ON ACTUAL OR COMPENSATORY DAMAGES:

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. EUFROCENIO LACESTE, CIPRIANO LACESTE, RIZALINO LACESTE EDDIE BAUSON, ARTHUR BAUSON, BONIFACIO SORIANO, and JOHN DOE, accused, EUFROCENIO LACESTE, accusedappellant. G.R. No. 127127 July 30, 1998 DAVIDE, JR., J.: FACTS: The evidence for the prosecution as narrated by Orlando Dispo and Bernardo Raboy are as follows: At 9:30 p.m. of 9 April 1995, Orlando Dispo, Bernardo Raboy, Rufo Narvas, Sr., and Edwin Genese were having a drinking spree in front of the store of Marta Dispo.after a while a tricycle driven by Bonifacio Soriano arrived and stopped near the store. Accused EUFROCENIO, Cipriano Laceste, Rizalino Laceste, Eddie Bauson, and Arthur Bauson immediately alighted from the tricycle and went toward Rufo Narvas, Sr. The last four accused held Rufo by the arms. EUFROCENIO forthwith stabbed Rufo at the abdomen with a "29 fan knife." Rufo then fell down. Fearing for his own life, Orlando ran away; but the Laceste brothers chased him until about twenty meters away. Bernardo Raboy also broke into a run, but Cipriano Laceste and Eddie Bauson chased him and boxed him. Thereafter, EUFROCENIO and his companions boarded the tricycle of Bonifacio Soriano and then sped away. ISSUE: W/N the heirs of the victim are entitled for actual damages. HELD: YES. We shall also modify the award of damages. It must be noted that the trial court awarded the heirs of the victim "in the amount of P100,000 as actual, moral, compensatory, and other consequential damages." In the first place, actual damages are not different from compensatory damages. Under Chapter 2, Title XVIII, Book IV of the Civil Code, actual and compensatory damages are synonymous; hence the title of the Chapter as well as Article 2199 thereof refer to them as actual or compensatory damages. They are, as well, different from moral damages under Article 2217 of the Civil Code. In every case then, courts must specify the award for each item of damages and make a finding thereon in the body of the decision. In this case, apart from the indemnity for death under Article 2206 of the Civil Code, which current jurisprudence law has fixed at P50,000, the heirs of the victim are entitled to an award of actual damages in the amount of P60,000, which the defense had admitted during the trial. However, since they waived moral damages by agreeing to a limited and specific amount to be paid by accused-appellant, the award therefor was unwarranted. INTEGRATED PACKAGING CORP., petitioner, vs.COURT OF APPEALS and FIL-ANCHOR PAPER CO., INC., respondents. G.R. No. 115117 June 8, 2000 QUISUMBING, J.: FACTS:

Petitioner and private respondent executed on May 5, 1978, an order agreement whereby private respondent bound itself to deliver to petitioner printing materials. In accordance with the standard operating practice of the parties, the materials were to be paid within a minimum of thirty days and maximum of ninety days from delivery. Later, on June 7, 1978, petitioner entered into a contract with Philippine Appliance Corporation (Philacor) to print three volumes of "Philacor Cultural Books" for delivery on different dates, with a minimum of 300,000 copies at a price of P10.00 per copy or a total cost of P3,000,000.00. As of July 30, 1979, private respondent had delivered to petitioner an incomplete set of printing paper. Petitioner alleged it wrote private respondent to immediately deliver the balance because further delay would greatly prejudice petitioner. From June 5, 1980 and until July 23, 1981, private respondent delivered again to petitioner various quantities of printing paper amounting to P766,101.70. However, petitioner encountered difficulties paying private respondent said amount. Accordingly, private respondent made a formal demand upon petitioner to settle the outstanding account. On July 23 and 31, 1981 and August 27, 1981, petitioner made partial payments totalling P97,200.00 which was applied to its back accounts covered by delivery invoices dated September 29-30, 1980 and October 1-2, 1980. 3 Meanwhile, petitioner entered into an additional printing contract with Philacor. Unfortunately, petitioner failed to fully comply with its contract with Philacor for the printing of books VIII, IX, X and XI. Thus, Philacor demanded compensation from petitioner for the delay and damage it suffered on account of petitioner's failure. On August 14, 1981, private respondent filed with the Regional Trial Court of Caloocan City a collection suit against petitioner for the sum of P766,101.70, representing the unpaid purchase price of printing paper bought by petitioner on credit. ISSUE: W/N the petitioner is entitled to actual damages. HELD: To recapitulate, private respondent did not violate the order agreement it had with petitioner. Likewise, private respondent could not be held liable for petitioner's breach of contract with Philacor. It follows that there is no basis to hold private respondent liable for damages. Accordingly, the appellate court did not err in deleting the damages awarded by the trial court to petitioner. The rule on compensatory damages is well established. True, indemnification for damages comprehends not only the loss suffered, that is to say actual damages (damnum emergens), but also profits which the obligee failed to obtain, referred to as compensatory damages (lucrum cessans). However, to justify a grant of actual or compensatory damages, it is necessary to prove with a reasonable degree of certainty, premised upon competent proof and on the best evidence obtainable by the injured party, the actual amount of loss. W. E. HICKS, plaintiff-appellant, vs. MANILA HOTEL COMPANY, defendant-appellee. G.R. No. L-9973 November 6, 1914

MORELAND, J.: FACTS: It seems that, on the 9th of November 1912, plaintiff and defendant entered into a written contract by which the defendant ceded to the plaintiff the exclusive right to serve its patrons with five-passenger

automobiles for a period of one year from the date thereof, with certain rights with respect to a renewal of the contract for a second year. Plaintiff entered on the performance of his duties under the contract and successfully discharged them during the first year. When about half of the first year had expired, and about June, 1913, the defendant company, disregarding, as plaintiff claims, the terms of its agreement with him, invited proposals from various garages for its five-passenger automobile privilege for the ensuing year, that is, from November, 1913, to November, 1914, the time covered by the second year of plaintiff's contract. Under these proposals various garages competed for the privilege, including that of George E. Brown, and, after certain negotiations with the latter, his offer was accepted by the defendant company and a written contract made with him for the exclusive right to the privilege during the year beginning November 9, 1913. This contract with Brown was executed some months prior to the termination of the first year of plaintiff's contract. Upon the termination of the first year of the contract the defendant company having, as we have seen, already entered into a contract with Brown relative to the matter included in plaintiff's contract for the period representing the second year thereof, refused, over plaintiff's objections and protests, to permit him to continue for the second year, deprived him of the privilege which the contract conferred, and evicted him from the hotel where, under the terms of the contract, he was entitled to have and did have an office. This action was brought to recover damages for breach of contract. ISSUE: W/N the plaintiff is correct when he claims his damage to be P10,800, basing that claim upon the profits which he would have received if he had continued the business for the second year. HELD: The appellee makes no objection to this amount, the question of the amount of damages not having been referred to in its brief. It is the practice of this court, in case of reversal of a judgment dismissing the complaint on the merits, to examine the evidence and enter or order entered the judgment which the inferior court should have rendered; and, where the action is for a sum of money or damages, to find from the evidence the amount due or the damages suffered and to render or order the trial court to render judgment for the amount. We assume that the practice is thoroughly understood and that if appellee had any objection to urge as to the amount of damages which should be awarded to the plaintiff in case judgment should be found for him in this court, it would have presented it in its brief. The only damages claimed relate to profits. Article 1106 and 1107 of the Civil Code reads as follows: Indemnity for losses and damages includes not only the amount of the loss which may have suffered, but also that of the profits which the creditor many have failed to realize, reserving the provisions contained in the following articles. The losses and damages for which a debtor in good faith is liable, are those foreseen or which may have been foreseen, at the time of constituting the obligation, and which may be necessary consequence of its non-fulfillment. In case of fraud, the debtor shall be liable for all those which clearly may originate from the no-fulfillment of the obligation. Under these provisions we are required to determine the amount of profits which plaintiff failed to realize by reason of the refusal of defendant to permit him to continue under the contract for the second year and which were foreseen or which might have been foreseen at the time the contract was made and which were a necessary consequence of the breach. Plaintiff testified that he made P11,000 profit the first year and that he would unquestionably have made a net profit of P1,200 a month if he had been left to enjoy the second year of the contract. There is no evidence contradicting this, and while the estimation of speculation, it is inherent in the nature of the subject matter and not in its manner of treatment.

