TORTS TESORO

Articles: 2195-2206, 2214-2215

Title XVIII. - DAMAGES

CHAPTER 1
GENERAL PROVISIONS

Cases: 40, 80, 285, 213-232

Art. 2202. In crimes and quasi-delicts, the defendant shall be liable for all
damages which are the natural and probable consequences of the act or
omission complained of. It is not necessary that such damages have been
foreseen or could have reasonably been foreseen by the defendant.

Art. 2195. The provisions of this Title shall be respectively applicable to all
obligations mentioned in Article 1157.

Art. 2203. The party suffering loss or injury must exercise the diligence of a
good father of a family to minimize the damages resulting from the act or
omission in question.

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

Art. 2204. In crimes, the damages to be adjudicated may be respectively

increased or lessened according to the aggravating or mitigating
circumstances.

Art. 2197. Damages may be:

(1) Actual or compensatory;
(2) Moral;
(3) Nominal;
(4) Temperate or moderate;
(5) Liquidated; or
(6) Exemplary or corrective.
Art. 2198. The principles of the general law on damages are hereby adopted
insofar
as
they
are
not
inconsistent
with
this
Code.
CHAPTER 2
ACTUAL OR COMPENSATORY DAMAGES
Art. 2199. Except as provided by law or by stipulation, one is entitled to an
adequate compensation only for such pecuniary loss suffered by him as he
has duly proved. Such compensation is referred to as actual or compensatory
damages.
Art. 2200. Indemnification for damages shall comprehend not only the value
of the loss suffered, but also that of the profits which the obligee failed to
obtain. (1106)
Art. 2201. In contracts and quasi-contracts, the damages for which the
obligor who acted in good faith is liable shall be those that are the natural
and probable consequences of the breach of the obligation, and which the
parties have foreseen or could have reasonably foreseen at the time the
obligation was constituted.
In case of fraud, bad faith, malice or wanton attitude, the obligor
shall be responsible for all damages which may be reasonably attributed to
the non-performance of the obligation. (1107a)

3C 2012 Digest Group

Art. 2205. Damages may be recovered:

(1) For loss or impairment of earning capacity in cases of temporary
or permanent personal injury;
(2) For injury to the plaintiff's business standing or commercial
credit.
Art. 2206. The amount of damages for death caused by a crime or quasidelict shall be at least three thousand pesos, even though there may have
been mitigating circumstances. In addition:
(1) The defendant shall be liable for the loss of the earning capacity
of the deceased, and the indemnity shall be paid to the heirs of the latter;
such indemnity shall in every case be assessed and awarded by the court,
unless the deceased on account of permanent physical disability not caused
by the defendant, had no earning capacity at the time of his death;
(2) If the deceased was obliged to give support according to the
provisions of Article 291, the recipient who is not an heir called to the
decedent's inheritance by the law of testate or intestate succession, may
demand support from the person causing the death, for a period not
exceeding five years, the exact duration to be fixed by the court;
(3) The spouse, legitimate and illegitimate descendants and
ascendants of the deceased may demand moral damages for mental anguish
by reason of the death of the deceased.
Art. 2214. In quasi-delicts, the contributory negligence of the plaintiff shall
reduce the damages that he may recover.
Art. 2215. In contracts, quasi-contracts, and quasi-delicts, the court may
equitably mitigate the damages under circumstances other than the case
referred to in the preceding article, as in the following instances:
(1) That the plaintiff himself has contravened the terms of the contract;
(2) That the plaintiff has derived some benefit as a result of the contract;
(3) In cases where exemplary damages are to be awarded, that the
defendant acted upon the advice of counsel;
(4) That the loss would have resulted in any event;

TORTS TESORO

Articles: 2195-2206, 2214-2215

Cases: 40, 80, 285, 213-232

(5) That since the filing of the action, the defendant has done his best to
lessen the plaintiff's loss or injury.

Code, they suffered sleepless night, mental anguish, serious anxiety, and wounded
feelings. An award of moral damages in their favor is thus justified.

40. SANITARY STEAM LAUNDRY V. CA

However, the award of P100,000 to the heirs of Dalmacio Salunoy, denominated in the
decision of the trial court as "moral damages and unearned income" cannot be upheld.
The heirs were already included among those awarded moral damages. Marilyn Salunoy
was ordered to be paid P10,000, Jack Salunoy, P10,000, and their mother Nenita
Salunoy, P20,000, as moral damages. The amount of P100,000 was presumably
awarded primarily for loss of earning capacity but even then the amount must be
modified.

Facts: This case involves a collision between a Mercedes Bent panel truck of petitioner
Sanitary Steam Laundry and a Cimarron which caused the death of three persons and
the injuries of several others (Cimarron passengers are the respondents). All the victims
were riding in the Cimarron. One of those who died was the driver.
The passengers of the Cimarron were mostly employees of the Project Management
Consultants, Inc. (PMCI). The other passengers were family members and friends
whom they invited to an outing. The Cimarron was owned by Salvador Salenga, father
of one of the employees of PMCI. Driving the vehicle was Rolando Hernandez. It
appears that on its way back to Manila, the Cimarron was hit on its front portion by
Sanitary's panel truck, which was traveling in the opposite direction.
The trucks driver, Herman Hernandez, claimed that a jeepney in front of him suddenly
stopped. He said he stepped on the brakes to avoid hitting the jeepney and that this
caused his vehicle to swerve to the left and encroach on a portion of the opposite lane.
As a result, his panel truck collided with the Cimarron on the north-bound lane.
The driver of the Cimarron, Rolando Hernandez, and two of his passengers, namely,
Jason Bernabe and Dalmacio Salunoy, died. Several of the other passengers of the
Cimarron were injured and taken to various hospitals.
They filed an action against Sanitary for damages. The RTC sided with the victims and
granted moral damages to 14 of them, in amounts ranging from 2k to 20k. The heirs of
Salunoy were also awarded 100k for moral damages and unearned income. (The
respondents also received actual damages, attorneys fees and a 50k civil indemnity for
the heirs of Bernabe )
On appeal, the CA affirmed the decision.
Issue: Whether or not the moral damages were justly awarded.
Held: To those injured Yes!
To the heirs of Salunoy No!
Doctrine: As to the moral damages awarded, we find them to be reasonable and
necessary in view of the circumstances of this case. Moral damages are awarded to
allow the victims to obtain means, diversion, or amusement to alleviate the moral
suffering they had undergone due to the defendant's culpable action. In this case,
private respondents doubtless suffered some ordeal because some of them lost their
loved ones, while others lost their future. Within the meaning of Art. 2217 of the Civil

3C 2012 Digest Group

The SC awarded Salunoys heirs P50k as death indemnity and P124, 300 as
compensatory damages based on the formula we studied in class.
80. CAPILI v. CARDENA
FACTS:
On Feb 1993, Jasmin Cardena, a 12 year old school girl, was walking along the fence of
San Roque Elementary School when a branch of a caimito tree located within the school
premises fell on her. It caused her death. Hence, her parents filed a case for damages
against Capili, the principal of the school.
The spouses allege that as early as Dec 1992, a certain Lerios reported on the possible
danger of the tree to passersby but it was not acted upon by the principal whose office
even stood near the office. The spouses averred principals gross negligence and lack of
foresight as the cause of their daughters death. Capili denied knowledge of the trees
rotting condition.
The TC dismissed the complaint for failure to establish Capilis negligence. The CA
reversed the decision and found Capilli liable for Jasmins death. The CA ordered Capili
to pay to the spouses the following amounts:

for the life of Jasmin D. Cardena - P50,000

for burial expenses - 15,010

for moral damages - 50,000

for attorney's fees and litigation - 10,000.

Capili now avers that she was not negligent and she in fact assigned the person next in
rank to her to dispose of the tree. And that she did not observe any indication that the
tree was already rotten. She also claims that oral damages should not be granted since
there was no fraud or bad faith on her part.
ISSUE: W/N Capili the principal was negligent and is liable for the death of
Jasmin Cardena.
HELD/RATIO: Yes, negligent. But NOT liable for moral damages. No bad faith
or fraud.
The fact that respondents' daughter, Jasmin, died as a result of the dead and rotting
tree within the school's premises shows that the tree was indeed an obvious danger to
anyone passing by and calls for application of the principle of res ipsa loquitur.

