DAMAGES

I General Principles
Meaning of damages - The sum of money which the law awards or imposes as
pecuniary compensation, recompense, or satisfaction for an injury done or a wrong
sustained as a consequence either of a breach of contractual obligation or a tortious
act.
Banez vs Valdevilla
Doctrine : Whereas this Court in a number of occasions had applied the
jurisdictional provisions of Article 217 to claims for damages filed by employees, we
hold that by the designating clause "arising from the employer-employee relations"
Article 217 should apply with equal force to the claim of an employer for
actual damages against its dismissed employee, where the basis for the
claim arises from or is necessarily connected with the fact of termination,
and should be entered as a counterclaim in the illegal dismissal case.
Petitioner was the sales operations manager of private respondent in its branch in
Iligan City. In 1993, private respondent "indefinitely suspended" petitioner and the
latter filed a complaint for illegal dismissal with the National Labor Relations
Commission ("NLRC") in Iligan City. In a decision dated July 7, 1994, Labor Arbiter
Nicodemus G. Palangan found petitioner to have been illegally dismissed and
ordered the payment of separation pay in lieu of reinstatement, and of backwages
and attorney's fees. The decision was appealed to the NLRC, which dismissed the
same for having been filed out of time. Elevated by petition for certiorari before this
Court, the case was dismissed on technical grounds; however, the Court also
pointed out that even if all the procedural requirements for the filing of the petition
were met, it would still be dismissed for failure to show grave abuse of discretion on
the part of the NLRC.
On November 13, 1995, private respondent filed a complaint for damages before
the Regional Trial Court ("RTC") of Misamis Oriental, docketed as Civil Case No. 95554, which prayed for the payment of the following:
a. P709,217.97 plus 12% interest as loss of profit and/or unearned
income of three years;
b. P119,700.00 plus 12% interest as estimated cost of supplies,
facilities, properties, space, etc. for three years;
c. P5,000.00 as initial expenses of litigation; and
d. P25,000.00 as attorney's fees.1[4]
1

On January 30, 1996, petitioner filed a motion to dismiss the above complaint. He
interposed in the court below that the action for damages, having arisen from an
employer-employee relationship, was squarely under the exclusive original
jurisdiction of the NLRC under Article 217(a), paragraph 4 of the Labor Code and is
barred by reason of the final judgment in the labor case. He accused private
respondent of splitting causes of action, stating that the latter could very well have
included the instant claim for damages in its counterclaim before the Labor Arbiter.
He also pointed out that the civil action of private respondent is an act of forumshopping and was merely resorted to after a failure to obtain a favorable decision
with the NLRC.
Ruling upon the motion to dismiss, respondent judge issued the herein questioned
Order, which summarized the basis for private respondent's action for damages in
this manner:
Paragraph 5 of the complaint alleged that the defendant violated the
plaintiffs policy re: His business in his branch at Iligan City wherein
defendant was the Sales Operations Manager, and paragraph 7 of the
same complaint briefly narrated the modus operandi of defendant,
quoted herein: Defendant canvassed customers personally or through
salesmen of plaintiff which were hired or recruited by him. If said
customer decided to buy items from plaintiff on installment basis,
defendant, without the knowledge of said customer and plaintiff, would
buy the items on cash basis at ex-factory price, a privilege not given to
customers, and thereafter required the customer to sign promissory
notes and other documents using the name and property of plaintiff,
purporting that said customer purchased the items from plaintiff on
installment basis. Thereafter, defendant collected the installment
payments either personally or through Venus Lozano, a Group Sales
Manager of plaintiff but also utilized by him as secretary in his own
business for collecting and receiving of installments, purportedly for
the plaintiff but in reality on his own account or business. The
collection and receipt of payments were made inside the Iligan City
branch using plaintiffs facilities, property and manpower. That
accordingly plaintiffs sales decreased and reduced to a considerable
extent the profits which it would have earned.
In declaring itself as having jurisdiction over the subject matter of the instant
controversy, respondent court stated:
A perusal of the complaint which is for damages does not ask for any
relief under the Labor Code of the Philippines. It seeks to recover
damages as redress for defendant's breach of his contractual
obligation to plaintiff who was damaged and prejudiced. The Court
believes such cause of action is within the realm of civil law, and
jurisdiction over the controversy belongs to the regular courts.
While seemingly the cause of action arose from employer- employee
relations, the employer's claim for damages is grounded on the
nefarious activities of defendant causing damage and prejudice to

plaintiff as alleged in paragraph 7 of the complaint. The Court believes

that there was a breach of a contractual obligation, which is
intrinsically a civil dispute. The averments in the complaint removed
the controversy from the coverage of the Labor Code of the Philippines
and brought it within the purview of civil law. (Singapore Airlines, Ltd.
Vs. Pao, 122 SCRA 671.) xxx2[6]
Petitioner's motion for reconsideration of the above Order was denied for lack of
merit on October 16, 1996. Hence, this petition.
Acting on petitioner's prayer, the Second Division of this Court issued a Temporary
Restraining Order ("TRO ") on March 5, 1997, enjoining respondents from further
proceeding with Civil Case No. 95-554 until further orders from the Court.
By way of assignment of errors, the petition reiterates the grounds raised in the
Motion to Dismiss dated January 30, 1996, namely, lack of jurisdiction over the
subject matter of the action, res judicata, splitting of causes of action, and forumshopping. The determining issue, however, is the issue of jurisdiction.
Article 217(a), paragraph 4 of the Labor Code, which was already in effect at the
time of the filing of this case, reads:
ART. 217. Jurisdiction of Labor Arbiters and the Commission. --- (a)
Except as otherwise provided under this Code the Labor Arbiters shall
have original and exclusive jurisdiction to hear and decide, within thirty
(30) calendar days after the submission of the case by the parties for
decision without extension, even in the absence of stenographic notes,
the following cases involving all workers, whether agricultural or nonagricultural:
xxx
4. Claims for actual, moral, exemplary and other forms of
damages arising from the employer-employee relations;
xxx
The above provisions are a result of the amendment by Section 9 of Republic Act
("R.A.") No. 6715, which took effect on March 21, 1989, and which put to rest the
earlier confusion as to who between Labor Arbiters and regular courts had
jurisdiction over claims for damages as between employers and employees.
It will be recalled that years prior to R.A. 6715, jurisdiction over all money claims of
workers, including claims for damages, was originally lodged with the Labor Arbiters
and the NLRC by Article 217 of the Labor Code. 3[7] On May 1, 1979, however,
Presidential Decree ("P.D.") No. 1367 amended said Article 217 to the effect that
"Regional Directors shall not indorse and Labor Arbiters shall not entertain claims
2