The cause is returned to the Court of First Instance whence it came with instructions to enter a judgment in favor of the plaintiff and against the defendant for the sum of P10,800, with costs in that instance but without costs in this. THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. JESUS G. RUIZ, defendant-appellant. G.R. No. L-33609 December 14, 1981 DE CASTRO, J.: FACTS: At about 6:30 P.M. of May 30, 1968, while accused was in the mezzanine of the store situated at the first floor of his house, Raymundo Discipulo arrived thereat and after quite sometime asked the accused whether it was true that the loading of copra on the M/V Sweet Hope that day was given to Goring Gavero. Expressing his surprise as he could not believe then that it could happen because of his contract and good relation with the deceased, the accused was only able to answer: "Ha?" to Raymundo Discipulo's query. Enrage at the news the accused went searching for the deceased but was not able to find him. Meanwhile, between 8:30 and 9:00 o'clock that same evening of May 30, 1968, a wharf-bound cargo truck loaded with copra of the deceased and driven by Jose Mendrez developed engine trouble as such it stopped and the latter was invited by the accused for a drink. Thereafter, as Mendrez was about to leave the accused threatened him that he will be shot if he would leave. While Mendrez was thus being threatened by the accused, the deceased arrived in the vicinity riding in his jeep. Taking advantage of this opportunity, Mendrez left and went towards his parked cargo truck. The deceased went to talk to the accused and it was there that the deceased was shot by the accused. ISSUE: W/N the heirs of the deceased are entitled for damages. HELD: As to the amount of indemnity and damages awarded, the amount of actual and compensatory damages, represented by the loss of expected earnings, finds support in the case of Alcantara vs. Surro, et al., G.R. No. L-4555, July 23, 1953, 59 O.G. 2769. From the physical condition of the deceased, and his social standing when gunned down by appellant, his heirs are also entitled to moral damages as awarded by the court a quo, but the amount so awarded may be reasonably reduced, there being no aggravating circumstance, but there are three mitigating ones. However, as held recently in the case of Nora Aguilar Matura vs. Hon. Alfredo C. Laya and People of the Philippines, G.R. Nos. L-44550-51 and L-44552-53, July 30, 1979 that there is no basis for awarding exemplary damages when not even one aggravating circumstance was established, no exemplary damages may be awarded. The amount of P10,000.00 for attorney's fees may likewise be reasonably reduced to P5,000.00, the private prosecutors that helped in the prosecution of the case being deemed to have rendered aservice for a fellow member of the bar more in the spirit of professional fraternity.

ON MORAL DAMAGES:
PRUDENTIAL BANK, petitioner, vs. COURT OF APPEALS and LETICIA TUPASI-VALENZULA joined by husband Francisco Valenzuela, respondents.

G.R. No. 125536 March 16, 2000 QUISUMBING, J.: FACTS: Private respondent Leticia Tupasi-Valenzuela opened Savings Account No. 5744 and Current Account No. 01016-3 in the Valenzuela Branch of petitioner Prudential Bank, with automatic transfer of funds from the savings account to the current account. On June 1, 1988, herein private respondent deposited in her savings account Check No. 666B (104561 of even date) the amount of P35,271.60, drawn against the Philippine Commercial International Bank (PCIB). Taking into account that deposit and a series of withdrawals, private respondent as of June 21, 1988 had a balance of P35,993.48 in her savings account and P776.93 in her current account, or total deposits of P36,770.41, with petitioner. Thereafter, private respondent issued Prudential Bank Check No. 983395 in the amount of P11,500.00 postdated June 20, 1988, in favor of one Belen Legaspi. It was issued to Legaspi as payment for jewelry which private respondent had purchased. Legaspi, who was in jewelry trade, endorsed the check to one Philip Lhuillier, a businessman also in the jewelry business. When Lhuillier deposited the check in his account with the PCIB, Pasay Branch, it was dishonored for being drawn against insufficient funds. Lhuillier's secretary informed the secretary of Legaspi of the dishonor. The latter told the former to redeposit the check, Legaspi's secretary tried to contact private respondent but to no avail. Upon her return from the province, private respondent was surprised to learn of the dishonor of the check. She went to the Valenzuela Branch of Prudential Bank on July 4, 1988, to inquire why her check was dishonored. She approached one Albert Angeles Reyes, the officer in charge of current account, and requested him for the ledger of her current account. Private respondent discovered a debit of P300.00 penalty for the dishonor of her Prudential Check No. 983395. She asked why her check was dishonored when there were sufficient funds in her account as reflected in her passbook. Reyes told her that there was no need to review the passbook because the bank ledger was the best proof that she did not have sufficient funds. Then, he abruptly faced his typewriter and started typing. Later, it was found out that the check in the amount of P35,271.60 deposited by private respondent on June 1, 1988, was credited in her savings account only on June 24, 1988, or after a period of 23 days. Thus the P11,500.00 check was redeposited by Lhuillier on June 24, 1988, and properly cleared on June 27, 1988. Because of this incident, the bank tried to mollify private respondent by explaining to Legaspi and Lhuillier that the bank was at fault. Since this was not the first incident private respondent had experienced with the bank, private respondent was unmoved by the bank's apologies and she commenced the present suit for damages before the RTC of Valenzuela. ISSUE: W/N the respondent court erred and gravely abused its discretion in awarding moral and exemplary damages and attorney's fees to be paid by petitioner to private respondent. HELD: Admittedly, as found by both the respondent appellate court and the trial court, petitioner bank had committed a mistake. It misposted private respondent's check deposit to another account and delayed the posting of the same to the proper account of the private respondent. The mistake resulted to the dishonor of the private respondent's check. The trial court found "that the misposting of plaintiff's check deposit to another account and the delayed posting of the same to the account of the plaintiff is a clear proof of lack of supervision on the part of the defendant bank." 6 Similarly, the appellate court also found that "while it may be true that the bank's negligence in dishonoring the properly funded check of appellant might not have been attended with malice and bad faith, as appellee [bank] submits, nevertheless, it is the result of lack of