TORTS TESORO

Articles: 2195-2206, 2214-2215

As the school principal, petitioner was tasked to see to the maintenance of the school
grounds and safety of the children within the school and its premises. That she was
unaware of the rotten state of the tree calls for an explanation on her part as to why
she failed to be vigilant.
Moral damages are awarded if the following elements exist in the case:(1) an injury
clearly sustained by the claimant; (2) a culpable act or omission factually established;
(3) a wrongful act or omission by the defendant as the proximate cause of the injury
sustained by the claimant; and (4) the award of damages predicated on any of the
cases stated in Article 2219 of the Civil Code. However, the person claiming moral
damages must prove the existence of bad faith by clear and convincing evidence for the
law always presumes good faith. It is not enough that one merely suffered sleepless
nights, mental anguish, and serious anxiety as the result of the actuations of the other
party. Invariably, such action must be shown to have been willfully done in bad faith or
with ill motive. Under the circumstances, we have to concede that petitioner was not
motivated by bad faith or ill motive vis--vis respondents' daughter's death. The award of
moral damages is therefore not proper.
285. MCC INDUSTRIAL vs. SSANGYONG CORPORATION
FACTS:
MCC Industrial Sales is engaged in the business of importing and wholesaling stainless
steel produce. Ssyangyong was one of its suppliers, whose head office was in S. Korea
and has a HQ in Makati.
The 2 corporations conducted business through telephone calls and facsimile
or telecopy transmissions. Ssangyong would send pro forma invoices containeing the
details of the order to MCC and the latter conforms to it through its representative by
affixing the latters signature on the faxed copy and sending it again by fax.
On April 13, 2000, Ssangyong Mla Office sent a letter through fax addressed to
MCCs manager (who is also Sanyo Seiki Corps president) to confirm Sanyo Seikis
order of 220 metric tons of hot rolled stainless steel. Mr. Chan assented and affixed his
signature in the letter.
On April 17, 2000, Ssangyong forwarded to MCC a pro forma invoice that
contained the terms and conditions of the transaction. MCC agains sent back by fax the
invoice to Ssangyong with Chans conformity signature. Stated in the invoice was that
payment for the ordered steel products would be made through an irrevocable letter of
credit in favor of Ssangyong. The goods would be delivered after the L/C had been
opened.
Pursuant to MCCs order, Ssangyong placed the said order with its steel
manufacturer, Pohang Iron Corp in S. Korea and paid in full.
MCC could only open a partial L/C so the 220 metric tons of steel order was
split in 2. (2 orders of 110 tons each) On June 20, 2000, Ssangyong informed Sanyo
Seiki and Chan through fax that it was ready to ship 193 tons of steel to the Phil. It
requested for the opening of the L/C.
Despite several letters of requests to open the L/C, MCC failed to so. Even
though it was granted an extension of time, it still failed to set up the L/C. So on Aug
15, 2000, Ssangyong wrote Sanyo Seike that if the L/C's were not opened, Ssangyong

3C 2012 Digest Group

Cases: 40, 80, 285, 213-232

would be compelled to cancel the contract and hold MCC liable for damages for breach,
inclusive of warehouse expenses, related interests and charges.
On Aug 17, MCC was able to open an L/C with PCIBank for payment of half of
the stainless steel order. As to the other half, MCC requested through fax letter, for a
price adjustment. Ssangyong rejected this request.
Exasperated, Ssangyong through counsel wrote a letter to MCC, on September
11, 2000, canceling the sales contract and demanding payment of US$97,317.37
representing losses, warehousing expenses, interests and charges.
Ssangyong then filed, on November 16, 2001, a civil action for damages due to breach
of contract against defendants MCC, Sanyo Seiki and Gregory Chan. Ssangyong alleged
that defendants breached their contract when they refused to open the L/C for the
remaining 100 tons of steel.
RTC ruled in favor of Ssangyong and ordered MCC too pay actual damages
amounting to $93,493.87 representing the outstanding principal claim plus interest at
the rate of 6% per annum from March 30, 2001, and attys fees.
CA affirmed but absolved Chan of liability.
ISSUE: W/N the award of actual damages and attorney's fees in favor of
Ssangyong is proper and justified.
HELD/RATIO: No.
It is axiomatic that actual or compensatory damages cannot be presumed, but must be
proven with a reasonable degree of certainty.
Actual or compensatory damages are those awarded in order to compensate a party for
an injury or loss he suffered. They arise out of a sense of natural justice and are aimed
at repairing the wrong done. Except as provided by law or by stipulation, a party is
entitled to an adequate compensation only for such pecuniary loss as he has duly
proven.
In the instant case, the trial court awarded to respondent Ssangyong US$93,493.87 as
actual damages. On appeal, the same was affirmed by the appellate court. Noticeably,
however, the trial and the appellate courts, in making the said award, relied on the
statements of account and details of losses presented by Ssangyong which are at best,
self-serving. There were no official receipts to substantiate them.
Ssangyong contended that it resold the items at a loss but it did not show actual proof
of the assertion.
Nonetheless, the Court finds that petitioner knowingly breached its contractual
obligation and obstinately refused to pay despite repeated demands from respondent.
Petitioner even asked for several extensions of time for it to make good its obligation.
But in spite of respondent's continuous accommodation, petitioner completely reneged
on its contractual duty. For such inattention and insensitivity, MCC must be held liable
for nominal damages. "Nominal damages are 'recoverable where a legal right is
technically violated and must be vindicated against an invasion that has produced no

TORTS TESORO

Articles: 2195-2206, 2214-2215

actual present loss of any kind or where there has been a breach of contract and no
substantial injury or actual damages whatsoever have been or can be shown.'"
Accordingly, the Court awards nominal damages of P200,000.00 to respondent
Ssangyong.
213. SILVERIO MARCHAN vs. ARSENIO MENDOZA
FACTS:
One evening, a passenger bus of the Philippine Rabbit Bus Lines which was then driven
by Silverio Marchan fell into a ditch while travelling on its way to Manila. As a result of
which, Arsenio Mendoza, his wife and child, were thrown out to the ground resulting in
their multiple injuries.
Arsenio Mendoza damaged his vertebrae causing the paralysis of his lower
extremities. The physician who attended and treated him opined that he may never
walk again.
Consequently, Silverio Marchan was convicted in the RTC for serious, less
serious and slight physical injuries through reckless imprudence.
Arsenio Mendoza, his wife and child sought to recover damages against
Arsenio Marchan and Philippine Rabbit Bus Lines, predicated not only on a breach of
contract of carriage for failure to safely convey them to their destination, but also on
account of a criminal negligence resulting to Mendozas multiple physical damages.
The Court of Appeals affirmed the amount of P40,000.00 awarded by the RTC as
compensatory damages modifying the appealed lower court decision by holding
petitioners to pay the amount of P30,000.00 as exemplary damages and sustaining the
award of attorney's fees in the amount of P5,000.00.
The errors assigned would dispute the holding of the Court of Appeals in
imposing liability in the respective amounts of P40,000.00 for compensatory damages
and P30,000.00 for exemplary damages.
ISSUE: W/N the amounts are proper.
HELD/RATIO: YES. The amount of P40,000.00 as compensatory damages is quite
reasonable and fair, considering that Arsenio Mendoza had suffered paralysis on the
lower extremities, which will incapacitate him to engage in his customary occupation
throughout the remaining years of his life, especially so if we take into account that
plaintiff Arsenio Mendoza was only 26 years old when he met an accident on January
22, 1954; and taking the average span of life of a Filipino, he may be expected to live
for 30 years more; and bearing in mind the earning capacity of Arsenio Mendoza who
before the happening of this accident derived an income of almost P100.00 a month
from the business of his father-in-law as Assistant Supervisor of the small [fairs] and his
income of P100.00 a month which he derived as a professional boxer.
Considering that respondent Arsenio Mendoza was only in his middle twenties when he
lost the use of his limbs, being condemned for the remainder of his life to be a
paralytic, in effect leading a maimed, well-nigh useless existence, the fixing of such