for moral or other forms of damages." This limitation in jurisdiction, however, lasted
only briefly since on May 1, 1980, P.D. No. 1691 nullified P.D. No. 1367 and restored
Article 217 of the Labor Code almost to its original form. Presently, and as amended
by R.A. 6715, the jurisdiction of Labor Arbiters and the NLRC in Article 217 is
comprehensive enough to include claims for all forms of damages "arising from the
employer-employee relations".
Whereas this Court in a number of occasions had applied the jurisdictional
provisions of Article 217 to claims for damages filed by employees, we hold that by
the designating clause "arising from the employer-employee relations" Article 217
should apply with equal force to the claim of an employer for actual damages
against its dismissed employee, where the basis for the claim arises from or is
necessarily connected with the fact of termination, and should be entered as a
counterclaim in the illegal dismissal case.
Even under Republic Act No. 875 (the "Industrial Peace Act", now completely
superseded by the Labor Code), jurisprudence was settled that where the plaintiff's
cause of action for damages arose out of, or was necessarily intertwined with, an
alleged unfair labor practice committed by the union, the jurisdiction is exclusively
with the (now defunct) Court of Industrial Relations, and the assumption of
jurisdiction of regular courts over the same is a nullity. 4[10] To allow otherwise would
be "to sanction split jurisdiction, which is prejudicial to the orderly administration of
justice."5[11] Thus, even after the enactment of the Labor Code, where the damages
separately claimed by the employer were allegedly incurred as a consequence of
strike or picketing of the union, such complaint for damages is deeply rooted from
the labor dispute between the parties, and should be dismissed by ordinary courts
for lack of jurisdiction. As held by this Court in National Federation of Labor vs.
Eisma, 127 SCRA 419:
Certainly, the present Labor Code is even more committed to the view
that on policy grounds, and equally so in the interest of greater
promptness in the disposition of labor matters, a court is spared the
often onerous task of determining what essentially is a factual matter,
namely, the damages that may be incurred by either labor or
management as a result of disputes or controversies arising from
employer-employee relations.
There is no mistaking the fact that in the case before us, private respondent's claim
against petitioner for actual damages arose from a prior employer-employee
relationship. In the first place, private respondent would not have taken issue with
petitioner's "doing business of his own" had the latter not been concurrently its
employee. Thus, the damages alleged in the complaint below are: first, those
3
4
5

amounting to lost profits and earnings due to petitioner's abandonment or neglect

of his duties as sales manager, having been otherwise preoccupied by his
unauthorized installment sale scheme; and second, those equivalent to the value of
private respondent's property and supplies which petitioner used in conducting his
"business ".
Second, and more importantly, to allow respondent court to proceed with the
instant action for damages would be to open anew the factual issue of whether
petitioner's installment sale scheme resulted in business losses and the dissipation
of private respondent's property. This issue has been duly raised and ruled upon in
the illegal dismissal case, where private respondent brought up as a defense the
same allegations now embodied in his complaint, and presented evidence in
support thereof. The Labor Arbiter, however, found to the contrary ---that no
business losses may be attributed to petitioner as in fact, it was by reason of
petitioner's installment plan that the sales of the Iligan branch of private respondent
(where petitioner was employed) reached its highest record level to the extent that
petitioner was awarded the 1989 Field Sales Achievement Award in recognition of
his exceptional sales performance, and that the installment scheme was in fact with
the knowledge of the management of the Iligan branch of private respondent. 6[12]
In other words, the issue of actual damages has been settled in the labor case,
which is now final and executory. Manikan
Still on the prospect of re-opening factual issues already resolved by the labor court,
it may help to refer to that period from 1979 to 1980 when jurisdiction over
employment-predicated actions for damages vacillated from labor tribunals to
regular courts, and back to labor tribunals. In Ebon vs. de Guzman, 113 SCRA 52,7
[13] this Court discussed:
The lawmakers in divesting the Labor Arbiters and the NLRC of
jurisdiction to award moral and other forms of damages in labor cases
could have assumed that the Labor Arbiters' position-paper procedure
of ascertaining the facts in dispute might not be an adequate tool for
arriving at a just and accurate assessment of damages, as
distinguished from backwages and separation pay, and that the trial
procedure in the Court of First Instance would be a more effective
means of determining such damages. xxx
Evidently, the lawmaking authority had second thoughts about
depriving the Labor Arbiters and the NLRC of the jurisdiction to award
damages in labor cases because that setup would mean duplicity of
suits, splitting the cause of action and possible conflicting findings and
conclusions by two tribunals on one and the same claim.
So, on May 1, 1980, Presidential Decree No. 1691 (which substantially
reenacted Article 217 in its original form) nullified Presidential Decree
6
7