due care and caution expected of an employee of a firm engaged in so sensitive and accurately demanding task as banking." 7 In Simex International (Manila), Inc. vs. Court of Appeals, 183 SCRA 360, 367 (1990), and Bank of Philippine Islands vs. IAC, et al., 206 SCRA 408, 412-413 (1992), this Court had occasion to stress the fiduciary nature of the relationship between a bank and its depositors and the extent of diligence expected of the former in handling the accounts entrusted to its care, thus: In every case, the depositor expects the bank to treat his account with the utmost fidelity, whether such account consists only of a few hundred pesos or of millions. The bank must record every single transaction accurately, down to the last centavo, and as promptly as possible. This has to be done if the account is to reflect at any given time the amount of money the depositor can dispose of as he sees fit, confident that the bank will deliver it as and to whomever he directs. A blunder on the part of bank, such as the dishonor of a check without good reason, can cause the depositor not a little embarrassment if not also financial loss and perhaps even civil and criminal litigation. The paint is that as a business affected with public interest and because of the nature of its functions, the bank is under obligation to treat the accounts of its depositors with meticulous care, always having in mind the fiduciary nature of their relationship. . . . In the recent case of Philippine National Bank vs. Court of Appeals, 8 we held that "a bank is under obligation to treat the accounts of its depositors with meticulous care whether such account consists only of a few hundred pesos or of millions of pesos. Responsibility arising from negligence in the performance of every kind of obligation is demandable. While petitioner's negligence in this case may not have been attended with malice and bad faith, nevertheless, it caused serious anxiety, embarrassment and humiliation". Hence we ruled that the offended party in said case was entitled to recover reasonable moral damages. Even if malice or bad faith was not sufficiently proved in the instant case, the fact remains that petitioner has committed a serious mistake. It dishonored the check issued by the private respondent who turned out to have sufficient funds with petitioner. The bank's negligence was the result of lack of due care and caution required of managers and employees of a firm engaged in so sensitive and demanding business as banking. Accordingly, the award of moral damages by the respondent Court of Appeals could not be said to be in error nor in grave abuse of its discretion. There is no hard-and-fast rule in the determination of what would be a fair amount of moral damages since each case must be governed by its own peculiar facts. The yardstick should be that it is not palpably and scandalously excessive. In our view, the award of P100,000.00 is reasonable, considering the reputation and social standing of private respondent Leticia T. Valenzuela. 9 ABS-CBN BROADCASTING CORPORATION, petitioner, vs. HONORABLE COURT OF APPEALS, REPUBLIC BROADCASTING CORP, VIVA PRODUCTION, INC., and VICENTE DEL ROSARIO, respondents. G.R. No. 128690 January 21, 1999 DAVIDE, JR., CJ.: FACTS: In 1990, ABS-CBN and Viva executed a Film Exhibition Agreement (Exh. "A") whereby Viva gave ABS-CBN an exclusive right to exhibit some Viva films. Sometime in December 1991, in accordance with paragraph 2.4 [sic] of said agreement stating that . 1.4 ABS-CBN shall have the right of first refusal to the next twenty-four (24) Viva films for TV telecast under such terms as may be agreed upon by the parties hereto, provided, however, that such right shall be exercised by ABS-CBN from the actual offer in writing.

Viva, through defendant Del Rosario, offered ABS-CBN, through its vice-president Charo Santos-Concio, a list of three(3) film packages (36 title) from which ABS-CBN may exercise its right of first refusal under the afore-said agreement (Exhs. "1" par, 2, "2," "2-A'' and "2-B"-Viva). ABS-CBN, however through Mrs. Concio, "can tick off only ten (10) titles" (from the list) "we can purchase" (Exh. "3" - Viva) and therefore did not accept said list (TSN, June 8, 1992, pp. 9-10). The titles ticked off by Mrs. Concio are not the subject of the case at bar except the film ''Maging Sino Ka Man." On February 27, 1992, defendant Del Rosario approached ABS-CBN's Ms. Concio, with a list consisting of 52 original movie titles (i.e. not yet aired on television) including the 14 titles subject of the present case, as well as 104 re-runs (previously aired on television) from which ABS-CBN may choose another 52 titles, as a total of 156 titles, proposing to sell to ABS-CBN airing rights over this package of 52 originals and 52 re-runs for P60,000,000.00 of which P30,000,000.00 will be in cash and P30,000,000.00 worth of television spots. On April 2, 1992, defendant Del Rosario and ABS-CBN general manager, Eugenio Lopez III, met at the Tamarind Grill Restaurant in Quezon City to discuss the package proposal of Viva. What transpired in that lunch meeting is the subject of conflicting versions. Mr. Lopez testified that he and Mr. Del Rosario allegedly agreed that ABS-CRN was granted exclusive film rights to fourteen (14) films for a total consideration of P36 million; that he allegedly put this agreement as to the price and number of films in a "napkin'' and signed it and gave it to Mr. Del Rosario (Exh. D; TSN, pp. 24-26, 77-78, June 8, 1992). On the other hand, Del Rosario denied having made any agreement with Lopez regarding the 14 Viva films; denied the existence of a napkin in which Lopez wrote something; and insisted that what he and Lopez discussed at the lunch meeting was Viva's film package offer of 104 films (52 originals and 52 re-runs) for a total price of P60 million. Mr. Lopez promising [sic]to make a counter proposal which came in the form of a proposal contract Annex "C" of the complaint. On April 06, 1992, Del Rosario and Mr. Graciano Gozon of RBS Senior vice-president for Finance discussed the terms and conditions of Viva's offer to sell the 104 films, after the rejection of the same package by ABSCBN. On April 07, 1992, defendant Del Rosario received through his secretary, a handwritten note from Ms. Concio, (Exh. "5" - Viva), which reads: "Here's the draft of the contract. I hope you find everything in order," to which was attached a draft exhibition agreement (Exh. "C''- ABS-CBN; Exh. "9" - Viva, p. 3) a counterproposal covering 53 films, 52 of which came from the list sent by defendant Del Rosario and one film was added by Ms. Concio, for a consideration of P35 million. Exhibit "C" provides that ABS-CBN is granted films right to 53 films and contains a right of first refusal to "1992 Viva Films." The said counter proposal was however rejected by Viva's Board of Directors [in the] evening of the same day, April 7, 1992, as Viva would not sell anything less than the package of 104 films for P60 million pesos (Exh. "9" - Viva), and such rejection was relayed to Ms. Concio. On April 29, 1992, after the rejection of ABS-CBN and following several negotiations and meetings defendant Del Rosario and Viva's President Teresita Cruz, in consideration of P60 million, signed a letter of agreement dated April 24, 1992. granting RBS the exclusive right to air 104 Viva-produced and/or acquired films (Exh. "7-A" - RBS; Exh. "4" - RBS) including the fourteen (14) films subject of the present case. 4 On 27 May 1992, ABS-CBN filed before the RTC a complaint for specific performance with a prayer for a writ of preliminary injunction and/or temporary restraining order against private respondents Republic Broadcasting Corporation 5 (hereafter RBS ), Viva Production (hereafter VIVA), and Vicente Del Rosario. ISSUE: W/N RBS is entitled to moral damages. HELD: As to moral damages the law is Section 1, Chapter 3, Title XVIII, Book IV of the Civil Code. Article 2217 thereof defines what are included in moral damages, while Article 2219 enumerates the cases where they may be recovered, Article 2220 provides that moral damages may be recovered in breaches of contract where the defendant acted fraudulently or in bad faith. RBS's claim for moral damages could possibly fall only under item (10) of Article 2219, thereof which reads:

(10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35. Moral damages are in the category of an award designed to compensate the claimant for actual injury suffered. and not to impose a penalty on the wrongdoer. 62 The award is not meant to enrich the complainant at the expense of the defendant, but to enable the injured party to obtain means, diversion, or amusements that will serve to obviate then moral suffering he has undergone. It is aimed at the restoration, within the limits of the possible, of the spiritual status quo ante, and should be proportionate to the suffering inflicted. 63 Trial courts must then guard against the award of exorbitant damages; they should exercise balanced restrained and measured objectivity to avoid suspicion that it was due to passion, prejudice, or corruption on the part of the trial court. 64 The award of moral damages cannot be granted in favor of a corporation because, being an artificial person and having existence only in legal contemplation, it has no feelings, no emotions, no senses, It cannot, therefore, experience physical suffering and mental anguish, which call be experienced only by one having a nervous system. 65 The statement in People v. Manero 66 and Mambulao Lumber Co. v. PNB 67 that a corporation may recover moral damages if it "has a good reputation that is debased, resulting in social humiliation" is an obiter dictum. On this score alone the award for damages must be set aside, since RBS is a corporation. PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. REYNALDO SAHOR BAAGO, accused-appellant. G.R. No. 128384 June 29, 1999 PUNO, J.: FACTS: The prosecution presented the testimony of the thirteen-year-old victim, Dolores Jaurigue. 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. That evening, she was left alone in the bodega as her sister attended a party. She went to bed at around seven o'clock. She was later roused from her sleep when she felt someone embracing her. It turned out to be accused-appellant. Accused-appellant poked a gun at her and started to remove her short pants and underwear. She tried to shout but accused-appellant slapped her twice. Then, he took off his pants and underwear and succeeded in having carnal knowledge of Dolores. He admonished her not to tell anybody about the incident. Thereafter, accused-appellant put on his pants and left the room. 3 When Dorotea arrived from the party, she saw accused-appellant coming out of the bodega zipping his pants. Dorotea asked Dolores what happened but she did not answer. 4 The following day, Dorotea again asked Dolores what happened the previous night. Dolores told her sister that accused-appellant raped her. Afraid of what accused-appellant might do to them, Dolores and Dorotea kept the incident to themselves. 5 It was only on March 18, 1994 that Dolores had the courage to tell her aunt, Lourdes Corcuera, about the assault on her womanhood. Lourdes tried to talk to accused-appellant but nothing happened. 6 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 explanation. Dolores was compelled to tell her mother about the rape incident. 7 Antonina brought Dolores to the Philippine National Police Crime Laboratory for physical examination on March 29, 1994. The medico-legal report executed by Dr. Jesusa N. Vergara of the Philippine National Police Crime Laboratory revealed that Dolores was "in non-virgin state physically" and that "there (were) no signs of recent application of any form of violence." 8

On July 14, 1994, Dolores, assisted by her mother, filed a criminal complaint for rape against accusedappellant. ISSUE: W/N the victim is entitled for moral damages. HELD: The trial court found accused-appellant guilty beyond reasonable doubt of the crime charged. It sentenced him to reclusion perpetua and ordered him to indemnify the victim the sum of P50,000.00 as moral damages. We likewise affirm the award of moral damages to private complainant. In rape cases, the court may, in its discretion, award moral damages to the victim without need for pleading or proof of the basis thereof. We held in People vs. Prades 15 that "the conventional requirement of allegata et probata in civil procedure and for essentially civil cases should be dispensed with in criminal prosecutions for rape with the civil aspect included therein, since no appropriate pleadings are filed wherein such allegations can be made." As the fact of rape has been sufficiently proved in this case, we find the award of moral damages proper and correct. TEOFISTO I. VERCELES, Petitioner, vs. MARIA CLARISSA POSADA, in her own behalf, and as mother of minor VERNA AIZA POSADA, CONSTANTINO POSADA and FRANCISCA POSADA, Respondents. G.R. No. 159785 April 27, 2007

QUISUMBING, J.: FACTS: Respondent Maria Clarissa Posada (Clarissa), a young lass from the barrio of Pandan, Catanduanes, sometime in 1986 met a close family friend, petitioner Teofisto I. Verceles, mayor of Pandan. He then called on the Posadas and at the end of the visit, offered Clarissa a job. Clarissa accepted petitioners offer and worked as a casual employee in the mayors office starting on September 1, 1986. From November 10 to 15 in 1986, with companions Aster de Quiros, Pat del Valle, Jaime and Jocelyn Vargas, she accompanied petitioner to Legaspi City to attend a seminar on town planning. They stayed at the Mayon Hotel. On November 11, 1986, at around 11:00 a.m., petitioner fetched Clarissa from "My Brothers Place" where the seminar was being held. Clarissa avers that he told her that they would have lunch at Mayon Hotel with their companions who had gone ahead. When they reached the place her companions were nowhere. After petitioner ordered food, he started making amorous advances on her. She panicked, ran and closeted herself inside a comfort room where she stayed until someone knocked. She said she hurriedly exited and left the hotel. Afraid of the mayor, she kept the incident to herself. She went on as casual employee. One of her tasks was following-up barangay road and maintenance projects. On December 22, 1986, on orders of petitioner, she went to Virac, Catanduanes, to follow up funds for barangay projects. At around 11:00 a.m. the same day, she went to Catanduanes Hotel on instructions of petitioner who asked to be briefed on the progress of her mission. They met at the lobby and he led her upstairs because he said he wanted the briefing done at the restaurant at the upper floor. Instead, however, petitioner opened a hotel room door, led her in, and suddenly embraced her, as he told her that he was unhappy with his wife and would "divorce" her anytime. He also claimed he could appoint