3C 2012 Digest Group

Cases: 40, 80, 285, 213-232

liability in the amount of P40,000.00 as compensatory damages was well within the
discretion of the Court of Appeals.
As to the finding of liability for exemplary damages, exemplary damages may be
imposed by way of example or correction only in addition, among others, to
compensatory damages, but that they cannot be recovered as a matter of right, their
determination depending upon the discretion of the court. It further appears that the
amount of exemplary damages need not be proved, because its determination depends
upon the amount of compensatory damages that may be awarded to the claimant. If
the amount of exemplary damages need not be proved, it need not also be alleged, and
the reason is obvious because it is merely incidental or dependent upon what the court
may award as compensatory damages. Unless and until this premise is determined and
established, what may be claimed as exemplary damages would amount to a mere
surmise or speculation. It follows as a necessary consequence that the amount of
exemplary damages need not be pleaded in the complaint because the same cannot be
predetermined. One can merely ask that it be determined by the court if in the use of
its discretion the same is warranted by the evidence, and this is just what appellee has
done.
No such reproach can be hurled at the decision and resolution now under review. No
such indictment would be justified. As noted earlier, both the second and the third
assignments of error are devoid of merit.
Nor is there any occasion to consider further the fourth assigned error, petitioner being
dissatisfied with the award of P5,000.00 as attorney's fees to respondents. On its face,
such an assignment of an alleged error is conspicuously futile.
The judgment, however, must be modified in accordance with the ruling of this Court in
Soberano v. Manila Railroad Co. Respondents are entitled to interest for the amount of
compensatory damages from the date of the decision of the lower court and legal
interest on the exemplary damages from the date of the decision of the Court of
Appeals.
WHEREFORE, as thus modified, the decision is affirmed, petitioners being liable for the
sum of P40,000.00 in the concept of compensatory damages with interest at the legal
rate from and after January 26, 1960, and the sum of P30,000.00 as exemplary
damages with interest at the legal rate from and after December 14, 1964, as well as
for the sum of P5,000.00 as attorney's fees, likewise earning a legal rate of interest
from and after January 26, 1960.
214. PEOPLE V. TAAN
FACTS: Accused-appellant Eduardo Taan was found guilty of murder aggravated by the
use of an unlicensed firearm and sentenced to death by the RTC. In view of penalty
imposed, Taans case was elevated to SC for automatic review. Case was transferred to
the CA. Taan argues that the trial court, among others (other issues not related to

TORTS TESORO

Articles: 2195-2206, 2214-2215

torts), erred in: sentencing him to indemnify the heirs of Ladaga P75,000 as moral
damages and another P50,000 as exemplary damages. CA affirmed the trial court.
Issue: W/N Taan should pay the damages as imposed by the trial court.
Held & Ratio: Regarding damages, when death occurs due to a crime, the following
may be recovered: (1) civil indemnity ex delicto for the death of the victim; (2) actual
or compensatory damages; (3) moral damages; (4) exemplary damages; (5) attorneys
fees and expenses of litigation; and (6) interest in proper cases. SC affirmed the
monetary awards granted by the CA but modified the awards of civil indemnity ex
delicto to P75,000 and moral damages to P50,000 for the heirs of Ladaga, based on
recent case of People v. Elberto Tubungbanua.

215. PEOPLE VS. BARLAAN

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

216. PEOPLE VS. ELING

Facts: Mohammad Noh Tuttoh was in his nipa hut with Alangan Sakandal. Mukim Eling,
Sakandals brother, then shot Tuttoh from behind with an unlicensed .45 caliber pistol.
Eling was angry with Tutoh for scolding him for a relationship with a relative. Tuttoh
died of hemorrhage secondary to the gushot wound.

Cases: 40, 80, 285, 213-232

Tuttoh's mother, Jaihan Abu, testified that Tuttoh was her only son. At the time of
Tuttoh's death, he and his wife had five (5) children, and the wife was pregnant with
child. The wife had given birth after the demise of Tuttoh. Jaiham Abu further testified
that she incurred expenses in connection with the death of her son in the total amount
of P54,075.00. She said that in connection with Tuttoh's funeral, they spent 10 sacks of
rice in the total amount of P8,500.00. They also slaughtered a cow, and bought
cigarettes and fish.
However, no receipts were shown to support the claim of expenses incurred for the
wake and the burial of the victim.
The Zamboanga RTC found Eling guilty of murder aggravated with the use of an
unlicensed firearm. Eling was sentenced to death and ordered to pay to pay the heirs of
the victim P50,000.00 as indemnity for his death; P54,075.00 as actual damages;
P50,000.00 as moral damages; P30,000.00 as exemplary damages; and to pay the
costs.
Because of the death penalty imposed, the case was brought to the SC, but there, it
was then brought to the CA pursuant to jurisprudence.
The SC affirmed the conviction but because of Republic Act No. 9346, which prohibited
the imposition of the death penalty, it downgraded the penalty from death to reclusion
perpetua and awarded temperate damages in lieu of actual damages. It deleted the
award of actual damages for the reason that no receipts were shown to support the
claim of expenses incurred for the wake and the burial of the victim.
The awards then were:
P50,000.00 as civil indemnity; P50,000.00 as moral damages; P30,000.00 as exemplary
damages; and P25,000.00 as temperate damages in lieu of actual damages.
Issue: Whether or not the temperate damages should have been granted in lieu of
actual damages.
Held: Yes! (The SC affirmed Elings conviction)
Doctrine: We are in accord with the grant by the Court of Appeals of civil indemnity;
however, in accordance with prevailing jurisprudence, we increase the same to
P75,000.00. The amount of P75,000.00 as civil indemnity is awarded only if the crime is
qualified by circumstances which warrant the imposition of the death penalty. Though
the penalty imposed on appellant was reduced to reclusion perpetua pursuant to
Republic Act No. 9346, civil indemnity to be awarded remains at P75,000.00. We also
agree with the award of moral damages in the amount of P50,000.00. We award the
same as the circumstances surrounding the untimely and violent death, in accordance
with human nature and experience, could have brought nothing but emotional pain and
anguish to the victim's family.
We retain the award of exemplary damages but reduced the amount to P25,000.00
following current jurisprudence. Exemplary damages in the amount of P25,000.00 must

3C 2012 Digest Group

TORTS TESORO

Articles: 2195-2206, 2214-2215

be awarded, given the presence of treachery which qualified the killing to murder.
Article 2230 of the Civil Code allows the award of exemplary damages as part of the
civil liability when the crime was committed with one or more aggravating
circumstances. The term aggravating circumstance as used therein should be construed
in its generic sense since it did not specify otherwise.
Notwithstanding the absence of receipts to prove actual damages, we affirm the
grant of the Court of Appeals of temperate damages in the amount of
P25,000.00, in lieu of actual damages. The award of P25,000.00 in temperate
damages in homicide or murder cases is proper when no evidence of burial
and funeral expenses is presented in the trial court. Under Article 2224 of the
Civil Code, temperate damages may be recovered as it cannot be denied that the heirs
of the victim suffered pecuniary loss although the exact amount was not proved.