No. 1367 and restored to the Labor Arbiter and the NLRC their
jurisdiction to award all kinds of damages in cases arising from
employer-employee relations. xxx (Underscoring supplied)
Clearly, respondent court's taking jurisdiction over the instant case would bring
about precisely the harm that the lawmakers sought to avoid in amending the Labor
Code to restore jurisdiction over claims for damages of this nature to the NLRC.
This is, of course, to distinguish from cases of actions for damages where the
employer-employee relationship is merely incidental and the cause of action
proceeds from a different source of obligation. Thus, the jurisdiction of regular
courts was upheld where the damages, claimed for were based on tort, malicious
prosecution, or breach of contract, as when the claimant seeks to recover a debt
from a former employee or seeks liquidated damages in enforcement of a prior
employment contract.
Neither can we uphold the reasoning of respondent court that because the
resolution of the issues presented by the complaint does not entail application of
the Labor Code or other labor laws, the dispute is intrinsically civil. Article 217(a) of
the Labor Code, as amended, clearly bestows upon the Labor Arbiter original and
exclusive jurisdiction over claims for damages arising from employer-employee
relations ---in other words, the Labor Arbiter has jurisdiction to award not only the
reliefs provided by labor laws, but also damages governed by the Civil Code.
Thus, it is obvious that private respondent's remedy is not in the filing of this
separate action for damages, but in properly perfecting an appeal from the Labor
Arbiter's decision. Having lost the right to appeal on grounds of untimeliness, the
decision in the labor case stands as a final judgment on the merits, and the instant
action for damages cannot take the place of such lost appeal.
Respondent court clearly having no jurisdiction over private respondent's complaint
for damages, we will no longer pass upon petitioner's other assignments of error.

II Actual and Compensatory Damages

People vs Tambis
Cerilo Tambis (appellant) was charged before the Regional Trial Court (RTC) of
Quezon City with Murder in an Information reading:
xxx
That on or about the 12th day of June 1998 in Quezon City[,] Philippines, the abovenamed accused, with intent to kill, with treachery and evident premeditation did
then and there willfully, unlawfully, and feloniously attack, assault, and employ
personal violence upon the person of one GAUDIOSO MORAL JR. by then and there
stabbing him on the left portion of his body thereby causing upon him [a] serious
and grave wound which was the direct and immediate cause of his death to the
damage and prejudice of the heirs of GAUDIOSO MORAL JR.
Upon the other hand, appellant, admitting that he stabbed the victim, claimed selfdefense, averring that when the victim saw him, the latter got mad and attacked
him with a knife to thus draw him to grab the knife with which he stabbed the
victim.

Branch 219 of the Quezon City RTC credited the claim of the prosecution. It rejected
appellant's claim of self-defense. And it held that while the killing was not attended
by evident premeditation, it was attended by treachery, thus:
x x x In this case, the victim was drinking with his buddies, unarmed, and in no
position to defend himself when the accused suddenly appeared and stabbed him.
Although, as testified to by the victim's wife, the accused had warned the group
"Walang kikilos!" x x x which should have alerted the victim or put him on guard,
the suddenness [of] his attack against Gaudioso Moral, who was unarmed,
demonstrated that the accused deliberately employed a method of attack which
ensured the execution of his felonious design without risk to himself arising from
any defense which his victim might make. 6 (Underscoring supplied)cralawlibrary
The trial court thus convicted appellant of Murder, by Decision of June 17, 1999,
disposing as follows:
WHEREFORE, finding the accused Cerilo Tambis y Ollana guilty beyond reasonable
doubt of the crime of Murder, the Court hereby sentences him to suffer the penalty
of [r]eclusion [p]erpetua; to pay the heirs of Gaudioso Moral the amount of
P26,034.93 as actual damages; the amount of P30,000.00 as moral damages; the
amount of P1,640,034.50 as compensatory damages for the loss of the victim's
earning capacity, and P75,000.00 as indemnity for his death, and to pay the costs.
SO ORDERED.
Appellant lodged before this Court an appeal which it forwarded to the Court of
Appeals following People v. Mateo which directs the intermediate review of
decisions imposing the penalty of death, reclusion perpetua, or life imprisonment.
Appellant's utterance prior to the attack cannot be considered a warning that would
negate treachery. For a warning to negate treachery, such must give the intended
victim the opportunity to defend himself. Since appellant's utterance [was] made
immediately prior to the attack, such cannot constitute adequate warning that
would have given the victim the chance to escape or parry the blow. Effectively, the
utterance was inconsequential to the progress of the attack for even with such
utterance, the victim still was not able to defend himself.
By Decision of July 27, 2006, the Court of Appeals affirmed the trial court's decision.
Appellant thereupon brought the case to this Court.
In separate manifestations, appellant and the Solicitor General informed that they
would no longer file supplemental briefs, their respective positions having been
adequately discussed in the Briefs they had earlier filed which had been passed
upon by the Court of Appeals.

From a review of the records of the case, this Court finds that, contrary to
appellant's argument, the Court of Appeals committed no reversible error in
appreciating the qualifying circumstance of treachery.
x x x Treachery may still be appreciated even though the victim was forewarned of
the danger to his person. In other words, even when the victim is warned of the
danger, if the execution of the attack made it impossible for him to defend himself
or to retaliate, alevosia can still be appreciated.
Appellant's sudden attack deprived the victim of an opportunity to defend himself.
His utterance - "walang kikilos" - cannot be construed as warning to the victim to
defend himself. It indicates a caveat to restrain anyone from coming to the victim's
defense.
Appellant's appeal thus fails.
As it is well-established that an appeal in criminal proceedings throws the whole
case open for review of all aspects, including those not raised by the parties, the
Court, after combing through the documentary evidence for the prosecution, finds
that a modification of the decision respecting the civil aspect of the case is in order.
The trial court awarded P26,034.93 as actual damages representing expenses for
the hospitalization, wake, and funeral of the victim. A recomputation of the amounts
reflected in the documentary evidence (Exhibits "G," "G-1" to "G-18," "H," "H-1," "I,"
and
"I-1")
basis
of
the
award
yields,
however,
a
total
of
P26,300.45.rbl r brr
As for the award of P1,640,034.50 representing compensatory damages, the trial
court arrived at it in this wise:
x x x The [amount] was computed taking into account the following: a) his age at
the time of his demise - 41 years old; b) his life expectancy - 65 years; c) his
monthly salary of P7,624.70 [as driver of Egon Trade, Inc.] plus 13th month pay of
P6,214.70; and d) his gross earnings for 24 years - P2,342,906.4.
Deducting thirty percent 30% therefrom as his living expenses (702,817.92), the
actual damages to be paid by the accused should, therefore, be P1,640,034.50. In
considering the thirty percent rate, the Court took into account the fact that he was
the sole bread winner of the family and he had three minor children.
Jurisprudence, however, has established the following formula for computing
compensation for loss of earning capacity:

net earning capacity = [2/3 x (80-age at time of death) x (gross annual income reasonable and necessary living expenses],
and pegged reasonable and necessary reasonable expenses at 50% of earnings in
the absence of contrary evidence. Applying this formula, this Court arrives at
P1,269,047.30 as compensatory damages.
WHEREFORE, the July 27, 2006 Decision of the Court of Appeals affirming that of
Branch 219 of the Quezon City Regional Trial Court is MODIFIED in that the award of
actual damages for the hospitalization, wake, and funeral expenses is INCREASED to
P26,300.45, and the award of compensatory damages for loss of earning capacity is
REDUCED to P1,269,047.30. In all other respects, the challenged Decision is
AFFIRMED.

PEOPLE OF THE PHILIPPINES VS. Solongan

Actual damages may be awarded representing the amount of ransom paid. In
People vs Morales the Court awarded actual damages representing the amounts of

the ransom paid. In the instant case, the heirs of the victim are entitle to the award
of P50,000.00 as actual damages, which is the equivalent to the amount of the
ransom paid. In People vs Yambot, the Court awarded civil indemnity of P50,000.00
after finding the accused guilty of the crime of kidnapping for ransom aside from
ordering the return of the amount of the ransom. In addition, the heirs of the victim
are also entitled to an award of moral damages in the amounts of P100,000.00 and
P200,000.00, respectively, predicated on the c=fact that the victims suffered
serious anxiety and fright when they were kidnapped.
People vs Ocampo
Benjamin Ocampo (appellant) was indicted for Murder before the Regional Trial
Court (RTC) of Baguio City, alleged to have been committed as follows:
That on or about the 9th day of October, 2003, in the City of Baguio, Philippines,
and within the jurisdiction of this Honorable Court, the above-named accused, with
intent to kill and with treachery, did then and there willfully, unlawfully and
feloniously stab RUBEN NGO Y TYCHINGCO with a stainless knife, thereby inflicting
upon the latter: stab wound on the neck, and as a result thereof the said Ruben Ngo
y Tychingco died.1avvphi1
That the killing was attended by the qualifying circumstance of treachery
considering that the accused suddenly attacked/stabbed the victim who did not
have any means to defend himself.1
From the evidence for the prosecution consisting of, among other things, the
testimony of eyewitnesses Mary Ann Lombay (Mary Ann) and Rosemarie Ngo, wife
of Ruben Ngo (the victim), the following version of events is culled: 2
At around 4:30 p.m. of October 9, 2003, while the victim and his wife were buying
garlic chips from Mary Anns store at 439 Old Market Building, Baguio City, appellant
suddenly surfaced, pushed himself between the spouses, stabbed the victim at the
right side of his neck with a kitchen knife, and walked away.
The post-mortem examination of the victim who died two hours after the stabbing
yielded the following findings:
GENERAL:
Fairly developed, fairly nourished, previously embalmed male cadaver. Needle
puncture noted at the left arm, left cubital region and left wrist.
HEAD AND NECK:

1. Incised wound, neck, measuring 10 x 4 cm, 6 cm right of the anterior

midline with stitches applied.
2. Incised wound, neck, measuring 2 x .02 cm, just along the anterior midline
with 4 stitches applied.
3. Incised wound, neck, measuring 13.5 x 3 cm, 6 cm left of the anterior
midline.
- The right sterno-cleido-mastoid muscle are noted to be hemorrhagic.
- Incised wound noted at the trachea and esophagus.
- Hemorrhages noted on areas of external and internal jugular veins,
bilateral.
- Incised wound noted at the bifurcation of the left carotid artery.
x x x x3
The cause of death of the victim was determined to be "hemorrhagic shock
secondary to stab wound of the neck." 4
Explaining the number and nature of the wounds on the victims neck, Dr. Elizardo
Daileg (Dr. Daileg) who conducted the post-mortem examination declared that the
wounds along the anterior midline and at the left of the anterior midline were
surgical wounds, while the wound at the right of the anterior midline was most likely
a stab wound which was extended surgically for the exploration and ligation of the
injured blood vessels;5 and that the stab wound was 10 to 12 centimeters deep, and
the carotid artery and jugular veins were injured. 6
Dr. Daniel Recolizado, who attended to the victim when he was brought to the
hospital, corroborated Dr. Dailegs testimony.7
Upon the other hand, appellant, denying the accusation and interposing alibi, 8
claimed as follows:
He was drinking with friends from 8:00 a.m. to 3:00 p.m. of October 9, 2003, after
which he repaired to the Everlasting Memorial Park where his parents are buried and
where he continued drinking as he was depressed over the death on October 5,
2003 of his brother. He stayed in the park until 6:30 p.m.
From the park, he went to the house of his friend Manny Guanzon (Guanzon) at
Brawer Road where he slept and washed his face. He then went to a beerhouse