her as a municipal development coordinator. She succumbed to his advances. But again she kept the incident to herself. Sometime in January 1987, when she missed her menstruation, she said she wrote petitioner that she feared she was pregnant. In another letter in February 1987, she told him she was pregnant. Clarissa explained petitioner used an alias "Ninoy" and addressed her as "Chris," probably because of their twenty-five (25)-year age gap. In court, she identified petitioners penmanship which she claims she was familiar with as an employee in his office. Clarissa presented three other handwritten letters5 sent to her by petitioner, two of which were in his letterhead as mayor of Pandan. She also presented the pictures6 petitioner gave her of his youth and as a public servant, all bearing his handwritten notations at the back. Clarissa avers that on March 3, 1987, petitioner, aware of her pregnancy, handed her a letter and P2,000 pocket money to go to Manila and to tell her parents that she would enroll in a CPA review course or look for a job. In June 1987, petitioner went to see her in Manila and gave her another P2,000 for her delivery. When her parents learned of her pregnancy, sometime in July, her father fetched her and brought her back to Pandan. On September 23, 1987,7 she gave birth to a baby girl, Verna Aiza Posada. Clarissas mother, Francisca, corroborated Clarissas story. She said they learned of their daughters pregnancy through her husbands cousin. She added that she felt betrayed by petitioner and shamed by her daughters pregnancy. The Posadas filed a Complaint for Damages coupled with Support Pendente Lite before the RTC, Virac, Catanduanes against petitioner on October 23, 1987. ISSUE: W/N respondents are entitled of moral damages. HELD: We, however, cannot rule that respondents are entitled to damages. Article 221924of the Civil Code which states moral damages may be recovered in cases of seduction is inapplicable in this case because Clarissa was already an adult at the time she had an affair with petitioner. Neither can her parents be entitled to damages. Besides, there is nothing in law or jurisprudence that entitles the parents of a consenting adult who begets a love child to damages. Respondents Constantino and Francisca Posada have not cited any law or jurisprudence to justify awarding damages to them.

ON NOMINAL DAMAGES:
LUCIO ALGARRA, plaintiff-appellant, vs. SIXTO SANDEJAS, defendant-appellee. G.R. No. L-8385 TRENT, J.: FACTS: March 24, 1914

This is a civil action for personal injuries received from a collision with the defendant's automobile due to the negligence of the defendant, who was driving the car. The negligence of the defendant is not questioned and this case involves only the amount of damages which should be allowed. As a result of the injuries received, plaintiff was obliged to spend ten days in the hospital, during the first four or five of which he could not leave his bed. After being discharged from the hospital, he received medical attention from a private practitioner for several days. The latter testified that after the last treatment the plaintiff described himself as being well. On the trial the plaintiff testified that he had done no work since the accident, which occurred on July 9, 1912, and that he was not yet entirely recovered. Plaintiff testified that his earning capacity was P50 per month. It is not clear at what time plaintiff became entirely well again, but as to the doctor to whom he described himself as being well stated that this was about the last of July, and the trial took place September 19, two months' pay would seem sufficient for the actual time lost from his work. Plaintiff further testified that he paid the doctor P8 and expended P2 for medicines. This expenses, amounting in all to P110 should also be allowed. Plaintiff sold the products of a distillery on a 10 per cent commission and made an average of P50 per month. He had about twenty regular customers who, it seems, purchased in small quantities, necessitating regular and frequent deliveries. Since the accident his wife had done something in a small way to keep up this business but the total orders taken by her would not net them over P15. He lost all his regular customers but four, other agents filing their orders since his accident. It took him about four years to build up the business he had at the time of the accident, and he could not say how long it would take him to get back the business he had lost. Under this state of facts, the lower court, while recognizing the justness of he claim, refused to allow him anything for injury to his business due to his enforced absence therefrom, on the ground that the doctrine of Marcelo vs. Velasco (11 Phil., Rep., 277) is opposed t such allowance. The trial court's opinion appears to be based upon the following quotation from Viada (vol. 1 p. 539), quoted in that decision: ". . . with regard to the offense of lesiones, for example, the civil liability is almost always limited to indemnity for damage to the party aggrieved for the time during which he was incapacitated for work; . . ." ISSUE: W/N the value of the loss which she suffered can be extended to pain which she experienced by reason of the accident." HELD: Actions for damages such as the case at bar are based upon article 1902 of the Civil Code, which reads as follows: "A person who, by act or omission, causes damage to another where there is fault or negligence shall be obliged to repair the damage so done." Again it is quite common under the English system to award what is called nominal damages where there is only a technical violation of the plaintiff's rights resulting in no substantial injury to him. This branch of damages is also unknown under the Civil Code. If no damages have actually occurred there can be none to repair and the doctrine of nominal damages is not applicable. Thus it has been often held by the supreme court of Spain that a mere noncompliance with the obligations of a contract is not sufficient to sustain a judgment for damages. It must be shown that damages actually existed. (Decision of February 10, 1904.) Again, in its decision of January 9, 1897, that high tribunal said that as a logical consequence of the requirements of articles 1101, 1718, and 1902 that he who causes damages must repair them, their existence must be proved. The case at bar involves actual incapacity of the plaintiff for two months, and loss of the greater portion of his business. As to the damages resulting from the actual incapacity of the plaintiff to attend to his business there is no question. They are, of course, to be allowed on the basis of his earning capacity, which in this case, is P50 per month. the difficult question in the present case is to determine the damage which has results to his business through his enforced absence. In Sanz vs. Lavin Bros. (6 Phil. Rep., 299), this court, citing numerous decisions of the supreme court of Spain, held that evidence of damages "must rest upon satisfactory proof of the existence in reality of the damages alleged to have been suffered." But, while certainty is an essential element of an award of damages, it need not be a mathematical certainty. That this