217. VILLA REY TRANSIT, INC. vs. CA

At about 1:30 in the morning of March 17, 1960, an Izuzu First Class passenger bus
owned and operated by Villa Rey Transit, Inc. d riven by Laureano Casim, left Lingayen,
Pangasinan, for Manila. Among its paying passengers was the deceased, Policronio
Quintos, Jr. who sat on the first seat, second row, right side of the bus. At about 4:55
o'clock a.m. the vehicle frontally hit the rear side of a bullcart filled with hay. As a result
the end of a bamboo pole placed on top of the hayload and tied to the cart to hold it in
place, hit the right side of the windshield of the bus. The protruding end of the bamboo
pole, about 8 feet long from the rear of the bullcart, penetrated through the glass
windshield and landed on the face of Policronio Quintos, Jr. who, because of the
impact, fell from his seat and was sprawled on the floor. The pole landed on his left eye
and the bone of the left side of his face was fractured. He suffered other multiple
wounds and was rendered unconscious due, among other causes to severe cerebral
concussion. Policronio Quintos, Jr. died at 3:15 p.m. on the same day, March 17, 1960,
due to traumatic shock due to cerebral injuries.
The private respondents are the sisters and only surviving heirs of Policronio Quintos
Jr., who died single. Said respondents herein brought this action against herein
petitioner for breach of the contract of carriage between said petitioner and the
deceased Policronio Quintos, Jr., to recover the aggregate sum of P63,750.00 as
damages, including attorney's fees. Said petitioner defendant in the court of first
instance contended that the mishap was due to a fortuitous event, but this pretense
was rejected by the trial court and the Court of Appeals.
Issue: Amount of damages recoverable by private respondents
The determination of such amount depends, mainly upon two (2) factors, namely:
(1) the number of years on the basis of which the damages shall be
computed
Trial Court: based upon the life expectancy of Policronio Quintos, Jr., which was placed
at 33-1/3 years he being over 29 years of age (or around 30 years for purposes of

3C 2012 Digest Group

Cases: 40, 80, 285, 213-232

computation) at the time of his demise by applying the formula (2/3 x [80-301 = life
expectancy).
Petitioner: damages were computed on a four (4) year as held in the Alcantara case.
(2) the rate at which the losses sustained by said respondents should be
fixed.
Held
(1)The Alcantara case cited is not controlling in the one at bar. In the Alcantara case,
none of the parties had questioned the propriety of the four-year basis adopted by the
trial court in making its award of damages. Both parties appealed, but only as regards
the amount thereof. On the contrary, it declared:

"(t)here can be no exact or uniform rule for measuring the value of a human life and
the measure of damages cannot be arrived at by precise mathematical calculation, but
the amount recoverable depends on the particular facts and circumstances of each
case. The life expectancy of the deceased or of the beneficiary, whichever is shorter, is
an important factor.' Other factors that are usually considered are: (1) pecuniary loss
to plaintiff or beneficiary; (2) loss of support; (3) loss of service; (4) loss of society; (5)
mental suffering of beneficiaries; and (6) medical and funeral expenses."
Thus, life expectancy is, not only relevant, but, also, an important element in fixing the
amount recoverable by private respondents herein. The Court of Appeals has not erred
in basing the computation of petitioner's liability upon the life expectancy of Policronio
Quintos, Jr.

(2) In fixing the amount of that support, We must reckon with the "necessary expenses
of his own living", which should be deducted from his earnings. Thus, it has been
consistently held that earning capacity, as an element of damages to one's estate for
his death by wrongful act is necessarily his net earning capacity or his capacity to
acquire money, "less the necessary expense for his own living. Stated otherwise, the
amount recoverable is not loss of the entire earning, but rather the loss of that portion
of the earnings which the beneficiary would have received. In other words, only net
earnings, not gross earning, are to be considered that is, the total of the earnings less
expenses necessary in the creation of such earnings or income and less living and other
incidental expenses.
All things considered, We are of the opinion that it is fair and reasonable to fix the
deductible living and other expenses of the deceased at the sum of P1,184.00 a year, or
about P100.00 a month, and that, consequently, the loss sustained by his sisters may
be roughly estimated at P1,000.00 a year or P33,333.33 for the 33-1/3 years of his life
expectancy. To this sum of P33,333.33, the following should be added: (a) P12,000.00,
pursuant to Arts. 104 and 107 of the Revised Penal Code, in relation to Article 2206 of
our Civil Code, as construed and applied by this Court; (b) P1,727.95, actually spent by
private respondents for medical and burial expenses; and (c) attorney's fee, which was
fixed by the trial court, at P500.00, but which, in view of the appeal taken by petitioner
herein, first to the Court of Appeals and later to this Supreme Court, should be
increased to P2,500.00. In other words, the amount adjudged in the decision appealed
from should be reduced to the aggregate sum of P49,561.28, with interest thereon, at

TORTS TESORO

Articles: 2195-2206, 2214-2215

the legal rate, from December 29, 1961, date of the promulgation of the decision of the
trial court.
218. DAVILA VS. PAL
Facts: The case arose from the tragic crash of a passenger plane of PAL which took the
lives of all its crew and passengers. The plane took off from the Manduriao Airport,
Iloilo, on its way to Manila, with 33 people on board, including the plane's complement.
It did not reach its destination, but crashed at Mt. Baco, Mindoro, one hour and fifteen
minutes after take-off. The plaintiffs, parents of Pedro T. Davila, Jr., who was one of
the passengers, had no definite news of what had happened to their son, getting what
information they could only from conflicting newspaper reports, until they received a
letter of condolence from PALs president, informing them that their son had died in the
crash.
Issue: WON PAL is liable for violation of its contract of carriage and if so, for how much.
-YES!
Ratio: It was undisputed that the pilot did not follow the route prescribed for his flight,
at least between Romblon and Manila. Since up to that point over Romblon, the
weather was clear, the most reasonable conclusion is that his failure to do so was
intentional, and that he probably wanted to fly on a straight line to Manila. It was a
violation of air-craft traffic rules to which, under the circumstances, the accident may be
directly attributable. In any case, absent a satisfactory explanation on the part of the
defendant as to how and why the accident occurred, the presumption is that it was at
fault, under Article 1756 of the Civil Code.
The next question relates to the amount of damages that should be awarded to the
plaintiffs, parents of the deceased. The trial court fixed the indemnity for his death in
the amount of P6,000.00. Pursuant to current jurisprudence on the point it should be
increased to P12,000.00.
The deceased was employed as manager of a radio station, from which he was earning
P8,400.00 a year, consisting of a monthly salary of P600.00 and allowance of P100.00.
As a lawyer and junior partner of his father in the law office, he had an annual income
of P3,600.00. From farming he was getting an average of P3,000.00. All in all therefore
the deceased had gross earnings of P15,000.00 a year.
According to Article 2206, paragraph (1), of the Civil Code, "the defendant shall be
liable for the loss of the earning capacity of the deceased and indemnity shall be paid to
the heirs of the latter." This Article, while referring to "damages for death caused by
crime or quasi-delict," is expressly made applicable by Article 1764 "to the death of a
passenger caused by the breach of contract by a common carrier."
The deceased, Pedro Davila, Jr., was single and 30 years of age when he died. At that
age one's normal life expectancy is 33-1/3 years, according to the formula (2/3 x [80-

3C 2012 Digest Group

Cases: 40, 80, 285, 213-232

30]) adopted in the case of Villa Rey Transit, Inc. vs. Court of Appeals on the basis of
the American Expectancy Table of Mortality or the Actuarial of Combined Experience
Table of Mortality. However, although the deceased was in relatively good health, his
medical history shows that he had complained of and been treated for such ailments as
backaches, chest pains and occasional feelings of tiredness. It is reasonable to make an
allowance for these circumstances and consider, for purposes of this case, a reduction
of his life expectancy to 25 years.
Considering the fact that the deceased was getting his income from three (3) different
sources, namely from managing a radio station, from law practice and from farming,
the expenses incidental to the generation of such income were necessarily more than if
he had only one source. Together with his living expenses, a deduction of
P600.00 a month, or P7,200.00 a year, seems reasonable, leaving a net
yearly income of P7,800.00. This amount, multiplied by 25 years, or
P195,000.00 is the amount which should be awarded to the plaintiffs in this
particular respect.
Parents were also entitled to actual damages, moral damages, and attorneys fees but
the award of exemplary damages was eliminated.
219. PEOPLE VS BAGUIO
Facts: Alfredo Paulino as barangay tanod had unpleasant dealings with Rodolfo
Baguio, aka Bebot. So when a group of people passed by Alfredo and his wife Lidovina,
the wife recognized Baguio. Lidovina went inside the house to get money when she
suddenly heard her husband scream, aray ko po!. She rushed out and found her
husband sprawled and being stabbed by Baguio and his companions. The assailants
then fled. Alfredo later died on the operating room.
Baguio was arraigned and tried before the RTC for murder with treachery and
abuse of superior strength. Baguio put up the defense of alibi but the RTC rejected this
and declared that the crime of murder was established beyond reasonable doubt. RTC
sentenced Baguio to reclusior perpetua OR life imprisonment and to indemnify the heirs
of Alfredo Paulino in the amount of P12K. Baguio appealed to the SC.
Issue:

What is the proper penalty for the crime of murder?