along Magsaysay Avenue where he continued drinking until 9:00 p.m. when he
checked in at the Leisure Lodge where he spent the night.
Denying having gone to the public market in the afternoon of October 9, 2003,
appellant claimed that he was a victim of a frame-up, of which the Chinese are the
masterminds, he having been exposing a Chinese syndicate. 9
By Decision of June 15, 2004, Branch 6 of the Baguio City RTC convicted appellant of
Murder, disposing as follows:
WHEREFORE, the Court finds the accused Benjamin Ocampo guilty beyond
reasonable doubt of the offense of Murder, defined and penalized under Article 248
of the Revised Penal Code as charged in the Information and hereby sentences him
to suffer the penalty of Reclusion Perpetua; to indemnify the heirs of the deceased
Ruben Ngo the sum of P50,000.00 as civil indemnity for his death; P235,682.78 as
actual damages incurred in connection with his death, P671,760.00 as unearned
income; and P300,000.00 as moral damages for the mental anguish and pain
suffered by his heirs as a result of his death; all indemnifications being without
subsidiary imprisonment in case of insolvency, and to pay the costs.
The accused Benjamin Ocampo, being a detention prisoner, is entitled to be
credited 4/5 of his preventive imprisonment in the service of his sentence in
accordance with Article 29 of the Revised Penal Code.
SO ORDERED.10 (Underscoring supplied)
Before the Court of Appeals to which appellant challenged the trial courts decision,
he faulted the trial court as follows:
I
x x x IN FINDING [THAT] THE ACCUSED-APPELLANT WAS POSITIVELY IDENTIFIED BY
THE PROSECUTION WITNESSES AS THE ASSAILANT.
II
GRANTING ARGUENDO THAT THE ACCUSED-APPELLANT STABBED RUBEN NGO, THE
COURT A QUO ERRED IN FINDING THE ACCUSED-APPELLANT GUILTY BEYOND
REASONABLE DOUBT FOR THE CRIME OF MURDER.11
By Decision12 of February 13, 2007, the Court of Appeals affirmed the conviction of
appellant but modified his civil liability in light of the following observations:

We reduce the award of actual damages from P235,682.78 to P69,681.70. x x x

[O]nly substantiated and proven expenses or those that appear to have been
genuinely incurred in connection with the death, wake or burial of the victim will be
recognized. Based on the record, We cannot consider some of the receipts
submitted by the prosecution for it was not shown that they were expended in
relation to the death or funeral of the victim. The list submitted by Rosemarie Ngo
with respect to the expenses incurred in the transfer of the body of the victim and
the food served during the wake and burial is self-serving and cannot be considered
competent proof. The court can only award actual damages if supported by receipts.
However, current jurisprudence grants the award of P25,000.00 as temperate
damages when it appears that the heirs of the victim had suffered pecuniary losses
but the amount thereof cannot be proved with certainty.
Likewise, the award of moral damages should be reduced from P300,000.00 to
P50,000.00 in line with the prevailing jurisprudence. Moral damages are not
intended to enrich the victims heirs but rather they are awarded to allow them to
obtain means for diversion that could serve to alleviate their moral and
psychological sufferings.
With respect to the award of P671,760.00 by way of loss of earning capacity, We
hereby increase it to P671,999.97. As testified to by Rosemarie Ngo, the victim was
receiving a net monthly income of P6,000.00 as a dried fish dealer. His annual
income, computed at the rate of P6,000.00 per month multiplied by twelve (12)
months is P72,000.00. From this amount will be deducted his necessary and
incidental expenses estimated at fifty percent (50%) thereof, leaving a balance of
P36,000.00. As the victim was fifty-two (52) years old at the time of his death, his
life expectancy of eighteen point sixty seven (18.67) years is derived using this
formula: 2/3 x [80-(age of victim at the time of death)]. Multiplying the balance of
P36,000.00 by his life expectancy of 18.67 years, We arrive at P671.999.97 as his
loss of earning capacity.
In addition to the civil indemnity and damages awarded by the trial court,
exemplary damages in the amount of P25,000.00 must be awarded given the
presence of treachery which qualified the killing to murder. Article 2230 of the Civil
Code provides that in criminal offenses, exemplary damages may be imposed only
when the crime was committed with one ore more aggravating circumstances. The
term aggravating circumstances as used therein should be construed in its generic
sense since it did not specify otherwise. 13 (Underscoring supplied)
Thus the Court of Appeals disposed:
WHEREFORE, premises considered, the Decision dated June 15, 2004 rendered by
the Regional Trial Court of Baguio City, Branch 6 in Criminal Case No. 22124-R,
finding him guilty of the crime of murder is hereby AFFIRMED WITH MODIFICATON.

The award of loss of earning capacity is increased to P671,999.97. The award of

actual and moral damages is reduced to P69,681.70 and P50,000.00, respectively.
The accused-appellant is further ordered to pay the heirs of the victim Ruben Ngo
P25,000.00 as exemplary damages and P25,000.00 as temperate damages.
(Emphasis and underscoring supplied)
SO ORDERED.14
Before this Court at which appellant filed a Notice of Appeal, 15 he and the Solicitor
General adopted and repleaded the arguments they raised in the briefs they
respectively filed before the Court of Appeals. 16
Appellant questions his identification by Mary Ann as the perpetrator of the crime,
arguing that Mary Ann failed to point to him when the policeman showed her
photographs of many possible suspects, but that when shown his photograph the
following day, she identified him as the culprit. He thus posits that the power of
suggestion might have influenced her to point to him as the culprit. 17
When an accused challenges his identification by witnesses, he in effect attacks
their credibility.18 Appellate courts will not generally disturb the assessment by the
trial court of the credibility of witnesses whose testimonies it has heard and their
deportment and manner of testifying it has observed. 19
In crediting the testimony of eyewitness Mary Ann, the appellate court observed:
x x x Mary Ann Lomboy was unable to identify accused appellant-from several
pictures shown to her by the policemen precisely because accused-appellant was
not in any of those photographs. When shown a lone photograph of the accusedappellant, Mary Ann Lomboy positively identified him as Ruben Ngos assailant
because she knew and remembered him to be the assailant. Her identification was
based solely on her recollection as an eyewitness and it cannot be said that she was
influenced by the policemen to wrongly accuse the accused-appellant. There is no
showing that the prosecution witnesses were ill-motivated to testify against him. 20
(Emphasis and underscoring supplied)
Appellant has not, however, refuted the foregoing observation of the appellate
court.
Mary Anns answer to the question of the trial court when it was eliciting from her
the basis of her identification of appellant as the culprit should put the issue to rest.
xxxx

