public convenience for the business of public
the fast lane of the superhighway then across the island and ultimately to the opposite lane transportation is the financial capacity of the holder of the license, so that liabilities arising
where it collided with the jeepney. from accidents may be duly compensated. The kabit system renders illusory such purpose
and, worse, may still be availed of by the grantee to escape civil liability caused by a
On the other hand, petitioner Lim's liability for Gunnaban's negligence was premised on negligent use of a vehicle owned by another and operated under his license. If a registered
his want of diligence in supervising his employees. It was admitted during trial that owner is allowed to escape liability by proving who the supposed owner of the vehicle is,
Gunnaban doubled as mechanic of the ill-fated truck despite the fact that he was neither it would be easy for him to transfer the subject vehicle to another who possesses no
tutored nor trained to handle such task.6 property with which to respond financially for the damage done. Thus, for the safety of
passengers and the public who may have been wronged and deceived through the
Forthwith, petitioners appealed to the Court of Appeals which, on 17 July 1996, affirmed baneful kabit system, the registered owner of the vehicle is not allowed to prove that
the decision of the trial court. In upholding the decision of the court a quo the appeals court another person has become the owner so that he may be thereby relieved of responsibility.
concluded that while an operator under the kabit system could not sue without joining the Subsequent cases affirm such basic doctrine.11
registered owner of the vehicle as his principal, equity demanded that the present case be
made an exception.7 Hence this petition. It would seem then that the thrust of the law in enjoining the kabit system is not so much
as to penalize the parties but to identify the person upon whom responsibility may be fixed
It is petitioners' contention that the Court of Appeals erred in sustaining the decision of the in case of an accident with the end view of protecting the riding public. The policy therefore
trial court despite their opposition to the well-established doctrine that an operator of a loses its force if the public at large is not deceived, much less involved.
vehicle continues to be its operator as long as he remains the operator of record. According
to petitioners, to recognize an operator under the kabit system as the real party in interest In the present case it is at once apparent that the evil sought to be prevented in enjoining
and to countenance his claim for damages is utterly subversive of public policy. Petitioners the kabit system does not exist. First, neither of the parties to the pernicious kabit system
further contend that inasmuch as the passenger jeepney was purchased by private is being held liable for damages. Second, the case arose from the negligence of another
respondent for only ₱30,000.00, an award of ₱236,000.00 is inconceivably large and would vehicle in using the public road to whom no representation, or misrepresentation, as
amount to unjust enrichment.8 regards the ownership and operation of the passenger jeepney was made and to whom
no such representation, or misrepresentation, was necessary. Thus it cannot be said that
private respondent Gonzales and the registered owner of the jeepney were in estoppel for for their part did not offer any substantive evidence to refute the estimate made by the
leading the public to believe that the jeepney belonged to the registered owner. Third, the courts a quo.
riding public was not bothered nor inconvenienced at the very least by the illegal
arrangement. On the contrary, it was private respondent himself who had been wronged However, we are constrained to depart from the conclusion of the lower courts that upon
and was seeking compensation for the damage done to him. Certainly, it would be the the award of compensatory damages legal interest should be imposed beginning 22 July
height of inequity to deny him his right. 1990, i.e. the date of the accident. Upon the provisions of Art. 2213 of the Civil Code,
interest "cannot be recovered upon unliquidated claims or damages, except when the
In light of the foregoing, it is evident that private respondent has the right to proceed against demand can be established with reasonable certainty." It is axiomatic that if the suit were
petitioners for the damage caused on his passenger jeepney as well as on his business. for damages, unliquidated and not known until definitely ascertained, assessed and
Any effort then to frustrate his claim of damages by the ingenuity with which petitioners determined by the courts after proof, interest at the rate of six percent (6%) per annum
framed the issue should be discouraged, if not repelled. should be from the date the judgment of the court is made (at which time the quantification
of damages may be deemed to be reasonably ascertained).14
In awarding damages for tortuous injury, it becomes the sole design of the courts to provide
for adequate compensation by putting the plaintiff in the same financial position he was in In this case, the matter was not a liquidated obligation as the assessment of the damage
prior to the tort. It is a fundamental principle in the law on damages that a defendant cannot on the vehicle was heavily debated upon by the parties with private respondent's demand
be held liable in damages for more than the actual loss which he has inflicted and that a for ₱236,000.00 being refuted by petitioners who argue that they could have the vehicle
plaintiff is entitled to no more than the just and adequate compensation for the injury repaired easily for ₱20,000.00. In fine, the amount due private respondent was not a
suffered. His recovery is, in the absence of circumstances giving rise to an allowance of liquidated account that was already demandable and payable.
punitive damages, limited to a fair compensation for the harm done. The law will not put
him in a position better than where he should be in had not the wrong happened.12 One last word. We have observed that private respondent left his passenger jeepney by
the roadside at the mercy of the elements. Article 2203 of the Civil Code exhorts parties
In the present case, petitioners insist that as the passenger jeepney was purchased in suffering from loss or injury to exercise the diligence of a good father of a family to minimize
1982 for only ₱30,000.00 to award damages considerably greater than this amount would the damages resulting from the act or omission in question. One who is injured then by the
be improper and unjustified. Petitioners are at best reminded that indemnification for wrongful or negligent act of another should exercise reasonable care and diligence to
damages comprehends not only the value of the loss suffered but also that of the profits minimize the resulting damage. Anyway, he can recover from the wrongdoer money lost
which the obligee failed to obtain. In other words, indemnification for damages is not limited in reasonable efforts to preserve the property injured and for injuries incurred in attempting
to damnum emergens or actual loss but extends to lucrum cessans or the amount of profit to prevent damage to it.15
lost.13
However we sadly note that in the present case petitioners failed to offer in evidence the
Had private respondent's jeepney not met an accident it could reasonably be expected that estimated amount of the damage caused by private respondent's unconcern towards the
it would have continued earning from the business in which it was engaged. Private damaged vehicle. It is the burden of petitioners to show satisfactorily not only that the
respondent avers that he derives an average income of ₱300.00 per day from his injured party could have mitigated his damages but also the amount thereof; failing in this
passenger jeepney and this earning was included in the award of damages made by the regard, the amount of damages awarded cannot be proportionately reduced.
trial court and upheld by the appeals court. The award therefore of ₱236,000.00 as
compensatory damages is not beyond reason nor speculative as it is based on a WHEREFORE, the questioned Decision awarding private respondent Donato Gonzales
reasonable estimate of the total damage suffered by private respondent, i.e. damage ₱236,000.00 with legal interest from 22 July 1990 as compensatory damages and
wrought upon his jeepney and the income lost from his transportation business. Petitioners ₱30,000.00 as attorney's fees is MODIFIED. Interest at the rate of six percent (6%) per
annum shall be computed from the time the judgment of the lower court is made until the
finality of this Decision. If the adjudged principal and interest remain unpaid thereafter, the
interest shall be twelve percent (12%) per annum computed from the time judgment
becomes final and executory until it is fully satisfied.
1âwphi 1.nêt

Costs against petitioners.

SO ORDERED.

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