is true is adduced not only from the personal injury cases from the supreme court of Spain which we have discussed above, but by many cases decided by this court, reference to which has already been made. As stated in Joyce on Damages, section 75, "But to deny the injured party the right to recover any actual damages in cases f torts because they are of such a nature a cannot be thus certainly measured, would be to enable parties to profit by and speculate upon their own wrongs; such is not the law." We have now outlined the principles which should govern the measure of damages in this case. We are of the opinion that the lower court had before it sufficient evidence of the damage to plaintiff's business in the way of prospective loss of profits to justify it in calculating his damages as to his item. That evidence has been properly elevated to this court of review. Under section 496 of the Code of Civil Procedure, we are authorized to enter final judgment or direct a new trial, as may best subserve the ends of justice. We are of the opinion that the evidence presented as to the damage done to plaintiff's business is credible and that it is sufficient and clear enough upon which to base a judgment for damages. Plaintiff having had four years' experience in selling goods on commission, it must be presumed that he will be able to rebuild his business to its former proportions; so that at some time in the future his commissions will equal those he was receiving when the accident occurred. Aided by his experience, he should be able to rebuild this business to its former proportions in much less time than it took to establish it as it stood just prior to the accident. One year should be sufficient time in which to do this. The profits which plaintiff will receive from the business in the course of its reconstruction will gradually increase. The injury to plaintiff's business begins where these profits leave off, and, as a corollary, there is where defendant's liability begins. Upon this basis, we fix the damages to plaintiff's business at P250. The judgment of the lower court is set aside, and the plaintiff is awarded the following damages; ten pesos for medical expenses; one hundred pesos for the two months of his enforced absence from his business; and two hundred and fifty pesos for the damage done to his business in the way of loss of profits, or a total of three hundred and sixty pesos. No costs will be allowed in this instance. PNOC SHIPPING AND TRANSPORT CORPORATION, petitioner, vs. HONORABLE COURT OF APPEALS and MARIA EFIGENIA FISHING CORPORATION, respondents. G.R. No. 107518 October 8, 1998 ROMERO, J.: FACTS: in the early morning of September 21, 1977, the M/V Maria Efigenia XV, owned by private respondent Maria Efigenia Fishing Corporation, was navigating the waters near Fortune Island in Nasugbu, Batangas on its way to Navotas, Metro Manila when it collided with the vessel Petroparcel which at the time was owned by the Luzon Stevedoring Corporation (LSC). After investigation was conducted by the Board of Marine Inquiry, Philippine Coast Guard Commandant Simeon N. Alejandro rendered a decision finding the Petroparcel at fault. Based on this finding by the Board and after unsuccessful demands on petitioner, 7 private respondent sued the LSC and the Petroparcel captain, Edgardo Doruelo, before the then Court of First Instance of Caloocan City, paying thereto the docket fee of one thousand two hundred fifty-two pesos (P1,252.00) and the legal research fee of two pesos (P2.00). 8 In particular, private respondent prayed for an award of P692,680.00, allegedly representing the value of the fishing nets, boat equipment and cargoes of M/V Maria Efigenia XV, with interest at the legal rate plus 25% thereof as attorney's fees. Meanwhile, during the pendency of the case, petitioner PNOC Shipping and Transport Corporation sought to be substituted in place of LSC as it had already acquired ownership of the Petroparcel. 9 For its part, private respondent later sought the amendment of its complaint on the ground that the original complaint failed to plead for the recovery of the lost value of the hull of M/V Maria Efigenia XV. 10 Accordingly, in the amended complaint, private respondent averred that M/V Maria Efigenia XV had an actual value of P800,000.00 and that, after deducting the insurance payment of P200,000.00, the amount of P600,000.00 should likewise be claimed. The amended complaint also alleged that inflation resulting from the devaluation of the Philippine peso had affected the replacement value of the hull of the vessel, its

equipment and its lost cargoes, such that there should be a reasonable determination thereof. Furthermore, on account of the sinking of the vessel, private respondent supposedly incurred unrealized profits and lost business opportunities that would thereafter be proven. 11 ISSUE: W/N respondent is entitled to nominal damages. HELD: Nominal damages are awarded in every obligation arising from law, contracts, quasi-contracts, acts or omissions punished by law, and quasi-delicts, or in every case where property right has been invaded. 50 Under Article 2223 of the Civil Code, "(t)he adjudication of nominal damages shall preclude further contest upon the right involved and all accessory questions, as between the parties to the suit, or their respective heirs and assigns." Actually, nominal damages are damages in name only and not in fact. Where these are allowed, they are not treated as an equivalent of a wrong inflicted but simply in recognition of the existence of a technical injury. 51 However, the amount to be awarded as nominal damages shall be equal or at least commensurate to the injury sustained by private respondent considering the concept and purpose of such damages. 52 The amount of nominal damages to be awarded may also depend on certain special reasons extant in the case.
53

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

ON TEMPERATE DAMAGES:
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. RAFAEL PRINCIPE y MOLINA, accused-appellant. G.R. No. 135862 May 2, 2002

PER CURIAM: FACTS: Accused-appellant, an elementary graduate and then 19 years old, had a drinking spree with eight friends at the birthday party of Freddie Saragpon, held in the latter's house on Perigola Street, Valdefuente, Cabanatuan City on August 9, 1998, starting 9:00 a.m. At about 4:00 p.m., accused-appellant went to buy some "pulutan" at the Best-Line Eatery located along the national highway. Accused-appellant had only maroon shorts on and was wearing slippers. As it was raining, he brought an umbrella with him. On the way, he passed by the victim, 6-year old Arlene Ipurong, who asked if she could share his umbrella. Arlene was his niece, her paternal grandmother being the sister of accused-appellant's mother. Accusedappellant carried Arlene on his back and went to Best-Line Eatery to buy the "puIutan."9 They were seen by

witness Alfredo Apan as they passed by the church between 3:00 to 4:00 p.m. Apan was in the church attending an activity of the Singles for Christ.10 At the restaurant, accused-appellant was served by witness Lerma Morales. Lerma noticed the child with him, whom accused-appellant introduced as his niece. After getting the "pulutan," accused-appellant took the hand of Arlene, and the two went in the direction of an abandoned house, approximately 10 meters from the restaurant.11 Accused-appellant took Arlene to the abandoned house, which was owned by a certain Jet Magno. There, accused-appellant ordered Arlene to undress. Although Arlene complied, she told him that she was going to tell somebody about it. This angered accused-appellant, who picked up a big rock and hit the child with it three times on the forehead. When Arlene fell unconscious, accused-appellant pulled down his shorts to his knees and raped her. Accused-appellant then brought her to the toilet and dumped her into the bowl.12 At about 5:30 p.m., accused-appellant went back to Saragpon's house. He was still without any shirt on. He was wet from the rain and was no longer wearing his slippers. As accused-appellant was gone for about one and a half hours, some of his drinking buddies got tired of waiting for him and already fell asleep. After giving the "pulutan" to his friends, accused-appellant left.13 In the meantime, at about 5:00 p.m. of the same day, Arlene's father, Danilo Ipurong, a tricycle driver, arrived home from work and, realizing that her daughter was not in their house, started searching for her. He came upon a group playing "tong-its" but Arlene was not there.14 Danilo continued his search, now joined by several people, including Alfredo Apan. Then Apan saw accused-appellant and asked him, "Hindi ba ikaw ang may dala-dala noong bata sa balikat mo nang pagitan ng 3-4 ng hapon na iyon?" ("Wasn't it you who was carrying the child sometime between 3 and 4 o'clock in the afternoon?") Accused-appellant denied he was with the child, saying "Si kuya naman, hindi ko dinala ang bata." ("No, I didn't bring the child with me.") Apan began to suspect that accused-appellant had something to do with the disappearance of Arlene. He informed the Chief of the Bantay Bayan, Miguel Bernabe, of his suspicions.15 For this reason, Bernabe invited accused-appellant for questioning, but the latter denied having anything to do with the disappearance of the child.16 At around 8:00 p.m., Alfredo Apan and Danilo Ipurong found the body of Arlene in the toilet bowl in the abandoned house. Danilo was shocked and he screamed.17 On August 10, 1998, the body of Arlene was taken to the City Health Office of Cabanatuan City. Upon the request of PO2 Romeo Lopez, the investigating officer, Dr. Jun B. Concepcion, the medico-legal officer, conducted an autopsy. ISSUE: W/N the heirs of the deceased are entitled to temperate damages. HELD: The trial court likewise erred in granting the heirs of the deceased victim an additional amount of P21,307.00 representing funeral expenses. Under Art. 2199 of the Civil Code, a party is entitled to compensation only for such pecuniary loss suffered by him as proven.37 The recovery thereof must be premised upon competent proof and the best evidence obtainable, such as receipts, by the injured party showing the actual expenses incurred in connection with the death, wake, or burial of the victim. The list of expenses incurred for the wake, funeral, and burial of the victim amounting to P21,307.0038 submitted by Arlene's father is self-serving and not proved.39 Thus, the trial court's award of P21,307.00 for funeral expenses cannot be affirmed. However, the reason Arlene's father was unable to present the receipt for the funeral parlor was because the latter's representative refused to issue a receipt until he had fully paid the entire amount, which he had not done at the time of the trial. Under Art. 2224 of the Civil Code, temperate damages may be recovered if it is shown that such party suffered some pecuniary loss but the amount cannot, from the nature of the case, be proved with certainty.40 As there is no doubt the heirs of the victim incurred funeral expenses, although