Court: Just one question from the court because the counsel keeps on
repeating that the picture was the basis for your identifying the accused.
What is actually your basis for identifying the accused as the assailant? Was it
the fact that you saw the stabbing or was it the picture shown to you?
[MARY ANN]
A: He is the one I saw when he stabbed the victim.
Q: So your basis is what you actually saw in the stabbing, not the picture
itself?
A: Yes, Your Honor.21
x x x x (Emphasis and underscoring supplied)
Notably, the victims wife corroborated Mary Anns identification of appellant as the
assailant.22
Clutching at straws, appellant claims that he was suffering from delusions or
psychosis, hence, he could not have consciously adopted a mode of attack without
endangering himself, citing the assessment by the Department of Psychiatry of the
Baguio General Hospital and Medical Center in its Psychiatric Evaluation Report
which states that:
Mr. Ocampo was psychotic before, during, and after the alleged crime. He was
psychotic before the alleged crime, as he firmly believed without rational basis that
the "Chinese mafia" had influenced the jeepney driver of the vehicle that caused his
brothers death. During the commission of the alleged crime, he was psychotic as
he vowed to avenge his brothers death and reportedly stabbed to death a Chineselooking passerby whom he firmly believed to be a member of the "Chinese mafia".
He was also psychotic after the alleged crime, as he still harbored delusional beliefs
that the "Chinese mafia" had infiltrated and influenced the government and that
they were after him.23 (Underscoring supplied)
Appellant thus appeals to the Court to take notice of his psychosis which, to him,
was manifested by his behavior and irrational statements during the trial of the
case.24
The assessment of appellants mental condition by the Department of Psychiatry of
the Baguio General Hospital and Medical Center may not be appreciated to rule out
treachery in the commission of the crime. As the Court of Appeals noted:

x x x [T]he accused appellant only presented the Psychiatric Evaluation Report

conducted on him stating that he was psychotic during, before and after the
incident but admitted that the doctors who examined him were not presented in
court. In failing to present Gwendolyn C. Cayad, the medical officer who prepared
the questioned report as a witness, the report is considered hearsay evidence. And
even if We admit this report as an exception to the hearsay rule, this report cannot
be given evidentiary weight for it involves an opinion of one who must first be
established as an expert witness. Without presenting the doctor who prepared the
psychiatric report to show her qualifications as an expert witness, the report could
not be given weight or credit. The report has very little probative value due to the
absence of the examining physician.
We agree with the Office of the Solicitor General that the trial court could not take
judicial notice of the accused-appellants psychosis. This requires presentation of
competent proof. The defense cannot expect the trial court to take judicial notice of
the accused-appellants psychosis based on his behavior and irrational statements
during the trial for the presumption always is for sanity. To establish his insanity,
this issue must be properly heard and ruled upon by the court. x x x 25 (Emphasis
and underscoring supplied)1awph!1-a1f
At all events, the Report does not establish that appellants alleged psychosis
rendered him incapable of consciously adopting his chosen mode of attack at the
time of the commission of the offense. It bears noting that when appellant was
examined on November 12, 2003 and on December 4, 2003 or after the commission
of the crime on October 9, 2003, the Report notes that he was conscious, oriented
as to time, person, and place, and had intact remote, recent, and immediate
memories.26
With respect to the appellate courts affirmance with modification (increase) of the
trial courts award of compensation for the victims loss of earning capacity, the
Court takes exception thereto. As will be shown shortly, the testimony of the
victims wife that he had a P6,000 monthly net income as a dealer of dried fish does
not suffice to grant such award.27
The general rule is that documentary evidence is necessary to prove the victims
annual income. Excepted from the rule 28 for testimonial evidence to suffice as proof
is if the victim was either: (1) self-employed, earning less than the minimum wage
under current labor laws, and judicial notice may be taken of the fact that in the
victims line of work, no documentary evidence is available; or (2) employed as a
daily wage worker earning less than the minimum wage under current labor laws. 29
During the lifetime of the victim, he was a self-employed dried fish dealer from
Camarines Norte. For an award of indemnity for loss of earning capacity to be
proper based solely on his wifes testimony, it has to be shown that during his

lifetime, he earned less than minimum wage under current labor laws and no
documentary evidence is available.
The victims wife testified that as a dried fish dealer, he earned P15,000 gross
income per month and a net monthly income of P6,000.30
If the victims daily wage is computed based on 22 working days a month, assuming
that the victim did not work on Saturdays and Sundays, the result would be as
follows:
P6,000 net monthly income / 22 days per month = P273 per day
The amount of P273 is above the minimum wage range for non-agricultural workers
in Region V, which is P196-P239 per day. 31
If the victims daily wage is computed based on 30 working days per month,
assuming that the victim worked every day of the month (although it is of common
knowledge that the usual practice is to rest on week-ends), the result would be as
follows:
P6,000 net monthly income / 30 days per month = P200 per day
Again, the amount of P200 per day is within the minimum wage range for nonagricultural workers in Region V, which is P196-P239 per day.
If the Court bases the computation on 26 working days per month, assuming that
the victim rested only on Sundays, the result would be as follows:
P6,000 net monthly income / 26 days per month = P231 per day
The amount is still within the minimum wage range for non-agricultural workers in
Region V.
If the Court bases the computation on 16 working days per month, based on the
testimony that the victim stayed in Baguio three to four days to deliver goods 32 and
assuming that the stay was every week, the result would be as follows:
P6,000 net monthly income / 16 days per month = P375 per day.
The amount this time is above the minimum wage range for non-agricultural
workers in Region V, which is P196-P239 per day.