Held:

Reclusion perpetua!

Ratio: (Note: the ratio actually focused on the admissibility of dying declarations, alibis,
evidences...etc., essentially, whether the crime of murder was proven beyond
reasonable doubt. Ill skip this since this isnt our topic)
The SC finds that Baguio committed the crime of murder beyond reasonable
doubt. The RTC sentenced Baguio to reclusion perpetua or life imprisonment as if the
two were one and the same. Crime of murder is defined by the RPC. The RPC does not
prescribe the penalty of life imprisonment --- life imprisonment is imposed for serious
offenses NOT penalized by the RPC but by special laws. Reclusion perpetua carries with

TORTS TESORO

Articles: 2195-2206, 2214-2215

it accessory penalties while life imprisonment does not. Moreover, life imprisonment
does not appear to have any definite extent or duration. The proper penalty then is
reclusion perpetua since murder is defined and punishable under the RPC.
Indemnity payable to the heirs is increased from P12K to P50K conformably
with the current doctrine (no mention is made as to what doctrine this is).

220. HEIRS OF CASTRO VS BUSTOS

The trial court found Bustos guilty of homicide, crediting him with 2 mitigating
circumstances (passion or obfuscation and voluntary surrender). Petitioners were
awarded P6,000. Both parties appealed with the CA. CA affirmed the decision of the
trial court and adding P6,000 moral damages and P13,380 to compensate for loss of
earning. Upon motion for reconsideration, CA reversed itself and deleted the additional
damages it earlier awarded.
Petitioner prays that the first decision of the CA be reinstated
SC: First decision of CA reinstated
As a start, it is to be noted that in the matter of damages, the original decision of the
Court of Appeals, while correct in making a particularization in the award of indemnity
and damages, nonetheless, still failed to comply strictly with the constitutional
requirement that all decisions of courts of record must state both the facts and the law
on which they are based.
When death occurs as a result of a crime, the heirs of the deceased are entitled to the
ff items of damages:
1. As indemnity for the death of the victim of the offense P12,000.00, without
the need of any evidence or proof of damages
2. indemnity for loss of earning capacity of the deceased an amount to be
fixed by the Court according to the circumstances of the deceased related to
his actual income at the time of death and his probable life expectancy
3. As moral damages for mental anguish, an amount to be fixed by the court.
4. As exemplary damages, when the crime is attended by one or more
aggravating circumstances, an amount to be fixed in the discretion of the
court
5. As attorney's fees and expresses of litigation, the actual amount thereof,
(but only when a separate civil action to recover civil liability has been filed or
when exemplary damages are awarded).
6. Interests in the proper cases.
7. It must be emphasized that the indemnities for loss of earning capacity of the
deceased and for moral damages are recoverable separately from and in
addition to the fixed sum of P12,000.00 corresponding to the indemnity for the
sole fact of death, and that these damages may, however, be respectively
increased or lessened according to the mitigating or aggravating
circumstances, except items 1 and 4 above, for obvious reasons.

221. VICTORY LINER V. GAMMAD

3C 2012 Digest Group

Cases: 40, 80, 285, 213-232

Mrs. Gammad (respondents wife) was on board a Victory Liner bus from Manila bound
for Tugegarao. The bus, running at a high speed fell on a ravine somewhere in Nueva
Vizcaya, resulting to Mrs. Gammads (and others) deaths. Her heirs, led by Mr.
Gammad the husband filed a complaint for damages based on culpa contractual. Victory
claimed the incident was purely accidental and that it did not fail to exercise
extraordinary diligence.
Trial court ruled for Gammad, ordering Victory to pay the ff:
Actual damages 122K
Death Indemnity 50K
Exemplary and Moral Damages 400K
Compensatory Damages1.5M
Attys fees10%
Costs of the suit
On appeal by Victory, the CA modified the award:
Actual D
88K
Compensatory D
1.135M
Moral and Exemplary D
400K
Attys fees
10%
Victory argues that the grant of damages is without basis.
Issue: 1. w/n there was breach of contract of carriage
2. w/n amount of damages is proper
Ruling:
1. Yes, there was breach of contract
For breach of contract of carriage, the common carrier is presumed negligent and upon
him lies the burden of proving otherwise. In this case, because of negligence of
Victorys counsel, this burden of rebutting the presumption was not satisfied (note:
lawyer was repeatedly absent, no presentation of evidence, no cross examination of
respondents evidence. Negligence of counsel binds the client).
2.

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

Under the CC, a common carrier that breached its contract of carriage which
results in death of a passenger is liable to pay: (1) indemnity for death; (2)
indemnity for loss of earning capacity; (3) moral damages.
Under current jurisprudence, heirs of deceased are entitled to indemnity at a fixed
amount of 50K.

Compensatory damages must be deleted. To warrant compensatory damages,

there must have been documentary evidence presented to prove loss of

earning capacity. The exceptions to this rule are: (1) deceased is selfemployed earning less than minimum wage and judicial notice may be taken

TORTS TESORO

Articles: 2195-2206, 2214-2215

of the fact that in the deceaseds line of work no documentary evidence is

available; (2) deceased is employed as a daily wage worker earning less than
the minumim wage. In the present case, only Mr. Gammads testimony was the basis
for compensatory damages. Because the case does not fall under the exceptions, no
compensatory damages.

Temperate damages must be awarded. Under the CC, temperate damages may be
recovered when the court finds that pecuniary loss had been suffered but its
amount cannot be proved with certainty. 500K should be awarded to respondents.
In a number of cases, the SC awarded temperate damages in lieu of damages for loss
of earning capacity which was not substantiated with the required documentary proof.

Moral and exemplary damages, having different bases, should not be lumped together.

Moral damages may be recovered when the defendant acted in bad faith or
with gross negligence in cases of culpa contractual. By special rule, moral
damages may also be awarded in cases where breach of contract of carriage
results in the death of passenger. Moral damages: 100K. Exemplary damages
may be recovered in contractual obligations if the defendant acted in
wanton, fraudulent, reckless, oppressive or malevolent manner. For failure to
exercise extraordinary diligence, 100K exemplary damages must be awarded.

Actual damages should be reduced for failure to substantiate expenses incurred. Actual

damages genuinely incurred in connection with the death, wake or burial of

the victim are recognized, but must be supported by competent proof. In this
case, only 78K was supported by official receipts.
Attys fees, 10% of all amounts due, is warranted. Pursuant to the Eastern Shipping
case, because this is a case of a judgment awarding a sum of money that is final and
executory, 12% interest must also be awarded, until all amounts are fully paid.

222. GA MACHINERIES V YAPTINCHAY

Facts:
Yaptinchay (Y) bought a Fordson engine from GA Machineries (GAMI) for P7,560. He
relied on the representations of the latters representative that the engine was brandnew.
Y was engaged in the trucking business. The engine was installed in one of his
trucks.
Within a week from delivery, the engine started to have malfunctions which
necessitated successive trips to GAMIs repair shop.

oil leak, clutch disc, release bearing hub and trunion bolt, propeller
shaftLEMON! LEMON! LEMON!

Upon investigation, the ff were discovered:

1)
Worn-out screw courtesy of Ys mechanic

3C 2012 Digest Group

2)

Garcias macro-etching test

Cases: 40, 80, 285, 213-232

Tampered original motor number courtesy of Capt.