the amount thereof has not been proven, it is appropriate to award P15,000.00 by way of temperate damages to the heirs of the victim. THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. ANTONIO DE LA TONGGA, accusedappellant. G.R. No. 133246. July 31, 2000 MENDOZA, J.: FACTS: The prosecution evidence shows that, on January 7, 1990, Jesus Crisanto, Danilo Veneracion and the victim Peter Bace went to the house of Paulino Reyes in Sapang Buli, Cainta, Rizal to attend a birthday party of one of the latters children. Jesus Crisanto and Peter Bace arrived in Paulinos house at around 1 p.m. They were followed by Danilo Veneracion. While the group were having drinks outside the house, accusedappellant Antonio de la Tongga and two companions arrived. Crisanto offered them drinks. A few minutes after that, the group noticed that Peter Bace and accused-appellant were having an argument inside Paulinos house, about a meter away from where they were drinking. Crisanto testified that they could not understand why the two were having an altercation. The host tried to pacify them and was apparently able to do so because accused-appellant and the victim later shook hands. Accused-appellant stayed for a short while and then left at past 2 p.m. Bace, Crisanto, and Veneracion stayed behind. Then between 3 p.m. and 4 p.m., they decided to go home but not before they had consumed several bottles of beer and a bottle of rhum (Tanduay "lapad"). Paulino Reyes accompanied them, suggesting that they take another route, because accused-appellant, a known tough guy ("siga-siga") in the neighborhood, might be waiting for them along the way. The group walked until they reached Villarica Subdivision where they boarded a tricycle going to St. Joseph Subdivision. Crisanto sat on the right side of the tricycle, while the victim sat beside him. On the other hand, Veneracion took the seat inside the vehicle with Paulino Reyes sitting behind the driver. As the tricycle was about to stop at St. Joseph Subdivision, accused-appellant appeared and suddenly stabbed the victim while the latter was still inside the tricycle. At the time, Crisanto was less than a meter away and saw the incident, while Veneracion saw accused-appellant when the latter was running away. Reyes and Veneracion, followed by Crisanto, immediately alighted from the said vehicle. The three then returned to the vehicle and rushed the victim to the hospital, but he was dead on arrival. ISSUE: W/N the heirs of the victim are entitled to damages. HELD: YES. Accused-appellant questions the award of actual damages by the trial court in the amount of P30,000.00 because, other than the testimony of the victims wife, Maxima Bace, that she spent this amount for hospital and funeral expenses, no documentary evidence was presented by the prosecution to support this claim. We agree with this contention. To recover actual damages, it is necessary to prove the actual amount of loss with a reasonable degree of certainty, on the basis of competent proof and the best evidence obtainable by the injured party. In this case, there was no such proof to sustain the trial courts award of actual damages. In lieu of actual damages, accused-appellant should pay the heirs of the deceased the amount of P15,000.00 as temperate damages. Art. 2224 of the Civil Code provides that temperate damages "may be recovered when the court finds that some pecuniary loss has been suffered but its amount cannot, from the nature of the case, be proved with certainty."

In addition, consistent with the prevailing doctrine, the heirs of the victim are entitled to the award of moral damages in the amount of P50,000.00 considering the mental anguish suffered by them on account of the victims death.

ON LIQUIDATED DAMAGES:
BALAGTAS REALTY CORPORATION, petitioner, vs. HON. MANUEL V. ROMILLO, JR. as Judge of the Court of First Instance of Rizal in Pasay City, BURT RAYMOND, YU CHUN HIAN EDWARD FINLAN, JACK LERNEP CORNELIUS BREED, MARSHA BAECHER, LOURDES ANG, VICTORIA TEVES and JOSEPHINE TING respondents. G.R. No. L-63387 July 16, 1984 BALAGTAS REALTY CORPORATION, petitioner, vs. HON. MANUEL V. ROMILLO, JR. as Judge of Branch CX of the Regional Trial Court in Pasay City of the National Capital 'judicial Region, and DOMINGA MAPA. respondents. G.R. Nos. L-48376-85 July 16, 1984 GUERRERO, J.: FACTS: The above-cited cases for ejectment having been appealed to the Court of First Instance of Rizal, Pasay City, Branch XXXVII, the Presiding Judge thereof, respondent herein, Judge Manuel V. Romulo, Jr., on December 21, 1982 reversed the decision of the City Court of Pasay City, Branch IV, ruling thus: WHEREFORE, in view of the foregoing, the Court hereby sets aside the decision of the lower court dated January 25, 1977 and renders judgment as follows: (a) Dismissing the Complaints in Civil Cases Nos. 11967, 11968, 11971, 11973, 11975, 11976, 11977, 11978 and 11979 in toto as well as the counterclaims of defendants-appellants; (b) Ordering plaintiff-appellee to credit any sum in excess of the rentals originally consigned by defendantsappellants with the City Court to future rentals; and (c) Releasing the supersedeas bond of the defendants-appellants without pronouncement as to costs. IT IS SO ORDERED. The reversal of the decision promulgated by the lower court, which We had previously ordered executed pending appeal, rendered Our decision of May 22, 1982 moot and academic. Petitioner moved for reconsideration of the decision of respondent Judge. Petitioner likewise moved for the immediate issuance of writs of ejectment pursuant to the judgment of this Court. Respondent Judge denied both motions in his Order of February 11, 1983, holding that, "the Court believes it improper to order the execution of the judgment appealed from considering that it has already rendered a decision on the appeal reversing the judgment now sought to be executed. The appeal had already been terminated by the rendition of the judgment by this Court, such that an execution pending appeal is now inappropriate and untimely. It should have been pursued by the then prevailing party (herein movant) during the pendency of the appeal." Petitioner, claiming that respondent Judge deliberately disobeyed this Court's final and executory ejectment order and the Interim Rules of Court, filed a Motion before Us dated February 16, 1983 praying that respondent Judge be ordered not only to forthwith issue the writs of ejectment but also to show cause why