If the Court bases the computation on 12 working days per month, assuming that
the victim stayed in Baguio three days per week to deliver his goods, the result
would be
P6,000 net income per month / 12 days per month = P500 per day
Again, the amount is above the minimum wage range for non-agricultural workers in
Region V, which is P196-P239 per day.
Based on the above computations, as the victims daily wage was either within or
above but never below the minimum wage range, no indemnity for loss of earning
capacity can be awarded based on his wifes testimony alone.
But even if the victim were earning below minimum wage, a third requirement has
to be satisfied for testimonial evidence to suffice as basis for an award of indemnity
for loss of earning capacity: that in the victims line of work no documentary
evidence is available.
It is of common knowledge that a fish dealer keeps records of his transactions. In
fact, the victims wife was able to testify as to his gross and net earnings -- gross
earnings being understood by her to be sold as the total amount of fish sold from
which expenses are deducted 33 -- which would only be possible if records were being
kept.34 The wife did not, however, present documentary proof showing how she
arrived at her estimate of gross and net earnings.
In fine, no indemnity for loss of earning capacity may be awarded based on the
victims wifes testimony alone.
The Court takes exception, too, to the award by the appellate court of temperate
damages in the amount of P25,000, such kind of damage being recoverable only
when some pecuniary loss has been suffered but its amount cannot, from the nature
of the case, be proved with certainty. 35 In the case at bar, actual damages had been
proven and awarded.
Finally, the Court, following current jurisprudence, 36 increases the civil indemnity to
P75,000.
WHEREFORE, the February 13, 2007 Decision of the Court of Appeals is AFFIRMED
with the MODIFICATION that the award of civil indemnity is increased to P75,000
and the awards of P671,999.97 for loss of earning capacity and of P25,000 as
temperate damages are DELETED.
The Court thus finds the accused-appellant, Benjamin Ocampo, GUILTY beyond
reasonable doubt of Murder and is sentenced to suffer the penalty of reclusion

perpetua; to pay the heirs of Ruben Ngo P75,000 as civil indemnity, P235,682.78 as
actual damages, and P25,000 exemplary damages; and to pay the costs.

Pan Malayan Insurance vs CA

Facts:
1 Canlubang Automotive Resources Corp. obtained from PanMalay a motor
vehicle insurance policy for its Mitsubishi Colt Lancer.
2 While the policy was still in effect, the insured car was allegedly hit by a pickup owned by Erlinda Fabie but driven by another person. The car suffered
damages in the amount of P42K.
3 PanMalay defrayed the cost of repair of the insured car. It then demanded
reimbursement from Fabie and her driver of said amount, but to no avail.
4 PanMalay filed a complaint for damages with the RTC of Makati against Fabie
and the driver. It averred that the damages caused to the insured car was
settled under the own damage coverage of the insurance policy.
5 Private respondents filed a motion to dismiss alleging that PanMalay had no
cause of action since the won damage clause of the policy precluded
subrogation under Art. 2207 of the Civil Code. They contended that
indemnification under said article is on the assumption that there was no
wrongdoer or no 3rd party at fault.
6 The RTC dismissed PanMalays complaint and ruled that payment under the
own damage clause was an admission by the insurer that the damage was
caused by the assured and/or its representatives.
7 CA affirmed but on different ground. Applying the ejusdem generis rule, CA
held that Section III-I of the policy, which was the basis for the settlement of
the claim against insurance, did not cover damage arising from collision or
overturning due to the negligence of 3rd parties as one of the insurable risks.
Issue:

Was PanMalay subrogated to the rights of Canlubang against the driver and his
employer?
Held:
Yes.
Decision:
The Supreme Court remanded the case back to the trial court.
Ruling:
Right of Subrogation of the Insurer
Article 2207 of the Civil Code is founded on the well-settled principle of
subrogation. If the insured property is destroyed or damaged through
the fault or negligence of a party other than the assured, then the
insurer, upon payment to the assured, will be subrogated to the
rights of the assured to recover from the wrongdoer to the extent
that the insurer has been obligated to pay.
Payment by the insurer to the assured operates as an equitable assignment
to the former of all remedies which the latter may have against the third
party whose negligence or wrongful act caused the loss.
The right of subrogation is not dependent upon, nor does it grow out of,
any privity of contract or upon written assignment of claim. It accrues simply
upon payment of the insurance claim by the insurer.
There are three exceptions to this rule:
1 where the assured by his own act releases the wrongdoer or third party liable
for the loss or damage
2 where the insurer pays the assured the value of the lost goods without
notifying the carrier who has in good faith settled the assured's claim for loss
3 where the insurer pays the assured for a loss which is not a risk covered by
the policy, thereby effecting "voluntary payment"
None of these exceptions are present in this case.
As to the trial courts ruling:
When PanMalay utilized the phrase "own damage" a phrase which is not found in
the insurance policy to define the basis for its settlement of Canlubang's claim
under the policy, it simply meant that it had assumed to reimburse the costs for
repairing the damage to the insured vehicle. It is in this sense that the so-called
"own damage" coverage under Section III of the insurance policy is differentiated
from Sections I and IV-1 which refer to "Third Party Liability" coverage (liabilities
arising from the death of, or bodily injuries suffered by, third parties) and from
Section IV-2 which refer to "Property Damage" coverage (liabilities arising from
damage caused by the insured vehicle to the properties of third parties).
As to the Court of Appeals ruling:
The Court of Appeals' ruling on the coverage of insured risks stems from an
erroneous interpretation of the provisions of the policy. It violates a
fundamental rule on the interpretation of property insurance contracts where

interpretation should be liberally in favor of the assured and strictly against the
insurer in cases of disagreement between the parties. The meaning advanced by
PanMalay regarding the coverage of the policy is undeniable more beneficial to
Canlubang than that insisted upon by the CA. In any case, the very parties to the
policy were not shown to be in disagreement regarding the meaning and coverage
of Section III-I. Hence, it was improper for CA to assert its own interpretation of the
contract that is contrary to the clear understanding and intention of the parties to it.