3)

Two-tone paint (unlike brand-new engine painted

with single color) courtesy of Manila Trading Company

Y institutes action for indemnification for

damages. Trial Court orders GAMI to pay Y P54k in actual damages, P7,590 as
reimbursement for the purchase price of the engine, and P2k in attorneys fees. CA
affirms the decision. Hence, this petition.
Issue: WON award of damages is justified
Held: YES (reimbursement), NO (actual)
GAMI committed a breach of contract of sale. The misrepresentation of the quality of
the engine is tantamount to fraud or bad faith. Hence, the award of P7,590 is
justified.
ART 2200 CC entitles Y to recover compensatory damages for actual loss suffered and
prospective profits while Art 2201 entitles him to recover all damages which may be
attributed to non-performance of the obligation. Such damages, however, have to be
proven.
BEST EVIDENCE TEST: A person claiming damages lucro cessante must produce the
best evidence of which his case is susceptible and if that evidence warrants the
inference that he has been damaged by the loss of profits which he might with
reasonable certainty have anticipated but for the defendants wrongful act, he is
entitled to recover.
Award of actual damages is unwarranted under best evidence test.
Projected profit prepared by a Mr. Macasieb (P369.88 profit per trip multiplied
by the number of trips the truck allegedly was unable to make)
Average actual profits of Ys trucks plying the Manila-Baguio route would have
provided a more reasonable basis for actual damages
DECISION MODIFIED: award of P54k deleted
***In the case of G. A. Machineries, Inc. v. Yaptinchay (126 SCRA 87), we ruled that in
order for damages under Article 2200 of the Civil Code to be recovered, the best
evidence obtainable by the injured party must be presented, and thus, "the bare
assertion of the respondent that he lost about P54,000.00 and the accompanying
documentary evidence presented to prove the amount lost are inadequate if not
speculative." We further ruled that:
... To prove actual damages, it would have been easy to present the
average actual profits realized by the other freight trucks plying the ManilaBaguio route. With the presentation of such actual income the court could
have arrived with reasonable certainty at the amount of actual damages
suffered by the respondent. We rule that the award of actual damages in the
amount of P54,000.08 is not warranted by the evidence on record.

TORTS TESORO

Articles: 2195-2206, 2214-2215

223 VDA. DE JAVELLANA V. COURT OF APPEALS

Facts:
Leonor de Javellana owned 3 parcels of land in Makati. She leased said property to
Mobil Oil Phils. Mobil had up to Feb. 18, 1970 to exercise its option. On July 31, 1970,
Javellana leased the same to Shell. Mobil, claiming it had exercised the option, filed an
action against Javellana and Shell to declare the lease agreement between Javellana
and Shell null and void and to compel Javellana to execute and sign a lease agreement
in its favour. It also prayed that both defendants be ordered to pay damages and attys
fees and that a writ of preliminary injunction be issued.
Issue: W/N the petitioner Javellana is entitled to an award of damages for the wrongful
filing of a case against her and the improvident issuance of a writ of PI? YES.
Held:
Even if Javellana did not assign as error the failure of the trial court to adjudge recovery
and to award damages, SC feels there is sufficient justification to set aside the
judgment (denying her claim for damages) in this respect. The error is patent.

Cases: 40, 80, 285, 213-232

to pay, notwithstanding demands. Thus, Bautista filed a collection suit as well as a

complaint for damages against Guballa and included the Maxino spouses as party
defendant for having allegedly conspired with their co-defendant, Guballa to defraud
the Bautista when they executed the deed of sale.
The Maxinos filed counterclaims for sums of money but it was dismissed. The
Court ruled in favor of Bautista and ordered Guballa (the judgment did not include
Maxino) to pay.
One of the contentions of Maxino in his counterclaim was that he should be
entitled to moral damages because they had suffered great mental anguish serious
anxiety, besmirched reputation, wounded feelings, moral shock, and social humiliation
and were compelled to litigate and contract legal services based on the malicious filing
of a completely groundless and defamatory complaint.
Issue:Is Maxino entitled to damages?

Were it not for the filing of this case and the improvident issuance of the writ
of PI, Javellana would have received P912K from Shell. But since she had been given an
advance rental of P120K, the accrued rental due her is P792K. Mobil is now directed to
pay this amount of P792K to Javellana with interest thereon at the legal rate from
finality of judgment until the same is fully paid, plus the amount of P7K per month,
from July 31, 1983 until the possession of the property in question is returned to
Javellana. Mobil is also ordered to pay P20K representing attys fees and expenses of
litigation.

Decision:No.
Guballa and his wife still owed Bautista the amount of P30,000.00. It is not
far-fetched that Bautista was disappointed and disturbed, and laid part of the blame
upon Maxino who negotiated the sale and transfer of the property to Guballa and his
wife and even suspected that there was a conspiracy to defraud her.

224. BAUTISTA V. MAXINO

225. BENGUET ELECTRIC COOPERATIVE, INC. VS. CA

Facts:

Facts:
The deceased Jose Bernardo, a meat shop vendor, was 33 years old at the time of his
death and was survived by his spouse and 3 minor children.
When he was about to board a jeepney loaded with slaughtered pigs in order to select
the meat he would sell for that day, upon grasping the handlebars he was electrocuted
because the antenna of the jeepney was entangled with an open electric wire. He died
as a result of the incident.
His wife filed a complaint for damages against Benguet Electric Cooperative.

In 1956, Maxino and his wife sold their hacienda and fishponds, as well as the
agricultural tools and equipment used therein to Bautista for the amount of P70,000.00,
with the condition that the Bautista shall assume the payment of an obligation, secured
by mortgages on the property, in favor of the Rehabilitation Finance Corporation (RFC),
now Development Bank of the Philippines.
Bautista sold the same property to the San Jose Development Company,
represented by its president, Francisco G. Guballa, for the amount of P80,000.00,
P20,000.00 of which shall be paid upon the execution of the contract, and the balance
to be paid in three (3) equal installments of P20,000.00 each, per year, for three (3)
years.
However, Maxino and his wife also sold the same property to Guballa. As of
1961, Guballa had an outstanding obligation of P30,000.00 to Bautista which he failed

3C 2012 Digest Group

Thus, the filing of the complaint by Bautista against Maxino was not baseless.
It cannot be said to have been motivated by, malice or spite to warrant the payment of
the damages claimed by the Maxino spouses.

Issue: W/N damages awarded are appropriate?

Held/Ratio:
2 factors to be considered in determining loss of earning capacity: (1) number of years
on the basis of which the damages shall be computed (life expectancy); and (2) the

10

TORTS TESORO

Articles: 2195-2206, 2214-2215

rate at which the losses sustained by the widow and her children should be fixed (net
income).

Re: 1st factor

Life expectancy = 2/3 x (80-age at time of death)
31.33 = 2/3 x (80-33)
HOWEVER, the SC held that taking into account the nature and quality of life of a meat
vendor, it is hard to conceive that Jose would still be working for the entire 31.33 years.
So SC found it reasonable to reduce the decedents life expectancy to 25 years.

Re: 2nd factor

The SC ruled that although the widow failed to present documentary evidence
regarding the income of the deceased, the unrebutted testimony of Joses sister
supplied such deficiency considering that Joses meat stall used to belong to his sister
and that she only gave it to him. She testified that Jose earned around P150-P200/day.
SC fixed Joses daily gross income to P150/day or P54k annually.
Net income = gross income necessary living expenses
P27,000 = P54,000 P27,000
*Necessary living expenses is fixed at 50% of gross income
So, the net earning capacity of Jose is:
Net Earning Capacity = Life expectancy x net income
P675,000 = 25 x P27,000

227. GLOBE-MACKAY CABLE V. BARRIOS

Facts: Petitioner Cable Company admittedly failed to deliver a telegram to respondent
spouses. The telegram came from Mercy Hospital in New York and stated that it had
admitted respondent-wife for a rotating internship in the said hospital. Failure caused
the respondent spouses financial difficulties in New York, due to loss of earnings for 6
months, serious anxiety and sleepless nights, for which petitioner should be held liable,
and which should be corrected for the public good. A telegraph company is a public
service corporation owing duties to the public and is liable to any member of the public
to whom it owes a duty for damages proximately flowing from a violation of that duty.
Trial Court and CA awarded damages in the following amounts:
1. actual damages - $5,417
2. moral damage P50,000
3. Exemplary damages P50,000

3C 2012 Digest Group

4.