he should not be held in contempt of this Court. We directed respondent Judge to comment on said motion, to which he complied. Thereafter, petitioner filed a supplemental petition for review, praying that the decision of respondent Judge be reversed and that the judgment of the Trial City Court of Pasay City be affirmed. Indeed, the fact that each apartment unit leased to the private respondents comprises three storeys or levels with an area of 80 sq. meters each or a total area of 240 sq. meters if leased at P600.00 a month as claimed by some lessees would render a rental of only P2.50 per sq. meter a month, P3.125 per sq. meter if leased at P750.00 a month. the rate claimed by other lessees, whereas if leased act, P2,000.00 a month, the rental would render an amount of P8.33 per sq. meter a month as demanded by petitioner has not been given the proper significance by respondent court. In the business of renting or leasing apartments in which petitioner is engaged, being the owner of the row of some 32 apartment units located in Balagtas St., Pasay City, it is the usual and normal trade practice in fixing the reasonable rental to take into account the location of the apartment including the neighborhood, the area per floor or storey, the number of rooms, bedrooms, kitchen, closet, the facilities provided therefor, and other material factors as the description of the building, its type and construction, as well as the age of the building, While neither of the decision of the trial court nor of the Court of First Instance considered the above factors, We find in the records a brief description of the apartments in question, thus: "These apartments are concrete apartments of three-storey building: there is a big space at the back, it's a common playground, there is a garage ..." ISSUE: W/N there should be liquidated damages to be paid by the lessees. HELD: In the case at bar, petitioner Balagtas Realty Corporation as the new owner of the residential apartments located at Balagtas St., Pasay City and successor-in-interest of the previous owner, the PerezRubio Trust, may terminate, as it did, the old lease agreement under the previous owner and impose, on a month-to-month basis an increased rental. According to the letter-contract, Exhibit "A", dated April 21, 1976, the respective month-to-month leases ending April 30, 1976 were terminated and in the same letter offered to each of the lessees a new lease commencing on May 1, 1976 at an increased monthly rental of P2,000.00 payable to the lessor, petitioner Balagtas Realty Corp., with a discount of P1,000.00 if paid on time within the first three days of each month. It further gave to each lessee the first choice to accept or to reject the offer, namely: non-acceptance by vacating their respective premises on or before April 30, 1976, while acceptance was by continued occupancy of their respective premises on May 1, 1976. Since the lessees rejected the increased rentals and insisted on the old rate, We must resolve the controversy on the question of the reasonableness of the rental increase. However, We find no justification for the award of liquidated damages in the sum of P4,000.00 to be paid by each of the lessees for there is no clear showing that the lessees agreed expressly to the payment thereof under the terms and conditions set forth in the letter-contract. WHEREFORE, IN VIEW OF ALL THE FOREGOING, the supplemental petition for review filed in G.R. No. L-4837685 is granted and We hereby REVERSE and SET ASIDE the decision of respondent Judge dated December 21, 1982. The Judgment of the Trial City Court of Pasay City is hereby AFFIRMED MODIFIED in that the award of P4,000.00 as liquidated , damages is excluded and rejected. In G R. No. 63387, the order of respondent Judge dated February, 11, 1983 is hereby REVERSED and SET ASIDE and We hereby order the dismissal of the petition for certiorari filed by private respondent in Civil Case No. 5187-P before the Regional Trial Court, National Capital Judicial Region, Pasay City Branch CX and the execution of the final judgment of the City Court of Pasay City, Branch IV in Civil Case No. 11964 as modified herein in that the award of liquidated damages is similarly excluded and rejected. Costs against respondents.

POLYTRADE CORPORATION, plaintiff-appellee, vs. VICTORIANO BLANCO, defendant-appellant. G.R. No. L-27033 October 31, 1969

SANCHEZ, J.: FACTS: Suit before the Court of First Instance of Bulacan on four causes of action to recover the purchase price of rawhide delivered by plaintiff to defendant.1 Plaintiff corporation has its principal office and place of business in Makati, Rizal. Defendant is a resident of Meycauayan, Bulacan. Defendant moved to dismiss upon the ground of improper venue. He claims that by contract suit may only be lodged in the courts of Manila. The Bulacan court overruled him. He did not answer the complaint. In consequence, a default judgment was rendered against him on September 21, 1966. ISSUE: W/N attorneys' fees can be allowed in the form of liquidated damages. HELD: Defendant protests the award of attorneys' fees which totals P51,961.63, i.e., 25% of the total principal indebtedness of P207,846.51 (exclusive of interest). Defendant's thesis is that the foregoing sum is "exorbitant and unconscionable." To be borne in mind is that the attorneys' fees here provided is not, strictly speaking, the attorneys' fees recoverable as between attorney and client spoken of and regulated by the Rules of Court. Rather, the attorneys' fees here are in the nature of liquidated damages and the stipulation therefor is aptly called a penal clause.4 It has been said that so long as such stipulation does not contravene law, morals, or public order, it is strictly binding upon defendant.5 The attorneys' fees so provided are awarded in favor of the litigant, not his counsel. It is the litigant, not counsel, who is the judgment creditor entitled to enforce the judgment by execution.6 The governing law then is Article 2227 of the Civil Code, viz.: "Liquidated damages, whether intended as an indemnity or a penalty, shall be equitably reduced if they are iniquitous or unconscionable." For this reason, we do not really have to strictly view the reasonableness of the attorneys' fees in the light of such factors as the amount and character of the services rendered, the nature and importance of the litigation, and the professional character and the social standing of the attorney. We do concede, however, that these factors may be an aid in the determination of the iniquity or unconscionableness of attorneys' fees as liquidated damages. May the attorneys' fees (P51,961.63) here granted be tagged as iniquitous or unconscionable? Upon the circumstances, our answer is in the negative. Plaintiff's lawyers concededly are of high standing. More important is that this case should not have gone to court. It could have been easily avoided had defendant been faithful in complying with his obligations. It is not denied that the rawhide was converted into leather and sold by defendant. He raises no defense. In fact, he did not even answer the complaint in the lower court, and was thus declared in default. Nor does he deny the principal liability. Add to all these the fact that the writ of attachment issued below upon defendant's properties yielded no more than P400 and the picture is complete. The continued maintenance by defendant of the suit is plainly intended for delay. The attorneys' fees awarded cannot be called iniquitous or unconscionable. In the very recent case of Universal Motors Corporation vs. Dy Hian Tat (1969), 28 SCRA 161, 170, we allowed attorneys' fees in the form of liquidated damages at the rate of 25% of the total amount of the indebtedness. Here, the trial court has already reduced the attorneys' fees from the stipulated 25% "of the total amount involved, principal and interest, then unpaid" to only 25% of the principal amount due. There is no reason why such judgment should be disturbed.