* Even assuming for the sake of argument that the insurance policy does not cover
damage to the insured vehicle caused by negligent acts of third parties, and that
PanMalay's settlement of Canlubang's claim for damages allegedly arising from a
collision due to private respondents' negligence would amount to unwarranted or
"voluntary payment", insurer may still recover from the third party
responsible for the damage to the insured property under Article 1236 of
the Civil Code.

NATIONAL HOUSING AUTHORITY v. HEIRS OF ISIDRO GUIVELONDO

FACTS:

On February 23, 1999, petitioner National Housing Authority filed with the
Regional Trial Court of Cebu City, Branch 11, an Amended Complaint for
eminent domain against Associacion Benevola de Cebu, Engracia Urot and
the Heirs of Isidro Guivelondo for the purpose of the public use of Socialized
housing.

On November 12, 1999, the Heirs of Isidro Guivelondo filed a Manifestation

stating that they were waiving their objections to NHAs power to expropriate
their properties. Thus an order of execution has been granted and the court
already appointed commissioners to determine the amount for just
compensation

On April 17, 2000, the Commissioners submitted their report wherein they
recommended that the just compensation of the subject properties be fixed
at P11,200.00 per square meter wherein a partial judgment has been
rendered.

After the report on the just compensation has completed, both parties filed
an MR on the amount for the just compensation stating that it has no
adequate basis and support. Both MR was denied by the court.

While the judgment has been rendered in the RTC and an entry of judgment
and the motion for execution has been issued, NHA filed a petition for
certiorari to the Court of Appeals. The CA denied the petition on the ground
that the Partial Judgment and Omnibus Order became final and executory
when petitioner failed to appeal the same.

Wherefore, the Petitioner NHA filed an appeal to the Supreme Court.

ISSUE
1)
WHETHER OR NOT THE STATE CAN BE COMPELLED AND COERCED BY THE
COURTS TO EXERCISE OR CONTINUE WITH THE EXERCISE OF ITS INHERENT POWER
OF EMINENT DOMAIN;
2)
WHETHER OR NOT WRITS OF EXECUTION AND GARNISHMENT MAY BE ISSUED
AGAINST THE STATE IN AN EXPROPRIATION WHEREIN THE EXERCISE OF THE POWER
OF EMINENT DOMAIN WILL NOT SERVE PUBLIC USE OR PURPOSE
3) WHETHER OR NOT JUDGMENT HAS BECOME FINAL AND EXECUTORY AND IF
ESTOPPEL OR LACHES APPLIES TO GOVERNMENT;
HELD:
The petition was denied and the judgment rendered by the lower court was
affirmed.

RATIO:
On the first issue, the court held that, yes the state can be compelled and
coerced by the court to continue exercise its inherent power of eminent domain,
since the NHA does not exercise its right to appeal in the expropriation proceedings
before the court has rendered the case final and executory. In the early case of City
of Manila v. Ruymann and Metropolitan Water District v. De Los Angeles, an
expropriation proceeding was explained.

Expropriation proceedings consists of two stages: first, condemnation of the

property after it is determined that its acquisition will be for a public purpose or
public use and, second, the determination of just compensation to be paid for the
taking of private property to be made by the court with the assistance of not more
than three commissioners.

The first is concerned with the determination of the authority of the plaintiff to
exercise the power of eminent domain and the propriety of its exercise in the
context of the facts involved in the suit. It ends with an order, if not of dismissal of
the action, of condemnation declaring that the plaintiff has a lawful right to take
the property sought to be condemned, for the public use or purpose described in
the complaint, upon the payment of just compensation to be determined as of the
date of the filing of the complaint. An order of dismissal, if this be ordained, would
be a final one, of course, since it finally disposes of the action and leaves nothing
more to be done by the Court on the merits. So, too, would an order of
condemnation be a final one, for thereafter, as the Rules expressly state, in the
proceedings before the Trial Court, no objection to the exercise of the right of
condemnation (or the propriety thereof) shall be filed or heard.

The second phase of the eminent domain action is concerned with the
determination by the Court of the just compensation for the property sought to be
taken. This is done by the Court with the assistance of not more than three (3)
commissioners. The order fixing the just compensation on the basis of the evidence
before, and findings of, the commissioners would be final, too. It would finally
dispose of the second stage of the suit, and leave nothing more to be done by the
Court regarding the issue. Obviously, one or another of the parties may believe the
order to be erroneous in its appreciation of the evidence or findings of fact or
otherwise. Obviously, too, such a dissatisfied party may seek a reversal of the
order by taking an appeal there from.
On the second issue, the court held that a socialized housing is always for the
public used and that the public purpose of the socialized housing project is not in
any way diminished by the amount of just compensation that the court has fixed.
On the third issue, the court ruled that in this case the doctrine of state immunity
cannot be applied to the NHA, although it is public in character, it is only public in
character since it is government-owned, having a juridical personality separate and
distinct from the government, the funds of such government-owned and controlled
corporations and non-corporate agency, although considered public in
character, are not exempt from garnishment.
Notes:
Important Discussion in the case:
When does the Doctrine of State Immunity not applied in the government
agencies?
1. The universal rule that where the State gives its consent to be sued by
private parties either by general or special law
2. If the funds belong to a public corporation or a government-owned or
controlled corporation which is clothed with a personality of its own,
separate and distinct from that of the government, then its funds are not
exempt from garnishment. This is so because when the government
enters into commercial business, it abandons its sovereign capacity and is
to be treated like any other corporation.

GARNISMENT AS DEFINED BY BLACK LAW DICTIONARY:

Garnishment
A judicial proceeding in which a creditor (or a potential creditor) asks
the court to order a third party who is indebted to or is bailee for the
debtor to turn over to the creditor any of the debtors property (such as
wages or bank accounts) held by that third party.
A person can initiate a garnishment action as means of either
prejudgment seizure or post judgment collection.
In short, it only means whether the Heirs of Guivelendo can file a case to
NHA to compel the latter to give to them the amount of the just
compensation as rendered by the court.