Cases: 40, 80, 285, 213-232

Attorneys fees P10,000

Issue: W/N the damages are excessive

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

228. NELEN LAMBERT VS. HEIRS OF RAY CASTILLON

FACTS: Ray Castillon visited the house of his brother Joel and borrowed his motorcycle.
Ray then invited his friend Sergio to roam around the city.
At around 10:00 p.m., after eating supper at Honas Restaurant and drinking a bottle of
beer, they traversed the highway at a high speed and figured in an accident with a
Tamaraw jeepney, owned by petitioner Nelen Lambert and driven by Reynaldo Gamot,
which was traveling on the same direction but made a sudden left turn. The incident
resulted in the instantaneous death of Ray and injuries to Sergio.
Heirs of Ray filed an action for damages with prayer for preliminary attachment and
Joel also included his claim for the damages caused to his motorcycle.
RTC decided in favor of the heirs of Ray but reduced Nelens liability by 20% in view of
the contributory negligence of Ray. CA affirmed the decision.
Nelen insists that the negligence of Ray Castillon was the proximate cause of his
unfortunate death and therefore she is not liable for damages.
ISSUE: WON Ray contributed to his death? YES.
RULING:
While we agree with the trial court that Ray was likewise guilty of contributory
negligence as defined under Article 2179 of the Civil Code, we find it equitable to
increase the ratio of apportionment of damages on account of the victims negligence.
The underlying precept on contributory negligence is that a plaintiff who is partly
responsible for his own injury should not be entitled to recover damages in full but must
bear the consequences of his own negligence. The defendant must thus be held liable
only for the damages actually caused by his negligence. The determination of the
mitigation of the defendants liability varies depending on the circumstances of each
case.

11

TORTS TESORO

Articles: 2195-2206, 2214-2215

Cases: 40, 80, 285, 213-232

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

Earning Capacity
In considering the earning capacity of the victim as an element of damages, the
following factors are considered in determining the compensable amount of lost
earnings: (1) the number of years for which the victim would otherwise have lived; and
(2) the rate of loss sustained by the heirs of the deceased. Jurisprudence provides that
the first factor, i.e., life expectancy, is computed by applying the formula (2/3 x [80 age at death]) adopted in the American Expectancy Table of Mortality or the Actuarial
Combined Experience Table of Mortality. As to the second factor, it is computed by
multiplying the life expectancy by the net earnings of the deceased, i.e., the total
earnings less expenses necessary in the creation of such earnings or income and less
living and other incidental expenses. The net earning is ordinarily computed at
fifty percent (50%) of the gross earnings. Thus, the formula used by this Court in
computing loss of earning capacity is: Net Earning Capacity = [2/3 x (80 age at
time of death) x (gross annual income reasonable and necessary living
expenses)].

229. FLOREZA V. DE EVANGELISTA

It was established that Ray was 35 at the time of his death and was earning a gross
annual income of P31,876.00 as a driver at the Mindanao State University. In arriving at
the net earnings, the trial court deducted from the gross annual income the annual
living expenses in the amount of P9,672.00, broken down as follows: P20.00 a day for
travel or P520.00 per month; P60.00 a month for cigarettes; P26.00 for drinks; and
other personal expenses like clothing, toiletries, etc. estimated at P200.00 per month.
The amount of P9,672.00, however, appears unrealistic, and constitutes only 30.34% of
the gross earnings. It even includes expenses for cigarettes which by no means can be
classified as a necessary expense. Using the cited formula with the net earnings
computed at 50% of the gross earnings, a detailed computation is as follows:
NET EARNING
CAPACITY (X)

= LIFE EXPECTANCY [2/3

(80-age at the time of
death)]

x GROSS ANNUAL
INCOME (GAI)

- LIVING
EXPENSES (50% of
GAI)

= [2/3 (80-35)]

x [P31,876.00

-50% x
P31,876.00]

= [2/3 (45)]

x [P31,876.00

- P15,938.00]

= 30

x 15,938.00

3C 2012 Digest Group

= P478,140.00

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

FACTS:

Plaintiffs Maria de Evangelista and Sergio Evangelista, who are mother and
son, (the EVANGELISTAS, for short) are the owners of a residential lot valued at
P410.00. The EVANGELISTAS then borrowed from FLOREZA the amount of P100.00.
Thereafter, with the consent of the EVANGELISTAS, FLOREZA occupied the said
residential lot and built a house of light materials without any agreement as to payment
for the use of said residential lot owing to the fact that the EVANGELISTAS has a
standing loan in favor of FLOREZA.
The EVANGELISTAS again borrowed different amounts on several occasions
totaling to P740.00, including the first loan.
The last three loans were evidenced by private documents stating that the lot
stands as security therefor and that the amounts covered thereunder are payable within
six years, without mention of interest.
FLOREZA then demolished the house of light materials and constructed one of
strong materials.
The EVANGELISTAS, for and in consideration of P1,000.00 representing the
total outstanding loan of P740.00 plus P260.00 in cash, sold their residential lot to
FLOREZA, with a right to repurchase within a period of 6 years from date.
Seven months before the expiry of the repurchase period, the EVANGELISTAS
paid in full the repurchase price of P1,000.00.
The EVANGELISTAS made a formal written demand to vacate, within five days.
FLOREZA refused to vacate unless he was first reimbursed the value of his house.
ISSUE: W/N FLOREZA MUST PAY RENT BECAUSE OF HIS REFUSAL TO VACATE
W/N FLOREZA IS A BUILDER IN GOOD FAITH AND THEREFORE
REIMBURSEMENT UNDER ARTICLE 448 OF THE CIVIL CODE.

HAS A RIGHT OF

HELD: YES, FLOREZA MUST PAY RENT. NO, HE DOESNT HAVE THE RIGHT TO REIMBURSEMENT.
RATIO:
As regards the issue of rentals, it is clear that from the date that the
redemption price had been paid by the EVANGELISTAS on January 2, 1955, petitioner's
right to the use of the residential lot without charge had ceased. Having retained the
property although a redemption had been made, he should be held liable for damages

12

TORTS TESORO

Articles: 2195-2206, 2214-2215

in the form of rentals for the continued use of the subject residential lot at the rate of
P10.00 monthly from January 3, 1955 until the house was removed and the property
vacated by petitioner or his heirs.
As regards the issue of reimbursement, Article 448 applies only when the
builder, planter, or sower believes he had the right so to build, plant or sow because he
thinks he owns the land or believes himself to have a claim of title. Here, petitioner
makes no pretensions of ownership whatsoever.
Petitioner contends that as vendee a retro he is entitled to the rights granted
under Article 1616 of the Civil Code. This is incorrect. It should be noted that
petitioner did not construct his house as a vendee a retro. The house had already been
constructed even before the pacto de retro sale.
Petitioner incurred no useful
expense, therefore, after that sale. The house was already there at the tolerance of the
EVANGELISTAS in consideration of the several loans extended to them. Since petitioner
cannot be classified as a builder in good faith within the purview of Article 448 of the
Civil Code, nor as a vendee a retro, who made useful improvements during the lifetime
of the pacto de retro, petitioner has no right to reimbursement of the value of the
house which he had erected on the residential lot of the EVANGELISTAS, much less to
retention of the premises until he is reimbursed.
The rights of petitioner are more akin to those of a usufructuary who, under
Article 579 of the Code, may make on the property useful improvements but with no
right to be indemnified therefor. He may, however, remove such improvements should
it be possible to do so without damage to the property.
Side Note: During the pendency of this appeal, Maria D. de Evangelista died and was
ordered substituted by her son, petitioner Sergio. Also, FLOREZA had since died and
that his heirs had voluntarily vacated the residential lot in question. Thus, only the
issue of the payment of rent was disposed of by the SC.

229. PERFECTO v. GONZALES

Private respondent Juliana, a public school teacher, was appointed poll clerk by the
COMELEC during the 1965 Elections. Petitioner Perfecto, a Congressional candidate,
filed with the COMELEC an administrative complaint against the members of the BEI
and Juliana, charging them of nonfeasance, malfeasance and misfeasance for willful
failure to comply with the orders and instructions of the COMELEC relative to the
conduct of the elections. Juliana then filed with the RTC an action for damages alleging
that the charges against her were false and without basis and instituted maliciously to
expose her to public ridicule, for which she suffered mental torture, anguish, sleepless
nights, besmirched reputation, wounded feelings, mental shock and social humiliation
which may be assessed as moral damages in the amount of P120K. Further, she claims
the sum of P15K as exemplary damages and P10K for attorneys fees and litigation
expenses. The RTC ruled that there was no sufficient proof to sustain the administrative
charge against Juliana, who was awarded compensatory damages amounting to P2K.

3C 2012 Digest Group

Cases: 40, 80, 285, 213-232

ISSUE: W/N the awarding of compensatory damages by the RTC was proper.
NO. Respondent judge found no basis for actual or compensatory damages and
exemplary damages. Compensatory damages are those recoverable because of
pecuniary loss in business, trade, property, profession, job or occupation, and the
same must be provided, otherwise, if the proof is flimsy and non-substantial, no
damages will be given. Well settled is the rule that even if the complaint filed by one
against the other is clearly unfounded, this does not necessarily mean, in the absence
of specific facts proving damages, that said defendant really suffered actual damage
over and above, attorneys fees and costs. The Court cannot rely on its speculations as
to the fact and the amount of damages. It must depend on actual proof of the damages
alleged to have been suffered.
231. RODRIGUEZ LUNA V. IAC
Facts: The petitioners are the heirs of Roberto R. Luna who was killed in a vehicular
collision at a go-kart practice. Those involved were the go-kart driven by the deceased,
a business executive, and a Toyota car driven by Luis dela Rosa, a minor of 13 years
who had no driver's license.
In the suit for damages filed by the petitioners agains Luis dela Rosa and his father, the
latter were sentenced pay jointly and severally
P1,650,000.00 as unearned net earnings of Roberto Luna, P12,000.00 as compensatory
damages, P50,000.00 for the loss of his companionship, with legal interest from the
date of this decision.
The award of P1,650,000.00 was based on two factors: (a) that the deceased Roberto
R. Luna could have lived for 30 more years; and (b) that his annual net income was
P55,000.00, computed at P75,000.00 annual gross income less P20,000.00 annual
personal expenses.
Upon MR of the defendants, the decision was modified as to the unearned net earnings,
which was reduced to P450,000.00 with legal interest thereon from the date of the
filing of the complaint.
In reducing the amount, Court of Appeals took into account the fact that the deceased
had been engaged in car racing as a sport, a dangerous and risky activity. The result
was that the 30-year life expectancy of Luna was reduced to 10 years only.
Considering the escalating price of automobile gas which is a key expenditure in
Roberto R. Luna's social standing, the personal expenses was increased to P30,000.00.
Thus P75,000.00 annual gross income less P30,000.00 annual personal expenses leaves
P45,000.00 multiplied by 10 years of life expectancy and the product is P450,000.00.
Issue: Was CA correct in reducing the unearned net earnings of Roberto Luna from
P1,650,000 to P450,000
Held: NO
Ratio: That Luna had engaged in car racing is not based on any evidence on record, he
was engaged in go-kart racing. This cannot be categorized as a dangerous sport for go-

13

TORTS TESORO

Articles: 2195-2206, 2214-2215

karts are extremely low slung, low powered vehicles, only slightly larger than footpedalled four wheeled conveyances.
It was error for the Court of Appeals to reduce the net annual income of the deceased
by increasing his annual personal expenses but without at the same time increasing his
annual gross income. It stands to reason that if his annual personal expenses should
increase because of the "escalating price of gas which is a key expenditure in Roberto
R. Luna's social standing" [a statement which lacks complete basis], it would not be
unreasonable to suppose that his income would also increase considering the manifold
sources thereof.
232. HERBOSA V. CA:
Facts: Petitioner spouses contracted the services of PVE for the betamax coverage of
their then wedding celebration. .On the day of the wedding, the PVE crew arrived at the
residence of the bride. They recorded the pre-departure activities of the bride before
leaving for the church and the Manila Hotel where the wedding reception followed. 2
days after the wedding however, studio manager of PVE, informed the petitioners that
the videotape coverage of their wedding celebration was damaged due to mechanical
defect in their equipment.
Petitioners alleged that said failure on the part of PVE to perform its obligation
caused deep disappointment, anxiety and an irreparable break in the continuity of an
established family tradition of recording by film or slide historical and momentous family
events especially wedding celebrations and for which they were entitled to be paid
actual, moral and exemplary damages including attorneys fees.
RTC rendered a decision ordering defendant to pay the plaintiffs actual, moral and
exemplary damages in the amount of P100,000.00, P10,000.00 for attorneys fees and
to pay the costs of these proceedings.
Issues: Whether or not the petitioners are entitled to award of damages arising from
breach of contract of service.

Cases: 40, 80, 285, 213-232

However, the award of damages to the petitioners cannot be lumped together as

was done by the trial court. It is basic that the claim for actual, moral and exemplary
damages as well as attorneys fees must each be independently identified and justified.
Article 1170 of the New Civil Code provides that those who in the performance of their
obligations are guilty of fraud, negligence or delay, and those who in any manner
contravene the tenor thereof, are liable for damages. For failure of PVE, to comply
with its obligation under the video tape coverage contract, petitioners are entitled to
actual damages at least in the amount of (P1,423.00) representing their downpayment
in that contract.
Ordinarily, moral damages cannot be recovered in an action for breach of contract
because such an action is not among those expressly mentioned in Article
2219. However, moral damages are recoverable for breach of contract where the
breach was wanton, reckless, malicious or in bad faith, oppressive or abusive. The
wanton and reckless failure and neglect to timely check and remedy the video tape
recorder by the PVE crew indicates a malicious breach of contract and gross negligence
on the part of said respondent in the discharge of its contractual obligations.
Consequently, the petitioners who suffered mental anguish and tortured feelings
thereby, are entitled to an award of One Hundred Thousand Pesos (P100,000.00) as
moral damages.
In the case of Go v. Court of Appeals it was emphasized that (i)n our society,
the importance of a wedding ceremony cannot be underestimated as it is the matrix of
the family and, therefore, an occasion worth reliving in the succeeding
years. Considering the sentimental value of the tapes and the fact that the event
therein recordeda wedding which in our culture is a significant milestone to be
cherished and rememberedcould no longer be reenacted and was lost forever.
The award of exemplary damages which is hereby fixed to (P40,000.00) is
justified, under the premises, to serve as a warning to all entities engaged in the same
business to observe good faith and due diligence in the fulfillment of their contractual
obligations. Additionally, the award of attorneys fees in the amount of Ten Thousand
Pesos (P10,000.00) is also proper in accordance with Article 2208 of the Civil Code.

Held: PVE liable for damages.

Ratio:
PVE disclaimed any liability for the damaged videotape by invoking
force majeure or fortuitous event and asserted that a defective transistor caused the
breakdown in its video tape recorder, but failed to substantiate its bare allegation by
presenting in evidence the alleged defective transistor before the trial court.
At any rate, in order that fortuitous event may exempt PVE from liability, it is
necessary that it be free from negligence. The PVE crew miserably failed to detect the
defect in the video tape recorder and this could have been avoided by a timely exercise
of minimum prudence by the crew of PVE.
The failure to record on videotape the wedding celebration of the petitioners
constitutes malicious breach of contract as well as gross negligence on the part of
respondent Solid Distributors, Inc.

3C 2012 Digest Group

14